It makes me wonder how companies managed to stay in business when there was lack of purchasing power and goods usually cost way more than today compared to the average salaries.
So people wouldn’t buy a lot of new products and generally products lasted longer.
How did companies make money during this period before mass consumption became normal and products started to be sold by the millions?
In: Economics
Depends on the time period but I assume most cultures used some form of serfdom instead of what we see in modern times. I could be wrong take it with a grain of salt
There wasn’t many companies as we think of them.
There would be local providers (like smiths/weavers/etc) living anywhere large enough to support them. People living in tiny villages would travel for things they couldn’t make themselves, or the tradesperson would travel (like a farrier).
Well small businesses and companies flourished, because you didn’t have huge overhead to start a business or giant international conglomerates to compete against. You could get land and buildings way more easily, access more raw materials straight from the land.
But more importantly: You could get by with way less economic activity in the olden days. Yes we are spoiled today by a higher standard of living, but also society raised the bare minimum you’re able to do. Vagrancy is criminalized, yet owning a house is out of the question for poor people. So you literally can’t just have a sewing business where you make enough for food and clothes and have a simple life, because now there is a threshhold of $200,000 to own a house in most cities. In my city it’s been illegal to build a house under 900 sq ft or with primitive materials or on a lot that already has another house on it for many many generations. Homeless people aren’t allowed to build a shack in their friend’s yard by law; they have to be homeless, pay rent, or somehow make hundreds of thousands of dollars to buy a house.
Same as in any era – you leveraged some sort of ability you had that wasn’t feasible for others to do and sold those goods at a markup.
For example merchants/groups of investors got together and leveraged expensive technologies like seafaring merchant ships to transport in-demand goods from distant lands and sold them for a big profit.
Stuff was also much more expensive in the past for that reason. For example, the most valuable item people used to own was their bed, which was passed down through multiple generations and often the first thing saved in a fire. Technology obviously made a lot of stuff cheaper.
You said it yourself: Products cost way more.
So you spend a long time making something by hand, but also got paid a lot for it. People didn’t buy as much stuff or as often, because it was more expensive.
A company in that context would be a land owner. They could still trade stuff in bulk,
Other commenters already wrote about how it was mostly smaller businesses and tradesmen which is true
If you were wondering about larger companies and operations, they were typically done with some combination of violence and political backing (like today, but more)
Executives weren’t making billions. They weren’t concerned about the stock prices and quarter after quarter growth. They prided themselves on how they treated their employees and longevity of employment. They were happy with enough instead of as much as possible. Basically, less greed
Imagine choosing between making 1 $10,000 watch each month, or selling 10,000 $1 watches each month. Mass production make the supply go way up and kill masterpieces. Hell, there was a time when printed books were new and they de-valued handwritten books and were considered vulgar.
Companies would sell repair services a lot more. So for example, the cobbler would not just make shoes, but repair them. The tailor would not just make clothes, but repair them. The watchmaker would not just sell watches, but repair them.
Repair services existed throughout the 20th century – when I was a kid, there were many local businesses that not only sold small appliances and computers, but offered repair services as well. Today, many of these devices are not made so that repairs are all that viable, and if the devices are repairable, it often is a lot harder to find someone locally to do it – you may need to send away to a specialist.
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