UKNM: Internet Economics Empowers Consumer, Curbs Prices

[Steve Mynott]

found this in the depths of my mailbox


basically he thinks the net will decrease the marketing/sales role

in society


unfortunately the yahoo link is dead


----- Forwarded message from Dan Clemmensen <

DanClemmensen [dot] ShireNet [dot] com

> -----


From:

DanClemmensen [dot] ShireNet [dot] com

 (Dan Clemmensen)

Date: Tue, 07 Jul 1998 09:00:22 -0400

Subject: Internet Economics Empowers Consumer, Curbs Prices


A reuters news item on Yahoo at:



http://dailynews.yahoo.com/headlines/technology/story.html?s=z/reuters/980706/tech/stories/economics_1.html


Notes that the internet is dramatically increasing the "efficiency" of the

market for many products. Basically, since anybody can now easily find the

current advertized prices, It's very hard for a merchant to charge too much.

According to the article, this is occuring mostly in the US and mostly so far

in business-to-business situations. While acceptance is slow as measured in

internet time, it's very fast as measured in normal time. The article

mentions several possible effects, but I'll make some predictions of my own here.


Basically, we're looking at an increase in market efficiency. This is an

technical economic term that relates to the ease of acquisition of information

and the cost of a transaction (and which I am probably abusing through ignorance.)

Such an increase tends to favor the buyer in the short term, and favors the

more efficient producers over the less efficient producers in the long term.

This ultimately drives down the cost of goods.


I perceive a second effect. The cost of sales should also go down. Basically,

each sales and marketing person should sell more. Essentially, the internet

and the associated host computers are automating much of the sales/marketing

job on the seller's side and much of the purchasing department's job on the

buyers side. In addition, the fact that the transaction is electronic also

minimizes the financial paperwork for buyer, seller, and within the banking

system. Basically, This automates much of the buying, selling, and accounting.


The moral of this story? Just as the PC automated most secretaries and many

middle managers out of existence over the last ten years, internet commerce

will automate many sales, marketing, purchasing, and accounting jobs out of

existence over the next few years. The percentage of administrative personnel

within a company will continue to fall.




----- End forwarded message -----

 

1024/D9C69DF9 steve mynott

stevetightrope [dot] demon [dot] co [dot] uk

 http://www.pineal.com/ 

    imagination is more important than knowledge. -- albert einstein


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