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E-commerce, a no nonsense perspective for new business

Copyright 2005 Oliver Phillips. May be freely reproduced "as-is" for private or commercial use.

Success is about making fewer mistakes

Why you should read this Guide

Whilst failure is one of the best ways we can learn, learning from others’ experience is far less painful - and that’s essentially the point of this guide! Learning from others makes achieving your own goal quicker and easier, plus lets face it, making unnecessary mistakes is just plain dumb!

Spend just 2 hours digesting the information in this guide and you could save years of trial and error. Which route do you think will put your e-commerce venture into profit fastest?

Whether you are thinking of starting a new Internet business, or you already run your own business and are interested in developing a website or perhaps an e-commerce operation; if you are considering developing a presence on the Internet then this guide is for you.

If it seems too good to be true, it just might not be.

Why e-business?

Since the early ‘90s the Internet has shaped the way we do business. At first it was peripheral nowadays it is central to business life. Technologies have advanced and access is more widespread, meaning businesses can do more things for more people. But the Internet is really just another communication channel, though unlike other communication channels it differs in that it can offer a uniquely interactive experience, serve multiple data formats, and provide information on-demand.

This said the Internet is still a communication channel and successful web applications usually leverage one or more of the following benefits.

Immediacy. With today’s data transmission rates communication can be almost instantaneous.

Frequency. The convenience of the Internet and particularly email, means that communication is likely to happen more often.

Cost efficiency. Migrating traditional communication to utilise internet technologies can greatly reduce costs.

So how can your Business leverage the Internet and in particular the communication benefits? Below are just a few areas your Business should consider.

Commerce - e-commerce has become synonamous with the Internet; from presenting product information, to marketing, to communication with Customers - costs are often very low.

Business Awareness - Industry sector, latest news, product range or simple directions. The Internet is an ideal vehicle for delivering information about your Business to a wide audience at low cost.

Image - Brand and Image are important assets to Business. The Internet can be used to promote an image and reinforce a brand - perception is all!

Community - A web site can provide a superb focal point for people with similar interests, especially where visitors are encouraged to interact with your Business and each other.

Support - Providing post sale support, or just dealing with frequently asked questions, a website can be used to provide a structured mechanism for providing help or information.

Competition - In an age where businesses without a website are increasingly the exception, a professionally designed website may differentiate your Business from your competitors'.

Think of any web site you use, and you’ll see that the benefits users and the Business itself derive will mostly relate to communication and fall into one of the three categories previously mentioned; immediacy; frequency and cost efficiency. 

Ten Golden Rules of e-business

1.Start re-skilling now. If you don’t have huge financial backing your idea will not get off the ground UNLESS you can do much of the work yourself.

2. You have more chance of making money if you can take just one step up the supply chain.

3. The real profit makers on the Internet match supply with demand, but do not sell anything!

4. You can’t just build a site and expect to start generating income any more.

5. There are few truly new ideas - most things have already been done. Exploit a niche, leverage breaking technology, or do the same thing but just better.

6. If you come across an idea that hasn’t been done, congratulations you could be on your way - but think long and hard about why no one else is already doing it.

7. Expect any competitive advantage you may establish to be short-lived. Where will your profit come from tomorrow?

8. Be amazed at how little your e-business is worth.

9. Don’t buy an e-business “off the shelf”. At least one person does not want it – why not?

10.Establish a budget to build your site then add at least 30% more to build an adequate administration interface.

1. Start re-skilling now

Here’s an unwritten law of the Jungle; many businesses thrive off other start-up businesses. This is true whether your business is offline or online. Just getting your Business off the ground can seriously stress your cash-flow. e-business can be even more expensive as additionally you’ll need technical services like web hosting, graphics design, site design and database development, search engine optimisation, secure servers, bandwidth, data backup, credit card processing, disaster recovery and insurance to name a few; these are on top of your other overheads!

Technical services are always expensive, and true experts in technical areas are worth their weight in gold - but sometimes what is actually being done is not that complicated; understanding what is involved can help inform your decision about when to bring in an expert, but more importantly allow you to perform some of this work yourself.

Start re-skilling and outsource less, or your ground breaking e-business idea may never see the light of day!

