eBay and the American Economy

What happened to the American economy to make eBay's success possible? Up until the late 1960's if you wanted to purchase a pair of Levi's Jeans you had to search for a store that had a men's department that had construction workers and telephone line-men for customers. Your mom's favorite department store did not carry Levi's or jeans at all because they were not considered fashionable and the retailers were not about to take up all the shelf-space to stock all the sizes that the shrink-to-fit denims came-in. Levi's did not make a seperate line of women's jeans, ladies had buy the zip-fly east, button-fly west garments and alter them to fit a woman's body until the 1970's.

Levi's had garment manufacturing plants in several geographic regions of the country to save on shipping costs, and the business had operated that way for thirty years, just riveting along.

As the decades went by denim's dark indigo became fashions stone-washed sky blue. Department stores started selling Levi's Jeans and even contracted for there own namesake fashion brand leather labels to be applied to jeans from various smaller garmet manufacturers. Levis expanded it's operations and the number of clothing lines that it designed, produced and distributed. The department stores made money, Levis sold stock on the New York Stock Exchange and the stockholders were happy, the denim cloth, thread and zipper manufacturers in the Carolinas were estatic, and the garment workers were happy that they were employed. Somebody was unhappy though, he lived and worked in Cambridge Massachussets.

The unhappy man, who had the blues while everyone else was in denim heaven, was Professor Theodore Levitt of the Harvard Business School.

If you ever wondered where the term Globalization came from it was in a paper by Theodore Levitt in an 1983 edition of The Harvard Business Review where he proposed standardizing manufacturing practices so that low-priced consumer products could be produced anywhere in the world. This was interesting because Theodore Levitt was a professor of marketing, and he had no inkling of what his initial idea would be transformed into by the Masters of Business Management from the Cambridge-Princeton Axis.

At that time there were three tiers of pricing in bluejeans, discount store brands, Dickies, Lee, Levi's and Wrangler in the middle and the fashion "designer jeans" in the top pricing tier. All were made by the same group of manufacturers from materials produced in the in the United states also. One fateful day an executive at one of the companies hired his nephew, a newly degreed MBA and the race to the bottom was on. The nephew persuaded his uncle to start making the jeans in mexico for one third the labor cost, and even with the increased shipping costs the company would still save over half of the manufacturing costs, selling them at same price, pocketing the increased profits. In a few years the other manufacturers did the same thing, eventually closing all the factories in the United States and all low and mid-priced jeans were made offshore.

The garment workers were now unhappy.

As more and more basic industries like chemicals, steel and paint adopted offshore production and the toy, electrical and electronic industries moved all of their manufacturing plants overseas, millions of workers and managers became long-term unemployed. This coincided with the availabilty of personal computers and the Internet.

There were people available who had enough education and had acquired enough basic business knowledge and skills through their employment in the once great American Production Economy that with the right business plan they would create the American Mercantile economy. That business plan was eBay. ebay enabled thousands of people to "set-up shop" on their kitchen table or in their garage and market their products and sell their products to all of america.

In associated contents eBay insight man Randy Smythe's article: www.associatedcontent.com/article/66123/what_is_the_true_hollywood_story.html he tells his success story of how he built his sales business from an idea to $4,600,000 in sales in one year to become an eBay Power Seller. And of how that success created optimism and a new building to be leased, only to be filled with empty shelves as eBay changed it's business plan and employed a new strategy. I receive emails "Become An eBay Developer" that are selling $169 software packages everyday, I wonder if those sales are going to be affected now?

There are many ways to build a business on the Internet. The McGraw-Hill published book: Internet Marketing: Intergrating Online and Offline Strategies by Mary Lou Roberts explains the latest techniques for attracting customers on the Web.
Click This Link! www.amazon.com/exec/obidos/asin/0072827033/ref+nosim/your_httpgetoveblo-20_id