Sunday, January 16, 2011

Business Pipelines

Suppose that you are an entrepreneur and you want to start an online retailing company.  You understand at the start that you will need to set up systems to handle order processing and fulfillment, customer support, inventory management, returned merchandise, accounting, etc., etc.  But what if you had started other ventures in the past and already had infrastructure set up to handle those things?

For example, what about inventory management and order processing?  Irrespective of the product that you sell, you will need warehouse space to store inventory (assuming that you aren't doing a drop-ship only operation), you will need systems for tracking inventory, space for filling orders and storing shipping supplies, and not least of all, you will need to have personnel who are trained to take orders, retrieve the merchandise from the warehouse, package it, and ship it to where it needs to go in an efficient and timely manner.

Suppose that, as a serial entrepreneur, you already owned a warehouse and that you had already set up systems to handle shipments and train personnel.  Suddenly, starting a new retailing company isn't as big a task because much of the work is done already.  Your warehousing infrastructure is a like a pipeline into which you can push new business ideas more or less at will.  In fact, if your operation were efficient and automated enough, you could go into business handling inventory and order fulfillment for other companies!  (Incidentally, there are lots of companies that do this if you are willing to pay for it).

The same thinking applies for other aspects of the business, from customer support to marketing to human resources.

Thinking about business in this way makes it much more interesting than it might be otherwise.  An entrepreneur isn't "selling stuff."  Rather, an entrepreneur is building machines and pipelines to automate the money-making process.  I want to start an online retailing company simply so that I can build warehousing and customer support pipelines (making money in the process is, of course, a big plus).

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