2. You have more chance of making money if you can take just one step up the supply chain.

Mention e-commerce and you immediately think of retailing; businesses selling to consumers. But what are they selling and where are they sourcing it from? The answer, in the majority of cases, is from other businesses further up the supply chain.

Retailing really is the front line in e-commerce, hard fought and often a war of attrition. For many reasons if you can take just one step up the supply chain and into wholesale supply, the odds of succeeding move in your favour plus, you could always retail as well! This is why.

Your Customers are people just like you - would be entrepreneurs, people who want to do their own thing, run their own business and make a success of it. Unfortunately unlike you, they haven’t read this guide, so whilst they have enthusiasm, work hard, and have money to spend, they start at the bottom of the supply chain and opt to retail someone else’s (your) products. Ask yourself this; will you sell more with all these enthusiastic entrepreneurs promoting your products, or less? Though many may fail, if they succeed you succeed also, so make supporting these people the focus of your own e-business efforts. Excellent product, price, and customer service.

Retail customers expect the best product and service at lowest cost. In retail e-business supply often exceeds demand; if you’re retailing someone else’s products, chances are there are another 20 or maybe 100 retailers with the same dream and same products, all doing the same thing! Too many suppliers chasing too few sales, and Customers are free to choose! Quality


product? Great service? These days these are pre-requisites, so what else will differentiate you from your competition?

3. The Real Profit takers on the Internet match supply with demand, but do not sell anything!

Think of the big e-businesses like Google, Ebay, and Overture. These companies are successful and worth millions, but they don’t sell any products! Instead they are service providers; they offer different services that have one thing in common – they connect people who want to sell with people who want to buy. Otherwise put they are market makers and if you are serious about your e-business you will very quickly end up paying companies like these for your own sales as these companies can give your products the exposure needed to sell them – but at a cost! 

I’m not going to advocate you set up your own search engine, online auction site, classified ads site or even dating agency, as I think you’ll agree you couldn’t seriously expect to take market share off established big name brands like those above? But remember, in e-business, market makers are the real profit takers. If you spot an opportunity to be a market maker which hasn’t already been dominated by a big name, that could just be your ticket to e-business success.

4. You can’t just build a site and “expect” to start generating income any more.

There was a time, not too long ago, when you could build a simple e-commerce site using off the shelf software like Actinic Catalog or EROL, submit it to a few search engines for free, and if your products were reasonable and at attractive prices, you could expect people to find it and buy from it.

Sadly, those days are long gone, the Internet has matured; there are a thousand sites just like yours and the search engines are much more selective about the resources they index.

Whilst, your first challenge is getting indexed in the search engines, and make no mistake this will cost your business money, your second challenge is convincing your visitors they should buy from your web site and not another which is also just one click away. Your final and most often overlooked challenge is making enough profit to cover your customer acquisition costs.

On more than one occasion I have found the profit from a sale does not cover the cost of the advertising and marketing necessary to acquire that sale. This is not that significant if you can reasonably expect your Customer to purchase from you again as the cumulative profit from repeat sales may well cover the customer acquisition cost and see you into profit. However, if your products are niche, high value, or typically one off or impulse purchases, you only get one opportunity to make a profit from your Customer.

5. There are few truly new ideas for e-business - most things have already been done. Exploit a niche, leverage breaking technology, or do the same thing but just better.

As a technology matures, the opportunities to leverage that technology to create competitive advantage generally decrease. This happens for three reasons. The cost of the technology falls making it more accessible to the masses; as more people opt into the technology more ways to utilise the technology are found and the technology becomes more user friendly which drives further take up, until eventually the technology becomes commonplace - as does the knowledge required to utilise it. Indeed rather than it providing competitive advantage, you could be said to be at a competitive “disadvantage” if you don’t use the technology. 

By way of example, consider the telephone. These days nobody, at least in the western world, would claim a telephone gives their Business a competitive advantage though many would recognise that not having a telephone could well be detrimental to their Business. However think back to the days shortly after Alexander Graham Bell invented the first telephone - a Business with a telephone would certainly have had a competitive advantage over its competitors without.

So how do you get ahead in e-business? How do you create competitive advantage; I believe there are actually only three ways you can.

