[swalsh]

When I worked in a LARGE eCommerce company maybe 6 years ago, everything was driven by CSV files dropped in an FTP folder. There were a few exceptions where companies had API's. Still even those were GET requests initiated by us, and we didn't want to overload them so it wasn't super up-to-date, but that was the norm. I tried to break out to do my own thing, and I realized those automated systems were only for the big guys.

If you were small, you don't even get the privlidge of an inventory file. Vendors don't have time to deal with small guys, and it can be super difficult to get started.

Playing with crypto, and NFT's, I realized this was what I wish was the norm. The indexers were close to real-time. The chain I was using (AVAX) had a finality of 4 seconds, and gas is cents.

What i'm going to describe isn't a solution to a problem the big guys have. They had enough sway with their vendors to get good systems. But for small guys like me, open access to automated systems would have been a god send. My dream system would be something like this:

Think of this happening in a subnet (an app specific blockchain that doesn't share space with other apps, so scale is not affected by other apps)

1. A Trusted supplier mints a NFT for each of their SKU's (yeah trust and crypto don't go together ideologically, that's a purity problem crypto needs to get over itself, sometimes trust is useful... if you try to build the whole thing trustless, it's not better than traditional systems).

2. These NFT's are listed in any NFT marketplace that cares to list them. (with subnet-to-subnet messaging, you don't need to duplicate the contracts... so shouldn't have major scale issue. This is a brand new feature, so i'm not super sure though.)

3. I as a small scale vendor list a sku on my normal site. I can take payment as normal, but then I can call the NFT's index to get real-time inventory (even though I have no preexisting relationship with the vendor)

4. I get an order, I buy the NFT off the marketplace, and burn the NFT. My customers details are provided in the NFT burn contract. An app specific precompile let's me transmit those details to the vendor without making it public on the block chain (with proof it received it correctly).

5. After the NFT is burned, an ERC20 token is dropped in my stores wallet. After I get enough of these, I can trade them in for a volme rebate. This let's the small vendors get access to effectively what is a volume discount.

I suppose this could be a SaSS app, but there's a bunch of side benefits to crypto, such as defi, tooling etc. But mainly vendors can customize their own terms if they own the full contract chain.

[thwayunion]

> What i'm going to describe isn't a solution to a problem the big guys have. They had enough sway with their vendors to get good systems. But for small guys like me, open access to automated systems would have been a god send.

I guess what I don't understand about this is the incentive structure for the vendor.

If the TAM opened by providing small guys with inventory files is big enough, just put a CSV in an S3 bucket or provide an API that's "free until abusive". No need for middleware and you can probably pay for decades of bandwidth before the middleware's cut comes even close to break-even. I work with a few small vendors, and this is basically what they do. No NFTs, blockchain, or other nonsense needed. File hosting+CSV solved the problem over a decade ago.

This part also doesn't make any sense to me:

> After I get enough of these, I can trade them in for a volume rebate. This let's the small vendors get access to effectively what is a volume discount.

The real question is: how many of these vendors even want to work with the small guys?

In B2B, nontrivial volume discounts are justifiable due to a downstream entity's ability to guarantee demand to the upstream supplier. It's a cash-flow thing. If a downstream consumer can guarantee they will buy a certain amount of product, I can take that to the bank (sometimes literally) and invest in growing the business. The reduced volatility and guaranteed demand is worth a 20% discount because it allows me to invest in growth with reduced risk.

Small businesses with JIT inventory and bursty sales are literally the exact opposite of what a small manufacturer wants. As a manufacturer, why would I give a bulk discount to the least attractive type of consumer?! It'd be literally paying for the privilege of taking on someone else's risk... I can understand why my counterparty would love post-facto bulk rebates, but why the heck would I as a manufacturer give them the pleasure of screwing me!?

[swalsh]

> just put a CSV in an S3 bucket or provide an API

It's more than JUST inventory. It's inventory, orders, and volume discounts. I don't deny that you could build a bunch of s3 buckets, and API's to solve these problems. Of course you can, we've been doing it for 2 decades. But it's not a great solution. I've worked with them, it sucks. As a retailer I need to automate each one independently. My web3 solution gives a single interface for multiple vendors for each function. I believe my solution is simpler. It may not sound simpler because the tech underneath is somewhat complicated. But from a user point of view (as a retailer, and as a vendor) it's WAY easier. I think it's also SIGNIFICANTLY less work for the vendor to implement.

> Small businesses with JIT inventory and bursty sales are literally the exact opposite of what a small manufacturer wants.

Does a vendor care if it's 1 large business or many small businesses in aggregate? It does if it has to deal with all the small guys. The main problem with dealing with many small vendors is the management of it all. This is my solution to making it trivial, so they can get the additional reach, without having to deal with a bunch of small entities.

My goal is to make it easier for small businesses to compete with big business (as in retailers). I think this technology can solve some of the problems that previously made it not worth the time for vendors.

[thwayunion]

> It's inventory, orders, and volume discounts.

I see. That makes more sense.

The web3 angle seems like a red herring.

> It may not sound simpler because the tech underneath is somewhat complicated. But from a user point of view (as a retailer, and as a vendor) it's WAY easier. I think it's also SIGNIFICANTLY less work for the vendor to implement.

