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SE Book [Draft] Exchange of Goods, Introduction of Currency, Worth vs. Value, Retail Sales Inventions

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Here we have loosely chapters 2 through 5 of the first section of the first part. All rough draft and cold read.

The really rough draft text of the 4 chapters:


Exchange of Goods

Barter vs. Trade; They sure sound the same, don’t they? Actually, the terms refer to different methods of moving money or goods around.

In the case of barter, which is older than trade, the exchange is ‘goods for goods’. No money is exchanging hands, which is why it was used far, far earlier than the invention of currency. Bartering on a local scale meant that the other party had access to the same materials, so the inherent value was the same. But if the materials were hard to obtain, even in the same area they could be given a higher value-even though both parties have access to the same materials.

Another consideration in local bartering would be if the materials needed to be prepared in a fashion that required, say, a significant expense of labor, or skill.

But a much less labor-intensive approach would be to barter with a party in an area that doesn’t have the advantage of your natural resources, and vice versa. The problem there, of course, is that there is no control over what goes for how much, and you couldn’t arrange a deal in advance.

You were really at a disadvantage if you were the one traveling to the other. Not only did your time and expense go into the traveling, but at the end there were 2 things you wouldn’t have any control over. One was what the other party thought your goods were worth. And two, as you’ve no doubt guessed, was what value would they attach to the goods they were giving you in exchange. Both parties back then, as today, would over-estimate the worth of their own goods, and underestimate the worth of the other’s.

And if you couldn’t find someone to deal with, then you just went back. And if you were looking for a big difference in available resources to barter between, the value of your goods went up the further you traveled.

Money changed all that. You didn’t have to carry goods at all. You could go anywhere you liked-local or not-and just trade your money for goods or services. Wealth became not who had the biggest stockpile, but who had the most money. The difference is pretty significant. Suppose you are sitting on tons of furs, ready to wear/use. But nobody wants them; Everyone already has all the furs the could ever use. Are you wealthy? Maybe. But you can’t unload one single fur to anyone around you, so their value goes down.

Remember the stories about the gold rush[es], where in the mining towns a haircut would go for 100x what it would in the real world? Supply & demand, and taking in gold for goods or services was trade.

My neighbor has no furs, but lots of currency. They are wealthy in a very versatile way. They don’t need to find people without furs, as their currency (as long as it is within the area recognizing the currency, and is valued reasonably) can buy anything.

Gold or other precious metals were used before coinage, and even salt was used as currency in certain situations. Gold was an early favorite as it never rusted or broke down, and could be melted to make it more pure. It could be shaped, melted down and re-shaped as often as desired. The fact that there wasn’t much of it around early on made it valuable-not the fact that later it would be fashioned into coins.

Now trade actually encompasses, or includes, bartering (the barter system). What I mean by that is that all bartering is trading, but not all trading is bartering. Trading and the development of our week, are tied to one another. The week is, essentially, the days between market days, where the community and travelers would get together on an agreed upon day to buy & sell. It was a lot easier to use markets than just stand around hoping a Bauer or seller would walk by. Markets also allowed the exchange of news and ideas. While farm goods would stay fresh short distances, long distances were a problem for consumables.

Ebola, probably the earliest Syrian kingdom, regulated trade with silver. They established a value for a certain weight of silver, and all goods’ prices were fixed against that standard. All this was documented and in wide use back in 2,500 BCE. An interesting concern of the day was translation of language, and there are many dictionaries for distant languages with Sumerian translations found through archeology.

You might think that bartering is long dead, and that everyone buys & sells with currency, trading. At all levels bartering is alive and well. Many cities organize that are called Barter Exchanges. Small companies can deal face to face, while large corporations may exchange things like advertising or media exposure as leverage. Some actually use a “trade credit”, which is agreed upon, and in writing. The IRS now requires barter exchanges to be reported as per the Tax Equity and Fiscal Responsibility Act of 1982. For variations on this theme, see Local Exchange Trading Systems.

