Monday, December 30, 2013

How to Monetize Your Close
Thomas Friedman, NY Times



This title may sound a bit strange but it refers to an emerging concept called a sharing economy—one that focuses on benefiting from a utility without ownership. The example discussed in the article is one where women can exchange clothing in a way never before possible on the internet. Although not applicable to all situations, the concept of focusing on what you need and potentially gaining the utility in ways other than ownership is very powerful to many if not all business situations. The web site is www. Tradesy.com.

....Tradesy, which enables women to monetize the used or unused clothing and accessories in their closets by creating a peer-to-peer marketplace in which pricing, listing, buying, selling, shipping and returning goods is seamlessly easy — and with Tradesy taking a 9 percent commission. She is not alone in that space, but it’s working.... 

...“A sharing economy platform can aggregate massive amounts of inventory more quickly and cheaply than retailers because our supply is crowd-sourced from users,” DiNunzio said via email. “Having an abundance of product and content available allows our site to achieve larger and faster distribution across web channels such as search and social media, accessing masses of customers quickly and cheaply. Tradesy has accumulated $97.5 million in inventory, at virtually no cost to our business, in 13 months. If we had to do that with product that we produced or purchased, it would certainly take more time and resources, and expose us to significant inventory risk.”
The sharing economy is producing both new entrepreneurs and a new concept of ownership. “With improved peer-to-peer commerce platforms that remove the friction and risk from multiparty transactions, consumers are being empowered to value and sell their space, their belongings and their time in ways that weren't previously possible,”....
 
“For those at the cutting edge of this trend, durable goods are viewed as temporal objects to enjoy and pass on rather than ‘belongings.’ Personally, I no longer feel like I ‘own’ anything. I enjoy my consumer goods for a day, a week or a year, take good care of them because I assume they’ll go on to have another life with someone else, then share or sell whatever I’m tired of. I get access to goods and services that would typically be beyond my means, without accumulating a ton of stuff.” 
This “lightweight living,”“goes hand in hand with a re-imagined concept of ownership that’s focused on utility rather than possession, and can ultimately result in consumers enjoying more variety for their dollar.” Aren’t retailers hurt? “Tradesy’s early data suggests that our customers actually spend more at retail when they feel confident that there’s a viable resale opportunity on the secondary market.”


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