Nomad Economics and E-Commerce

My old friend Abe Burmeister was interviewed about the philosophy behind his company Outlier by Dan Gould for PSFK:

A few hundred years ago most products were sold directly from the maker to the user. If you wanted forks and knives you went to a silversmith. To get shoes you went to a shoemaker. The industrial revolution exploded all that, and gradually layer upon layer of wholesalers, distributors, buyers and salespeople have been added into the purchasing process. In the end you often find dozens of people separating the designers from the end users.

The internet has the potential to explode this game, but perhaps more importantly it also provides an economic incentive to. Most of those layers separating the designer from the user are layers that raise the price of the product and reduce the profit margins of the manufacturer. Gut out the layers of wholesalers and distributors and you wind up reducing the price of products and making more money at the same time. But to do this requires boldly throwing out the old business model. Of the established companies, Apple is close to the only large one confident enough to do it.

One of the craziest things about selling design on the internet is that there are no sales people. Not only can you eliminate layers of middlemen between the designer and the user, but you also eliminate the persuader at the end of the line. All of a sudden the product basically needs to sell itself, and anyone who knows how to google can turn themselves into an expert in hours. It’s a new environment and one in which the designer takes a much more important role in selling the product than they have in the past.

PSFK: The Internet Has Changed the Way We Make Products

This is an application of theory that Abe wrote about in his master’s thesis Nomad Economics. Abe’s very seldom updated blog Abstract Dynamics was one of the best blogs of the early to mid 00s and he’s still one of the most interesting people I follow on Twitter.

2 Comments

  1. All of a sudden the product basically needs to sell itself, and anyone who knows how to google can turn themselves into an expert in hours.

    Providing sellers do not deceive, or (worse) groups of sellers agree to deceive. Providing the item purchased can be understood by the reader, not being overly technical or legalistic or medical.

  2. Yes, I enjoy what Abe says about nomad economics. The funniest part of all this is pretty much everyone has skills and knowledge that other people would gladly pay for.

    It’s also funny that people don’t realize their own skills as valuable. Most of the time they go completely unnoticed. Because, hey, we’ve always been taught to get jobs and follow orders from someone else…

    With Command Z we’ve been able to get our products and services out to people who want and need them, without the need for other publishers or middle-men. Our affiliate program is direct, and everyone who takes part is hand-chosen from a selection of people who have real experience with the services and products.

    Cheers.

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