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Comment by dsr_ | Hacker News Reader

The retailer's problem can be solved through diversification. If you sell enough different things, and they are all of good quality, people will come back to shop for other things that you sell.

The manufacturer's problem needs more capital, because it is also solved through diversification. If the total market for space oscillators is 120,000 a year, with about a 2-3% annual growth, making the best space oscillators has a cap. You'll need to figure out how to turn your expertise in space oscillators into neighboring products - space modulators and electromagnetic oscillators, perhaps - each of which is an R&D investment itself.

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Massdrop's original version is essentially what you are describing, they were a middleman that ran drops where you would pay for something upfront and once done they would collect the money and order it from the manufacturer before shipping it to you in a couple months. They used to sell a wide variety of things, but over time they moved more and more to their collaborations and Drop branded goods in the headphone and keyboard spaces and essentially became just another online retailer.

> The retailer's problem can be solved through diversification.

Perhaps in a textbook economy, yes; but in the U.S. economy that Massdrop operated in, continued sales of products hinged upon wages being available to spend on optional desires. That economics assumption has not held: most people’s inflation-adjusted pay decreased over Massdrop’s lifetime while the inflation-adjusted costs of necessary goods increased (thanks, enshittification and shrinkflation!), and so their potential customer pool would have been steadily draining throughout their operating years. The private equity model of ‘diversify to generate horizontal revenue’ only functions in a wages-dropping economy for retailers selling necessary goods, such as Walmart; for Massdrop, whose goods are exclusively non-essential, they had little chance to survive by increasing product diversity. (And effectively none whatsoever, considering how small their niche was to begin with!)

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