Exploring the Reputational Economics Era

 

For all the effects of globalisation, which are largely a good thing, we seem to be coming full circle as a species by way of the one thing through which we have ruined the world. I’m talking about the monetary system – trade. Sure, it’s convenient being able to use something like paper or binary bits as legal tender, but as a result something like living off the grid or living free is seen to be radical.

Anyway, the manner in which we’ve come full circle is that of how we’re relying more and more on reputation to make buying decisions again. This is how it used to be when most goods you’d buy were produced locally, with those that were produced elsewhere stocked by a local vendor who would then be held directly accountable for the quality of the goods they sell to their immediate community.

It made for a great mechanism through which to ensure consumers knew exactly where to go if they had any complaints about the goods they bought.

For quite some time during the earliest stages of globalisation, this direct access to any kind of due restitution was compromised due to the faraway location of the original manufacturers and suppliers. If you bought a consignment from as far away as China for example, you’d have very little restitution if the goods you received were faulty or if they were not of the quality desired or even advertised.

Thanks to the advancement of the web however, things are very quickly getting back to the way they used to be – to the way they should be. Thanks to the various parallel industries which are developing and advancing around core globalisation industries such as e-commerce, these parallel industries like air-freighters and shippers at the very least provide us with some kind of paper-trail we can trace back to the suppliers.

The world is a much smaller place now and any vendor or direct seller’s virtual store in the form of something like their e-commerce website makes for the new head-office or storefront location. It’s no longer possible to hide behind the World Wide Web – if you offer a terrible service news spreads around in an instant, so too if you offer a great service, as is the case with those e-commerce players who are winning the game.

We see a kind of open rating system which is regulating the game, accounting for what is referred to as reputational economics. Think the likes of Uber, AirBnB, etc…

Some of the leaders of the e-commerce game in particular don’t get there by sheer luck or good fortune – they work hard for it by simply offering a great service through which they provide high quality goods. I know to go directly to the site of Broadway Basketeers for example when I’m looking for some of the best anniversary gift ideas or for gift ideas for any other special occasion, for that matter!

A new player could very well enter the same space and match this high-ranking online retailer in many ways, but they’d still have to contend with the disadvantage of coming up against a well-established player.

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