I don’t have any scientific proof but it seems that more and more jobs and or professions are being commoditized. As defined by Wikipedia it is “the process by which goods that have economic value and are distinguishable in terms of attributes (uniqueness or brand) end up becoming simple commodities in the eyes of the market or consumers. It is the movement of a market from differentiated to undifferentiated price competition and from monopolistic to perfect competition.” While I believe that commoditization of professional jobs absolutely has its pros and cons there is one factor often overlooked by consumers of these new “commodities.”
Commoditization Ignores A Professional’s Ability to Explain What You Don’t Know
Anyone can find and obtain car insurance quotes online or even find a life quote, but what are they missing? They are missing the personal and professional experience of someone behind the desk hopefully acting in their best interest. Rather than relying on a possible expert in the field (if not an expert someone that does it daily) they depend on a website to ask certain questions, this completely removes the critical thinking part of it? Maybe there are riders or slight tweeks on the policy that may provide more coverage for less money.
An easier example is obtaining a Last Will and Testament. As I have mentioned in the past I prepare Wills for clients that are referred to me. Am I more expensive than LegalZoom? Yes, and if I had to guess my fees are probably double or triple the price. Why? Because I don’t believe that the practice of law will ever be completely commoditized. LegalZoom will never be able to sit down with a client and explain to the client what they don’t know, they don’t know.
Commoditization of Professionals is Not a Bad Thing
Notwithstanding the above problems I think commoditization of a profession may actually be a good thing as a whole for a market. If there is a company out there who can do the task for cheaper then it will eliminate those middle of the road performers leaving just the cheap option and the more advanced/personalized option. It forces those that are going to stick around to step up their game.
What other industries can you think of that have been commoditized? Has your job been commoditized?