Wednesday, March 10, 2010

Girl Scout Cookies and Economic Moats.

When one thinks of economic moats, the Girl Scouts seldom come to mind. I think that their cookies should and here is why:

1) They utilize cute kids to sell their stuff: I have bought 6 boxes of cookies from my niece, not because I eat a ton of sweets (Girl Scout cookies probably make up 75% of my cookie purchases in a year), but because she is my niece and she knows that she can hit me up for stuff like that virtually anytime she wants; because, well, she is my niece...

Besides, other than maybe Gordon Gekko, who can say 'no' to a little girl that is trying to be a member of an organization that is pretty much universally respected?

2) They have created an artificial shortage: When can you buy Girl Scout cookies? That's right... once a year, and they sell about 200 million boxes a year doing so. That is a little under 1 box for every single adult in the country.

3) Everyone (even me) knows their favorite Girl Scout cookie. Generally, I have trouble naming my favorite, well, anything...

4) They are not much different that the stuff you could get elsewhere: I would be willing to bet that if you would do a blind taste test, putting Girl Scout cookies up against the equivalent Pepperidge Farm product, the Girl Scouts would loose.

5) Virtually no selling expenses: once produced and shipped to the local council, they are using what I would liken to free child labor to not only push, but also sell and personally deliver the product to consumers.

6) Advertising: Word of mouth, the best kind.

7) Names matter not: despite anger over calling some of the cookies 'Samoas' and the subsequent name change, sales are unblemished. Could other candies do that? Probably not.

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