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Selling Lemons

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Re: Selling Lemons

#51

Post by jauntywundrkind »

fsckboy wrote: post #43

just a quibble, a lemon market is not a stage of a market, it's a market with information asymmetry which affects prices which affects market participation. the Amazon mixing of products from separately sourced vendor inventories or luxury goods with counterfeiting competitors, or buying jewelry from a jeweler creates lemon markets for those products. used markets do have the nature of lemon markets, and once you dis…

Amazon ending commingling is going to be interesting. Instead of having 1-gallon Tide laundry detergent we'll have 20 listings for it? Or will these folks have price authority, no one else able to sell Tide 1-gallon except Tide themselves?

This feels like a potential massive shift, seems fated to raise prices significantly & flood users with way way way more results.

Re: Selling Lemons

#52

Post by mikepurvis »

fsckboy wrote: post #43

just a quibble, a lemon market is not a stage of a market, it's a market with information asymmetry which affects prices which affects market participation. the Amazon mixing of products from separately sourced vendor inventories or luxury goods with counterfeiting competitors, or buying jewelry from a jeweler creates lemon markets for those products. used markets do have the nature of lemon markets, and once you dis…

> "descending into lemonhood" is not a progression of markets

It takes time for the participants to respond to the lemon market conditions, eg buyers to make purchases that are bad, so that they come to distrust the sellers, and then sellers with quality goods taking them elsewhere because the buyers are now pricing everything as if it's going to be a lemon.

The transition from healthy market to lemon market once the preconditions have been in place for enough time could reasonably be described as a "descent".

Re: Selling Lemons

#53

Post by the_snooze »

AznHisoka wrote: post #36

>> The safest, smartest path is also the most mundane: keep the main thing the main thing. Outcomes matter, but output literally comes first. Outputs are the business to everyone outside it—what customers see, buy, and use. I dont understand how this overcomes the problem. How do you then stand out as a candidate in a saturated lemon market of candidates for instance? How you then stand out as an authoritiative websi…

I think "standing out" in a market of lemons is playing the wrong game. The winning move is to sidestep the market altogether and find a niche where there's a barrier to entry that's both high enough to deter most other competitors but low enough that you can clear it.

It doesn't scale, but that's the point. Direct competition is a loser's game.

Re: Selling Lemons

#54

Post by mikepurvis »

jauntywundrkind wrote: post #51
fsckboy wrote: post #43

just a quibble, a lemon market is not a stage of a market, it's a market with information asymmetry which affects prices which affects market participation. the Amazon mixing of products from separately sourced vendor inventories or luxury goods with counterfeiting competitors, or buying jewelry from a jeweler creates lemon markets for those products. used markets do have the nature of lemon markets, and once you dis…

Amazon ending commingling is going to be interesting. Instead of having 1-gallon Tide laundry detergent we'll have 20 listings for it? Or will these folks have price authority, no one else able to sell Tide 1-gallon except Tide themselves? This feels like a potential massive shift, seems fated to raise prices significantly & flood users with way way way more results.

They can still say "more like this" and group the listings on the frontend, but the point would be have a clear chain of accountability between what you buy, who you buy it from, and what actually arrives.

Like, when I purchased an Apple laptop charger "ships from and sold by Amazon.ca" but what arrived was an obvious counterfeit, that was... bad.

Re: Selling Lemons

#55

Post by sonofhans »

gitpusher wrote: post #30
spongebobstoes wrote: post #26

Earlier quoted context omitted.

what makes you think 1000 pages of catalog 2x per year is carefully curated? my experience is that it was also filled with random junk I'd rather rely on online reviews. I'm pretty good at buying quality products sight unseen at this point. And with free returns, the risk is even lower.

The people making those catalogs would've wet their pants with excitement if they could stuff 100x more crap in there. Lol

No, they wouldn’t — that’s the point of this entire thread. A catalog with 100x the pages and items would be useless, impossible to organize, and expensive to stock. The creators of those catalogs, who lest we forget, were at the forefront of their own tech revolution, were keenly aware of the limitations and possibilities of their tools.

