A View From Under the Long Tail 123
An anonymous reader writes "Here's a funny article by James Boyle in the Financial Times on what it really feels like to be part of the long tail economy." From the article: "Where Amazon's normal customer service seems to be run by suspiciously cheerful MBAs from Stanford, who break off from counting their stock options to write apologies and deliver refunds, 'Amazon Advantage', the ironically named system for selling wares, is clearly based on the last days of the Soviet system. The problem with their representatives is not that their native language is not English, it is that their native planet is not Earth."
More about Amazon..... (Score:3, Interesting)
I've heard from more than one person of their frustrations in dealing with this program which has lead me to delay efforts to publish a couple of items through them...
Re:More about Amazon..... (Score:5, Interesting)
I have no idea why people insist on using confusing examples for the Long Tail concept. THIS [atariage.com] is the Long Tail. Brand new games created for a system that's 30 years old, with a very specialized fan base. In a traditional market, you would NEVER be able to make money off of this. But in an Internet-enabled environment, you can theoretically reach every member of this esoteric market in every region in the world, with a very small advertising budget.
The only reason why Amazon keeps coming up is that they collectively sell lots of esoteria, thus managing to hit a farther end in the population dropoff (i.e. the longest part of the tail) than a business like AtariAge could reasonably profit from.
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That is not the example Chris uses though. He sites the author who had been in the doldrums for years then, via Amazon's "readers who bought this book also bought X" is rediscovered. The agregation of lots of small sales is important but also the data mining
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A two-tiered system is NOT the "long tail" (Score:3, Insightful)
Amazon seems to have a two-tiered system that brings out the worst in the long tail principle: Flawless, reliable service for fairly common items - I have returned several shipments or gotten them late and I have never had trouble working things out
Life sucks, until there's real competition... (Score:3, Insightful)
Fund/find an alternative, and you will see Amazon fix itself. Until that happens, bend over and grab your ankles.
The network effect makes competition impossible (Score:5, Insightful)
Fund/find an alternative, and you will see Amazon fix itself.
A major point of the article is that this is not possible because of the network effect - people who want to buy a book online go to Amazon, because Amazon has all the books and "just works".
As the article puts it:
As an academic, I am very interested in network effects - the curious economic features of networks, which increase in value as they increase in size. Does this mean that customers will be "locked in" to the system that achieves ubiquity? (...) Does this threaten the efficiency that the networked economy was supposed to provide? As a vendor, I fume and rant, but am unable to convince myself that we can shift distributors: will the people who want our books trust an unfamiliar name?
The network effect makes competition DIFFICULT (Score:2, Insightful)
Competitors to Yahoo exist: Google [google.com], etc.
Competitors to MySpace exist: Facebook [facebook.com], etc.
Competitors to YouTube exist: Revver [revver.com], Vobbo [vobbo.com].
The network makes it difficult, but nobody's ever given up because something was difficult. There are always options, and yes - there can be significant barriers to entry, but it's never "impossible".
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Re:The network effect makes competition DIFFICULT (Score:5, Insightful)
The road transport system = the new ebay. People could club together to sell things and you could call them -- Oh I don't know -- Markets or Shops....
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Yes but this caters to a very niche market - those who leave the house to buy things
ZK
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The network makes it difficult
Difficult, for high levels of difficulty, approximates impossible.
And just because something is difficult rather than impossible doesn't somehow make it okay.
Unbalanced, uncompetitive markets are bad and it's a pity the legal system hasn't really learned to deal with them yet.
---
New game: Spot the lying astroturfer [wikipedia.org] on /.!
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Nonsense. I give up on things because they're difficult all the time!
Re:The network effect makes competition DIFFICULT (Score:5, Funny)
This statement sounded suspicious to me, so I tried to think up a counter-example, but after twenty minutes I quit because it was too hard. I guess you were right!
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Take a random web site that wants to sell a book. You don't know if that book will actually show up, or if they'll just take your money and vanish. You don't know them.
Enter Amazon. You know that if you buy something from Amazon, you'll get it. You have confidence in them. Of course they sometimes make mistakes. I remember when they sent me the wrong book, but it turs out it was an interesting book so I read it anyway. But you know th
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I've worked in publishing for 15 years. Producing the books has never been easier. Delivering the books to customers is now the hardest part. If you publish yourself, if you sell any at all (which is a whole other story) you end up with cartons of books in your garage and spend your days packing and posting and processing credit cards and cheques. Companies like Amazon earn their 55% by dealing with that. But Amazon, whi
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Okay, but this is a limited market. Most people want hard copy, especially for fiction and illustrated works.
Wow (Score:5, Funny)
Oh wait, what was I talking about again?
