Undertanding Business Competition

I'm not sure if this should be posted as a concern or a "business opportunity" but it is "how things work". With all the road work we are using 100-125 bags of cement per week. This will continue for probably another six weeks. In addition, we will be buying lots of cement for building the actual buildings.

Gixia has been buying from one vendor who will deliver. Not for free but it is easier (and cheaper) to pay them the delivery fee than rent a truck and driver and generally have to deal with it. A few days ago she went to order another 100 bags of cement. They only had 80. As the fee is fixed, that was undesirable. So, she goes off to the competition.

The price is the same and the other place did have 100 bags. She asked if they delivered. No. She pointed out that their competition did. The response was, "You should buy from them".

This is close to universal here. If you ask "do you have X?" they may say no. If you then ask "do you have anything like X?" they may offer you five perfectly good alternatives.

I remember my grandfather talking about working as an errand boy in a pharmacy when he was a kid. (We are talking late 1800s.) There were two pharmacies in the town where he lived. He said, quite often a customer would ask for something that they were out of. The owner would tell the customer they had some in the back and then give my grandfather money to run down the street and buy it from the competitor. The owner knew keeping that customer was worth taking a loss on that one sale.

I know one business in Estelí that works like that. It is a little hardware store (with lots of other stuff) just north of Petronic El Carmen. The owner will also tell you where to find other products if they are things he doesn't carry. The result is that I will go there because I will either get what I want or get directions where to find it. It seems like there is room for more than one business like that in town.

Oh, on the cement, if you buy 500 bags from the distributor in Managua they will deliver them to you for free. That makes the decision pretty easy for us.