Commoditization
One of the key elements to success in business is to differentiate yourself from your competition. If everyone makes widgets, the price per widget sinks to the barest minimum to sustain the business of manufacture.
If you differentiate yourself from the other manufacturers, you can command a higher price as your widget is somehow more desirable than
all those other widgets...
David St. Lawrence
writes a blog called Ripples and has an excellent two-parter (so far) on this concept:
Part One,
Part Two
You are not a commodity - don't act like one - Part 1
If you do not stand out from the crowd, you risk being considered a commodity. This has serious implications for the self-employed businessperson or artist.
Commodities are goods, services, or individuals that are virtually indistinguishable from others of the same type and are usually purchased or hired on the basis of price.
Gasoline, toilet paper, and kitty litter are three product examples that immediately come to mind. Bank cashiers, supermarket checkout clerks, and system administrators are treated as commodities because they are not hired because of their individuality, but because they are a known quantity at a convenient price.
The same can happen to musicians, potters, and plumbers who do not differentiate their services from everyone elses.
Very true -- we have a booth at a local Farmers Market where we sell produce from our market garden. Jen also makes soaps and lotions and I do photography and blacksmithing.
Another participant does herbal remedies and salves -- neither Jen or I would dream of branching into that area ourselves although we know the technologies involved and could turn out a good product. The market is like a small and close family and we are there to make money but also, we are there to support the community and to make the market strong.
Each participant offers something unique and although the prices are high, the level of quality is commensurate and people are paying without blinking an eyelash.
Our area is a major vacation resort with winter sports (Snowboarding was invented here), lots of river rafting, hiking, backpacking and it is also a fun place for motorcycle riding. We get several hundred people to the market each Sunday -- not bad for a town of under 100 full-time residents.
Not being a commodity is why this all works so very well.
Posted by DaveH at July 29, 2006 8:57 PM