Exploit a niche. Supplying specialist products or servicing a specialist market is one way to get ahead. If you have rare skills or knowledge you may well be able to use this to create an e-business niche, whereby only someone with the same skills or knowledge could compete with you. The more specialist the knowledge on which you build your e-business the more difficult it becomes for competition to enter the market and copy you. Simple economics dictates that in a marketplace with few suppliers, prices and therefore margins remain higher for longer. Of course this assumes demand exceeds supply and herein is a potential sting in the tail; in a specialist market place your Customers are specialists also. You will invariably have fewer prospects to market to - knowing who these prospects are is crucial, as many generalist marketing techniques will not work for you and could prove very expensive.

Leverage breaking technology. Despite what was said earlier in this section it is still possible to create technological competitive advantage. You need to be an early adopter, someone who embraces the technology as soon as it launches. You should expect to offset some of the advantage you create, with the high cost of using a new technology early on in it’s life-cycle, and you should also accept that not everything you try will yield gains for your Business so much of your investment may be wasted.

Do the same thing but just better. On the face of it a rather obvious statement, but you’ll be amazed how many people are running online auction websites, classified ads websites, or little search engines! When evaluating an e-business opportunity check out what the existing players are doing and ask yourself, “Can I do it better than these guys?” If your answer is no, then you might want to look elsewhere for your e-business opportunity! Could you buy an off the shelf auction website and take on the might of ebay? Will your classified Car Ads website give Autotrader anything to worry about? Might we all be searching the web via your new search website instead of Google in a few months time? 

Improvement opportunities should all focus on customer experience – like the ease with which they can use the website and the service level they get via the website. Don’t waste your time on anything else. For example, you might have a flair for graphic design, and think you could produce a better logo than the ebay logo for your own auction website. Perhaps you could, but this is unlikely to improve customer experience.

Keep the maxim of “doing it better” in mind at all times and you may well spot improvement opportunities in market sectors with no dominant players. Keep an open mind and you’ll be surprised how often you notice things that could be better. Perhaps your e-business could address these shortcomings and gain competitive advantage.

(continued in Part 2 of this series)

About the Author

Oliver Phillips runs the web development company eantics Ltd and as a qualified Accountant, has built intranet financial systems for an FTSE quoted UK PLC. His e-commerce operations have twice reached the finals of the UK e-commerce Awards; his Company’s latest venture, ‘PFS France’ has just launched.

 

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  • how to promote affiliate programs with much more success part 2 better downline performance

  • how to promote your business a 10 step guide for beginners

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  • how to start an online business in 5 easy steps and for under 50

  • how to stay focused on your home b usiness goals

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  • how to use rss feeds in your marketing

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  • hunting for online directories the in depth strategy

  • implementing an opt in list to optimise your internet marketing success

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  • income ideas and money making magic

  • increase sales with payment solutions

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  • index

  • internet marketing and public speaking seven steps to a successful murder board

  • internet marketing and public speaking the murder board practice

  • internet marketing for sales leads

  • internet marketing strategies setting up your affiliate program

  • internet marketing surviving the first year

  • internet nostalgia remember this dumb little ad

  • introduction to affiliate marketing

  • is a trade show for you

  • is email marketing still an effective option for network marketing

  • is it a real business or a hobby

  • is it possible to make a living being an affiliate marketer

  • is permission email marketing in trouble and is rss the answer

  • is your online storefront open for business

  • is your site ready to face the new year

  • its all about the hits

  • its free its powerful its in your email

  • it really is only early days in the internet gold rush

  • ive got to get this off of my chest

  • i hate asking for referrals 6 proven methods for getting a flood of referrals without asking

  • keeping your affiliates active and loyal

  • keyword density and how to use it to keep traffic flowing to your site

  • knocking the mythology out of affiliate network marketing

  • learn how to market your ebusiness in real time dissect study emulate

  • learn how to use these six explosive marketing techniques to explode your website with traffic

  • linking is queen

  • link myths

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  • make money online work from the comfort of your own home

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  • make your e commerce website more than an electronic catalog

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  • managing your downline

  • marketing

  • marketing all about focus

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  • marketing your business the affiliate way

  • marketing your home business through newsletters

  • meeting the uk ecommerce regulations

  • michael glaspies hidden key to making massive amounts of money from your list

  • milk your winners drop your losers

  • misery loves company a marketing disease

  • mlm and work at home businesses get financial boost

  • mlm leads for network marketing

  • mlm or dlc

  • mlm success requires leadership and professionalism

  • more article submission websites require authors to register and use passwords

  • multi level marketing mlm is it taboo

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  • multi level marketing with email leads

