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6. Keep the quality of
your products high. Competition on the Internet is much tougher than the
brick-and-mortar variety. Your customers can simply leave your site and find
your competitor at the click of a mouse. It is therefore imperative that you
ensure the quality and consistency of your products or service. The Internet
entrepreneurs that we’ve featured may not have the best-looking web site
in their category, but they make it a point to give the best value for their
customers.
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A significant part of BigKidsVideo.com’s success lies in the high
standard that it sets for its products. Its founder, Tamara Carlisle, makes
sure that every product that they sell are of the best quality. “We’re
extremely particular of the products that we choose. .. We strive hard to
maintain high standards for our products. We look for quality of the
production and the sleeve (packaging). Sometimes the product is great but
the packaging is terrible. It has to be a show that we feel really strongly
about.”
Donahue-Arpas offers the same advice, “Now we have over 700 items that
we sell and we could continue to expand but we are looking for something
special. We test it out with our family and friends; even our neighborhoods
test it out. We have to really love the things before we sell them.”
7. Ability to diversify and keep revenues streaming in from different
avenues. One strategy that has become crucial to success on the Web is the
ability to diversify a company’s offerings, allowing them to earn money
from various sources. Yahoo, for instance, now earns from a variety of means
banner advertising, directory listing, Yahoo store, auctions, even web
site hosting. HomeStore, on the other hand, earns revenue from advertising
and listing fees to real estate agents, as well as on sales of software that
help realtors keep track of clients.
Home-based online businesses, particularly start-up businesses, may not
have the ability to implement different revenue models simultaneously.
However, those who have gained an understanding of their markets have begun
to expand their offering to several niche products that have great market
potential.
Charlotte Fowkes, founder of Baby-Cakes.com started out by offering
diaper cakes. Now, she has expanded her product line to include “cakes for
all occasions.” Using the same concept of a diaper cake, she branched out
to offering non-edible cakes made from towels to create unique and practical
gift ideas for housewarming, anniversary, and weddings. She also added
wholesaling to her business: “I've developed a wholesale line for other
stores and Web sites. At least 30 web sites and about 50 retail stores,
hospitals etc. across the country carry my "baby cakes." I now
probably put an average of 35 or 40 a day for wholesale orders.” As a
result, corporate clients are now a sizeable part of her business.
After three years of being in business, Fowkes also shifted from an
Internet pure-play venture to a clicks-and-mortar when she opened her first
gift store in her downtown area. Her new store represents a new milestone
for her business. As she describes it, “the store is 900 sq. feet. While
there, I can still operate my online store; take orders and answer emails.
We have arranged for UPS to pick up deliveries. They are already picking up
at the house. I print all the shipping off the computer anyway. And I will
do the assembly there.”
Carlisle of Big Kids Video Production (http://www.bigkidsvideo.com)
combined the power of the web with direct mailing. “I started with a small
brochure of about 9 videos and did the direct mailing. I started to make my
way through the maze of distribution in the country, both retail and other
wholesale distribution companies. We realized the value of having an
e-commerce site tied in with our print catalog.”
8. Use the Internet as one of many distribution channels. The Internet
can go hand-in-hand with other distribution channels. In fact, studies show
that customers’ overall loyalty goes way up if they can shop in more than
one channel.
BigKidsVideo.com has found that the more catalogs it mails out, the more
Internet traffic the company gets. Carlisle notes, “The Web and catalog
complement each other because a lot of our clients who receive catalogs are
avid web users. Even if they get our catalog, most order on the web. Like
with mothers, it is easier to go to their computer at night when their kids
are in bed to place orders.”
Savvy Net entrepreneurs understand the power of cross-distributing
products. Roeder of RedWagons.com feels that his company is now ready to
look at other options of distributing their products. “For the past two or
three years, we just focused on building a business and getting it up and
running. Now that we are established and feel that we have the strength to
move on. So we're turning our focus on the direct marketing aspects of the
business. We're neophytes in that area. We approaching it with the same kind
of ignorance, confidence and excitement that we undertook the whole venture
in the first place. We may do something on it eventually, and if we do it,
we will find a low-cost way of doing it.”
