Absolutely, I agree. The time IS coming. However, before it can reach that point, 2 things have to be figured out to an even HIGHER degree than they already have been....
1. Inventory management as a means of developing pricing signals (or vice versa). Since this is my field, I recognize the value of this. It is an inexact science, and one that is hard to pin down. If you allow consumers to completely choose what they want, essentially they cherry pick and you wind up with diddly. There are certain reasons to limit choice. Under a controlled inventory management system, you can pricing to drive decision making and decision making to drive pricing. It is virtually impossible to do it if you don't have a handle on what people are going to ask for next....
2. Lean production. I'm not as astute on the hows/whys/wherefores of this style, but I know that inventory management plays a major role in it. Essentially, a purely consumer-driven method means you have to have your lean production skills honed to the nth degree. That makes point #1 even more important, so that you can maintain some margin of profitability.
OTOH, I have (and continue to maintain) that the Internet is the harbinger of virtually PURE Capitalism in this sense:
basic economics dictates that the best way to maximize revenue is to push prices to the point at which marginal price is equal to average price...
Essentially, that means there are razor-thin margins to be had in a purely competitive environment. You can see this at most major retail environments. Supermarkets, KMarts, bookstores (the reason why I believe Amazon will eventually be overcome by B&N) ALL operate on razor-thin margins. It is a tough way to do business, but if you're good at it, you can survive.
The Internet is basically going to make everything a commodity. So, to survive and be successful, you better have your eye on the ball. That means knowing points 1 and 2 COLD. |
