Ecommerce Tip: Know Your Products

Someone over at Yahoo Answers asked:

If i were to open an online scrapbooking store with really great low prices, a whole variety of products both old and new and barely any knowledge on the materials, how sucessful will my business be?

Low prices and wide selection of great products are key ingredients of a successful retail tore -- any business that provides these two elements can expect reasonable chances of success.

What caught my eye, though, is the phrase "barely any knowledge on the materials."

An online store is unlike a traditional store where you can put the materials on shelves and let customers inspect and look at it and decide if the material is what they want. On a physical store, the product speaks for itself, without you speaking for the product.

Selling on the Web, however, is different. An online store relies on great pictures and SALES COPY. The sales copy often gives the description of the product, what is the size, what is it made of, and other selling points of the material. If you don't know what the material is, you will miss the opportunity to suggest ways scrapbookers can use the material (e.g. material is great for decorative painting or for use with journaling).

Sales copy is a critical tool to persuade the customers to buy the product, and how well you write the sales copy will depend on your knowledge of the product itself. It is hard to sell a product that you do not know, afterall.

There's only one instance where having "barely any knowledge of the materials" will work -- that is, when you will hire a copy writer to write your product!

Business Idea: Addressing the Childhood Obesity Problem

According to a Center for Disease Control study , an estimated 16 percent of children and adolescents ages 6-19 years are overweight. And the number seem to be growing! In fact, this estimate represent a 45% increase from their previous study.

Childhood obesity is caused by a myriad problems. But a huge part is attributed to young people not regularly engaging in vigorous-intensity physical activity. Participation in physical education classes has been dropping. Children are sitting more on the sofa watching TV or playing computer games instead of running around.

Whatever the reason for childhood obesity, this is one market segment that could offer small business entrepreneurs significant opportunities. Here are some ideas:

• Create a gym/fitness center specifically for kids -- sell fitness as a source of fun and enjoyment. Have a climbing wall and other facilities that will allow kids to exercise and play at the same time.
• Life coach -- to help kids who need to lose weight
• Seller of kid size exercise equipment -- kid size tread mill, trampoline, kid size dumbells, even hydraulic equipment
• Seller of sports equipment for kids -- junior golf clubs, children's tennis rackets, and children's bikes.
• Weight loss camps for children -- one month camp to help children lose weight appeals to busy parents worried that their already overweight children might gain even more weight during the summer vacation.
• After school programs for kids -- exercise programs that children can go to after school to have fun and lose weight
• Food products -- instead of supersizing, go for the opposite end and provide smaller portions of food

I have seen some of these businesses in action -- and it takes a while for parents to understand that they need to do something for their kids. But this is a growing market that should be considered by anyone trying to start or expand a business.

Business Idea: Starting a Party Planning Business

Here are some resources on how to start a party planning business

• How to Start a Planning Business
• Personal Event Planning Business Plan (Free)
• Party Planning Business
• Party planner's growing business

I recommend reading the following books for in-depth information

• The Party Planner by Charles Maring, Jennifer Maring, and David Tutera
• It's Party Time: How to Start & Operate Your Own Home-Based Party-Planning Business by M. L. Hine

What Topic is Good for Adsense?

The best type of website with Adsense are those sites that attract visitors who are looking for ways to spend money. Make your site as simply an information source - not the final destination. Visitors should be looking for something else - and if those are found in your ads, then they are very likely to click on your ads and earn you money.

The responsiveness of visitors to the ads is a key element to success with Adsense. Think of a travel website. A travel website that provides information on travel to Spain will attract visitors looking for ways to arrange their travel and spend money on their vacation to Spain. Your site provides the info, but the ads will provide hotels, travel agencies, tourist destinations, car rentals -- ads that are likely to get the attention of the users of your site. This is a site that will most likely do well with Adsense.

Another example is a review site wherein you compare makes and models of products or services. For example, a camera review site. The visitors you will attract are at the stage where they are very keen on looking to buy a camera. Hence they want to compare prices, models, etc. Your site will provide the review -- the Adsense ads can provide places where they can buy the camera. Hence, CTR can be very high and you may be able to escape the dreaded smartpricing.

Don't really buy into those high keywords thing. When publishers learned that "mesothelioma" is a keyword that costs more than $100 per click, everyone went in to create a site around it -- only to find that they were smartpriced. Instead of getting like $50 per click, they got $0.05 per click.

Create a site with the end user in mind. A site that attracts visitors looking to spend their money -- and you will enjoy the benefits of Adsense

Online Local Directory Advertising Works

Online local directories work, according to a new study by the Interactive Advertising Bureau and comScore.

Their research entitled "Impacts and ROI of Internet Local, Classifieds, and Directory Advertising" shows that online local directories can be a powerful medium to drive online and offline sales. The local space attracts highly valuable customers who are likely to convert both online and offline (though the study finds that most of the conversion occurs offline). The study offered several case studies (e.g. Verizon superpages, Cars.com, etc.) and looked at the funnel analysis for each as well as the conversion rates.

