Internet Business Superbook Book 1. Business Website, Collect Money, Send Things

E-commerce lowers the cost of transmitting information and makes it accessible to everywhere on the planet in under a second. That's great but that's all it is, a faster, more accessible means to do business.

If your product is not very good and you have problems running your business, e-commerce will not magically make you rich.

Many players tried to make money from the internet itself like ebay, amazon, google, etc. but most failed. Many retail internet websites failed but some fared alright, the ones that had a niche market where the products they sold could be easily shipped by a delivery company and already established companies who merely put out a website to enhance their existing business.

The major disadvantages of internet sales are as follows:

Some things are meant to be sold in person like clothing, a car, flowers, etc.

Some things are simply not condusive to being shipped because it costs too much like dog food, garden tools, etc.

Customers are picky about some things, they complain a lot and there's room for fraud. Consider vitamins. There are fakes and cheap knock-offs. If you buy a bottle at your local health food store, you feel safer than buying a bottle over the internet.

The shipping costs make some things not amenable to being sold over the internet like small, inexpensive things where the cost of shipping is as much as the product itself.

Anything that's perishable can't be sold.

A big part of buying is impulse. You see something at the mall and buy it.

Some products have to be inspected. You can't get a feel for them over the internet.

Some products don't have enough buyers to justify a website operation.

You must constantly advertise on the internet and in the real world. It's not like the local electronics store which is in the Yellow Pages. You're competing with everybody else on huge search engines.

There is all kinds of copyright theft of music, movies, written text, etc. These problems have to be ironed out somehow.

In my opinion, overall, there are three types of people retailwise:

1.) Those that could go either way, buy some stuff at the mall and some off the internet. They don't particularly care.

2.) Lazy or introverted people who prefer to shop on the internet.

3.) The large majority of people who drive to the nearest Walmart when they need something.

This is the way life really works. If average Joe wants something, he wants it now from someone he knows where he can take back if he doesn't like it so most people will continue to buy face to face.

Again, in my opinion, if you could have big retail websites for major cities where Average Joe gets on, orders three spark plugs and a baseball bat and within 24 hours, a driver drops the stuff off, that would work but it takes time to develop such a clientele.

This reminds me of a concept they had in the 1970s called Consumer's Distributing. They had a big warehouse with a little retail shop upfront. You went in but you didn't look at the merchandise in the retail space.

You looked in a catalog, filled out an order form, they went back into the warehouse and got it for you. The line of thinking was that because they didn't have to spend money on retail space, clerks, lighting, shoplifting, etc., they saved money so you saved money.

The internet concept could work for locally oriented department store and/ or supermarket websites. A local guy orders some tires and a walkman off the local website, pays by credit card then a delivery guy drops it off in a day or so. If the guy doesn't like it, he can drive to the warehouse where they have a little customer service place set up.

Sales remains basic; offer a good product at low prices and have great customer service to please the customer if he has a problem.

A pet food website went bankrupt because it's not worth the costs of shipping heavy packages of pet food.