How to Boycott a Billionaire, Issue #3 - The Home Depot Billionaires Club

DIY your own boycott of this Billionaires Club

Why it is difficult to boycott the Home Depot Billionaires Club

This one is going to be tough.

First, boycotting Home Depot, particularly for an avid DIY-er like me, is challenging enough since they (and their only real competitor, Lowes) have been largely successful in driving out competition. In many places, there is basically no other place to buy hardware supplies.

Second (and related), because of Home Depot’s pseudo-monopolistic success, if you can find a non-big-box competitor in your area, they will have a tough time getting close to Home Depot on price or selection.

Third, since the death of billionaire co-founder Bernie Marcus, the Home Depot Billionaire Club has become a little less public. To be sure, there are still several Billionaires on the list that are propped up by Home Depot stock: Ken Langone, David Batchelder, and Atlanta Falcons owner Arthur Blank, to name a few. However, like many on the Boycott Billionaires List, to find other billionaires, you have to dig a little deeper. Many of Home Depot’s largest shareholders are what Wall Street calls Institution Investors.

These Institutional investors include Vanguard Investments and Blackrock Investments to name just two. Without getting too into the weeds (yet) these investment firms do list average, middle-class investors amongst their clients, however, many of their largest investors are in turn billionaires. This means that boycotting Home Depot (and just about every other big box retailer on this list) is going to affect a significant number of what I’ll term “Shadow Billionaires.”

Why is it important to boycott the Home Depot Billionaires Club?

It is important to boycott the Home Depot Billionaires Club for a variety of reasons.

First, when companies like Home Depot achieve pseudo-monopolist success the market ceases to work, that is why we have laws against monopolies.

A quick example: for simplicity’s sake, let’s say that a drill manufacturer makes 100,000 drills per year. And in a “perfect” market there are 50 retail customers. The market, through basic supply and demand economics, would find the “market” price for those drills. The retail customers would buy their share of those 100,000 drills at the “market” price and then sell them to their customers at a price that their business can sustain. The customer is able to choose from amongst those 50 businesses, which one provides the best price and service for their drill purchase. The market has worked correctly, the customer got a fair price for the drill, the retail business, got a profit that the market could sustain and the manufacturer got a fair market price for its product. Everybody in the drill purchasing arena wins.

Now, let’s take that same example, but instead of 50 retail customers, let’s say there are 3. These three include one, let’s call it Home Depot, which has a market share of 60%; another, Lowes, with a Market share of 38%, and another, we’ll call Local Hardware, with 2% (these numbers aren’t accurate, but they do illustrate the point).

Now, our drill maker is not negotiating prices with a market of 50 sellers. Instead, they are going to Home Depot and Lowes and begging for whatever price the pair deems appropriate (i.e., the price that profits them the most). Our little 2% share of the Local Hardware store has no bargaining power because they aren’t buying 98,000 drills; they are buying 2,000 drills. So predictably, our drill maker, who wants to make a few bucks after getting reamed by the pseudo-monopoly, charges Local more.

Local has to charge more to cover their added expense while Home Depot and Lowes can set whatever price they want collectively because in most markets they are the only two points of sale. So who wins?

The drill maker doesn’t win because he has almost no leverage with pricing. The customer doesn’t win because, with 98% market share consolidated in 2 companies, there is usually nowhere else to go, they pay the price that the pseudo-monopoly sets. The Local hardware store doesn’t win because since they can’t match the pseudo-monopoly on price, a squeezed customer base is forced to buy the cheaper drill from the pseudo-monopoly. The only winner is the pseudo-monopoly. They can bully both the manufacturer and the end customer so they can’t lose.

The second reason (I’ll keep this brief since my first reason was rather lengthy) that it’s important to boycott the Home Depot Billionaires Club is that being a pseudo-monopoly they have no incentive to care about anything that their customers care about; the environment, workers’ rights or local property concerns. The only concern of the HD Billionaires Club is making more money. Period.

How to start boycotting Home Depot

If you’ve read the prior pair of “How to Boycott Billionaires” issues you might recognize this starting point. Pick anywhere. Do you buy a lot of lumber? Find and support a local lumberyard. Do you need tools? Find either a local hardware store or go directly to the manufacturer. Do you need garden supplies? Go visit a local nursery. You don’t have to do all of this just pick one.

Will it be more expensive to buy from a local lumberyard, a local hardware store, or a local nursery? Maybe. In fact, probably. But if you identify a couple of products that you can find elsewhere without breaking the bank, start there.

As a bonus, you will find yourself saying things like: “I’m going to see my lumber guy. Or “I was talking to my plant guy.” Why? Because you will have a lumber guy and a plant guy. You will know the people you are giving your money to. And that is cool.

A few things to remember about Boycotting the Home Depot Billionaires Club (you might recognize these).

Don’t shame Home Depot shoppers. They aren’t the problem. Home Depot is. We shouldn’t harass or shame a person who just needs a toilet at 8:30 on a Friday and has nowhere else to go.

Start slowly, but start. Boycotting takes time and in that time life moves on. If you haven’t found a lumber guy yet and you need a 2x4 go buy a 2x4. And then find your lumber guy.

Remember, every dollar counts. In our “growth at all costs” economy we don’t have to eliminate a billionaire club’s profit to win, you just have to eliminate the profit growth. If you find a way to spend $80 at Home Depot instead of $100 that is a win.