Appliance Repair businesses are the bottom feeders of our society. I have had an Appliance Repair business in Pretoria for 10 years. Initially, I made a lot of money, but like in any free market environment, when that happens new entrants eat away at your market share and profits. Now the business is barely surviving. I planned to close it, because of my dealings with the Russian Federation.
But I thought, I now have enough money available to kick some butt in the Appliance Repair game. So it is time for a shake up. The structure of the market is as follows:
2 suppliers of spare parts
2 or 3 big repair businesses
100's of small repair businesses
All the repair businesses buy their spares from one of the 2 suppliers.
Now my planned strategy is as follows:
Buy out the spares parts suppliers even if I have to pay a premium. If they do not want to sell, headhunt their personnel and open a spare part supply business next door to them and close them down by selling at cost less 10% for 3 months or however long it takes to kill them.
Buy the 2 big repair shops. Now that I control the spares supply in Pretoria, I can drive the smaller repair shops out of business by either discontinuing their discount or refusing to sell to them.
Many customers are a bunch of arseholes and once they know what the problem with the machine is, they do not accept the quote, but want the machine back to do the repairs themselves. This is easy to manage when the spares supply and the repairs are integrated. You can flag that customer on the system and when someone comes in to buy that spare, you ask for his details. If he is the one who did not accept the quote, you sell the spare at double the normal retail price or he can buzz off and go buy it in Johannesburg, because he will not be able to buy it in Pretoria.
This will be how you gain control of the market in Pretoria. Then on to Johannesburg where you do the same. Now I wonder, will the Competition Commission waste their time with a business like this which is clearly behaving monopolistic, but not deemed as strategic like bread?