Warren Buffett once said, “If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”
By Buffett’s reckoning, then, Marlin Steel had a terrible business 10 years ago.
In 2003, Marlin made $800,000 selling wire bagel baskets, and it was sinking fast because of newfound competition from Chinese factories, which were selling bagel baskets for $6--half of what Marlin’s baskets cost. “Marlin’s customers were switching to save $200 a store. And Marlin would never be able to match its Chinese competitors on price,” reports Charles Fishman in Fast Company.
Via The Learning Factor