A short YouTube segment (uploaded by Lori Harder) in which Jeff Fenster explains vertical integration using his business Everbowl as a concrete example: rather than buying acai from third-party importers, he created his own import company to source acai from Brazil, reducing cost, enabling price competitiveness, and protecting his business by solving a repeatable supply problem.
Vertical integration. It sounds very complex. It's not. Think about what are your repeatable business problems. So if you take Everbowl, because I know my business, I can explain it. I have to import acai from Brazil. Every time I want to sell an acai bowl, I have to get it from Brazil because that's the only place it comes from. So I can buy it from a third party supplier who's importing it already. I can acquire a company who's doing that, or I can start my own. I'm an entrepreneur, so I start my own import company. I go to Brazil, I source it myself, I bring it in, and I save money on the acai, which means I make more money selling bowls. Or I can lower my price and be very price competitive. But more importantly, I vertically integrated an important repeatable issue for my business. So I'm protecting my business.
