Online Expansion
March 21, 2007
In 2000 or so I read a great book about small businesses and the Internet. It's called Striking It Rich.com: Profiles of 23 Incredibly Successful Websites You Probably Have Never Heard Of. Though it's now out of print, it was (and is) a good primer on what works and what does not online, even still. Jeff Bezos, founder and CEO of Amazon.com wrote the forward to that book, and he said something in that forward that I think bears repeating. You can tell if a website will be successful, he said, by answering the following question:
"Does the Website harness the unique characteristics of the Internet to create a strong value proposition for customers, one that could not be easily duplicated in the physical world?"
If you want to know what works online, I suggest there is no better teacher than Bezos. As Bezos suggests in this quote, the Internet is unique. Indeed, I think there are four distinctive things that need to be kept in mind about the e-world if you want to be an e-success.
1. The ability to keep your overhead low: By and large, the culture of the Internet is one of bargains. Sites like Amazon routinely discounts merchandise, and sites like this one offer plenty of free content.
One reason for this, a big reason, is that is should be less expensive to do business over the Internet than in the physical world. Brick and mortar stores are expensive: Rent, upkeep, labor costs, and so on, mean that overhead is usually fairly high and margins are fairly small. But online, those things either don't exist or they are less. That means you can sell for less, and you should. That is what your e-customer will expect.
2. The ability to offer a huge selection: Whether its content or products, another one of the things that makes the Internet unique is that online you have a chance to offer a much wider selection than you can offline. A real bookstore can stock, at most, several thousand books. An online bookseller can offer, literally, millions of books. (We authors like that!) USA Today.com can offer much more content than the physical paper can.
Does this mean that if you own, say, a music store, that online you should sell a wider variety of sheet music than you do offline? Not necessarily, but that you can must be given due consideration. SheetMusicPlus.com offers more than 400,000 sheet music titles.
3. The ability for small businesses to compete on an even playing field with the "big boys": For a very modest cost, your online store can look as elegant and beautiful as any big, corporate website. Maybe your hardware store cannot compete against Home Depot in terms of selection or cost offline. But online, you can, and should. Coastal Tool and Supply is a small, regional hardware store in Connecticut you probably never heard of. But online it is a hardware behemoth, rivaling anything any Big Box store does. That's the idea.
4. The ability to tap international markets: I've said it before and I'll say it again. Never before in history have small businesses had the chance to sell outside their local geographic market and region. But now, via the Internet, we all can be global players. Amazing.
So I say, if you want to expand your online presence, follow these four rules. Be like Bezos and you can't go wrong.
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Today's Tip: In the great book Freakonomics, authors Steven Levitt and Stephen Dubner tell the tale of Paul Feldman, who created a very successful small business dropping off bagels at large corporations and allowing people to pay via the honor system. The most honest offices, Feldman decided, where those where "employees like their boss and their work."
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