If you want to make a lot of money in business, you need to corner the market on a product. Companies from Standard Oil to the Hunt brothers have tried this approach in the past, with regrettable results. The same business tragedy occurred when Kim Gardner tried to corner the market on Sweet Tarts.
Sweet Tarts arrived in our town in the early Sixties, when I was in junior high school. My friends and I gathered every morning before school at Tandy’s Market. None of us had much money, but when we found ourselves with a few extra coins, we’d make a visit to the store’s candy counter.
One day my buddy, Mac, came out of the store with a little pack of Sweet Tarts. We’d never seen them before, but we gave them a try and decided this was the best candy ever produced.
Within a week Sweet Tarts were all the rage at school. Kids searched for them like junkies looking for a hit of heroin. A pack cost ten cents in the local markets, but on the playground you could get a dime for a couple of tabs. One kid tried to trade his new Schwinn bike for three dime bags. Deals were struck on the playground during recess, and small packages of the product changed hands in the lunchroom. Fortunes were made and lost.
My friend Kim wasn’t much to look at. He was born with a big head that made him look like the bald scientist on the Muppet Show. But he had the mind of a true entrepreneur. Kim recognized a new business opportunity and made his move. One Saturday he rode his bike to all three stores in the area and bought up their entire supply of Sweet Tarts. By Monday there wasn’t a single Tart in the whole area that Kim didn’t control.
Proving the theory that scarcity leads to higher prices, the cost of Sweet Tarts at school went through the roof. If you needed a Sweet Tart, Kim was the man to see. If you didn’t want to pay his outrageous price, well, you could just go suck on a Tootsie Roll.
If you watch movies about mobsters selling drugs, you may notice that they always have plenty of big goons standing around supplying a little muscle to the operation. Kim forgot this vital business tool, and it led to his downfall. Big Dave, irritable from being tartless for two days, cornered Kim in the locker room. Big Dave possessed a brain and temperament ill-suited to sophisticated economic theory, but he had a keen understanding of market forces. He hoisted Kim onto the monkey bars by his jock strap and instituted a hostile takeover.
Kim lost his empire, but Big Dave fared no better, as his own appetite for his product quickly ate into his profits. He almost single-handedly liquidated his entire inventory in a fit of rampant consumerism.
The market soon returned to some level of sanity when Tandy’s Market ordered more Sweet Tarts, and we were eventually on to other fads. After high school, Kim became an expert in leveraged buyouts, and Big Dave went to prison. He’s out now, and available for hire if you need a little muscle to corner a market.