The Introduction of Currency

Coins were first thought to have been religious trinkets used in religious rituals, and maybe even distributed by priests. The earliest known were from the Kingdom of Lydia in Iron Age Anatolia. Coins as we know them evolved from other shaped metals or materials in various forms. If the form was standardized, typically called an “ingot”, it would mean that the value was set and agreed upon by a standard, typically the local kingdom or other authority. The late Bronze Age peoples used tokens, or shaped metals in ingots, to prep resent their currency, but there weren’t markings on them.

Aristotle said that the first place that issued coins was Demodike, or  Hermodike, of Kyme. Kyme was an ancient metropolis located in coastal Turkey. The name Hermodike doesn’t sound familiar to you? Maybe you know her as Queen Midas. That’s right, the wife of the guy whose golden touch was only cured by the god Dionysus.

The term “money” is thought to come from ancient mythology, when Zeus tied Hera with a golden chain half way between the Earth and the Heavens. Hera (Moneta)was lonely up there, and the word for lonely in Greek is “mone” or “moneres” (μονήρης), which means alone or uniquely alone. Hera broke her golden chain with the help of Hephaestus, and the gold chain fell to Earth and became money for mortals.

Did you know that all the gold in the world (above ground) if collected together, would form a cube 20m, or 60+ feet on each side? Another fact about gold as that metal backing much of our paper currency, is that price fluctuations in gold’s trading price are not because the value of gold is changing. It actually reflects the value of the currency changing. I’ll dally a moment longer here to suggest you to read the “Jekyll Island” story (”The birth of the Federal Reserve System”) in  Anthony Reinglas’ Thy Kingdom Come: Overcoming a Failed Economy to find something actually interesting on the topic.

It is thought that because the gods were involved with the Hera myth, gold was only used until 390 BCE in ancient Greece in temples and graves, and certain jewelry. In that year King Philip II of Macedon made gold coins for all of Greece. It’s funny and poignant today that the Greek word for money, “numisma” (or “nomisma”) means to the Greeks, “It is something we think has value, or something that someone convinced us it has, but in reality it has not.” In China, round coins were popping up in the 4th millennium BCE, with Rome not catching on until 289 BCE.

In the United States, we’ve had coins at 1/2 of a cent, two cents, three cents, and even 20 cents. And did you ever wonder why certain coins have those little ridges on their edges? It is from the practice of detecting “clipping” easier. Clipping is simply taking a little off a coin, and adding a lot of clippings together to get an appreciable amount of metal for free.

Currency, whether coins, credit, backed, paper, or commodities, futures, stocks, etc. Has allowed us to trade at all levels of society, acquiring it via any means. Gone are the days of bringing a chicken to fill up your car. In a way, it is kind of sad. Because now money from a bank you robbed spends the same as that hard earned at minimum wage. Money no longer cares what kind of a person you are, what your abilities are, or even where it came from. Your own merits no longer count for your worth in society. Your worth and value is now determined by your checkbook.

Worth vs. Value

According to WikiDiff.com[http://wikidiff.com/value/worth]:

“Worth is a synonym of Value.

As nouns the difference between worth and value is that worth is (countable) value while value is the quality (positive or negative) that renders something desirable or valuable.

As verbs the difference between worth and value is that worth is (obsolete|except in set phrases) to be, become, betide while value is to estimate the value of; judge the worth of something.

As a preposition worth is having a value of; proper to be exchanged for.”

To me, the difference is a little simpler to explain. The worth of something, anything, is the going rate-whatever the market will bear. If I want to sell my car, I look it up on line and see what professionals list it as, as well as what others are readily willing to pay for it. What are they selling for these days? It doesn’t matter if there is sentimental value, as the buyer will no doubt not share my sentiments, experiences, or memories.

So my car will sell for $1,000 or I will never sell it-at any price-because it was the car we shared so many memories in. We spent hours fixing it up, making road trips to far away places. That car was always there for you; It never let you down. You will pour many thousands of dollars into it to keep it running-long past the time for it to pass on to the junkyard to have it’s parts stopped off one-by-one as it’s shell rusts away in a field. That car is family, man! And that is it’s value. The value to me is far more than it’s worth.