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A Tail of Too Shities! (Score:1, Funny)
it makes sense, sort of (Score:3, Interesting)
well, with any service, there are going to be different tiers depending on what sort of customer you are. Obviously, direct Amazon customers get the top-level customer service. However, it doesn't make economic sense for Amazon to provide that same-level service for customers of a low-volume third-party-vendor selling their goods on an Amazon storefront.
I'm not saying it's "right", I'm just saying it makes sense.
"their native language is not English" (Score:1, Informative)
Disintermediation? BAH! (Score:5, Insightful)
Makes more sense for virtual than physical (Score:4, Insightful)
On the Internet, startup costs are negligible (I had capital investment of $60), and if you've got an aggregator which has a nation-state scale worth of eyeballs (*cough* Google *cough*) then you can pay them a weeee bit of money to send a sliver of those eyeballs over to you. Transactional costs amount to almost nothing: Paypal takes 4% of every sale. If you count the cost of AdWords, that comes out to 20%, but thats still a third of the traditional retail channel and AdWords scales *down* where retail only scales *up*. You might not think there is that much of a market for a one-screen application that makes reading bingo cards for teachers (www.bingocardcreator.com), but way-down-the-tail made $600 gross, $450 net. Not too terrible for an app which took a man-week to write and, literally, 20 minutes of work in September ("Lost your registration key? No problem, have a new one." "No, thank YOU, Ethel." multiplied by handful of emails).
The other beneficiaries besides me? Google (Adwords), Paypal, and Uncle Sam. They'll get $90, $30, and $lots respectively as a result of September, all for doing zero marginal work: they just let the computer systems/country they established continue to operate, and they get more money.
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Uh... yeah. Not too terrible. You made $15 an hour.
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And quite likely had fun doing it, not to mention he got to work without an incompetent looking over his shoulder.
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Those extra (non-primary) jobs people take for extra income don't need to pay a lot to be worthwhile.
Plus, as another reader pointed out, he probably had fun doing it, he was motiviated for some reason (wanted it for himself or a friend), so it's just extra money in his pocket. Nothing wrong with that, and it's a fine example of how a niche market can be worthwhile.
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I believe that the point is that the ability to sell this rather specialized pr
That alternative isn't an option, actually (Score:2)
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Just *let them* continue to operate? Yeah, maintenance just happens on its own. When things wear out, they just get up and repair themselves.
Have you ever visited a "3rd world" country? Personally, I'm happy to pay my ta
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Google has to pay its bills and replace broken servers anyway. Uncle Sam has to maintain our first world glory anyway. Selling $600 worth of software over the uberweb didn't mean google had to install a new server farm, nor did a new canal have to be dug.
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But the new economy that he claims to be studying would have him publishing his content directly online, digitally. No dead trees or intermediaries required.
Maybe that's what he wants to do, maybe not. But he's c
Goanna (Score:2)
Discrimination! (Score:1)
Amazon - Please Read This (Score:5, Interesting)
Because of your piss-poor service I have not bought anything from you for two years. I use your website to find books and then go to my local English bookstore to place the order. DVDs are obtained in a similar way by browsing your site and then walking round the corner to my local video rental shop. I am sure that I am not the only person who does this.
Ed Almos
Budapest, Hungary
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Well perhaps you living in Hungary has something to do with it. In the US, I've never had a problem with their service. In fact, the one time I had to return an item, it was probably the best experience I've ever had returning something.
I'm the exact opposite of you. I go to the bookstore to browse for books and then order them online, especially for technical books. To each his own though.
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I received a scratched DVD, and they sent me a new copy even without asking for the return. While I doubt this would be the case if it was a more expensive DVD (it was below $20), it's still nice from them.
And I'm just on the other side of ol' Iron curtain, in Slovenia.
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In some circumstances, yes. There are all sorts of issues which come up when shipping internationally that don't arise for domestic customers, and in particular, returns are much more expensive (not to mention that shipping is slower, in either direction). I don't know the specifics of anyone's bad experience in Hungary, but before blaming Amazon I'd look at wheth
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And their supposed MBA support staff, yeah right!
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Secondly, here in the US at least, Amazon service is incredible-- and here's the catch-- ONCE YOU FIND THEIR PHONE NUMBER. (You can Google for the number.) They sent me a video game box that was missing the DVD inside. This wasn't Amazon's fault, as they're not the company packaging the game DVD inside of the box, but they gladly sent me out a replacement with the quickest shipping and gave me a pre-paid stamp t
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Because of your high prices I have not bought anything from you for two years. I use your bookstore to find books which are interesting, then go to Amazon.co.uk to place the order. DVDs are obtained in a similar way by browsing your DVD section, then walking back home to my computer. I am sure that I am not the only person who does this.
