Tuesday, April 13, 2010

Reversing the market

I have this strange feeling that web has missed the trick on creating a different type of business model. I think probably it is appropriate to call this as “reversing the market”.

When someone wants to sell stuff they probably start a shop and sell whatever they want. So in that case the buyer had to approach the seller and do the buying.   I know that what I’ve said there is not rocket science , that’s what  has been happening for years, that’s the very reason we have millions or billions I don’t know what ever number of shops after doing the marketing of their goods and services playing the waiting game for the buyers to come.       

Then with the advent of internet we have seen that people building a web front to enable their sales, it has gone a bit more and we also see the existence of portals like ebay , where many sellers who list their items and play the waiting game.

When I try to compare these web portals with the traditional way of doing business, the usual ecommerce site selling items of a single merchant is similar to the shops/store fronts and then a place like ebay is similar to a traditional market place, where multiple sellers get together and sell stuff.  All in all, as i see it, by the introduction of the web, we have achieved an innovation in introducing another channel for sales, however we have not changed the status quo of the fundamental model, where the seller lists/keeps the items, does the marketing and waits for the seller.  

Customer is the King

Very often I am told that the customer is the king, but in reality with this business model I see the customer to be more like the prey. When thinking about this waiting game, I cannot stop imagining a big crocodile keeping is mouth open for the pray to come and sit inside it.

Just imagine a world in which, when you wanted to buy a camera you go and write a note and hang it on your own door and wait for the sales people to come and present the options and the customer like a real king looks at the options and picks the best one. I know probably you have already started to wonder, is this guy out of his mind? Can the sales people just go around checking each house? You would think that whats the amount of land to be covered, and how long can a buyer wait, blaa blaa

Now because of these arguments, it true that this model is not practical in the traditional way of sales. Quite understandably the model is not practiced in the sales of usual commodities unless the buyer is buying things of great value.

But in the world of web it’s quite a practical thing, imagine a site where you go and publish whatever you want to buy and then the sales people come and give the offers and you make the decision to buy based on that.
It is very handy for stuff like buying a SIM; getting a bank loan, getting an insurance package …you name it.  Obviously for the SIM agent or bank loan executive or the insurance agent, the place where people are listing their need for the service is a heaven and they will automatically come to the site and make the offer to get their sales commissions, so these stuff can be the starting point for this “reversed model” and I am pretty sure later on others will follow suit and come to the party.

It’s actually reversing the market, in a traditional world it’s like going to a market place and you put up a board with your shopping list and expect the sellers to come and sell you the stuff. In the old school of thought its stupid, but in modern times its practical. It will be absolute buyer power and the customer becomes the real king!

So the need is to have a portal where the requirement listings are done and get the sales agent to join the party. I am just fascinated by this model and I can see an unbelievable potential in it. Anyone interested in a start up? This is one for you! Let me know your thoughts on it. Would love to hear!

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