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Recently I’ve been pondering what the fate of our beloved local retail shops will be in the age of Amazon (or online comparison/bargain shopping in general).  This is particularly true of stores selling commodity goods, such as bookstores, electronics outlets, and so forth.  If the Targets and the Bed, Bath, and Beyonds of the world were to disappear, I would be disappointed, and if my favorite local retailers like Elliot Bay Book Company or Retrofit Home were to disappear, I’d be crushed. Like many others, I enjoy going to shops to check out the physical goods before making a purchasing decision.

In an attempt to address this issue, I’ve heard many calls from friends to “buy local,” appealing to shoppers’ morality, but I fear such a strategy can only have limited effectiveness.  Especially now, when consumers are so squeezed for money due to record unemployment rates and low wages relative to inflation, folks who are cash-strapped are going to look for the best deals they can find for themselves and their families.  It may not be nice, but it’s the reality.

I think the mode of attack local retailers like Elliot Bay Bookstore fear/loathe the most is “showrooming” – a consumer comes in, checks out a physical book, reads a few pages, likes it, then scans the barcode on her smartphone, sees the cheaper price on amazon and buys it from there right then or later at home; in either case the bookstore loses out on the sale, and the customer is benefiting without the store profiting from it in any sense.  A related scenario is when the customer is only interested in the e-book version, which the bookstore couldn’t sell even if it wanted to; after checking out the physical book they go home and buy.  I started thinking about how one might change this scenario so that both the bookstore and the customer could profit more than they are right now.

The Core Idea

Here’s the core idea: Amazon has long had a program called Amazon Associates which allows anyone to make money off Amazon sales if they can get consumers to buy items through their Associate-tagged links – they have a handy dandy tool to make a custom link out of any product they have for sale.   Amazon wants its associates to direct business its way, so the rewards are good – once you get beyond a hundred or so items sold per month, you get 7% of the retail price, and if you get beyond three thousand items, you get up to 8.5%.  For the purposes of discussion, consider getting 650 or so items per month sold this way through Amazon, which would get you 8% of the retail price for each item.

Let’s think about what this means.  Let’s say Elliot Bay has a book for sale for $15.  I don’t know what the retail margin on the book is, but it’s likely less a couple of dollars at best, once you take in the cost of renting the space, paying employees, shrinkage (theft and other random forces), etc.  Let’s say Amazon has that same book for $12.  If Elliot Bay could somehow get a customer to buy the book through their link, they would get $.96 (let’s call it $1 to keep things simple).  Also, that purchase would take zero time of any cashiers/etc., no labor to replace the book on the shelf, etc., so knock a few cents off the couple dollars they would have made from the physical book sale, and it’s not such a bad deal for the bookstore.  Furthermore, if a customer were interested in the kindle e-book, which the bookstore doesn’t carry, Elliot Bay would still make the $1.

Putting it into Practice

Now the question: how do we get the customer to click on the Elliot Bay Associate’s link instead of just scanning the barcode and getting it from Amazon?  There are two problems to solve here: first, how is the customer going to find the right Associate’s link to click on, and second, how will the bookstore convince the customer to deal with the bother and not just buy it directly from Amazon.

The first part has many possible solutions.  One that would be minimal coding/dev effort up front but more marginal manual labor is to just create a 2D barcode or tag for every book with the Associate’s links for the physical book and e-book, then put those on a (per-book) sticker and stick them to every physical book.  This would be labor intensive, but pretty easy to implement.  A more labor-efficient approach in the long term would be to create an Elliot Bay app for the popular smartphone platforms in which you could scan the book’s barcode and it would take you to the Associate’s link (physical or e-book).  This would cost more upfront in that someone would have to develop the app, but after that it would just be a matter of updating the server side’s database with the appropriate links.  In the long term, an app shop could even specialize in making a turnkey app for this purpose which they could rebrand and resell to many retailers, thus reducing the cost of the app development to any particular retailer.

But why would a consumer deal with the separate app or scan the special barcode instead of just going for the book’s original barcode?  That’s the second question, and I think to crack that one it’s necessary to share the gains with the customer.  Consider that instead of Elliot Bay taking the full $1 and keeping it, they return $.50 to the customer as 50 “Elliot Bay Points.”  The bookstore can decide how they want to make those points redeemable – they could be just like cash and be used towards any physical purchases (the best option for the customer); they could be redeemed for an occasional free book from the bestsellers list or something of that ilk; they could be restricted to a particular set of items like t-shirts (much worse for the customer).  The first option, I think, is the simplest and the best.