View the Powerpoint summary of the study

Don't Lose that Client!

We have been planning on a redesign of PowerHomeBiz.com and have contacted a web design firm to do the job. The quote was for a pretty substantial (for a home-based operation, that is) 5-figure amount; but we know that we need to do this. We agreed on the quotation, and waited on the contract to be sent to us so the project can be started.

We waited, waited, and waited. The "I'll send it to you the next day" stretched to 4 weeks. Then the contract finally came.

By then, we have lost the enthusiasm to work with the said firm. The delay gave us time to think through the price, and fostered in us the fear regarding the timing of the deliverables. What if they say the whole project will be completed in one month, only to turn to one year! Considering that the payment is calculated per hour of work (not on a per project basis), timeliness is critical -- I don't want to pay more because they work slow!

The design firm explained that the delay was caused in part by their efforts to change their legal structure. But as a customer, I really couldn't care less if the vendor or supplier is changing from C-Corp to LLC or whatever it is they want changed. I want my project done - on time and at the least cost possible.

We have found a new designer, at 1/6 of their price. Too bad that it didn't work with the first design firm.

The lesson for me? When a customer says YES to a project with you, move fast to seal the deal. It's not really "Yes" until that customer signs on the dotted line. So when they agree to work with you, make sure you don't give them time to change their mind. Give them the contract and make them sign on your project.

Get Your Calls Returned and Increase Your Sales

There are times when you need to call a potential customer, whether to follow up on an earlier conversation or gasp, to cold call. Calling a prospect and leaving a message can be daunting at times. I hate talking to answering machines, but I know I have to leave a message so I often have to prepare a script or at least run through my head what I am going to say. Plus, I speak with a Filipino accent so I have to speak slower to make sure that the person hearing my message can understand what I say.

But leaving a message is actually the easiest part -- getting that person call you back is the tricky part, especially in cold calling situations. Here are some tips to improve your chances of getting your calls returned:

1. Repeat your number -- the person on the other end of the line may not have been able to get your number the first time you said it so it is better to repeat your number again towards the end of your message. If a person was not able to hear your number well, there is a chance they wouldn't want to playback the message again to get your number. So make sure they get your number the first time they playback your message.

2. Be cryptic. Curiosity sometimes works. When you call, only leave your name and your telephone number - nothing else. This is especially effective when you call someone who is not expecting your call in cold calling situations. The curiosity that you stirred in them may make then call you back.

3. Tease with your message. If you have previously communicated with the person, call him and leave a message saying you have the solution to his/her problem -- but don't give the solution on the phone. Ask the person to call you instead. This is effective if you have previously communicated with the person and you'd want to present to him a solution to a problem the person has raised with you.

We have previously published the article Sales Technique: Voice Mail that Sells that you can read for additional tips.

Best Opportunities for the Boomer Market

The baby boomer market is big. The Census Bureau estimates that there are 78.2 million Americans born between 1946 and 1964, or what is known as "baby boomers."

If you are trying to reach this market, it is important to avoid the mistake of lumping all the baby boomers together as one market. They're not: they exhibit different consumption behaviours and are different. In fact, think of this market as consisting of 3 segments: the pre-retirees, the active retirees, and the oldest segment (those in their 70s and 80s).

Baby boomers are living longer and staying healthier than past generations. They are working longer too, whether it is because they love to work or they have to work (e.g. they don't have enough funds to support their retirement). They are leading more active lifestyles, enjoying more activities than ever.

If this is a market you are interested in, the best opportunities lie in two areas: travel and education.

A National Travel Association study showed that baby boomers recorded the highest travel volume in the United States. Even the recreational vehicle (RV) industry is receiving a huge boost from the baby boomers. According to the Recreational Vehicle Industry Association, "more RVs are owned by 35-to-54 year olds than any other age group." The Association of Travel Marketing Executives provided a profile of the baby boomers and why they are now an important growth segment of the travel industry. According to ATME, baby boomers consider travel as a necessity and not a luxury; they see themselves as forever young; they want to have fun (and have the resources to have fun), among others.

Education is another area that serves the biggest opportunity for businesses who want to target baby boomers. A record number of boomers are returning to school - some because they want to start a second career, others because they want to continue working. They feel the need to be able to compete with younger workers, and getting new skills such as computer proficiency can help them stay on their jobs.

If you're looking at what business you can start to reach this market, one way is to search the web (for example, "baby boomer travel") to see what businesses are out there already. If you replicate their business, do you think that the business can work in your locality or if you will compete in the same space (e.g. on the Web), do you think you can offer something better? Better yet, come up with something unique and be the first mover in the market.

