In today's and tomorrow's new eYouconomy, your business success and #1 earn money opportunity no longer lie in manufacturing.
The greatest opportunities lie in what
Paul Zane Pilzer(Opens new window) calls the intellectual distribution sector of our economy.
In the 1960s, entrepreneurial fortunes were made by those businesspeople who found ways to lower manufacturing costs significantly, often by using plastics or relocating production facilities overseas.
Distribution costs on that same product have also fallen, where they now account for approximately 70 percent of the price for a typical 100 US Dollar retail product.
This increasing percentage of distribution cost is why, over the past 35 years, the majority of great personal fortunes have been made by people who found better ways of distributing things rather than better ways of making things (manufacturing).
For instance, Sam Walton of Wal-Mart became the richest man in the world in 1992 by simply distributing name-brand merchandise made by other companies.
Fred Smith of Federal Express became a billionaire by building an entire airline for distributing products rather than transporting people.
And Jeff Bezos of Amazon.com, an Internet entrepreneur, found ways to use the Internet to distribute books and other things more efficiently.
Distribution... Two Processes
Pilzer splits distribution in two processes:
1. Educating consumers about products and services that will improve their lives (intellectual distribution). 2. Physically distributing products and services to consumers (physical distribution).
Sam Walton and Fred Smith made their fortunes by finding better and cheaper ways to physically distribute products to consumers.
Jeff Bezos and other businesspeople in the Internet Age are making their distribution fortunes mostly by educating consumers about new products and services that consumers don't even know are available.
Your Lesson
As a small businessperson there is much to learn from people like Jeff Bezos and others.
They understood that today most of the expense in making products and services are in research and development costs, and intellectual distribution costs. Not in physical manufacturing or production costs, and physical distribution costs.
Your earn money opportunity in manufacturing is now in the design or invention of the product rather than in finding a way to simply lower the per-unit cost of physical production.
And your earn money opportunity in distribution is now in intellectual distribution versus physical distribution.
Teaching, intellectual distribution, is one of the greatest entrepreneurial opportunities now and for the foreseeable future. And to perform in intellectual distribution you must understand the function of the Internet in distribution.
Many small business owners have made the unfortunate mistake of seeing the Internet as a business unto itself.
However, the Internet is a powerful tool that can be used to leverage the opportunities in another business. It's an instantaneous global communication system.
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