Re: Selling Lemons

#56

Post by nostrademons »

fsckboy wrote: post #43

just a quibble, a lemon market is not a stage of a market, it's a market with information asymmetry which affects prices which affects market participation. the Amazon mixing of products from separately sourced vendor inventories or luxury goods with counterfeiting competitors, or buying jewelry from a jeweler creates lemon markets for those products. used markets do have the nature of lemon markets, and once you dis…

It's not the traditional economics framework but having read Akerlof's paper, I can read the title of this post and understand what they mean.

There's a very real phenomena where markets often start out functional and then descend into a market for lemons, and it has to do with game theory again. When the market is small and still growing, firms in it can count on repeat interactions. Even if your customers don't buy from you again, there are new customers, who often ask the existing customers what they should buy, and so you have an incentive to produce a good product. The information asymmetry that Akerlof describes doesn't exist, because actual experiences with the products quickly get conveyed to other market participants and incorporated into their purchase decisions.

But when the market matures, those repeat interactions (and prospect of future sales) decline. People who have repeated needs and vendors they can trust often exit the market and deal directly with their vendors. What's left are buyers who are not particularly well-connected and don't have a whole lot of information on past experiences with the product, but who trust the market as a whole. This is the kind of information asymmetry that breeds a market for lemons. Eventually all products start becoming crap, everyone who knows how to find non-crap exits the marketplace, and the market collapses.

Re: Selling Lemons

#58

Post by hylaride »

mattmaroon wrote: post #41
ChrisMarshallNY wrote: post #24

Not just The Internet. All of tech, and likely, other industries, as well. I was told that this was what happened to Etsy. When it first came out, people with real skills, sold real, handmade goods, at fairly high prices. Then, the mass-produced knockoffs flooded the site, priced way-lo. The legit stuff couldn't keep up; in price or in scale. I see this happening everywhere.

I now throw public festivals and it happens in meatspace too if you don’t actively prevent it. One minute that brand new themed festival is all vendors making cool clocks out of old vinyl, local glassblowers, local apiarists. Three years later there are 18 guys selling the same glass bongs from Temu. Curation is the answer.

I see the same thing from "handmade trinkets" in tourist areas when I travel. All drop-shipped crap that you see multiple times, especially if you go to multiple cities.

Now I just find a fridge magnet and not care where it's made.

Re: Selling Lemons

#59

Post by StableAlkyne »

mikepurvis wrote: post #54
jauntywundrkind wrote: post #51

Earlier quoted context omitted.

Amazon ending commingling is going to be interesting. Instead of having 1-gallon Tide laundry detergent we'll have 20 listings for it? Or will these folks have price authority, no one else able to sell Tide 1-gallon except Tide themselves? This feels like a potential massive shift, seems fated to raise prices significantly & flood users with way way way more results.

They can still say "more like this" and group the listings on the frontend, but the point would be have a clear chain of accountability between what you buy, who you buy it from, and what actually arrives. Like, when I purchased an Apple laptop charger "ships from and sold by Amazon.ca" but what arrived was an obvious counterfeit, that was... bad.

The best one I had was when I bought a VR headset, and inside of the package was a brick.

No questions asked and they took my return, but man, I was sweating that I'd get accused of something.

Re: Selling Lemons

#60

Post by StableAlkyne »

Gooblebrai wrote: post #23
reactordev wrote: post #9

Earlier quoted context omitted.

Can confirm. I went to school for this very purpose. It led me down a maze of software engineering jobs and eventually prof serv that I'm in now. (Yey?) The ability for anyone to learn Photoshop or learn how to create a website, create a game, create anything, content or otherwise, and sell it on the marketplace for a quick cash grab has never been easier. I think most people set out to try with their best intentions…

Would you say software still has this gate / barrier or is it disappearing? From my experience looking at bootcamp students, grasping programming is still nothing short of a mind switch that some are unable to do (regardless of if they have an LLM to assist, that tends to make it worse)

> Would you say software still has this gate / barrier or is it disappearing?

Not OP, but if you wanna get an idea for how much of a barrier there was 30 years ago... Just look through a few shareware CDs. So much crap was hastily thrown together by someone who read a beginner book on Hypercard or Visual Basic - and you'd have to mail $10 to an address, hope they hadn't moved, and that your floppy wouldn't get lost in the mail.

The general shittiness of most software back in the 90s is still a bit nostalgic IMO. It felt like software that was written by actual people instead of a faceless corporation

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