Furchin
London, England
PS: I think ultimately things balance out.
Economics ... setting the record straight (Score:3, Insightful)
First off, an efficient high tech economy means that the "business cycle" is going to be more drastic and harsh not magically soft land and smooth out like every body preaches now days. "soft landing?", It is absolutely insane for people to say that.
Second off, during the late 1800s the US economy experienced a period where efficient factory production drove down costs for every year for nearly half a century. This also had the effect of driving down pay and driving down profit margins, but it drove down costs faster than both - so people still did well. Now fast forward to 2006, and the US is going into the information age full blast, and hard drive farms that would cost over a million dollars yesterday, now cost a few hundred and can be held in your hand. In addition, overseas labor is driving down costs even more. But today there is one huge 'bigger than life' problem
Third off, having these huge amounts of debt and all these stock market bubbles and all these housing bubbles (today) is not a normal part of a free market economy. They happen specifically because investment is financed thru the banks, which is financed thru the Federal reserve, which is financed by nothing. I mean, when they need money to loan out - they print it up and loan it out. That means that over time, more and more money goes into circulation driving up prices, driving up debt, and driving out private savings. Hey lookie! The US has record high debt, record high housing prices, and record low savings. Hmmmmm.
Fourth off, if we used money like gold that couldn't be printed up out of thin air. That would naturally limit the amount of debt in the economy and force finances to come from savings instead of print-ups. That would kill bubbles, but more importantly put investment power back into the hands of private savers instead of central bankers and government.
In sum, the US economy is about to make a radical shift as the housing bubble violently pops and when it does the US will be in deep shit. This will happen because everything you have been taught about central banking and paper money is BS. Loaning out "modern" paper money (instead of real money like gold) leads to irrational allocation of resources that causes inflation, bubbles, too much debt, and puts investment power into the hands of inefficient central planners (bankers) instead of private individuals. Seriously, name one institution who ever thought they had too much money. At this point it is beond repair, so people would be very wise to collect guns, food storage, and gold like no tomorrow because all freaking satanic hell is about to break loose.
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Beware the man of one book.
Re:Economics ... setting the record straight (Score:4, Insightful)
The value of Gold is no more real than that of a promissory note. The important thing is scarcity, and paper money, if managed properly, can be just as scarce as any valuable commodity.
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If I'm not mistaken the price of gas measured in gold is lower than it's ever been.
Source: http://gold.unanimocracy.com/2006/05/15/i-bought-g as-for-89-cents-per-gallon-today/ [unanimocracy.com]
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Yes, theoretically fiat currency could be as scarce as gold and not be overproduced. But could you name even one fiat currency that isn't inflating and hasn't been inflating? I didn't think so. Why then would you propose that paper money and gold money is more or less equivalent when they clearly are not other than in theory?
It's not clear to me that lack of inflation is a good thing. One of the problems with a noninflating currency is that isolated communities (hmmm, maybe parts of society with low mo
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Hmmm, I don't buy their reasoning here, but we start by disagreeing on axiom sets. I don't think that's the problem here. For example, they claim that the purchasing power of money cannot be established. In a series of three transactions, one dollar is exchanged for a loaf of bread, half a kg of potatoes, and a kg of sugar. Then the claim is that an average value of a dollar cannot be established because the three goods aren't commensurable. But my take is that the acts of the transactions does make them co
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Macroscopic concepts like "velocity of money" are a lot like frequentist statistics. It's applied to an economy with a lot of similar actors like frequentist statistics is a collection of methods applied to a large sample of similar statistical events. Neither need be correct and they usually don't make sense when applied to a small sample or group of economic actors. Nor are these methods universally accepted. But they don't need to be always correct or accepted in order to be useful.
This characteristic
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The Yen was deflating fairly recently. It has since gone back to very modest inflation, which is a good thing because it means the Japanese economy is finally growing again.
Currencies can inflate or deflate based on a number of factors, and the ability of the government to print more money is only one of them.
Inflation isn't just a function of money supply, its a funciton of velocity - how quickly that money changes ha
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Did you not read my question? I'm not saying that fiat currency can't deflate or only inflate at a small pace over shorter periods of time. I'm saying that fiat currency will inflate at a much much higher rate than a gold currency.
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Thank you for inserting some sense into "economics by sociology majors".
Good point. I'm not an expert, but I believe it's s
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You mean like property tax?
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except I agree with argoff (142580) [slashdot.org] that
So I think the point is that you can trust the greed factor will cause it to be impossible for it to be "managed properly". Creating a system with a natural limit (essentially a limit outside of our control) causes the system to work correctly.
