Summary of the Core Content
This article addresses a common confusion: “Why are goods getting cheaper, but doing business becoming more difficult?” The root cause is not the efficiency itself, but rather the efficiency revolution brought about by technologies like the internet, which has changed the way profits are distributed and the rules of competition. Consumers benefit from lower prices, but the profits in the intermediate links have been compressed, squeezing the incomes and living spaces of ordinary people (workers, small merchants). Competition has shifted from a local level to a national or even global one, where individuals must compete with the “best players.” The “low efficiency” of traditional models was actually a social buffer; now that efficiency is more concentrated, the pressure falls entirely on the vulnerable groups. The article concludes by offering strategies for ordinary people to survive: avoid pure price competition and find irreplaceable value.
Detailed Analysis
1. The Double Face of Efficiency Improvement: The Money You Save May Come From Your Own Wage
Each of us has a “dual identity”—we are both consumers who seek low prices and producers who hope for high incomes. These two desires seem reasonable on their own, but together they create a contradiction.
- In the past: A product had to go through multiple intermediaries (general agents, wholesalers, small stores) before reaching the consumer. Although this was inefficient, these links all made profits—general agents earned markups, and small stores made retail profits, which also supported local businesses like restaurants and logistics services. The money circulated locally (for example, money earned by a small store would be spent in nearby restaurants, supporting their owners).
- The change now: The internet has eliminated many of these intermediaries. You might think you’ve saved money by buying a T-shirt for 29 yuan, but the next day, the clothing factory where your clothes are made might cut its workers’ wages due to low profits. The money you save is actually taken from your own wage.
Key issue: The benefits of efficiency improvement have mostly gone to consumers, large platforms, and companies, with little going to ordinary workers and small merchants, who have less bargaining power (for example, factory workers can’t negotiate higher wages, and small stores can’t compete with the low prices offered by larger retailers).
2. The Changing Rules of Competition: From “Best Local” to “Best National”
In the past, running a small business was successful as long as it outperformed its neighbors (for example, your noodle shop was better than the one next door). Now it’s different:
- Expanded competition: Running an online store means competing with businesses from all over the country, which may have cheaper supplies, more professional teams, and more money for advertising.
- A cycle of the strong getting stronger: Platform algorithms favor merchants with high sales volumes—higher sales lead to lower purchase costs, allowing them to offer even lower prices, which in turn drive more sales. It’s not that you’re doing worse; the rules have changed. In the past, being “the best locally” was enough; now, you need to be “the best nationwide.”
Example: It used to be enough to be the fastest runner in your village; now, you have to compete with athletes from all over the country—doesn’t that seem challenging?
3. Why Things Are Getting Harder Even Though Everyone Is Doing the Right Thing?
The pain of systemic transformation is evident:
- Consumers choosing low prices is a rational decision.
- Companies cutting costs is also a rational strategy.
- Platforms pursuing efficiency is another rational move.
However, when combined, the result is negative:
- The accumulation of individual rational choices: Companies cut costs, leading to lower employee wages.
- Everyone buying the cheapest products results in less profit for companies, which may lead to layoffs or wage cuts.
- The disappearance of buffers: The “low efficiency” of traditional models served as a social buffer (for example, county wholesalers supported families, and street shops created jobs). Now, with the internet’s high efficiency, the pressure is concentrated on the weakest links in the supply chain (factory workers, small merchants).
- Reduced room for innovation: Small businesses used to have time to try new things (like adjusting their menu); now, they don’t because any delay could lead to elimination.
4. Strategies for Ordinary People: Avoid Dead Ends and Find Irreplaceable Value
Don’t try to stop the changes of the times; instead, find your own place in the new landscape:
- Avoid pure price competition: Don’t produce standardized products (like ordinary T-shirts or everyday items), as large platforms and factories have lower costs.
- Find irreplaceable value: Offer services or products that machines and scale cannot replace—for example, building relationships with regular customers in your community (you know Aunt Zhang prefers sugar-free soy milk, Uncle Li likes spicy food), providing expert services (like traditional Chinese medicine consultations, personalized tutoring), or handling complex communication tasks (helping companies meet unique customer needs).
- Create buffers: Don’t invest all your time in one job; learn new skills (e.g., video editing, writing) and have a side hustle so you can adapt if the industry changes.
Conclusion
In this era of efficiency, the goal is not to become a “winner of the times” but to find a position that allows for long-term survival and continuous growth—perhaps by becoming someone who knows the locals in your community or providing services based on experience. Understanding the rules and choosing the right direction are more important than blindly striving.