Billiam said:
The explosion in the ab/dl diaper market is only going to be good for us. The competition will drive prices down and the quality of the diapers up. The market for these products can't be huge though, so the market must be approaching saturation.
More competition doesn't necessary mean lower prices. As you stated saturation is saturation. Some of the biggest costs in products like these is in the overhead such as shipping and storage; not the product. These prices will not go down simply because there is more competition. Who has lowered their prices really? AwwSoCute has been around for a few years, ABU has been around for along time and recently changed hands. Snuggies has been out for over 9 months selling products. Who has dropped their prices simply because? The sales are basicly the same, same time price drops and even frequency with only a few exceptions.
Also another factor in the pricing is in how many you can manufacture and how frequently you can manufacture them. More competition can have a negative affect for both of these factors across the board if people purchase from everyone evenly thus actually raising the price of the products or causing one or two to go out of business.
A worse cases situation is that one company goes under and does a massive liquidation of product then disrupting the normal flow of products into the market from other companies which can cause others to have cash flow problems, again this is kind of a worse case, then either having to choose to go negative or bust depending on how long that null lasts. It could in theory cause a few companies to go under like a domino effect if it was 'just right'. While having a choice is almost always nice it does not automatically mean the prices will go down or the quality will go up or as a consumer things will be better just because; but it can absolutely.
The companies still have to make a profit and still have bills to pay. Each market and country wants their tax payments, shipping costs are constantly going up both to go international and direct to consumer. If people want "free shipping" it really just means that the price of the product is going up. If people didn't want, expect or demand 'free shipping' the costs could in some case drop by 20% instantly, though you would still be paying it in shipping it may be a bit more transparent. I have had many people say "shipping is too high" or that companies "rip people off in shipping", honestly shipping is just costly. Niche market companies are not Amazon and do not make profits of a $1,000,000 or more a year. Many can not expect, demand or even satisfy huge discounts from companies like FedEx, UPS and USPS. To get discounts, particularly big discounts, you have to spend big first, then keep spending big to keep any discounts you get. They can often times give you an ‘introductory rate’ for a few months but If sales slow or you do not meet a certain bracket one month or quarter you can see rates rise. In some cases saving a dollar or not an order can be someone's salary each month and that is a big deal.
Long story short, the market is getting saturated and it will be interesting to see who gets to stick around. Some brands have other revenues to fall back on while others do not. The ones who do not have other income sources are at the most risk clearly and these are the ones run by ABDL people, the ones in the community.