This is like saying that a command economy [wikipedia.org] can work if "managed properly"...and we
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I'm confused. My wife says our paper money is scarce and it's because of poor management. Does this mean we're getting rich?
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Now with gold there is that little issue that there is no alchemists working for the US government. With money, on the other hand... Let's just say that the government went to iraq what in itself is insane act from a sanity perspective. And now try to guess where the financial backing for that came from? You can look up the national debt amount per citizen in the internet. It will take a year or two for all of this money to come back into circulation, but when it will the terrorists will
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While I agree in principle with some of your points...
This also had the effect of driving down pay and driving down profit margins, but it drove down costs faster than both - so people still did well.
Correction here-those who owned the factories did very well. Do you know what life was like for a 19th century industrial worker? Here's a hint: The labor strife didn't arise because safe working conditions and decent pay made life as a factory worker a desirable one.
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By far, the most valuable asset that most people possess is their ability to work. This is how you get a loan for a house, the bank expects you to be able to work in the fut
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Wealth for whom? Most homes in the US are not owned outright by the 'owner', they are mortgaged. If the 'owner' of a house owes less money than it is worth, then the equity may be considered to be wealth. If the housing bubble bursts and the money value of a house is less than what the 'owner' owes on it, to whom is it considered to be wealth? As long as the 'owner' makes as much or more money
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The point of the example was that they house has value regardless of how much paper you can exchange for it at a given moment. It i
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I don't have a mortgage btw, can't afford one. I am pretty disappointed about missing out on
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So what, there is industry and business in a gold based system too. Half the industrial revolution happened on gold. This "lets print up money and create wealth" attitud
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None of the things I talked about would change in value if the dollar coll
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Most economic crashes resulted from excessive inventory buildups. The crash of 1873 is a classic example of this. In such a crash, firms forecast increasing demand for their goods and, consequently, ramp up production to meet this perceived demand. When the demand fails to appear, the firms (1) slash prices in the hope of unloading their inventories, (
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That is a wonderfull
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Excessive debt can occur in a gold-based or a paper-based currenc
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As soon as I read/hear a line like this - the author thereof goes automatically in the 'barking lunatic' bin, right beside the inventors of perpetual motion machines and magic braclets that increase your gas mileage by 10%.
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Really? I would have thought that regulation of a free market economy would arise from three concerns, in rough order:
1. fraud, including insider trading, etc.
2. excessive debt
3. market bubbles.
I think the two 'aberrations' from a free market economy you raise are two of the three most common charasterics of such an economy (along with
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The economy won't grow without debt.
The US economy is not perfect but it is not teetering toward disaster. Read the Economist if you want to see the world the way it really is.
And while housing prices might drop substantially, the term 'bubble' doesn't make much sense. Houses will never be worth zero. Having lots of people overextended on something is bad, but a house is a good th
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D. While student acknowledges that inflation is a monetary phenomena, he fails to understand that the federal reserve typically manipulates the money
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Customers don't always get great service. (Score:1)
Not so good service (Score:4, Informative)
An example: For large orders, Amazons usually splits the items in several boxes - at no cost for the customer. This is usually fine, except for the fact that each box lists the contents of the whole order.
If you are overseas, this means that you will have to pay taxes for the value of the whole order for each box.
Last time my order was split in 3 boxes. I have to pay 16% VAT, so the net result is that I had to pay 48%.
Add to this that UPS has a policy of dealing with customs without talking to the customer first - they pay the taxes (VAT, custom fees, etc), and then you pay them upon delivery. So talking to the customs officials is not an option, since by the time you know about this the boxes are already out for the delivery. Refusing to pay taxes is not an option, since UPS will not deliver. You can't tell UPS to return everything to Amazon, since they paid for the taxes and will keep the stuff hostage.
In the end, I had to pay triple taxes. And still, Amazon refuses to acknoledge that the problem is that they don't write the actual contents of each box in the sleave.
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The VAT system also sounds like it's designed to fail in a way that's more expensive for
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Just an Advantage thing (Score:3, Interesting)
A small press is pretty much guaranteed to lose money on Advantage, 'cuz you have to pay for shipping, etc. yourself to Amazon, then give the standard 55% discount, and there's no way of predicting needed quantities.
What most indies do (admittedly, not Duke law professors), is say "screw it" to the Advantage program and sell themselves through marketplace.
In my lifetime I've met one person who was happy with Advantage, but he was a famous man [barricadebooks.com] who has since died...
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Of course, after having gone through the hassle of working with "regular" distributors, Amazon's been a dream. They order consistently,
Is that really a surpise? (Score:2)