How Did Home Depot Get Suppliers With No Sales Proof?
Ben Gilbert and David Rosenthal say Home Depot convinced manufacturers to supply a company that still had no proof it could sell in volume. The founders barely made a shoot-the-moon plan work by combining Pat Farrah's aggressiveness from HomeCo with Bernie Marcus and Arthur Blank's operations and finance skill, and by selling a dream.
They had $2 million and a scrappy team, yet the model needed a flood of customers on day one and deals from suppliers who had seen no volume. In Built From Scratch, the founders describe having to be psychologists, lovers, romancers, and con artists to get suppliers aboard. On paper they could not compete with Handy City or Handy Dan, and they lacked the buying power of established competitors. They told vendors to help now because down the road the chain would have 50 stores and eventually be the biggest in the industry. They appealed to greed, to enthusiasm for new concepts, and to the need to get products exposed.
Selling the future holds when the future comes true. In the American enterprise system, failure means bankruptcy, then joining the next thing, as Pat Farrah did.
