Wednesday, April 18, 2007

Job loss in the long tail: from professional to amateur

The world's largest model train store, Allied Model Trains, has been sold and is downsizing because they cannot compete with low-overhead Internet discounters. Consumers are getting better prices, but many of the highly specialized, knowledgeable store staff will be laid off.


Some of these workers may be able to earn income offering advice and information on-line, for example from advertising or subscription-supported blogs, but they will be in competition with on-line hobbyist communities. In general, amateur train enthusiasts will replace the professionals.


Allied owner Allen Drucker discusses the effect of the Internet on his business in this excerpt (1 min 40 sec) from a recent interview. (The entire interview is here).


This is reminiscent of the time supermarkets replaced small grocery stores or a Walmart store coming to a town. Can you think of other on-line markets where specialized jobs are being lost? What is lost and what is gained when specialized retailers are driven out of business by Internet-based alternatives?