The Web is a huge
marketplace that has attracted businesses with its potential for
big-time revenues. Dizzying success stories of ventures started
in a basement that grew to become stock market's darlings are
constantly parlayed in the media. Small businesses came to the
Internet, tentative at first, and then in droves - eager to sell
everything from fake estate jewelry to handcrafted tapestries.
As an aspiring entrepreneur, you read these stories with a
tinge of envy as you begin to ask yourself how you can partake
of the success other people are enjoying on the Internet.
"What can I sell on the Internet?" becomes the crucial
question.
Not all products can be sold on the Internet. Some products
may be better suited for online sales than others; others simply
will not work on this new commercial medium. According to an
Ernst and Young study, the most popular online purchases are
computer related products (40%), books (20%), travel (16%),
clothing (10%), recorded music (6%), subscriptions (6%), gifts
(5%) and investments (4%).
The kinds of products and services that sell best on the
Internet are those that take advantage of the convenience of the
Net. Remember that convenience is the primary reason why
consumers flock on the Internet in the first place. People can
shop any hour of the day at any site. They can avoid crowded
stores, irritating sales clerks, and even avoid pickpockets.
The success of any business starts with the right choice of
product or service. Small business owners need to keep an open
mind about the suitability of products for Web sales. To
increase your chances of success in e-commerce, you need to
choose products or service that exhibit the following
characteristics:
- High value.
Offbeat or
unusual products and services often attract online attention
and sell strongly. You would not-in general try to sell
items people can get at the corner store. Thus, few
toothbrushes are sold on the Net; the same thing with daily
food and beverage purchases. But special cheeses, rare
cigars, Turkish plates, long-aged wines, even diamonds, can
-- and do -- sell on the Net.
- Products suitable for shipping by
mail.
Most products sold by catalog and mail
order also sell well on the Net. Choose products that could
be shipped easily. Stay away from bulkier and heavier
products that would result in higher shipping and handling
costs. Higher shipping costs diminish the price
competitiveness of online products and turns-off a lot of
potential buyers. In fact, high shipping costs is the
primary factor that discourages people from buying online
more than any other single reason. Another Ernst and Young
report shows that 53 percent of online shoppers are
concerned with shipping costs that are too high, compared to
only 19 percent who are concerned with credit cards being
stolen.
Take for example dog food. A 40-pound dog food costs about
$31 in one online pet store - a price that is in itself
slightly more expensive than your neighborhood grocery store.
While price differential may not seem much, add to that price
the shipping costs of $8.99 and the gains from buying online
diminish. Why pay more for shipping costs when you can easily
run to your nearest grocery store to buy your dog food - at a
significantly lower price? As the merchant, you need to
rethink your product offering if your shipping cost will price
you out of the market.
- Information-based products.
The
Internet is primarily used to communicate, entertain,
educate and research. It is thus no wonder that
nonperishable, information-intensive products - including
computers and software, books, travel, consumer electronics,
magazine subscriptions - are the most popular online
products at present. Content-rich sites, subscription-based
sites to advertiser-supported sites focusing on a wide range
of topics, have been sprouting all over the Internet.
- Services.
Services
such as hotel reservation, air travel and investments have
successfully translated themselves to the Internet. A couple
in California is earning big bucks from the surfing school
business that they established online, where people pay and
come to their place to learn how to surf.
The Web, however, is less effective when face-to-face
selling is needed to close a deal. The Net can give lots of
preliminary information that's useful in setting the scene for
the closing. But the actual closing takes place offline - i.e.,
not on the Internet. For service businesses, it is easier to
use the Net to bring people into your home-office to complete
the deal. Then you have the face-to-face meeting needed to
present, and sign, papers and other documents.
The Internet offers a lot of growth potential and
opportunities. Growth will come from new markets, as well as new
categories of retail. Just a few years ago, selling apparel
online was not considered appropriate on the Internet. Today,
apparel sales are growing rapidly.
Whatever your product, a successful e-commerce venture will
be those that are able to provide convenience combined with
superb service and outstanding reliability of delivery.
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