The politically correct view is that companies make money if they deliver great products, price their products competitively, take good care of customers, respond to market needs, bla bla bla. The slightly cynical view is that companies make money by:
1. Screwing their customers.
2. Screwing their employees.
3. Screwing their suppliers.
Let's prove this using as an example GoDaddy, a domain name registration and hosting company. Godaddy are a fantastic company which I personally am a customer of. They have great products, which are priced competitively.
Screw Your Customers
GoDaddy don't take your money and run. If you pay for a domain name, it will be registered, and you can use it. But they do engage in pretty devious tactics to try and trick you into spending a lot more than you planned for.
The domain names are dirt cheap, which draws customers to the site. But most non-expert customers end up paying for way more than the domain name, because GoDaddy hits you with all kinds of offers on the way to the checkout page. Not just one offer, not just two, but HALF A DOZEN.
For example, the default registration period is two years - you have to manually reset it to just one year. Then there is the domain name privacy thing. This is totally useless (because your name and address are in hundreds of databases anyway) but the verbiage on the site scares ignorant people into going for it.
This is all perfectly legal. But would you use such tactics when selling something to your own, say, sister? Well perhaps Bob Parsons (the Founder and CEO of GoDaddy) would.
Screw Your Employees
I'm sure GoDaddy employees are well-paid. I doubt they have to endure sweat-shop conditions. But are they being screwed?
Well, it depends how you look at it. In the IT sector, it is common for large companies to make an IPO, and for the employees with stock options to become millionaires overnight. GoDaddy was planning an IPO, which no doubt encouraged a lot of people to join the company and/or work their butts off.
But the IPO got cancelled at the last minute, as explained in this blog post by the CEO. Was Bob intentionally screwing his employees? Or does he mean what he says? You be the judge.
Screw Your Suppliers
Screwing your suppliers is perhaps the most widespread business tactic of them all. Just about every company does this. I don't know exactly what GoDaddy do, but almost all profitable companies squeeze their suppliers hard.
Common tactics are forcing the supplier to deliver far more than promised. For example, the supplier may be forced to install equipment under the guise of "testing it to make sure it works." Old and tired equipment may be replaced just before the warranty expires - if the supplier doesn't concede, pending payments on other orders may be withheld.
Of course, if you push your suppliers too hard, they might quit and sue you. A delicate touch is required to make sure the suppliers aren't pushed over the edge entirely. Most big companies have elevated the business of screwing their suppliers to an art.
Conclusion
Many of the best and most admired companies screw their customers, employees, and suppliers. In the case of McDonalds or WalMart, their tactics are well documented. By showcasing GoDaddy, I think I have made a point that it happens in any sector, including the IT sector. In a future intel, I may discuss how Google are in league with GoDaddy, McDonalds and Walmart.
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Contributor's Note
Do you know how large companies are screwing their customers or employees? Add it to the comments. Thanks!
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