Parler just lost its data processing capabilities from Amazon, which raises the question of how dependent a company should be on a single service provider, vendor or customer
Parler just lost its data processing capabilities from Amazon Web Services, after Apple and Google had removed the app from their online stores. Beyond the political drama and antitrust allegations, this raises the question of how dependent a company should be on a single service provider, vendor or customer. A manufacturer may become dependent on a large wholesaler or retailer. A restaurant may become dependent on one food supplier. A condo owner may become dependent on a platform such as Airbnb. Relationships with suppliers of products or services can help businesses, especially those growing rapidly. Every relationship has risks, however, and an assessment of these risks is critical to business survival. The same is true of a wide range of business partners. Finding a new janitorial service for your building may be easy. Finding a company that can take over responsibility for a wide range of building services, in a wide geographic range, may be more difficult. As a company outsources more and more functions, it loses internal knowledge of the activities, making it harder to switch service providers. Walmart’s suppliers sometimes lament their relationship with the retail behemoth. Walmart can drive a huge volume, but it also demands low prices from its vendors. After landing a Walmart account, a manufacturer often becomes dependent on the company. It may find itself making hardly any profit despite a large volume of sales—and no easy way to broaden its market to other stores.
