Introduction

Back in the 1980s, when mail-order businesses were taking off, a sheepskin merchant based in Australia lamented the cost involved in printing and shipping heavy, expensively produced product catalogs to his global customers. His argument was that since he was shipping from a warehouse and his products were top-notch, he would much rather invest the cost of his catalog in lower prices and even better quality than in fancy marketing aids.

He was completely missing the point. The cost he was lamenting was actually the minimum investment required by his potential customers before they could trust him enough to do business with him without ever having met him. The trust equation that was in operation back then required a certain expense ...

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