One of the more sad to accept myths of this thing is that ecommerce was the answer to something when it came to opening up markets for our crafts and indigenous methods. The simple argument goes, “There is this whole world out there of people that would buy our products if only they knew about them and it could reasonably get to them. Ecommerce ‘flattens the world’ and so let’s fund and build marketplaces”
Almost every assertion of that statement is now widely agreed to be wrong
First, the world of people that would buy our products is just not that big. And it is very competitive. There is an extreme lack of a “why”. At best, there is some value in the specificity of a thing that you already know you want however the same specificity can alienate larger groups of consumers who just don’t know enough and live in perpetual fear of appropriation or cringe.
<ask people if there’s a better way to think about this>
Second, it can’t actually reasonably get to them. On average, logistics doubles the price of buying a thing…we simply have not reached the critical mass to get shippers to bring their price down. (I’m looking for someone that can explain this dynamic to me because presumably every market faces this cold start issue). Also, if you’re lucky - it will take a few days. And if you’re luckier, it will come to your door without you having to do an extra set of random things that you dont understand - sign a thing, pay an additional fee etc
Third, the world is not so flat. People want to touch an item - especially when they don’t know it. A buyer wants to feel the vibe of a maker - especially when they don’t know them. These initial interactions are hard to convert to an online experience. Even in the most information complete environments - we’re like 20% of flatness - the majority is and will continue to be more dynamic terrain
<wholesale buyer experience, retail buyer experience, from the people>
Lastly, let’s fund and build marketplaces isn’t the move. From a fair amount of experience - the only lifeblood of a marketplace is just velocity of matches. Based on the above, it will take a lot longer than any venture funder or impact funder has the patience for to really seed that velocity. It’s a proper chicken, egg, midwife situation. There just isn’t enough meat on the proverbial bone. Suppliers don’t have the consistency of orders to be consistent producers let alone the time to manage customers and the logistics…buyers don’t have the patience. It’s a hard one to settle especially as a non managed marketplace.
So we need a new story. Here are some areas/principles that i think are worth exploring:
- Build for less. Hopefully, AI and no-code tools like shopify etc make it much less expensive to try stuff out. This should not be impact or venture funded honestly. It’s a waste of money and builds bad habits.
- Actually, generally do less. Invest in much smaller SKUs that can have a more predictable performance and justify more appropriate funding (like credit). What are the real hero products?
- Joint warehousing / Dead stock. Warehouse somewhere else that makes more sense. Get everything there by a certain time and drop them like drops.
- Hide the cost of delivery. Never let a customer see that thing where the price keeps increasing. It looks crazy