For a while I was studying the business models of Costco and Apple pretty intensely. The question I started with was simple: how do they get prices from suppliers that nobody else can get?
The standard answer is scale. Big order volumes, strong bargaining power. That’s true, but it only describes the surface. What I found more interesting was a layer beneath that: these companies offer their suppliers something extremely scarce, a high-credibility future.
They have brands, distribution networks, loyal customer bases, and relatively predictable demand curves. So they can place orders earlier, forecast volumes more accurately, default less often, and change plans less frequently.
For suppliers, this matters enormously. Think about what a supplier fears most. You build a production line, stock a warehouse, and then your buyer says they don’t need it anymore. Or they take a third of what they promised. The leftover inventory, the idle capacity, the loans you took out to prepare — that’s all your problem now. A buyer who orders steadily, pays on time, and gives you forecasts you can trust is basically turning down the noise across your entire operation.
Suppliers give these buyers better prices partly because they’re big. But there’s a subtler reason too: the buyer is providing a kind of insurance. Not a formal policy, but something that works like one. It means you don’t have to spend every day worrying about tomorrow’s orders.
Put differently, Costco and Apple are trading their own certainty for other people’s concessions.
Once this clicked, I started seeing the same logic far beyond supply chains.
Take employment.
We usually say companies pay wages and employees provide labor. That’s correct, but it misses the most interesting part. A more honest description: the company takes on the uncertainty so the employee doesn’t have to. Say a major client cuts their orders in half this month. The company’s revenue drops 30%. But the number in the employee’s bank account at the end of the month stays the same. That difference is invisible most of the time, but it’s worth a lot of money.
An independent worker facing the market directly could, in theory, earn more. But they’d have to absorb all the uncertainty themselves: finding clients, negotiating rates, delivering work, chasing payments, surviving dry spells, building trust from scratch, eating bad debts. Skill is just one piece of that, and often not the hardest one.
What a company does is take all those transaction costs, fluctuations, and risks that would otherwise land on individuals, and absorb them centrally. In exchange, it gives you a relatively stable salary. You don’t have to reprove your market value every month. The company has already settled that question for you.
Flip the perspective and it gets interesting.
On the surface, the company is buying labor. But looked at from the other side, the employee is also buying stability from the company. A salary isn’t just compensation for work. It’s a risk-adjusted number. The income an employee takes home is the version where the market’s wild swings have already been flattened out.
Company profits can be reframed through this lens too. Management skill, technical advantages, economies of scale — those all count. But underneath, the company is also doing something that rarely gets named: turning uncertainty into certainty, and getting paid for it.
There’s another layer here that often gets missed.
Markets don’t usually buy “skills” directly. Markets buy solved problems. What a client actually wants is a product shipped on time, a project that goes smoothly, a system that keeps running, and someone to call when things break. Nobody buys “a person who can write code.” They buy “this feature goes live next week.”
Between a skill and that kind of result, there’s a lot of stuff in between: client acquisition, trust, brand credibility, pricing, contracts, coordination, management, support, cash flow. Individual workers rarely lack skill. What they often lack is everything needed to turn that skill into something the market will pay for.
The company is that everything. It sells results to the market and stability to employees. Profit tends to show up in the space between those two.
This also explains why the gap between high earners and low earners often has less to do with ability than you’d think. Having a skill doesn’t mean you have a market. Being able to create value doesn’t mean you can turn it into money. What’s missing in between? Client relationships, brand trust, distribution, payment infrastructure. Whoever controls those gets to decide how the money gets split.
But stability has a cost.
Stay at a big company long enough and you’ll quietly hand over certain capabilities. Finding clients becomes the sales team’s job. Pricing is set by your boss. Whether people trust you depends on your company’s name, not yours. Your professional skills might keep growing, but your direct connection to the market is getting weaker year by year.
This works like muscle. Abilities you don’t use will atrophy. People leaving big companies often say “I feel like I know everything and nothing at the same time.” The problem is usually not their expertise. It’s that they haven’t independently walked the full chain from skill to revenue in years. Every step between finding a client and collecting payment — they’ve never done it alone.
Stability is a painkiller. At the right dose, it lets you focus on the work that matters. Take it too long and your tolerance for volatility drops. Eventually you might find yourself unable to leave the place providing the stability, even though you’re perfectly capable of making it on your own.
The most subtle thing about the stability business is this: the seller is helping you while also, often without meaning to, making you more dependent. It’s not usually deliberate. But it happens.
With all this in mind, freelancing and entrepreneurship start to look different.
When people start taking independent contracts, consulting, or building a personal brand, their income structure shifts dramatically. Not because they suddenly got better at their craft, but because they’re taking back things that used to be in the company’s hands: client acquisition, pricing, credibility, distribution, repeat business. And along with those, they’re also taking back all the volatility the company used to absorb for them.
The “freedom” in freelancing is largely what you get after returning stability in exchange for pricing power. You give back the smoothed cash flow and get raw, volatile market income instead. You reclaim the right to set your own price, but you also reclaim the dry spells, the bad debts, the acquisition anxiety, and all the noise a company used to handle for you.
The most successful independents tend to end up in the same place eventually: building a personal brand, accumulating repeat clients, constructing some degree of predictable revenue. They’re manufacturing stability again. Only this time, the manufacturer and the consumer are the same person.
So the whole thing compresses into one line:
The most powerful players in business tend to be those who can turn other people’s uncertainty into certainty, and sell it back to them.
Costco and Apple do this with suppliers. Companies do this with employees. Same thing.
Maybe that’s why “stability” looks like such a gentle thing but carries such commanding power. Once you’re in the middle of volatility, you’ll instinctively give up a lot for stability: margin, time, optionality, even some of your freedom.
Stability is never a free benefit. It is manufactured, and therefore it is always priced.
Whoever can manufacture it holds the upper hand. Whoever desperately needs it will pay.