The Potential Result

If the bookstore were to implement that first option, and essentially give the customer 4% of their Amazon purchase price in “points” with every purchase, not only would customers gladly take the extra trouble to use the special barcode and/or app to make their purchase (allowing the store to monetize the scenario they are most worried about now), they’d also use it to buy e-books (something the store can’t make any revenue from right now); I would argue some consumers would even walk to the bookstore to make their e-book purchase, since they know they’d be getting points for every purchase as well as having an excuse to saunter through an awesome store (I know I would!).

Of course the bookstore might argue they’d still rather have the consumer buy the physical book (and thus keep $1-2) and not buy the e-book or pull out their smartphone and comparison shop, but this approach would let them aggressively start monetizing opportunities that they’re currently losing entirely – by this scheme they’d at least make $.50 (and give $.50 to the customer in points) rather than making $0.

[A friend of my dad's with a child just entering high school asked him to ask me for advice on getting into a great school.  Here's what I ended up writing....]

If you asked me what the most important thing was for a college application, a graduate school application, a job application, or success in life, I’d say the same thing: passion.  If you asked me to give a little more detail for college applications, I’d say the following:

  1. Excellent performance in school, i.e., great grades (in challenging classes) and test scores
  2. An outstanding, memorable application
  3. Extracurricular activities and community engagement
  4. Spark

The first one is pretty obvious; there are so many fantastic graduates you will be competing with, it helps to start off with great grades/test scores as a starting point.  Your grades certainly don’t need to be perfect, but better grades are always to one’s benefit.  The most important thing is what you learn, but for better or for worse, the outside world will tend to assess that (when looking at your applications) mostly through your grades.  It’s also important that these grades are for challenging courses too; of course it’s easy to get high grades if one takes only easy courses.  Take honors courses, AP courses, whatever is available.  Challenge yourself!  Also keep in mind that it is possible to study for the standardized tests; I spent many hours studying vocabulary lists to improve my verbal SAT scores.  I’m not really sure that was worthwhile in terms of admissions, but I certainly learned a lot of useful words that way :)   The one thing from the studying I did that I feel *is* worth doing is taking some practice SAT’s (or whatever other standardized test you need to take) – being familiar with the format and time constraints of the test will help a lot, both in terms of reducing your anxieties, and in best showing your skills.

The second is also important, but that is still several years away for you.  In order to best prepare yourself for that time, make the absolute most of your English classes to hone your essay-writing skills.  There are so many terrible writers out there, especially at the high school level, that a well-written essay will really stand out.  More important than the quality of writing, though, is the substance of the essay, and this part will come only from introspection. What makes you special, what do you want to do, what motivates you?   There will be thousands of essay from kids who want to “change the world” or “make the world a better place” in some abstract way; if you say something concrete like you want to develop new technologies for desalination to cheaply provide clean drinking water to areas that need it (and then provide some cool schematics on how you might do it), your essay will be remembered.  If you have an art portfolio or an album of your music online, throw in a URL.  Show them you’re more than the application form.

The third and fourth ones are subtle.  Many good students view the dreaded extra-curriculars as an extra “check mark” they need in order to get into a great school; I certainly started off thinking that way.  As time went on, though, I really got into the activities I was drawn towards – mock trial, model united nations, etc.  There were also ones that seemed like obvious resume fodder that I dropped out of, though, like academic decathalon (I couldn’t stand the people or the material).   You’ll have to figure out what works for you, since these activities take a lot of time, and you should do the ones you love because you want to, not because you think they’ll look good on your application. 

