On Turnkey Vendors and Fat Margins

In 2013, I attended a small business networking event in Las Vegas. A major marketing and tech vendor footed the bill for the shindig. More specifically, that company offered website maintenance, hosting, support, SEO, newsletter management, and other number of turnkey services. Additional options included occasional blogging.

After the Vendor X's salespeople gave their spiel, I spoke with a number of clients at my table. Eventually, the conversation turned to price. The recurring fee astounded me. Some of these companies paid $3,500 to $5,000 per month for these services.

Huh?

I shook my head in disbelief. The restauranteurs, lawyers, and other small-biz owners in attendance certainly knew their trades, but they lacked anything resembling expertise in contemporary tech. Vendor X's websites were largely cookie-cutter. They provided basic e-commerce functionality—a tough ask in 1996, but not om 2013. Even premium hosting had become affordable by that point. I'd bet my life that the vendor's profit margins were more Apple than Amazon.

Pay these vendors' monthly fees if you like, but the game has changed.

Nice work if you can get it. At least it pays for complementary sandwiches.

The More Things Change ...

Fast-forward 13 years. Some turnkey outfits continue to make a killing off of their unsuspecting clients.

Case in point: I spoke with a friend of mine recently about this very subject. One vendor charged him $700 per month to do the following:

1. Publish AI-assisted blog posts.
2. Route them to his two WordPress sites.

I floored him when I mentioned that I could build a Notion-based tool for him that would save him at least $5,000 per year. In a way, not much has changed since my book The New Small dropped in 2010.

What Else Can I Automate?

A simple question driving much of my work these days led to some useful Notion additions.

Phil SimonPhil Simon

Simon Says: Open your mind.

Building bespoke systems used to be prohibitively difficult and expensive. For this reason, millions of small businesses overpaid for the very applications and services I just described. No doubt that many (even most) of these companies will continue doing so. Make no mistake, though: the game has changed. Thank the explosion of AI and no-code and low-code tools.

Pay these vendors' fees if you like. I can't stop you. I'm betting, though, that there's a much cheaper mousetrap out there for you if you open your mind.