Mac Musings

The New eConomy

Dan Knight - 2001.02.07

Low End Mac Reader Specials

Memory To Go Special: MacPro 8 Core Memory 4GB kit $154 / 2GB kit $94, New 2008 iMac 2GB $46. MacBook Pro / MacMini / iMac Intel Core2 DUO 2GB $44 / 1GB $23--Free shipping available.

Download Typestyler, still the Ultimate Styling Tool for Internet, Print and Video Graphics. Works great in Classic with a Native OS X Version on the way. Free Tryout: www.typestyler.com

LA Computer Company: Specials on AppleCare, iMac's, Apple Batteries and Apple A/C Adapters. Also Great prices on Used Apple Computers. Call 1-800-941-7654 Click Here.

OWC: Upgrade to a Larger Hard Drive, Add Additional Drives SATA for Mac Pro and G5s, up to 1.0TB in each Bay. 500GB from $90!

Mac users can finally play Party Poker for Mac. Not only that, they can also learn how to play PokerStars for Mac.

Laptop Hardware Provided by TechRestore - Overnight Mac & iPod Repairs.

Compare products like desktop computers, laptops, and LCD TVs side by side! All the information and reviews to make the best purchasing decision for a new cell phone GPS products or MP3 players. The Ciao network makes searching products easy for you.

New MacPro Memory 800Mhz With Apple Spec Heat Sink 2GB $88 / 4GB $138 / 8GB $274 - Click to Maximize your Macs...

Like a rabbit being chase by a hound, the Internet economy took off like a shot in the 1990s. It looked like every dot-com had the Midas touch, and a "new economy" was born.

Yes, Virginia, there really is a new economy. More precisely, there's a new part of the economy that plays by a new set of rules.

I'm part of that new economy. So are all of the Web sites you visit. In many ways, the presence of the Web has created a whole new playing field. Of course, sometimes the quarterback doesn't know those rules or anticipate how the other teams are going to play.

I don't know the precise statistic, but a majority of startups fail within two years, whether that's a brick-and-mortar establishment or an ecompany. We've been hearing about Kmart closing stores, General Motors shutting down the Oldsmobile division, Chrysler eliminating 26,000 jobs - all old economy businesses.

Dot-Com Boom

And we've heard about all the dot-com failures, mostly new startups without the history of Kmart, Chrysler, or that Wintel clone manufacturer down the street. Why have we heard so much about dot-com failures? Because they're spectacular.

With little more than a vague business plan and no track record, startups were able to find investors ready to throw incredible amounts of money at them in hopes this would be the next Amazon.com.

Yeah, right. Amazon hasn't turned a profit yet, has just announced layoffs of 15% of their workforce, and could conceivably turn a profit later this year. Maybe.

Amazon.com has a brilliant business model: move the product through the warehouse within 24 hours of receipt. Keep as little inventory on hand as possible. Don't offer free overnight shipping. Don't charge buyers extra to use credit cards. Do make buying as simple as possible. Do offer exceptional customer service. And, while you're at it, offer good prices.

My theory is that each niche will have one winner and a lot of also-rans. Among booksellers, Amazon.com is the winner, while Barnes & Noble will remain a niche player. For Macintosh news links, Applesurf is nice, but I don't anticipate them unseating MacSurfer's Headline News.

One winner and a lot of niche players. If the niche players know the game, don't expect to unseat the top dog, and are content no to be #1, they can survive and thrive. (Low End Mac will never be the #1 Mac site on the Web. That's fine with me.)

The Playing Field

The rules are different A.W. (Anno Web) than the were B.W. I never would have dreamed of publishing a book about old Macs or creating my own Mac magazine, but marginal costs are minimal on the Web. I created LEM in my spare time, I had no idea it could even become a business, and I've lovingly nurtured it into a great resource for almost four years. All the money I've paid for hosting over the years is probably less than it would cost to design and print a single book or magazine.

A good Web site can minimize or even eliminate the need for a mailed catalog. My former employer, Baker Book House, has a great search engine on their site that makes it very easy for bookstores and individuals to find any title they publish. They even have links so you can conveniently order them from Amazon.com.

Amazon.com, of course, is the best known success story of the new economy. Unless you're spending over $30, you probably don't save a cent compared with running to the local Borders or Barnes & Noble. And it usually takes a few days for your order to arrive. You avoid the trip to the bookstore and don't get the book as quickly when you order through Amazon.com, but you can order 24 hours a day and have it delivered right to your door.

I shop Amazon.com as regularly as any etailer, mostly to add Star Trek: The Original Series DVDs to my growing collection. I don't think I've ever ordered a book from Amazon, and only a single CD (Beatles 1). But to get that 30-40% preorder discount on DVDs I know I want, and by buying two at a time (since that's how Paramount releases them), I do come out ahead and also receive the DVDs just a few days after the stores do.

