Just to be pedantic for a change, 1 is not a prerequisite. At an extreme, a lot of people (including discount and chain stores) do very well out of what I am sure we would all agree are poor products. We could get into a lengthy debate about this around meaning of qualityt, fitness for purpose, creating markets etc. I do think your model is too simplistic.
Frankly, I would rather sell a product that is cheap and convenient for me to provide to one person for huge profit.
I have no idea what you mean by relevant other than by definition if they have bought from me they are relevant. By 2 and 3 are your refering to you supply chain processes and marketing segmentation et al?
Stuart