You may want to read the following:

• Baby Boomers: A Profitable Niche for Small & Home Based Businesses
• The Older Population: Discover this Growing Market for Small Businesses
• The Aging Population and Its Effect On Small Business

Choosing the Right Business Name

Guy Kawasaki in his book "The Art of the Start" has a very interesting way of highlighting the importance of choosing the right name for your business. According to him, "A remarkable name for your organization, product or service is like pornography: It's hard to define, but you know it when you see it."

I totally agree with him. You might think that creating your business name is such a simple process - but actually it is not. Choosing the right name has ramifications in terms of the ability to create a strong brand, even ensuring top-of-mind awareness among your target audience. You'd want to give this process as much thought as choosing the business you started.

Kawasaki has some pointers on how to choose the right business name:

• Be early in the alphabet - Always consider where your business will be if you are in a situation where businesses are listed alphabetically -- in trade shows, in yellow pages directory. You'd want to be among the first, if not the first.
• Avoid numbers - People may not remember the numbers or whether the numbers are spelled out.
• Pick a name with verb potential - This is my favorite tip especially if you have dreams of becoming the next Google, whose name has become a verb ("google" the term).
• Sound different - You don't want to be confused with another product or brand that sounds so alike your name (e.g. Claris, Clarins, Claritin and Claria). I guess this wouldn't matter if you have the resources to spend building your brand and advertising your name, but if you don't, it really is better to sound unlike the others.
• Sound logical - Try to select a name that matches what you do. I suppose it reinforces easy recall.
• Avoid the trendy - Consider a name that will endure for decades

Of course, if you have a great product, you can give it the lousiest and most illogical name in the universe and the business would still work.

Starting a Business with No Money

One of the most common questions I get asked is, "How can I start a business with no money?" Oftentimes, no money means no assets, no savings, bad credit, no families or friends to turn to, and does not know anyone who can invest in the planned business. Someone over at Yahoo Answers asked if given these circumstances, can they get a loan for their business?

Unfortunately it takes money to make money.

Banks will give you loan to start a business if you can prove to them that

• You have a sound business idea that could work
• You have the capability and experience to run the business
• You can repay them the loan
• In case things go wrong, they have something of yours that has value that they can get their hands on if you don't pay

Small Business Administration (SBA) also requires the same things -- afterall, lending institutions such as banks are the ones that give the loans and SBA merely guarantees the loan. Another important factor is that you must show your own commitment and trust in your business -- and this you can demonstrate by putting in equity investment. Yes, they want you to show to them that you have money that you can put into your business!

SBA and banks will not give you 100% of the money you need. They will at most give you 80%, and SBA in many cases will not give the full loan amount up front. Sometimes the loan amount is given in a staggered way, while sometimes you need to spend first and show your receipt and then SBA's lending partner will reimburse the expense.

You can read about SBA's lending criteria and eligibility requirements on these pages

Credit Factors a Potential Borrower Should Know http://www.sba.gov/financing/preparation/qualify.html (#1 credit factor is equity investment)What Will I Need to be Considered for SBA Loan Assistance? http://www.sba.gov/financing/preparation/requirements.html

If you don't have any resources, you can either

(a) wait and save until your financial situation improves
(b) downscale your plans
(c) start a business that you can afford given your present resources
(d) or find an investor willing to give you the equity you need while you run the business -- be ready though to give up portion of your ownership as well as decision making capabilities

I suggest you read the following books to give you more information on how to raise funds for your startup business if you have no money

• Starting a Small Business of Your Own With No Money
• How to Start Your Own Business with No Money and No Risk
• Start Your Own Business for $1,000 or Less

PowerHomeBiz.com has several articles that you may want to read:

• Starting a Business with Little Cash?
• 10 Rules for Starting a Business on a Shoestring Budget

How to Earn from Your Blog

Everyone wants to jump in on the blogging bandwagon.

Blogs are the cheapest and most inexpensive way of getting an online presence. With a number of free and easy to use services available, you can create a blog in minutes. Because the blog creation process is simplier than website creation, blogs enable many individuals and businesses to easily publish a stream of constantly updated journals and commentaries.

More than just a display of their wit and knowledge, bloggers are now taking their blogs to the next step: blogs as a source of revenue. Many even turn their blogs into their main business! However, creating a blog is easy; turning it into a money making machine is a different story.

