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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."
The article, which was written by a guy, whose name is James, who shares the first name of a President, who helped create the constituion, which was written a long time ago, which is quite as old as when Communism was envisioned, which we can blame the Greeks for, which make great olive oil, which comes in extra virgin, which covers the majority of the slashdot crowd. . . .
Oh wait, what was I talking about again?
Your hair look like poop, Bob! - Wanker.
I have no idea why people insist on using confusing examples for the Long Tail concept. THIS is the Long Tail. Brand new games created for a system that's 30 years old, with a very specialized fan base. In a traditional market, you would NEVER be able to make money off of this. But in an Internet-enabled environment, you can theoretically reach every member of this esoteric market in every region in the world, with a very small advertising budget.
The only reason why Amazon keeps coming up is that they collectively sell lots of esoteria, thus managing to hit a farther end in the population dropoff (i.e. the longest part of the tail) than a business like AtariAge could reasonably profit from.
Javascript + Nintendo DSi = DSiCade
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.
"find an alternative, and you will see Amazon fix itself." too true. I have had very poor service from Amazon when I have used it as a (customer in the UK.) First I bought a usb thumb drive which arrived late because the vendor claimed "Amazon never passed on the order". Then I ordered a book on Python for my little geeklings (my children) who were showing interest in learning some programming. Strike while the iron is hot I thought. However this thought was not shared by Amazon. After a month I received an email saying that the book would be delayed a further 6 to 8 weeks. So I cancelled and instead went to http://computermanuals.co.uk/ who managed to get me the book delivered to the Scottish highlands next day! Guess who I am using for my tech books now. found my alternative.
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.
Dear Amazon
Because of your piss-poor service I have not bought anything from you for two years. I use your website to find books and then go to my local English bookstore to place the order. DVDs are obtained in a similar way by browsing your site and then walking round the corner to my local video rental shop. I am sure that I am not the only person who does this.
Ed Almos
Budapest, Hungary
The more corrupt the state, the more numerous the laws. - Tacitus, 56-120 A.D.
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.
There is a house in Steatham on the A11 in the UK that does its own ebaying - whenever I drive past they have a range of goods sitting by the side of the road with hand drawn price boards.
The road transport system = the new ebay. People could club together to sell things and you could call them -- Oh I don't know -- Markets or Shops....
Amazon's service is quite overrated actually. It usually works fine, and if there is a problem they usually fix it, but there are times when talking to amazon's rep is like talking to a wall.
An example: For large orders, Amazons usually splits the items in several boxes - at no cost for the customer. This is usually fine, except for the fact that each box lists the contents of the whole order.
If you are overseas, this means that you will have to pay taxes for the value of the whole order for each box.
Last time my order was split in 3 boxes. I have to pay 16% VAT, so the net result is that I had to pay 48%.
Add to this that UPS has a policy of dealing with customs without talking to the customer first - they pay the taxes (VAT, custom fees, etc), and then you pay them upon delivery. So talking to the customs officials is not an option, since by the time you know about this the boxes are already out for the delivery. Refusing to pay taxes is not an option, since UPS will not deliver. You can't tell UPS to return everything to Amazon, since they paid for the taxes and will keep the stuff hostage.
In the end, I had to pay triple taxes. And still, Amazon refuses to acknoledge that the problem is that they don't write the actual contents of each box in the sleave.
I sell my CGI books through Amazon, and I've been quite happy with the Advantage program. They clearly use an automated system to determine how many books to order. If demand is constant, orders are (usually) constant too. When they place a small order (for 2 books, say), I just send it via media mail to save on shipping. Larger orders go by UPS. It's worked out well for me.
Of course, after having gone through the hassle of working with "regular" distributors, Amazon's been a dream. They order consistently, they pay a month after the sales are made, and they never return anything! Compare that to Ingram, who would order WAY too many books, return half of them (most of them damaged), and take forever to pay. No thanks, I'll take Amazon any time.
nobody's ever given up because something was difficult.
This statement sounded suspicious to me, so I tried to think up a counter-example, but after twenty minutes I quit because it was too hard. I guess you were right!
I'd rather be lucky than good.