Wednesday, April 22, 2009

How I learned to stop worrying and love the commodity

Let's face it, Print is a commodity. That's the good news. Intel makes commodities. Walmart sells commodities. Computers are now commodities. The margin on commodities is low. The ability to manufacture commodities is high.

What's not and can never be a commodity is how a particular user uses your commodity. Combining commodities in a specific way to make a users life easier will never be a commodity, because users are always searching to make their lives more pleasant.

A VAR combines commodities to create new ways to make a user's life more pleasant. The more particular commodities that a VAR + user can combin in new ways, the greater the margins. Unique combinations just need smart. Smart is free.

Think iPod. It's just a MP3 player that is connected to the Cloud. The Cloud makes the iPod valuable. The design makes it cool and pleasant to use.

Cool + valuable + pleasant to use = decent margins.

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