Read the article "How to Earn from Your Blog"

How to Get Top Ranking in Google Part 2

Other tips on how to rank well with Google:

• Content must be compelling, accessible and unique - this is a key ingredient in getting links. Make sure people can link to specific content.
• Keywords in the URL is one SMALL signal Google looks at. Better to use keywords separated by dashes rather than two words squashed together (just make sure the URL does not have 10-15 keywords separated by dashes).
• Some websites will link to your site via your logo - that is still a vote but has little less value compared to link with anchor text
• It is a popularity contest to some degree, but, it's about quality over quantity. When getting inbound links to your site, remember that 1,000 links from crappy sites are not as good as 1 link from trusted authority sites such as NY Times or Stanford University
• For your outbound links, consider relevance and "smell test".
• On linking to sites with lower pagerank, Adam advised not to be hindered in linking to sites with lower pagerank. It is a myth that a site will be penalized if it links to sites with lower PR. A site showing 0 pagerank today maybe showing 0 because the toolbar is not updated; and that 0 pagerank can move to higher pagerank, too.
• Avoid linking to link farms
• More on the "sandbox" myth - the speaker clarified as much that Google views it unnatural if a site has 8,000 links in 3 days or 8,000 links using the same anchor link. The site must pass the "smell test" -- e.g. in the wake of Hurricane Katrina, some new sites focusing on the tragedy shot up in the search engine; while these sites are new, the recency and gravity of the news makes the rise of these sites look natural
• Don't spam, and don't cloak where you show something to Googlebot and different to users.
• The use of rank checking software is BAD IDEA - sending automated queries to Google is the way to get your IP address banned (except in cases where the vendor is using API). Remember, Web Position Gold has bee banned, so take this seriously.
• Google has comprehensive understanding of misspellings
• Write for humans, not search engines

Read the webmaster tips compiled by Adam Lasnik, Google search evangelist

How to Get Top Ranking in Google

I attended today a seminar called "Optimizing Your Websites for Google Search" on how to make your site get indexed and rank well on Google. The special part of this seminar is that it was conducted by a Google employee, Adam Lasnik, labelled as "the first search evangelist of Google." What else is the best way to learn how to rank well in Google than from Google itself!

The seminar was designed for government employees and held in Washington DC. But it did not prevent me from trying to get into the seminar. Boy, was I so happy when they accepted my credit card payment (so well worth the $30 fee)! Turns out, I'm not the only non-government participant who attended. A whole contingent of AOL employees came, as well as some employees of search engine optimization companies in the DC area.

Adam did not disappoint. He is geeky, but very personable. He knows how to work the room. Seminars always bring out the artist in me -- I often doodle instead of listening to the speaker -- but not this time. My ears were glued to the speaker from beginning to end.

So how can you rank well in Google? Some of Adam's teachings are basic that everyone who has tried to learn how SEO works should know by now. But he also spent his time debunking some of the myths floating around, some of which we were guilty of here at PowerHomeBiz. Here are the ways you can get indexed and ranked high in Google:

• Basic rule : design a site for the user, not for the search engines.
• Avoid javascript menus - Per Adam, Javascript is "evil" when used as navigation. Or even when used as Javascript dropdowns. Always have text linksand do not rely on graphics or javascript for navigation.
• Keep your links in one page less than 100, and make it very descriptive.
• Keep your outbound links relevant to your site -- if your site is about exporting, don't link to Britney Spears site (an extremely painful mistake we committed at one time when we were pretty generous with our reciprocal linking strategy)
• Don't ever use frames as Googlebot gets confused as to what really is the content
• Use CSS
• On the question of subdomains vs. subdirectories, nothing really about it but just make sure it makes sense to the users (don't use subdomains when you only have 1 page of content for that subdomain)
• Key markers of a web page are its title tags, meta description tag and smart anchor text. Keep the title tag descriptive and unique; put site description details in the meta description tag and summary in the title). Stop using "click here" as your anchor text (e.g., "Obtain the latest federal tax forms for 2006" instead of "Click here for 2006 federal tax forms")
• Size of the webpage matters -- keep it under 100K
• If you have dynamic URLs, avoid using "ID= " as this is viewed as a session ID and Googlebot ignores it. (I've seen this happen with 2,000 pages of content in a database not receiving any traffic from Google because of this mistake).
• Flash may look pretty but can be the Google indexing kiss of death. Googlebot does not read flash. If you have to use flash, you need to have thousands of trust sites linking to you to rank high.
• Consider link building as pounding the pavement. Do not ever use automated systems!
• Do reciprocal links ONLY if it makes sense to your users.
• Use 301 redirects to address the problem of canonicalization (the problem of a unique content presented in different ways -- http://www.powerhomebiz.com, http://powerhomebiz.com and http://www.powerhomebiz.com/index.htm)
• There is NO universal sandbox; Google does not hold sites in moderation (the myth of the sandbox is when a newly launched website does not rank well or even show up in Google)

More tips tomorrow ...

Earning from Advertising: How Much to Charge Advertisers to Your Site?

If you are thinking of earning from your website by selling ad spaces, one of your first questions will be: "What will I charge advertisers?"

