Sunday, January 19, 2014

Smart Shopper

I have some interest in internet marketing and I have recently run across a few businesses that make a profit from being a middle man. Now of course this is nothing new, the broker is a standard part of the business world.

But to my eyes, it seems a bit strange and bizarre. For instance, one business that was started by a Titanium seller on EBay exploits the price differential between Ebay and Amazon. Things are often cheaper on Amazon and all that someone does with this business model is cut and paste merchandise from Amazon to Ebay.

When something sells on Ebay, they simply fulfill the order by ordering it from Amazon and make their profit from the differential in prices. Apparently this can be a very profitable business. If you don't quite get it, you might do a bit of research yourself and you will easily discover this price differential.

This begs the question, why doesn't the Ebay buyer go to Amazon himself? Good question, and I don't know the whole answer. It may just be habit, laziness, or whatever. Some people hate to shop so when they find an item that they need at what seems like a reasonable price, they just buy it. Perhaps they consider shopping a waste of time. But this is exactly what keeps these guys in business.

In another model, they have developed some software that finds people with a certain skill on Fiver. Fiver is the website where people will do services for $5. They use the example of someone who needs a logo for their business. You can easily find someone on Fiver who will design you a logo for $5.

Then all you do is go to craigslist, using another software program and have it look for someone who needs a logo done. You negotiate to do it for say $100 and once you have made the deal you have your Fiver guy do the job. You just made $95. This is not a far fetched example.

So the question is again, why didn't the guy who needed the logo done just go to Fiver himself? Obviously he didn't know about that option. So the middle man exploits his ignorance and makes a profit. Or perhaps you think of it as providing a valuable service. I guess its all a matter of your perspective.

This is why I won't ever make a good hard core capitalist. To me this just smacks of people taking advantage of one another. I like what I am doing now, being the truth teller. And encouraging people to be smarter shoppers. One would think in these difficult times that more of this is happening. And it probably is.

In the meantime, I need to find a better way to monetize my truth telling :) I got expenses too, ya know :)