The hot online business should be computer etailing - and that is a good part of the new economy. Sure, like Amazon.com they're shipping you hard goods, but they also know that you're a computer user simply by the fact that you've managed to visit their site.

Each etailer tries to differentiate itself from the competition. I'm a real fan of Buy.com, because they tend to offer some of the lowest prices on the Web. When buying backup tapes at my last job, I want to MacMall, because they had consistently good prices on AIT tapes. But my favorite until now has been Outpost.com, which offered free overnight shipping on everything.

Yes, you read right: past tense. Unfortunately, overnight shipping simply isn't cheap, and people ordering a $25 Kensington Mouse-in-a-Box Optical and nothing more probably resulted in a net loss. (Guilty, you honor.)

Free overnight shipping differentiated Outpost.com from the rest. You knew the cost going in - no big charge for shipping tacked on at the end of the order process. And you still get that if your order totals over $100. If not, prepare to ante up $12.95 for overnight or $8.95 for second-day delivery. (We wonder why more etailers don't use Priority Mail from the Postal Service, which costs just a bit over three bucks.)

After all, dot-coms need profits just like brick-and-mortar stores do.

The New eConomy

The Web has created new kinds of businesses, particularly etailers (such as Amazon.com and Outpost.com) and content sites (like Low End Mac). It's created new ways for traditional businesses to market themselves and sell product. It's expanded the market for personal computers and Internet Service Providers.

A lot of the rules have changed with the Internet. Some have gone out the window. Others haven't been impacted in the least.

The dot-com boom didn't go bust, just a very visible chunk of it. There are still hundreds of etailers and thousands of content sites going along as if nothing happened. These people understand the basic rule of business, new economy or old, is making money.

The big failures I mostly attribute to people who didn't know exactly what they were doing, had too much of other people's money to work with, and spent that money as if they were assured of success.

As Aesop taught us in the story of the tortoise and the hare, slow but steady wins the race. LEM

Dan Knight has been using Macs since 1986, sold Macs for several years, supported them for many more years, and has been publishing Low End Mac since April 1997. If you find Dan's articles helpful, please consider making a donation to his tip jar.

Recent Mac Musings

Links for the Day

Recent Content on Low End Mac

About LEM | Support | Usage | Privacy | Contacts

Entire Low End Mac website copyright ©1997-2008 by Cobweb Publishing, Inc., unless otherwise noted. All rights reserved. Advice presented in good faith, but what works for one may not work for all. Please report errors to .
  LINKS: We allow and encourage links to any public page as long as the linked page does not appear within a frame that prevents bookmarking it.
  Access our RSS news feed at http://lowendmac.com/feed.xml.
  Email may be published at our discretion; email addresses will not be published without permission, and we will encrypt them in hopes of avoiding spammers. If you prefer your message not be published, mark it "not for publication." Letters may be edited for length, context, and to match house style.
  PRIVACY: We don't collect personal information unless you explicitly provide it. For more details, see our Terms of Use.
  Low End Mac is an independent publication and has not been authorized, sponsored, or otherwise approved by Apple Inc. Apple, the Apple logo, Macintosh, iBook, iMac, eMac, iPod, PowerBook, MacBook, Mac Pro, Apple TV, and AirPort are registered trademarks of Apple Inc. Additional company and product names may be trademarks or registered trademarks and are hereby acknowledged.


Have a question?
Ask an expert!

Navigation

Used Mac Dealers
Apple History
Best Used Macs
Video Cards
Email Lists
InfoMac's Low
End Mac Forum

Favorite Sites

MacSurfer
MacMinute
MacInTouch
MyAppleMenu
InfoMac
Macs Only!
The Mac Observer
Accelerate Your Mac
RetroMacCast
PB Central
MacWindows
The Vintage Mac
   Museum
DealMac
DealsOnTheWeb
Mac2Sell
ramseeker
Mac Driver Museum
JAG's House
System 6 Heaven
System 7 Today
the pickle's Low-End
   Mac FAQ
Abandonware
   Petition
Mac vs. PC Info

Affiliates

The Apple Store
Mac Connection
MacMall
TechRestore
MacResQ
ExperCom
Crucial Memory
batteries.com

Advertise

All of our advertising is handled by BackBeat Media. For price quotes and advertising information, please contact at BackBeat Media (646-546-5194). This number is for advertising only.

Open Link

Problems viewing this page with Internet Explorer 5.5 or 6? It works fine in other browsers, including IE 7. We recommend Firefox for those using Windows, as it is standards based and more secure than IE 6 (and earlier). More LEM visitors use Firefox than any other browser.