In my opinion, your rate will depend on several factors:

• Who is your audience and how desirable is your audience to the advertisers? If your audience are techies or those who have the propensity to purchase higher-ticket items, then you can charge a higher price as compared to an audience of bird lovers.
• What is the rate of comparative websites in your niche? You don't want to overprice yourself out of the market yet you don't want to undercharge as well.
• What is the rate advertisers are willing to pay in your site? You may charge $5 per CPM but if nobody's taking you up on the rate even though you may get inquiries, then it could imply that advertisers may consider your rate too expensive. But if you charge $0.50 per CPM and advertisers are flooding in, then you may be too cheap and can afford to increase your rate.
• What is the CPM you get from other advertising vehicles? Do you run Google Adsense, and if so, what is your effective CPM rate with them? Or if you run banner ads through ad networks like Burst Media, Valueclick or Tribal Fusion, what is the CPM you're getting? You can use those values to help you gauge your rate. It may not always work (e.g. if we use the CPM we get from Adsense, nobody's ever going to advertise on our site because our Adsense CPM is too high) but it can give you an idea of what rate to use.
• What is the level of exposure the advertiser wants? You can lower your rate for an advertiser willing to sign a longer term contract, say for one year vis-a-vis an advertiser that signs up for only a month. You can also arrange for special rates if the advertiser is purchasing several advertising products from your site (e.g. advertiser wants to buy banner ads, text ads and newsletter sponsorship).

If you're just starting in the game, experiment and see what rate the market will bite. You can start at $1 per CPM and see how it goes.

Earning from Google Adsense: It's All About the Fit

Adsense is mostly pay per click -- which means you earn when people click on the ads. Your earnings will depend on a large part to the responsiveness of audience to the ads.

For example, a travel website that provides information on travel to Spain will attract visitors looking for ways to arrange their travel and spend money on their vacation to Spain. Your site provides the info, but the ads will provide hotels, travel agencies, tourist destinations, car rentals -- ads that are likely to get the attention of the users of your site. This is a site that will most likely do well with Adsense.

Or a site providing reviews of laptop computers. This type of site attracts visitors who are ready and willing to spend money and visiting the review site is a step to help them make the decision to actually spend. The review site may provide information and specs of laptop computers, but Adsense may provide links to vendors of laptop computers. Hence, there is a high likelihood that visitors will click on the ads to laptop vendors after reading the reviews. This is the site that will do well with Adsense.

However, in a chatting or gaming website, the main purpose of your visitors is to chat or play games on your site. Your visitors are not interested in the ads and will more likely ignore the ads. Afterall, they come to your site to chat and play games and are not looking for ways to spend their money. Adsense is not likely to perform as well. For your site to earn 5 digits per month, you must offset your poor CPM and poor CTR with tons of ad impression.

You can still use Adsense but if your chatting or gaming site generates a lot of traffic, a CPM approach is much better. Try to check out banner advertising networks as they offer CPM adverts. You may earn better with this approach. Here are some banner ad networks that you may want to join

• Burst Media http://www.burstmedia.com
• Fastclick (ValueClick). http://www.fastclick.com
• Advertising.com. http://www.advertising.com
• Tribal Fusion http://www.tribalfusion.com

Earning from Blogging

If you have a blog, chances are you earn money from it via advertising through banner ads or contextual ads. But if you are so fond of blogging, you can expand your earning opportunities by writing for blogs and getting paid for your blogging.

There are several blog-for-pay venues that you can consider joining:

Blogit.com = readers pay a subscription fee to read blogs, and this fee is divided among the writers the subscriber reads. The more readers the blog writer attracts, the greater the income for the writer.

Pay per Post = this works more as paid advertising copy. Instead of the blogger writing a review about products or services unencumbered, the blogger responds to what is called "opportunities" which are requests for writeups from advertisers. An example is the request for 40-word writeup designed to create buzz for an online children's apparel website - and the fee is $2.50 -- such a paltry sum for blatant paid ad placement.

Weblogs Inc = this works more like a paid position, where you apply to blog for one of the company's blogs (mostly tech and Internet focused)

Marqui's Pay Bloggers Program = again, this acts like paid endorsement where you will be paid $800 per month to make a "textual mention (with URL link) about Marqui and its Service on your blog four times a month." An additional $50 will be paid for every qualified lead you send their way.

If you don't mind endorsing some companies or services, not because you think there are well worth endorsing, but because you were paid to do so, then you can consider several of the above opportunities.

Business Idea: Starting a Vending Machine Business

The vending machine business attracts many because it is a business that may not require as much time and effort as a daycare or catering business while allowing for immediate cash flow. It is a cash-only business so there are no worries of receivables, bad checks or credit card chargebacks. This business can relatively be started with a small investment with no personal selling required.

A seller of vending machines offer a number of good tips about the vending machine business :

1. Select the right product - Choose a product that offers a healthy return for your money but not too labor intensive. Consider how much revenue you can receive per location for your chosen products and how much time would be involved in replenishing your items including drive time. Study the profit margins of the product, cost of purchasing the items, capacities of the vending machines and the efficiency of servicing the machine.

2. Choose the right machine - In choosing the machine, you need to consider your product, what's available in the market, and how you will maximize your location. Also make sure that your machine will stand out from other vending machines in the location. It must impress your client.