  • my adsense click revenue shot up 12 times when i used free legal bulk email marketing

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  • newsletters are vital to your home based business success

  • new type of e comerce search engine on the block

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  • not knowing this explosive email secret can kill your mailing list

  • one a month in your network marketing business

  • one of the biggest and deadliest mistakes affiliates make online and how you can avoid falling into the same trap

  • online money making site 5000 free leads

  • online success by the numbers

  • optimize your search engine placement five easy ways

  • opt in email marketers how to deal with a growth pain of internet success the email glut

  • opt in mlm leads are good prospects to grow your business

  • ordinary people making extraordinary income

  • overachieving your way to super affiliate stardom

  • overcoming frustration with technology

  • overcoming the five obstacles to affiliate success

  • paid search advertising that delivers maximum roi

  • pay per click the ultimate tool to boost affiliate sales

  • people accusing you of sending spam five email marketer must know tips

  • pick a category sell then sell again

  • plain jane email equals flat results

  • planning for success a positive approach

  • plug n profit e commerce principles

  • practical information products for the internet

  • privacy reduce your customers concerns by building trust first

  • produce more sales from your email promotions

  • produce more sales from your email promotions five ways part 1

  • profitable network marketing systems and products

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  • proper opt in email marketing step by step

  • provide a good home for your website

  • putting people in a buying mood

  • p your way to online business success

  • qualifying yourself as a reliable vendor

  • quick ecommerce tutorial

  • realtors hit a home run with your email marketing

  • real world mlm marketing tips

  • reciprocal linking a business partnership

  • rejection

  • relationships the foundation of your network marketing business

  • resistance means success for affiliates

  • retired need some extra cash

  • rich dad

  • rotator

  • rss and the 10 most powerful reasons why you should be using it

  • rules for achieving online success

  • safelists extreme marketing

  • scams be aware and report when necessary

  • search engine marketing with blogs

  • search engine submission dont be a cheapskate

  • secrets to a higher conversion ratio

  • secrets to writing powerful s

  • sell anything to anyone on the internet with hypnotic writing

  • seven must follow rules while participating in message boards

  • seven simple questions to build your sites sales

  • seven tips on submitting your ezine articles to content sites and publishers

  • seven ways to set yourself apart from other affiliate marketers

  • shorten your blogging rss learning and submission curve

  • simple changes to make your web site sell

  • simple steps to start a profitable member only subscription web site

  • six reasons why your alexa rating is still important

  • smart ways to use a website with your business

  • smoke and mirrors

  • starting an e commerce business

  • start doing online business using b2b portals in six steps

  • stepping stones

  • steps to clickbank success

  • still seeking network marketing success

  • strategies to make your blog more interesting

  • success with newsletters

  • super affiliate strategies part 2

  • super affiliate strategies part 3

  • take dead aim with affiliate programs

  • take the leap and work at home

  • taking email marketing to the next level

  • taking e mail marketing to the next level

  • taking it personally

  • target the little guy this could be a reely big shoo

  • ten answers that turn your visitor in to your customer

  • ten free ways to promote your site

  • ten lessons from a survivor my first year as a network marketer

  • ten steps to a well optimized website step 2 content creation

  • ten tips for affiliate marketers using google adwords

  • testimonials as a linking strategy twist on link campaigns

  • the 2 step lead generation machine

  • the 3 secrets to successfully analyzing your marketing

  • the 5 sure fire ways of building massive traffic and making thousands in affiliate sales

  • the 7 habits of a successful web marketing plan

  • the affiliate model how to make money as an affiliate

  • the affiliate program starting your success online

  • the basics of asking for a reciprocal link

  • the best traffic secret i ever learned

  • the case for a network marketing system

  • the color of e business

  • the ecommerce business plan

  • the four best ways to market your affiliate program

  • the great direct marketing conundrum

  • the hidden key to making massive amounts of money from your list

  • the human touch

  • the idiots step by step guide to blogging for profit

  • the key to a winning internet marketing strategy is to master one technique first

