In 1998, Drew Greenblatt bought Marlin Steel, a small manufacturing company “that specialized in a single product: wire bagel baskets, which bagel stores use to display their wares. Marlin had the market to itself.”
“Within five years of buying Marlin, Greenblatt was getting killed. Chinese factories suddenly started making bagel baskets. Marlin sold its baskets for $12 apiece and with 36 baskets to equip a typical bagel shop made $450 when a company added a location. Chinese factories were selling baskets for $6 each. Marlin’s customers were switching to save $200 a store. And Marlin would never be able to match its Chinese competitors on price. ‘My steel was costing me $7 a basket,’ says Greenblatt. ‘We were going to go extinct.’”