3. Location, location and location - This is a business where the location of the machines is absolutely critical to the success of the business. The location must attract significant foot traffic. You can look for a location yourself or you can hire a professional location company.

Here are associations on the vending machine business where you can find more information about the business:

• National Automatic Merchandising Association http://www.vending.org/
• Automatic Vending Association http://www.ava-vending.org/
• Directory of Vending Business Associations
  http://www.vendingconnection.com/ypassoc.html

You may also want to read some articles on the business and check out other resources

• Vending Secrets
• How to Start a Vending Machine Business
• i-VendingMachines.com

For detailed information, check out the following books:

• Vending Business-In-A-Box: A step-by-step guide to starting a profitable vending business without getting burned by Bryon Krug
• Start Your Own Vending Business (Entrepreneur Magazine's Start Up) byAnne Rawland Gab
• Vending Success Secrets - How Anyone Can Grow Rich In America's Best Cash Business! by Bill Way
• Cash Locations: A step-by-step guide to securing the best money-making locations for your vending machines by Ronnie Talent
  
  
  

First Question to Ask When Launching a New Product

Someone over at Yahoo Answers posted a very interesting question: "What is the first most important question to answer when creating a business plan for a new product?"

For me, the first question to ask is, "Is there a market for this new product?"

Many entrepreneurs make the mistake of creating new products and spending so much money developing and marketing the product -- only to find that the buying public does not want it or does not need it.

Sometimes, what you think will click with the consumers does not click -- and if you have limited resources and your product is a dud -- that will be the end of your business. If you've watched the American Inventor show, many inventors suffered from this assumption and believed that the world would love their product -- only to be told by the judges that no one would buy that gadget.

The very first question you need to ask when writing a business plan is whether this is a product that people will actually buy. And to answer this question, you need to conduct some form of market research study which should be presented in your business plan. If you can afford it, hire a market research company to do some concept tests for you or focus group discussions.

Or gather some secondary data by pouring over stats and researches on the needs of the target market. If there are similar products in the market, check if there are any data available (e.g. industry or company revenues, number of players in the industry, etc.). It is hard to go through the development phase without knowing whether consumers would love this.

Of course, market research is not always the answer. Sony Walkman was launched in the 70s (the grand daddy of MP3s and IPods) without any market research at all. The Chairman of Sony at that time Akio Morita did not believe in market research, yet felt strongly that the Walkman is a product people will buy. And he was right! But then again, Sony has ample resources compared to a person whose entire life's savings can be thrown away if the new product they have do not resonate with the public.

However you do it, just make sure you can get some indication of the market's probable response to the product, whether through primary or secondary data. Or even ask a knowledgeable person who has wider experience in the market you are planning to penetrate (or ask one of those judges in American Inventor!)

10 Trends for Christmas

I come from a country where Christmas is such a huge celebration that Christmas decors, lights and music can be seen and heard as early as September. I absolutely love Christmas season.

The magazine Selling Christmas Decorations (a must-read if you're in the Christmas business) in their September 2006 issue (pp. 18-19) lists 10 trends for paper products such as stationary, gift cards and greeting cards this upcoming holiday season:

1. The Christmas Girl = the stylish girl carrying Xmas gifts or shopping bags is emerging as the new Xmas icon, edging out Santa Claus (why?!?!?!).

2. Fashion First = even without the stylish girl, consumer culture is becoming the new symbol of Christmas with the use of dresses, shoes and other fashion accessories (which unfortunately speaks of the realities of today's culture where the true meaning of Christmas has been reduced to shopping and spending).

3. Modernism = traditional cards show Victorian women and furnishings; now card and paper designers are showing more 20th century style and living

4. Beyond Red and Green = The traditional red and green are expanded to include various shades of these hues (e.g. lime green, pink, pastel green, etc.). The newest colors are "fun and funky" and colors such as turquiose, brown and orange are now seen as well.

5. Pop Art = the pop art look of circa-Andy Warhol is being revived in many Christmas products with bold stripes, repeating designs and abstract versions of holiday icons

6. More and Less = Christmas cards are going in two different directions - the minimalist look with sparse design and smaller images with more white space; and the embellished look designed to create a unique look.

7. Diversity = there are more ethnic lines (finally!) from Spanish language cards to African-American themed cards that go beyond Christmas and Kwanzaa holidays

8. Christmas Party = there are more upscale designs for Christmas invitations and even photo cards

9. Hitting Price Points = High-end handmade card lines were the norm of the past; now some suppliers are focusing on lower price points that have been left out in the past (yes, we want more of the inexpensive but unique cards!)

10. New product categories = new products such as pop-up gift toppers which are 3-dimensional alternative to bows; new ways to package gifts such as trinket purses, big-top boxes and treat bags.

