Do You Use a Professional For Items That Can Be Purchased Online?

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?

This post was inspired by LiverpoolVictoria

14 Responses to Do You Use a Professional For Items That Can Be Purchased Online?

  1. I work with the database at my job and there are many processes that we can automate but there will always be a question that needs a human so in that sense I am safe :)

  2. Phone operators, collection agencies, some manufacturing, etc.

    Nope, I’m in marketing. Can’t really have an algorithm for that.

  3. My job cannot be commoditized but can be outsourced to a cheaper country. Luckily my company had bad experiences with outsourcing so they don’t do it anymore.

  4. I think sometimes you need a professional — if for no other reason than to make sure you are on the right track in your thinking. For instance, you always read about how raising your deductibles will save you money on your insurance premiums. And while that may be correct in the short term, its not true in the long term. When the Princess turned 16 and I added her to my car insurance, I ran the numbers and realized that if I raised my deductible from $500 to $1000, I would save roughly $10/month. However, that would mean tht both the Princess and I would have to go 4 years without any sort of claim on either of us before those actual savings were realized. However, I really needed my insurance professional to be certain I was on the right track and that I wasn’t “missing” something. I was on the right track, and so we kept the deductible as it was… quite honestly, I’m hoping this will turn out to be a “bad” financial move and I don’t ever have to actually utilize the $500 deductible, but the odds are against a teen driver going 4 years without SOME sort of claim. I think I just needed the reassurance that I was making the most reasonable decision.

  5. There are certain things I want a human-professional for, like my financial advisor. Right now I’m not at the point where I could use a computer program. If I didn’t have assistance figuring these things out I probably wouldn’t invest at all and that’s no bueno. Someday I might fly solo on my money, for now I appreciate the help!

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