  • the lazy mans way to building a massive list in minimum time

  • the lowdown how to create and send html email

  • the magic the mystery of success

  • the mlm dilemma

  • the mlm revolving door syndrome

  • the most important thing you can do for your online business planning

  • the most useful way to utilize traffic exchanges

  • the new paradigm will it work

  • the new wave of multi level marketing

  • the no mailing list solution to affiliate profits

  • the one bite at a time principle

  • the only 5 things you can sell

  • the perfect network marketing system

  • the personal touch

  • the power of an autoresponder email service send out unlimited marketing follow up emails and newsletters to jump start your sales

  • the power of reverse advertising

  • the problem with html email newsletters

  • the problem with the affiliate system

  • the red flags of affiliate marketing scams

  • the right way to write articles

  • the secret weapon of successful web marketing is

  • the seven pillars of ecommerce defined

  • the ten commandments of linking

  • the top 10 e commerce ways to follow up with clients part 1

  • the top 10 e commerce ways to follow up with clients part 2

  • the top ten tips for auction success

  • the truth about affiliate commissions

  • the turtle and the rabbit do affiliate marketing

  • the value of value

  • the web your window of opportunity

  • the wrong email format can destroy your offer

  • three steps to building a 50k email list in less than 90 days

  • three ways to re invest in your business for maximum profit

  • three ways you can use the ezines to increase your sales

  • tips on writing a successfull ad

  • top 10 reasons why rss autoresponders are becoming a permission email marketers best friend

  • top 10 ways to irritate your visitors

  • top 5 super affiliate tips whats your usp

  • top 5 tips for frustrated affiliate program marketers

  • to buy or not to buy avoiding false promises

  • traffic generation the number one skill that will generate cash flow part 2 of 3

  • turn emails into dollars with one word

  • turn your customers into a sales force for your product or service

  • two newer methods to ensure your emails are read if you are an online marketer

  • use an affiliate network to boost your commissions

  • use email marketing wisely stand out from junk mail

  • using back links to get top search engine ranking

  • using drop shipping for e commerce

  • using google

  • video emailthe new way to communicate

  • viral marketing are you missing out

  • viral marketing methods and applications

  • viral marketing technique creates a chain reaction with one time action

  • viral mutations of email list building creating new strands part 1

  • viral mutations of email list building creating new strands part one

  • wacky test marketing part 3

  • want bigger profits think of your web site as a catalog not a store

  • ways to earn income using email

  • ways to persuade your web site visitors to give you their email address

  • ways to use autoreponders to increase your profits

  • web advertsing its all about the click thrus

  • web design for ecommerce

  • whats new on the internet scene

  • whats the straight scoop on mlm leads programs

  • what 15 years in the network marketing industry taught me

  • what are promotional articles and how can they work for you

  • what do i sell

  • what if you coulda had a piece of google

  • what is drop shipping the perfect solution

  • what is google poodle how it will help you

  • what is network marketing

  • what is wrong with email marketing

  • what to look for when choosing affiliate programs

  • when a customer has done everything to get your goat

  • when to hire a professional seo firm

  • wheres your web site

  • where do i start

  • where to post and read articles online

  • which affiliate program makes you the most money

  • which of these 7 mistakes are you making in mlm

  • whose watching you

  • who is sick and tired of network marketing

  • why arent visitors buying

  • why arent you making a ton of cash as an affiliate

  • why every articles marketing campaign must build an opt in email list

  • why has a work at home paradigm shift occurred

  • why is a work at home business now easy

  • why is no one buying from my website

  • why mastery equals profits

  • why mlm doesnt work for me

  • why mlm works for me

  • why search engine traffic should be your top priority

  • why this is the best year ever to shop and sell online

  • why youre missing out on hundreds of visitors if you arent doing this

  • why your network marketing efforts are failing

  • why you must have more than one niche sites

  • why you need to and how to follow up your visitor or customer

  • why you should be an affiliate of several products

  • why you should consider mlm as a second income

  • wise ways to build your email list

  • working with affiliate programs

  • working with drop shippers

  • writing emails with a purpose

  • yahoos back

  • your affiliate web site is built now what

  • your e business strategy is it love or fear

  • your fan club getting inbound links

  • your mission if you choose to accept it kunle

  • your newsletters are pretty lame if you are doing these 7 things

  • your words will determine your business

  • you aint seen nothin yet

  • you can achieve success on the interent

  • you can make great in a week from free advertising for only one affiliate