Selling Beyond eBay: Increase Your Online Sales by Tapping Alternative Marketplaces

eBay is a terrific marketplace that has allowed many people to earn a living by selling items found in their houses. Many have even started a full time business on eBay. If you are thinking of selling something, the first advice you'll get is "Sell it on eBay."

But alas, everyone by now knows about eBay. It feels that everyone and anyone is selling on eBay. Competition is really tough. When I started selling on eBay 3 years ago, the scrapbook kits I was selling then were literally flying off the shelves. Same with pearl necklaces, vintage postcards, home decor items from Southeast Asia, ikat cloth from Uzbekistan and several other items. Now admittedly, it is getting harder to sell on eBay. There's just too many sellers today. Plus, the fees keep on increasing and increasing.


No wonder savvy sellers are exploring other avenues to sell their wares. If you want to keep your profit margin growing, it is wise to look beyond eBay in selling items. A new book “Selling Beyond eBay: Foolproof Ways to Reach More Customers and Make Big Money on Rival Online Marketplaces” by Greg Holden urges sellers to look at opportunities beyond eBay. My colleague Lyve has written about the alternative marketplaces that sellers can consider other than eBay.

The author of the book provides the following tips when thinking of exploring other marketplaces:

1. Develop the right attitude -- have the confidence in your product. More importantly, set a goal such as aiming to double your sales by starting your own website and selling in two more auction destinations other than eBay.

2. Build on what you know already -- maintain your presence on eBay, but start exploring other venues by first offering your best selling products. Don't reinvent the wheel in terms of your system for listing, packaging and shipping items. Use tools such as Mr. Grabber and offer items that don't sell on eBay immediately to other marketplaces such as iOffer.

3. Be Flexible and try new approaches -- Some of the marketplaces operate differently from eBay so it is important to be flexible and learn about the customers of these marketplaces.

4. Match your merchandise to the venue -- Find the right marketplace for your products and see if there is a niche market specifically for your items. If there is, you may stand a better chance in offering your products to a place where enthusiasts and buyers for your products gather rather than a large marketplace such as eBay where clients are more diverse.

5. Find the right operational partner -- Try to find a solution provider or software to handle repetitive tasks such as relisting items, managing customer databases, sending confirmation and follow up emails, even feedback. Tools such as Vendio or ChannelAdvisor may increase your monthly operating costs, but these tools can save you lots of time and can allow you to focus more on productive activies.

6. Sell on your website -- Having your own website saves you listing and final value fees when the item is sold. When you are thinking of expanding beyond eBay, consider first selling on your own website.

7. Expand your sourcing efforts -- Don't think of starting your own website or expanding into other alternative marketplaces without first verifying that you indeed have enough inventory to sell!

8. Move from B2C to B2B e-commerce -- Consider selling in bulk to other businesses and use B2B marketplaces such as Liquidation.com or UBid.com

9. Ask for help -- the discussion boards of eBay and your marketplaces of choice can provide valuable inputs and assistance. Check them out if you haven't done so and get advice from these savvy sellers.

10. Buy globally, sell locally -- Consider selling locally through your newspaper classified ads, or online classifieds such as Craigslist.com and others.

If I have time, I really want to sell my wares in my own website, but I need first to check for tip #7 to see if I do have enough items to sell. Everyone wants to maximize their profits, so consider if selling beyond eBay can improve your bottomline.

Business Idea: How to Start a Limousine Business

If you are thinking of starting a limousine business, I suggest you start by researching and thinking through the business. It is best if you put everything together in a business plan.

Palo Alto software has a sample business plan for the limousine service, but it is not included in the free samples they provide. It is only available when you buy their product:

Limousine Business Plan

There are a number of things you need to consider:

• What is the type of limo that is right for the business you are envisioning, taking into consideration the different makes and models available in the market
• Should you buy or lease? Should you use brand new or used limousines? More importantly, how much is your capital?
• Make sure to get limousine insurance.
• Determine how are you going to reach your target market and market as well as advertise the business
• Know the permits and licenses you will need
• How are you going to hire, train and get the license for your chauffeurs
• How do you maintain your limo fleet, including parts and supplies
• How will you price your services? What is the ongoing rate in the market today?
• What to expect on expenses, especially with the rising cost of gasoline

To give you more information on starting a limousine service, here are some resources and books:

National Limousine Association http://www.limo.org/
Limousine Industry Discussion Group http://limos.infopop.cc/eve

How to Start and Operate a Limousine Service (Plastic Comb) by Randell Nyborg
Wheels of Gold: A Complete How-To Guide for Starting a Million Dollar Limousine Business -- by William J. Goerl
How to Start a Limousine Business -- by Don Hill

Tips to Sell More on the Web

If you are selling on the Web, you need to read the article "How To Sell More on the Web: 30 Tips To Increase Conversion Rates For An Ecommerce Site" . This is a long 4-article series that provides tips on improving your conversion rate. It is by no means complete, but it contains loads of ideas that you can implement in your own online store and improve your online revenues.