Also remember that extracurriculars don’t have to be at school – maybe you have a band with some friends, maybe you do amazing paintings with coffee grounds, maybe you make amateur documentaries about environmental issues in your hometown, maybe you tutor other kids in math and science, maybe you do campaigning for a local politician, etc.  This is what brings us to number four, “spark.”  Admissions committees are looking for unique, brilliant people that will succeed wonderfully and also make the campus a better place for everyone.  They want to invest in the brightest stars; they will see the test scores and grades as a filter, but the people they choose will be the ones whose passion burns right through their application and interview.  They want to admit the people who 20 years later show up in Science or the New York Times for doing something amazing, in which it will of course be mentioned they went to college at Such-and-Such U.  It doesn’t matter if you write short stories or paint pictures or do mock trial or build robotic teddy bears; go deep in whatever you do and let your talents and passion shine.  If you make paintings, have an art show, even if it’s in a local cafe.  If you love writing programs, make something that others can use and release it to the world.  If you write songs, play an open mic in town, and if there isn’t one, set one up with some friends. Do what you love, and make sure your passion and drive are evident in what you do and your application. It’s important that *you* pick what *you* love, though – if you just pick something that you think they’ll be impressed by, it will be obvious – the passion just won’t be there. The hardest part of this, of course, is finding where your real passions are, and that’s not an easy thing; for most of us, it’s something we spend our whole lives doing.  Note that I said “passions” (plural) and not passion – it’s easy to think that there’s only one thing we care about, but that’s rare; we are complex beings and tend to have multifaceted interests.  As a highschool student, I was passionate about writing and music as well as computers and electronics: you don’t have to choose while you’re still in highschool, and it’s better if you don’t.  Take the opportunity of highschool and college  (and the rest of your life) to expand all of your interests and find all the things that you love (also don’t worry too much about whether you’re good at them, that will come with time.  Recent studies show that expertise in anything takes about 10,000 hours of serious practice – if you’re still no good after that, perhaps consider something else :) .  My suggestion would be to try lots of different things – instruments, art forms, sciences, tinkering, drama, sports, inventing – build, play, create, think, absorb, and you will find the thing that drives you, and certainly have a lot of fun figuring it out.   When I had my interview for MIT, I got there a few minutes late, as I’d just been putting the finishing touches on a song I was working on.  When I mentioned this, the interviewer wanted to hear all about it, and we spent the entire hour talking about my music (and little else); this involved everything from what inspired the song (a recent breakup) to how I recorded it (I had built a crazy sustain pedal out of tinkertoys and aluminum foil, and used telephone wire to hook two cassette recorders together so I could get more than one track :) .   I doubt my music alone got me in, but I think the interviewer appreciated the passion I had for what I was doing and the fact that I was more than just a bunch of grades/test scores.

One thought about choosing a school – it’s not clear to me how important it is to go to an expensive private school like MIT or Harvard, especially if you plan to pursue graduate studies.  I did both my undergraduate work and my PhD at MIT; when I started graduate school there were students from all over the country (including a few folks from my hometown school, Iowa State University). They did no better or worse than the MIT folks, and by the time we had our PhD’s, nobody really cared where we went to undergrad.  Even if you don’t go to graduate school, it’s not clear how much it matters whether you go to MIT vs. the University of Michigan or some other high-quality state school.  If you care about such things, there is a slight income differential for those coming out of college at the top schools, but that differential is quickly absorbed by how one performs in the real world.  A star performer and leader who goes to U of M will quickly rise beyond a number-crunching drone from a fancy school in all senses – income, position, influence, opportunities, etc.  That said, one of the great things about going to one of the brand name schools is that they tend to be full of passionate and brilliant people like you, and that makes for a very interesting four years.   Even then, you will find those types of folks in the honors programs of any university: the driven folks always find other driven folks, I’ve seen that my whole life, from high school to where I am now.   Go to a school where you feel you will be able to learn the most, i.e., the environment that seems the most conducive to learning for *you.*  Visit schools if you can, stay with students over a weekend (most schools have programs like this); you’ll find you love the communities in some schools and hate the way people act in others.  I didn’t visit places and got lucky (I loved both the people and the city surrounding MIT); if I had ended up at Princeton (where I was fortunately rejected) I would have been a pretty sad monkey.

In the end, the most important thing of all this is finding your passions and developing them.  You can force yourself to do something you’re not passionate about, but you won’t be happy.  That said, you should be strategic as well:  if you think your passion is in painting and painting alone, you may not be casting your net broadly enough: see if there is a related craft (like graphic design) or perhaps something quite unrelated like programming which might inspire you as well.  Think of yourself as a superhero whose powers are as of yet unknown; only with patience, introspection, and experience will find out what you can really do.  Once you do begin to figure out what drives you, you can spend the rest of your life developing the talents you have and growing skills in the areas you don’t to maximize your potential impact and let you do all the amazing things you are capable of. 

Finally, if all this talk of figuring out your passions before you’ve even entered college is stressing you out, let me tell you what a wise man once told me when I wanted  desperately to find the “right path” for myself.  “Finding the right path takes a lifetime,” he said.  “Relax and enjoy the journey.”

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