Apr 6, 2006

I am on Spring Break with my family. My "good read" is FREAKONOMICS by Steven D. Levitt and Stephen J. Dubner. It's a fascinating analysis of stats presented to us every day - many of them creating fear despite being completely illogical and irrational. I don't agree with everything in the book, but a lot of it is food for thought. For instance, statistics show that children IN carseats have the same death rate as children NOT in carseats when it comes to automobile crashes. Carseats have not shown to prevent death or injury in car crashes. Seatbelts make a difference, though. Yet, we are "spooked" into thinking we must have government approved carseats. How many of us grew up rolling around in the back of the Station Wagon for a thousand miles and lived to tell about it??? ME!

One of the chapters talks about "Information Assymetry". For instance, term life insurance used to be very expensive. Then, a little thing called the INTERNET came along. Quotesmith.com - a website that did NOTHING but allow you compare rates for life insurance came on the scene in the early 90's. They didn't sell insurance - just allowed you to compare prices - something that would have been very difficult before. The price of life insurance PLUNGED dramatically. The information playing field was leveled.

Now, let's compare this to information assymetry in the scrapbook industry. There is lots of it. First of all - the FEAR instilled in us about ACID FREE! Who started that? Well, a company I won't name did. They test all their OWN products and then pronounce them the ONLY TRULY ACID FREE PHOTO SAFE products. Have they tested ANY other products from ANY other company? NOPE. So, do they know that there are no other photo safe products out there? NOPE. There could be, but they aren't interested in extensively testing them - it would kill the sales of their own products. They use this information assymetry to create fear in their customers - "If you use ANYTHING but our products in your albums, it will destroy them". Customers don't have any other way to find out information about OTHER scrapbook products, so they believe it.

Even the Acid Free movement is information assymetry that creates fear. Did you know that there are NO industry standards on what constitutes an "acid free" product? Does it has to be 100% acid free? Can it contain 10% acid? 20%? Less than half? No one has come up with a standard and no one is testing their products that I know of. Most people declare their products acid free because their printer or manufacturer tells them it is. It's like one reporter getting their story from another reporter - they can't verify the facts - they just take the story and print it - assuming it's true because someone else told them it was.

ScrapBiz is one way that the information playing field is being leveled. There is lots of info out there exclusively for certain types of businesses. We have gathered that info and compiled it into our program so you can use it to create your own business. For example, the direct sales company I started out with long ago didn't want anyone to know where they were getting their products. Their consultant contract prevented you from purchasing at a wholesale level. Consequently, they could blame the distributors for inventory supply problems. If products were out of stock for weeks on end, we would be told that their supplier was the problem. Not true... when I figured out who they were buying from after I started ScrapBiz, I asked the rep if they truly ever ran out of white cardstock (I was told the supplier was out for the 8 weeks I had it on order). The rep laughed at me and said, "We manufacture our own cardstock and we NEVER run out." Information assymetry. I was told one thing, but the truth was another.

Knowledge is power. The more information you have - complete information - the more ability you have to make intelligent decisions. Half bits of info cause you to sometimes make poor decisions. That's why we try to provide our members with good, solid information so they can make sound decisions. The interesting thing is that we can present information and everyone will come to a different decision on what it means. And, that's okay by me - that's what ScrapBiz is all about...

1 comment:

Mary Ann Nelson said...

Kim,
I read "Freakonomics" too. Loved it - quite the eye-opener. Never considered the acid-free myth, but you have a valid point!

As I love to scrapbook and want my work to last, nothing - absolutely nothing - lasts forever. Foremost in my mind is, "Will my family, friends, customer enjoy this creation?"

Thanks, M. A. Nelson