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A View From Under the Long Tail
An anonymous reader writes "Here's a funny article by James Boyle in the Financial Times on what it really feels like to be part of the long tail economy." From the article: "Where Amazon's normal customer service seems to be run by suspiciously cheerful MBAs from Stanford, who break off from counting their stock options to write apologies and deliver refunds, 'Amazon Advantage', the ironically named system for selling wares, is clearly based on the last days of the Soviet system. The problem with their representatives is not that their native language is not English, it is that their native planet is not Earth."
Fund/find an alternative, and you will see Amazon fix itself. Until that happens, bend over and grab your ankles.
Video for Online Dating Profiles
Fund/find an alternative, and you will see Amazon fix itself.
A major point of the article is that this is not possible because of the network effect - people who want to buy a book online go to Amazon, because Amazon has all the books and "just works".
As the article puts it:
As an academic, I am very interested in network effects - the curious economic features of networks, which increase in value as they increase in size. Does this mean that customers will be "locked in" to the system that achieves ubiquity? (...) Does this threaten the efficiency that the networked economy was supposed to provide? As a vendor, I fume and rant, but am unable to convince myself that we can shift distributors: will the people who want our books trust an unfamiliar name?
Looks great at first, then you realize they've changed one middleman for a different, 'internet based' one. The only folks who come out ahead on this deal are UPS, FEDEX, and USPS.
To put a witty saying into 120 characters, jst rmv ll th vwls.
Competitors to Microsoft exist: Apple, Linux
Competitors to Yahoo exist: Google, etc.
Competitors to MySpace exist: Facebook, etc.
Competitors to YouTube exist: Revver, Vobbo.
The network makes it difficult, but nobody's ever given up because something was difficult. There are always options, and yes - there can be significant barriers to entry, but it's never "impossible".
Video for Online Dating Profiles
I sell software online. Selling software at Best Buy gets you, perhaps, 40% of every sale, and they won't even think of doing it at the number of units I sell. Unless its to guffaw. Shelf space is limited and projects have to be made on the scales of minor nation states.
On the Internet, startup costs are negligible (I had capital investment of $60), and if you've got an aggregator which has a nation-state scale worth of eyeballs (*cough* Google *cough*) then you can pay them a weeee bit of money to send a sliver of those eyeballs over to you. Transactional costs amount to almost nothing: Paypal takes 4% of every sale. If you count the cost of AdWords, that comes out to 20%, but thats still a third of the traditional retail channel and AdWords scales *down* where retail only scales *up*. You might not think there is that much of a market for a one-screen application that makes reading bingo cards for teachers (www.bingocardcreator.com), but way-down-the-tail made $600 gross, $450 net. Not too terrible for an app which took a man-week to write and, literally, 20 minutes of work in September ("Lost your registration key? No problem, have a new one." "No, thank YOU, Ethel." multiplied by handful of emails).
The other beneficiaries besides me? Google (Adwords), Paypal, and Uncle Sam. They'll get $90, $30, and $lots respectively as a result of September, all for doing zero marginal work: they just let the computer systems/country they established continue to operate, and they get more money.
Help poke pirates in the eyepatch, arr.
This is a side issue, but I hear a lot of economics BS out there and every time I hear it I get pissed off.
... we have TOO MUCH FREAKING DEBT ... and our payment obligations are not going to go down even when pay and profit margins do. Translation: the US is in deep shit. (they will probably have to hyperinflate to stop a systemic collapse)
First off, an efficient high tech economy means that the "business cycle" is going to be more drastic and harsh not magically soft land and smooth out like every body preaches now days. "soft landing?", It is absolutely insane for people to say that.
Second off, during the late 1800s the US economy experienced a period where efficient factory production drove down costs for every year for nearly half a century. This also had the effect of driving down pay and driving down profit margins, but it drove down costs faster than both - so people still did well. Now fast forward to 2006, and the US is going into the information age full blast, and hard drive farms that would cost over a million dollars yesterday, now cost a few hundred and can be held in your hand. In addition, overseas labor is driving down costs even more. But today there is one huge 'bigger than life' problem
Third off, having these huge amounts of debt and all these stock market bubbles and all these housing bubbles (today) is not a normal part of a free market economy. They happen specifically because investment is financed thru the banks, which is financed thru the Federal reserve, which is financed by nothing. I mean, when they need money to loan out - they print it up and loan it out. That means that over time, more and more money goes into circulation driving up prices, driving up debt, and driving out private savings. Hey lookie! The US has record high debt, record high housing prices, and record low savings. Hmmmmm.
Fourth off, if we used money like gold that couldn't be printed up out of thin air. That would naturally limit the amount of debt in the economy and force finances to come from savings instead of print-ups. That would kill bubbles, but more importantly put investment power back into the hands of private savers instead of central bankers and government.
In sum, the US economy is about to make a radical shift as the housing bubble violently pops and when it does the US will be in deep shit. This will happen because everything you have been taught about central banking and paper money is BS. Loaning out "modern" paper money (instead of real money like gold) leads to irrational allocation of resources that causes inflation, bubbles, too much debt, and puts investment power into the hands of inefficient central planners (bankers) instead of private individuals. Seriously, name one institution who ever thought they had too much money. At this point it is beond repair, so people would be very wise to collect guns, food storage, and gold like no tomorrow because all freaking satanic hell is about to break loose.
So, it's a free country - you can sit on your ass and blame it on The Man or start your own distribution system. As others in this thread point out, you can do this yourself. THAT's the point of the "long tail" argument: "Quit Whining and Do It Yourself Online.".
Amazon seems to have a two-tiered system that brings out the worst in the long tail principle: Flawless, reliable service for fairly common items - I have returned several shipments or gotten them late and I have never had trouble working things out, and because I live on the west coast I usually get stuff in three days or less. Then, a low budget operation outsourced to who knows where for the "long tail" stuff.
FedEx did the same thing when they acquired RPS and changed it to FedEx Ground. A top-shelf service with premium prices that picks up anywhere and delivers on time anywhere, and a shambling low-priced service for those of us not living in Central Business Districts (that's still cheaper and better than UPS though.)
Give a man a fish and you have fed him for today. Teach a man to fish, and he'll say "WHERE'S MY FISH, YOU IDIOT?"