Easier than bespoke, sure. But a web2 platform custom-built for this purpose would surely be easier than web3. Both to implement and to sell to vendors. No?

> Does a vendor care if it's 1 large business or many small businesses in aggregate?

Well, you definitely care about your counter-party's credit risk and the cost to you of assessing that risk!

Cost of assessment: having one large counter-party vs. a ton of smaller counter-parties is a substantive difference even if they're identical credit risks.

Actual risk: In practice a good number of those small counter-parties are small shops that might keep close to zero capital in their business. Particularly in the case of eg drop-shipping. A typical drop shipper is literally more risky than the end consumer! So counterparty's credit risk is wildly different. A bunch of worthless LLCs running on razor thin margins with very little cash in the bank vs. a large well-capitalized company with significant assets.

> My goal is to make it easier for small businesses to compete with big business (as in retailers). I think this technology can solve some of the problems that previously made it not worth the time for vendors.

Aggregating demand is a useful role for an intermediary, but the real product is financial services rather than information services. Playing the role of either auditor or guarantor for aggregated larger purchasing promises made by smaller entities would certainly be a real financial service for which you could charge a reasonable fee (ie take a cut of the discount). But still the vendor doesn't care. They just treat you as the large well-capitalized client. And your customers are the smaller consumers.

[ElevenLathe]

> Easier than bespoke, sure. But a web2 platform custom-built for this purpose would surely be easier than web3. Both to implement and to sell to vendors. No?

Even better, if your goal is to promote competition rather than just make money: publish an open standard that can be implemented by anyone. Might not be much more than a specific set of columns that a CSV has to have to be considered an OpenVendorMagick(tm) inventory endpoint.

[swalsh]

In practice, web3 has proven to be more open and composable than web2. I guess in theory web2 could start coordinating with each other. But it just doesn't seem to happen often. On the other hand web3 companies have shown to be extremely interoperable. Whitnessing this was one of the first things that made me go "there's something here".

[swalsh]

The financial services aspect is something I'm also aware of. That's in a way what I want referring to when I said it has defi benefits. It's another example where the big guys have an advantage, but I think crypto can even the playing field (my main concern there is I suspect it would be legally classified as a security)

[nprateem]

> then I can call the NFT's index to get real-time inventory

Do you mean you're selling as an intermediary and aren't holding stock yourself? What sort of industries does that happen in? I'd have thought for most B2C sales you'd hold inventory yourself (that's always been one thing putting me off starting an online shop).

[thewataccount]

> I'd have thought for most B2C sales you'd hold inventory yourself (that's always been one thing putting me off starting an online shop).

Not sure if this is what you're talking about, but drop shipping (you're a proxy store) and Print-On-Demand (you sell t-shirts but they're made and shipped to the customer by the order from a different company - again you're just a proxy) are very popular.

There's less margin but you remove all of the cost/risk of logistics and inventory

[thwayunion]

> There's less margin but you remove all of the cost/risk of logistics and inventory

Risk isn't removed, only externalized. In this case you externalize it to the manufacturer. They know this and are happy to take on the risk... for a price.

That's why the kind of post-facto bulk rebates pitched in GP make no sense.

The Big Big bulk discount the big guys get is the "real" price, and drop shippers get smaller/no discount because they have to pay at least part of the risk premium induced by the drop shipping business model.

[swalsh]

Some people buy and hold inventory, but it's pretty common to do a process called "drop shipping" where you have a relationship with the manufacturer, and have them ship it to the customer. The benefit for them is YOU deal with the customers, and YOU do the marketing.

[ambicapter]

> yeah trust and crypto don't go together ideologically, that's a purity problem crypto needs to get over itself

The first white papers I read about crypto emphasized the "trustless" part of it. It's a selling point. They exchanged human trust for computational trust, only now people are realizing the limits of computer trust (namely, anything that isn't digital isn't covered).

What we're looking for now is a way to actually entangle digital assets with physical assets (hence the rise of NFTs, which purport to be a physical thing, or at least the closest thing to).

[PKop]

You would always need a central authority to reconcile the state of the physical world with the digital ledger. At that point what is the blockchain for? Or, what does the network look like that "runs" the blockchain? Surely there isn't any mining or proof of work, because there's no internal token to produce this way; the value is all external.

And you cant trust random people to create the token or to reconcile (lie) about the physical/digital correspondence. Entangling digital with physical seems to devolve to just a database with a trusted authority administering it. I don't see any other way.

[swalsh]

My design philosophy is to use the blockchain for the parts where it's a good solution, and to not use it for the parts where it's not. For physical products that means adding some trust into the system. For pure digital systems, that means identity, money, or owned objects etc. can go on-chain. Things that are just transient data can go in a traditional database.

[swalsh]

> (namely, anything that isn't digital isn't covered)

Yep! this was my realization when I first started thinking about the idea. You can't computationally trust the movement of physical stuff. Some amount of trust is going to slip in somewhere. It's better to insert the trustless transactions in the places where the relationship is purely digital. In my example above, you have a large vendor which you (as a retailer) trust has inventory to back up every NFT they minted, and you trust to ship relatively reliably. You can't avoid that trust (though you could build mechanisms to increase your trust like 3rd party audits or something). But the relationship with hundreds of small retailers could be built trustlessly. So it's more like strategic trust as opposed to pure trustlessness.