You don’t worth something, you value it.

Retail Sales Inventions

You are not likely a retail Sales Engineer, nor will you likely become one. The reason is that they don’t exist. Sales Engineers are for larger sales that have long sales cycles, with several prospect contacts and multiple simultaneous efforts on your side. Retail is the opposite of a Sales Cycle. There is only interaction with a prospect if the prospect asks for it. But just because retail sales doesn’t involve Sales Engineers doesn’t mean it is irrelevant. The same mindset and mental mechanisms used in retail sales are present in larger deals-from the consumer’s perspective, that is. Unaware of it, the buyer goes through the same mental genuflecting when buying anything expensive that they are not an expert in, which usually includes a car. So for just a minute or two we will look at how that experience has changed for our buyers as they shop for everything in their lives not work related.

The birth of modern retail in the 1700s and 1800s is marked by the development of the department store, chain store, and the price tag. We also have the bottle, the Sears Roebuck cataloger, the receipt, cash register, and even the vending machine during this early period. Advertising, a huge money mover in it’s modern form is invented along with the telephone.

Since that period we have been introduced to things like a price gun, the shopping cart, and a supermarket to push it around in. Air conditioning brings customers in past the neon signage so they can fill their shopping bags. At night they can still shop thanks to fluorescent bulbs and credit cards. Credit card debt soon followed. You could be seen on CCTV surveillance cameras taking clothes off their hangers, using your calculator to see how much money you had left after buying something, heading to the checkout where you put your goods on a conveyor belt. You bar codes got scanned while you watched an in-store television and watched a fork lift move some palettes.

Your smart phone scans branded items to see how much they are at the on line store, and you can put your leftovers in that Tupperware in your electric refrigerator for later.

In the 1910s, “Women became the nation’s primary purchasers of consumer goods, making 85% of consumer purchases. In advertising, however, women worked on products for the women’s market (food, soap, fashions and cosmetics). Men moved through training programs, working through all the departments to find the right job. Women started lower, as secretaries or researchers, trying to get noticed as copywriters.”, according to AdAge.com[http://adage.com/article/adage-encyclopedia/history-1910-1920/99072/]

It is critical to see how fast things changed so late in history. We are in business consumers drawing parallels from our personal, retail experiences. Buyers of high priced software tat Sales Engineers help sell to them are still, in their minds, going through the same processes for buying decisions that they do when buying tires for their car. An interesting thing to keep in mind as we look at how sales methodologies evolved is just that-they evolved. Each new one was developed with the lessons of the last, designed to be perfect for all time. Nobody creates something saying, “Well, this will last a few years tops.”

Our brief history of sales continues now with these breakthroughs as the backdrop for the processes and methodologies that make the art of Sales Engineering a science. Maybe not an exact science, but a science nonetheless.

This seems a good time to introduce and/or define a few terms in this whole process, as they are sometimes confused. There are four terms, or identifiers that we use Ni Sales Engineering more than any others:

Supplier – One who crafts, manufactures, or fabricates the thing or stuff. They are usually the shippers or deliverers of said goods (Distributor).
Seller – This is where Sales Engineers are. We are part of the Selling Team, with a Sales Rep (”Rep”) typically having the most at stake. In big ticket software, the supplier and seller are typically the same company.
Prospect – Someone who has not yet bought our stuff. They may in future, or they may not. Getting their attention is called “prospecting”. An existing customer can still be a prospect if they are looking to purchase additional things we sell.
Customer – Someone who has already bought our stuff. This may be a channel, or reseller.
Consumer – Sometimes called the “End User”, this is the party that actually uses and benefits from our stuff. They may buy our stuff directly from us, through a consultancy, or even online.

Early on in our 50,000’ timeline, we will see how it all started with 1:1, face to face sales, and quickly turned more industrial as demand outweighed demand, and cost of goods became significant in price-based competition.


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