The term “Just in Time Inventory” was coined to refer to the efficiency businesses could gain by not tying up their funds in inventory that sat around on warehouse shelves until the product was needed. The problem of maintaining inventory is that it ties up cash you might otherwise need for productive uses. Sitting on shelves waiting to be purchased or used in assembly is not. New efficiency models started in the 1950s Japan to proceed with new processes and rules that aimed for perfect timing for all business operations. The term “Just in Time” was eventually popularized to be applicable at all points of the business process.
Having your inventory days approach zero was the ultimate but, thought to be impossible, goal. Then the Internet came along. It became possible to have negative inventory rates. This means that you could take an order for a customer and have it paid in full for before you even have the parts or product itself. Dell computers was able to undercut competition using this new efficiency. Amazon.com could sell books without ever needing to stock them. Although, the book can be oversold for their preset printing run and become out of stock – but these were inefficiencies from the source, not their own. A paradigm change happened because of the new online business models. They reduced variation in price and stability, which improved product lines and quality. A new breed of retailers were born disrupting the old standbys.
Bitcoin can now be bought and sold at Circle.com just as efficiently. Once Circle.com has verified one’s bank for regular bank transfers, cash funds move through the traditional banking methods to get to Circle. After that point, one can buy and sell bitcoin in seconds. They make it as easy as doing cash deposits and withdrawals, with no fees. This now means you can have your bitcoin ‘just in time’ to make your online purchases using bitcoin – even after you’ve made your purchase online and you are in ‘check out’. Merchants have had the advantage of no volatility – there is finally no volatility risk to the customer as well. The merchant had been safe in this regard by selling the bitcoin immediately upon its arrival to utilize the stability of the US dollar. As merchants aren’t typically in the bitcoin speculation business, they have to follow their business plan and that means fiat currency. When you buy it ‘just in time’ the customer has no need either take on the risk. Previously to Circle.com, people would have to purchase bitcoin using an ATM or other exchange and then hope that the equivalent US dollar value would be equal at the time that they spent it But as bitcoiners – we know to keep stashing more than we spend. *wink*
But now it’s changed. One can place the order on Newegg.com (or other online retailers) and not actually own the bitcoin yet. Once you’ve clicked the “pay with bitcoin” you are given 15 minutes to complete your purchase. At this point you can click on over to Circle.com and instruct a payment to be sent. Better yet, don’t spend your bitcoin savings, and just transfer cash from another bank account over to Circle as they credit your account with bitcoin immediately. Then one can simply forward that money from the Circle wallet to the Newegg.com to complete the purchase. Easy-Peasy. Just in time!
This was done recently with mixed reviews. If there is wallet software on the PC, the Newegg checkout will detect that and will want to transfer the bitcoin from that source first. If it takes more than just a couple of minutes the value of bitcoin to dollar ratio may change somewhat, as it did with me, so that after I purchased my item with the set agreed amount of bitcoin I then had to make a second payment of 88 cents to cover the cost of the difference in price for the last few minutes. Newegg’s implementation of bitcoin payments could improve. It is still a bit clunky. A fifteen minute delay and price spread might work out in your favor or not, but a fifteen minute window of price ‘trust’ would be nice to not have to make multiple payment efforts for the item you just agreed to purchase. Will the opposite be true if the price of bitcoin soars in the 15 minute window giving you the instant discount? In that window of ‘trust’ sometimes you win, sometimes you lose, but it will likely even out so it might be better to just “pause” the outside bitcoin trading world for a few minutes for that one transaction while the payment is completed.
While we are discussing Newegg, their multiple warning screens about paying for items with bitcoin didn’t exactly give me warm and fuzzies. I’ve had good luck with Newegg – so if it’s not right, I trust that they will make it right as they’ve done in the past. I suggest that Newegg and other online retailers can build good-will if they open a new “Bitcoin Customer Service Desk” that bends over backwards to make sure the customer’s experience goes 100% perfect. Until third party arbitrage business models develop, they will be doing the arbitrage on behalf of the “would be” credit card company. Some of the 3% they just saved needs to be put to work building out a department that handles a payment confusion end of the spectrum. If they don’t get it right, it will set bitcoin back until third party companies come along to handle it. Credit cards actually use that 3% of every purchase to handle these business functions so it is a service somebody is paying for. (Passed along to customers when all things considered).
I’ve not had to rely on a credit card arbitration to force Newegg to behave. But I surmised multiple warning screens about using bitcoin were likely the result of an army of Newegg lawyers not knowing how to deal with unforeseen risk using the experimental currency. I’m ok with that: new technology tends to freak lawyers for the first few years. This tends to go away and relax once there are a few case law precedents they can use to navigate the uncharted waters. We all tend to be a little over cautious as we forge new pathways. Things are always a little rough at first, that’s why we want to get the bugs worked out now – and we are all part of that process and history -my fellow currency and payment system pioneers.
I didn’t have to give my credit card information; this time. I’ve purchased many times from Newegg in the past so my credit card information is still on file on some database somewhere I’m sure. At least a version of it before the Home Depot attack, the K-Mart attack, the Target attack, and my local burger joint hack attack. Newegg has my credit card history from a year ago, which means it is now four credit card numbers ago thanks to the revolving door of replacement credit cards I’ve received in the mail after each credit card hack attack. It reminds me of the days in the 80’s where you could join a record club to get ten FREE albums for the price of three.. The catch was that you were sent a random full price record each month if you forgot to send back a monthly notice telling them to hold off for that month. That was such a sweet and innocent scam of yesteryear, and I still have a few shiny and unused “Hall and Oats” records to remember it. As far as anybody knows – I did NOT actually purposely order the “Air Supply” album if anybody asks. Let’s just say I’m glad there wasn’t a block chain then to prove it.
So this will be my new method. I’ll shop first at merchants that accept bitcoin – I’ll make my purchase, swap cash for bitcoin at Circle.com just in time to complete the transaction and away it goes. “Just In Time Bitcoin” is going to change things. My monthly credit card statements are going to become a lot shorter.
It’s about time.