One of the best magazine that I read cover to cover is Internet Retailer - this is a magazine that you must have if you are selling on the Web. And of course, check out the ecommerce section of the WebmasterWorld.com forum as they have experienced etailers participating.

The article is the featured article in our newsletter today

Networking Tips: How to Introduce Yourself

I am not a gregarious person (oftentimes I am just content to be a wall flower observing everybody) so networking events require tremendous effort on my part. The most difficult portion for me is the introduction; I always have difficulty in introducing myself.

Joanne Black's “No More Cold Calling” book mentions that studies have shown that

"the number one skill for success in the twenty first century is the ability to talk to other people. If we don't connect with others, there is really no next step: no referrals, no job offers, no promotions, no alliances. In the first ten seconds, you have to intrigue people enough that they will say, "Tell me more." The only goal of your initial interaction is to have the next interaction. Period."

So what should be the right introduction that will generate interest from other parties and avoid uncomfortable silences or worse, the other person leaving the room?

Ms. Black recommends that your 10-second or less introduction should be succint, compelling and have a hook. Better yet if the hook can make the other person smile. Below is an example of a poor introduction spiel made by an IT professional while explaining what he does for a living:

"I help companies maximize their ROI on strategic IT and product initiatives through financial planning modeling and logical system modeling.

A mouthful, eh?

To make this spiel more interesting, Ms. Black asked the IT professional what he loved with his job. And he came up with "I help people solve tough problems in tough times" -- which is infinitely more interesting than the staid intro above.

Here are some of her other examples:

Health insurance: I make body maintenance more affordable.
Attorney: I make sure you don't get lost in the fine print.
Caterer: I cater to the needs of party animals.
Meeting planner: I relieve stress better than a martini.
Office Systems: I bring people from the dark ages to the digital age.

Interesting, isn't it. Now allow me to write my opening spiel ...

How to Ask for Referrals

One of the best ways to get new clients and customers is through referrals from your existing customers, friends or colleagues. If you are referred, half of the pre-selling work is done -- the potential customer is already familiar with you and the recommendation by which you came is from someone they trust.

But how do you start to ask for referrals? A new book “No More Cold Calling” by Joanne S. Black gives some suggestions on how to request someone for a referral:

• "It would mean the world to me if you could introduce me to one or two people you know."
• "It would be terrific if you could put me in touch with one or two people you know."
• "I’d really appreciate it if you could introduce me to one or two movers and shakers."
• "It’s your relationship, and I know you’ll want to make the call to introduce me."
• "It really works best if the person making the referral makes the introduction."
• "An introduction from you would be terrific. If I just get a name, it’s like a cold call (and you know I don’t make cold calls)."

You can read more from the book in this summary written by my colleague Lyve

How to Successfully Launch a New Product

I've come across a paper on how to launch a new product successfully. The paper is formal and a bit MBA-ish, but offers solid advice on the factors that could impact the launch of a new product.
According to the paper, the critical success factors for new product development are:

1. Product must be differentiated and superior = Make sure that your product is not a tired "me too" product, but something that is clearly better than your competitors.

Also avoid the mistake of launching new products that you think is great -- but nobody wants. Do not make products that are in search of a market - which is a totally wrong way to go about creating new products (yet many very established businesses make this mistake).

2. Research, research and research = Do a market research BEFORE even creating the product. Check the concept if this is a product that the target audience actually wants, find out what competitors are doing and whether they have similar products, and verify if you have the resources and capacity to produce the product.

I personally have made the mistake in the past in going to step 2 in product development procuring the software and equipment I need only to find that I cannot produce the product I wanted.

3. Tap the inputs of the customer = The paper suggests doing a lot of customer research including focus groups to tap into the inputs of the customer. This approach may be easy for a bigger business, but may be expensive for a home based entrepreneur. Actually, I have yet to find a home based entrepreneur who actually hires a market research agency to do focus groups prior to developing a new product. It's one of those things that sound really good, but beyond the reach of many home based business owners.

Formal market research may not be an option - but there are other ways to get customer feedback. If you have a website or access to an email list, you can create your survey for $19.99 per month with SurveyMonkey.com. You can ask your existing customer base about the concept of your product (without giving too much info away!) and verify if the product is something they would buy if available.

4. Clearly define the product. Scope creep is one of the most common causes of project failures. One simple example is a planned mini-ebook on making money through Adsense becomes an expanded book on contextual advertising. Expanding the idea seems to sound good, but you are likely to miss your deadline and you need to do a lot more work. The matter becomes difficult when you are creating a physical product and you have to go to production -- changing the specs will increase production costs and create unnecessary expense of revisions.

5. Think of marketing the product before launching. Do not wait for the product to be completed before you think how you are going to market the product. Even during the development phase, you need to know how you are going to reach your target customers, and even start some form of marketing.

You can read the complete paper from BPTrends.com