9. Always watch your
back. While most of the talk with regards to credit
card security focuses on the customers, credit card fraud can create havoc
to the bottom line of an online business. Chargebacks can be costly, and
businesses can suffer massive losses as a result of credit card fraud. Since
the credit card is not actually present when orders are placed, the Net
entrepreneur must devise ways to protect itself and his or her business
against unscrupulous Web customers.
A seasoned entrepreneur and owner of a dot-com video store, takes credit
card fraud very seriously. He said, “It's pretty amazing, all these
fraud. What happens is that the credit card company verifies and all they do
is to give you address verification to make sure that the zip code or
address checks out. I look at that as a hint, too. If I've got red flags all
over the place, I examine the order very carefully. We get 2,000 to 3,000
orders a month, and there could be 5,000 items in those orders -- that's a
lot! Sean and I do a dozen different things; it's a lot of time but it's
just something that has to be done manually over and over. Thank God that we
have programs and friends and employees who crunches numbers. But when you
go up to thousands of orders a month, if you are not really careful, that
could put you out of business. You really have to keep an eye for chargebacks.”
10. Concentrate on low-cost yet effective marketing
campaigns. No matter
what type of business you operate, how, why and where you advertise will
play a role in your overall success. Donahue-Arpas said, “The biggest
mistake I did when I started was to think that with so many people online
they would come across or stumble on the site. No way! And it takes a long
time, but once you put in a lot of hard work, it pays off.”
A shoestring online entrepreneur must learn to identify the marketing
strategies that will yield the best results for their business. As Roeder of
RedWagons.com said, “Our marketing has to make fiscal sense. So I sit with
a calculator and say its going to costs us this much to do it, this is the
industry standard return, and this is my profit margin, so ok it doesn't
make sense.”
11. Network: there is strength in
numbers. Partnerships are essential in
e-business. The right partner can help an online business achieve its
marketing and technological objectives.
GeniusBabies.com benefited tremendously from the partnerships that
Donahue-Arpas built at the start of her business. From designing and
developing her site, to marketing her products, her group of fellow “mompreneurs”
have lent a valuable helping hand and provided a strong support system for
her business. Today, her main marketing strategy is focused only on cross
promotions that she does with other e-moms who have online businesses with
the same target market.
Donahue-Arpas recalls, “My mentor, Dawn from BabyUniversity.com, was
the one in the beginning who said "Girl, what are doing? What are you
doing in frames?" She helped me develop my traffic. I really owe her
everything. We have one big group that I find most beneficial. It is called
MyBabyShops.com, organized by several mompreneurs and serves as a
cooperative advertising group. We have LOW budget. We try to think of
different marketing things that we can do. Like when one has a baby fair in
their area, they come, represent us, and bring all of our marketing
materials with them. We all try to promote that site from our site. There is
a very friendly competition. We feel like "well, maybe this time this
person will want to buy something from us and next time, they'll buy
something for you."
Her advice to startup online entrepreneurs? “Network as much you can
with fellow e- merchants. This is still such a new field; your neighbors,
family and friends may not be able to give you the valuable insight and
feedback that your e-colleagues can.’
12. Love what you are doing. All of the entrepreneurs who have seen real
success on the Internet shares one common thing: they all feel passionate
about what they do. As David Marcks, founder and owner of GeesePolice.com
said, "You better like what it is you're doing. If you're not having
fun anymore and you don't enjoy it, don't do it. Because I am still having
as much fun today as the day that I started."
Success on the Internet is a combination of various things. It may be a
result of offering more and better services, defining the position in the
marketplace, finding the right market, establishing quality strategic
alliances with other Internet businesses, and continuing to take advantage
of technological changes. Moreover, success can only be achieved as a result
of the commitment to never-ending improvement.
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