Starting a Small Business
The Hobby Economy
Like an explorer from a previous century, I am going to plant this flag in the ground and claim this phrase to be my own. What on earth could this phrase “Hobby Economy” mean?
I'm looking at the fact that even though our UK economy is currently bumping down along the bottom of economic stagnation, most of us actually have huge material wealth. In real terms (taking into account inflation) the cost of living is actually dropping.
We can buy clothing and certain foods for much less than we could in previous eras. You can now buy a 32inch digital television for less than £300. A new PC costs less than a few hundred pounds.
This is all due of course to the fact that China is now making reasonable quality items at a low price. Other East Asian countries are predominantly providing textiles and suchlike. You can now purchase a tee-shirt from Marks and Spencer from about £4. This is much less than it would have been nearly twenty years ago. So, where is all this preamble leading to.
I'm leading it to the notion that people will be increasingly looking towards an antidote to the mass-manufactured imported product lifestyle. The middle classes will increasingly be looking to differentiate themselves from the plebeian hordes by buying more (seemingly) artisan produced items and foods.
You will notice this movement in any fashionable pub or brasserie in the crisps and nibbles they sell. You may be able to purchase a packet of “sea salt and balsamic vinegar hand cooked crisps” for nearly a pound instead of the more prosaic packet of Walkers. Quite how it benefits the flavour of crisps to be “hand-cooked” is a bit beyond me, but you get the gist.
Somewhat less cynically, I think that the likes of ebay (especially ebay) has given rise to thousands of businesses that would otherwise be hobbies. There are a thousand different crafts and suchlike that are viable mini-businesses on ebay.
Some people just specialise in selling a very specific items, such as hair-clips. When you have a potential marketplace of tens of millions of people, there is pretty-much a viable ebay business for any single type of product.
The success of ebay I believe has a lot to do with the fact that there is a rating system for people selling items. Most of us will be quite familiar with this concept and it is always the first thing I look for when making any purchase on ebay.
A good rating will be over 99% positive approval. Often it will be nearer 99.7 percent and also having completed thousands of trades. These traders are often going to be one person. They are not going to give-up their high approval status very easily at all; this almost guarantees that they will provide excellent service.
Ebay is moving much more towards being a fixed-price store rather than an auction site. Also Amazon, which was a book-seller, has become a market-place for just about anything. Businesses can sell their wares on Amazon, or sometimes Amazon will act as the retailer on behalf of small businesses and actually stock some of the items.
All of this is very good news for this “Hobby Economy”. At last, one person in a back bedroom can actually have a greater credibility than a corporate giant. A corporation is never going to get 99.9% approval rating, they don't have a prayer. They'd be lucky to achieve even 96% because they always have the odd employee (often very odd indeed employee) who simply won't care.