Thursday, October 29, 2009

The problem with "stuff"

A few years ago, a friend of mine and I tried to start a business importing and selling eco-friendly crafts from rain forest areas. We thought we could help out poor countries and help the rain forest at the same time. We started with a $600 order from a women's shelter in Bolivia. It was perfect.

Then we got our "stuff"! 5 boxes of fragile, random, heavy, stuff. It was cool, but we soon realized we had to sort it, count it, take pictures of it, organize it, price it. Then when someone ordered it, we had to find it and ship it. This business was not going to scale, especially in our spare time and over the internet.

What we should have done is follow the Amazon model. Instead of creating a warehouse, we should have created a marketplace. Setup standards and guidelines for the kinds of things we would sell, and then tell people who were traveling to buy things from local artisans and sell them through our marketplace. Then, we have scale in that we have many sellers, we facilitate transactions so people might be encouraged to try to make money through us, and we have no inventory, nothing to do but make it easier to sell imports. This would have been much easier.

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