This article is written by Dustin Andaya and was first published in Computer World Magazine December 2007 issue.

Not so long ago, Galleon traders went around the globe in search of products to sell at premium prices. Their trick was to buy low from places where those goods were abundant, then sell high where the same goods were scarce. Since the suppliers of these products are usually kept secret, these middlemen could demand large margins. One could say that in the olden days, the value was not in the products themselves, but the information on where these products were found. This went on for many years creating wealth for traders all over the world.

Today, the Internet is changing the very definition of trade. It has given businesses the ability to cheaply and efficiently showcase their products and services worldwide. Company size is of less importance because large or small, they all have access to the Internet as a communication medium. By making information easy to acquire, the Internet gave suppliers the ability to bi-pass layers of middlemen. Because of this, middlemen had to take on different and more sophisticated roles as consolidators, aggregators, logistics providers, and retailers.

This new role is best exemplified by companies such as Amazon.com whose service involves consolidating products from around the world while providing an ideal marketplace for customers. They source products direct from suppliers to push prices down to a minimum level. Their margins are razor sharp and they work on sheer volume to produce income.

The Internet also gave rise to companies such as eBay whose service was non-existent before the advent of the Internet. In this auction style marketplace, a small-scale businessman can compete head on with large companies by offering goods directly to customers. The groundbreaking effects of auction websites are overwhelming. By taking away the middlemen, eBay customers can buy straight from the source giving them a savings benefit. At the same time, this system provides extra profit to suppliers who would otherwise sell their goods at cut down prices to high volume traders.

Unfortunately in the Philippines, we still have ways to go. Everyone has heard of how some items that are “Made in the Philippines” sell for so much in Europe and America. But who earned more profits here? Is it the Filipino who made the products, or the middlemen that sent these abroad? In most cases, it’s the latter. Moreover, the folks up in Europe and America ended up paying an arm and a leg for it. Wouldn’t it have been more cost effective if the item was ordered straight from the supplier in the Philippines and shipped straight to the buyer abroad?

On the local level, the same thing has been going on for years. How many times have we gone to the supermarket or department store asking ourselves why a certain item was so expensive when the exact same item is available in the province for half the price. The answer is plain and simple - someone had to make money in between.

The Internet can change all this today. All we need to do is wake up Philippine businesses and consumers to the new opportunities in e-commerce.

Exactly seven years ago, our obscure flower farm in Tagaytay embraced e-commerce by putting up a website called www.islandrose.net. Our message was a simple one - we will offer farm fresh flowers direct to our customers and we will ship it anywhere in the Philippines at a reasonable price. It pleased our customers so much that they made www.islandrose.net the biggest retailer of roses in the country.

Since Island Rose could go direct to clients, the middlemen who used to distribute our flowers needed to improve. The ones who did, became more sophisticated value added resellers. Some went on to distribute our products in channels where our website could not reach, while others used our supplies to create more complex products that we do not offer. In the end, the consumers benefited from better products and more convenient services.

The Internet gave us the ability to accomplish things faster and more cost effective than ever before. What’s magical is that the same opportunity is available to every business, of any size, in any industry.

I dream of a day when I can buy custom made furniture and handicrafts straight from our talented provincial suppliers or buy foreign goods direct from the importer’s warehouse. When this day comes, we will wake up to a more modern and prosperous Philippines.

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Make sure you send farm fresh flowers - Philippine cut flower corporation, owner and operator of Island Rose, specializes in delivering flowers straight from the farm. Send flowers to the Philippines through Island Rose and see the difference!