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In the long run, you can a) control the production of the good (or service) b) control the interface to the consumer Everything else are middlemen and will d

by benevol 11y ago

In the long run, you can a) control the production of the good (or service) b) control the interface to the consumer Everything else are middlemen and will disappear. These guys' suppliers do a) and Amazon does b). These guys are simple middlemen who add no real/critical value and will be crushed by Amazon. Just a matter of time.

tyingq 11y ago
In the real world, though, opportunities arise that neither "a" nor "b" take advantage of. One of them is noted in the article...grey area product sources. If "b" isn't taking the time to find distressed inventory, there's an opportunity for a middleman to do so, and undercut "b". There's also some value added where the middleman has expertise or something to offer that neither 'a' nor 'b' has. That could be better marketing (product photos, how-to videos), or better support (more lenient return policy, deeper technical support, etc), bundling multiple products together, niche sales, or something else. Generally, successful middlemen find something missing between "a" and "b" and fill the gap. Is it a war of escalation, where either "a" or "b" can react? Sure...but typically middlemen can move faster. Or, in short, they exist for a reason, and I don't see that the internet age changed anything about that other than pace of change.
deleted 11y ago
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jamesfe 11y ago
In a perfect world, yes, the producer controls the amount created and the specified price of the product, but the article mentions that producers sometimes sell to one market for more than another. If the delta between these two costs is large enough, these "simple middlemen with no value" step in and earn some money. I don't see any reason for Amazon to crush them - Amazon is getting a cut of their profits and they effectively outsource all liability to another company. I also don't think they're simple. They've identified a constant in our world - inequality in either income or product, and they're exploiting it for the (arguable) benefit of the consumer. What they're doing takes experience and connections (to the logistics & supply chain) and it takes intelligence and engineering (to predict supply/demand and price appropriately). Do I think these guys are inventing a world-changing technology? No, but let's not underestimate - they are far from simple and they will likely never go away.
thaumasiotes 11y ago
> you can > a) control the production of the good (or service) > b) control the interface to the consumer > Everything else are middlemen and will disappear You know, (b) is a middleman too.

by benevol 11y ago

tyingq 11y ago

In the real world, though, opportunities arise that neither "a" nor "b" take advantage of. One of them is noted in the article...grey area product sources. If "b" isn't taking the time to find distressed inventory, there's an opportunity for a middleman to do so, and undercut "b". There's also some value added where the middleman has expertise or something to offer that neither 'a' nor 'b' has. That could be better marketing (product photos, how-to videos), or better support (more lenient return policy, deeper technical support, etc), bundling multiple products together, niche sales, or something else. Generally, successful middlemen find something missing between "a" and "b" and fill the gap. Is it a war of escalation, where either "a" or "b" can react? Sure...but typically middlemen can move faster. Or, in short, they exist for a reason, and I don't see that the internet age changed anything about that other than pace of change.

deleted 11y ago

[deleted]

jamesfe 11y ago

In a perfect world, yes, the producer controls the amount created and the specified price of the product, but the article mentions that producers sometimes sell to one market for more than another. If the delta between these two costs is large enough, these "simple middlemen with no value" step in and earn some money. I don't see any reason for Amazon to crush them - Amazon is getting a cut of their profits and they effectively outsource all liability to another company. I also don't think they're simple. They've identified a constant in our world - inequality in either income or product, and they're exploiting it for the (arguable) benefit of the consumer. What they're doing takes experience and connections (to the logistics & supply chain) and it takes intelligence and engineering (to predict supply/demand and price appropriately). Do I think these guys are inventing a world-changing technology? No, but let's not underestimate - they are far from simple and they will likely never go away.

thaumasiotes 11y ago

> you can > a) control the production of the good (or service) > b) control the interface to the consumer > Everything else are middlemen and will disappear You know, (b) is a middleman too.