👉 Background: Temple & Webster is a Sydney-based furniture retailer that popped up nearly 11 years ago. It had rocky beginnings, but saw its share price soar during COVID.

👉 What happened: Now, Temple & Webster is investing $10 million into establishing The Build - an online store selling home improvement products like ceiling fans, light fixtures... you name it.

👉 What else: Sounds a lot like Bunnings 🤔. But we know the late Masters tried to enter Bunnings' territory and failed because of the high barriers to entry. Will it be the same for T&W?

🔔 What's the key learning?

💡 Barriers to entry are the costs and other obstacles that prevent new competitors from easily entering a market, or a new area of business.

💡 It could be regulatory hurdles like in the banking space, or set-up costs like in the mining space. The higher the barriers to entry, the better it is for established businesses in the space, because it means they can prevent new companies from taking market share.

💡 We saw this happen when Masters tried to compete against Bunnings, only to shut down after a few years. It was a big yikes, but Temple & Webster won't have to fork out the same costs for in-store labour and set-up... so let's wait and see 👀.