Why the Internet is a Great Place to Do Business

Low Startup Costs

With a brick and mortar business, creating a new business is both expensive and time-consuming. You need appropriate physical headquarters, extensive local advertising, and a favorable location to ensure that your business will thrive. Some web-based entrepreneurs can get started with little more than a $10 domain name and around $5 monthly in hosting fees. For that relative pittance, you gain access to the entire internet-connected world. Not too shabby. Many traditional brick and mortar businesses are expanding to the web in an effort to lower their overhead and reduce their costs. The internet levels the playing field for everyone. Now virtually anyone with a good idea has the opportunity to make it big online.

More Lenient Inventory

With a brick and mortar sales business, you typically need a showroom full of products for customers to browse, purchase, and take home with them. Online, all you need are photographs and good descriptive text. Thanks to drop shipping arrangements, some e-commerce store owners have never even seen the items they sell.  When it comes to information products, it’s just as easy. An online preview or sales page can give customers an accurate idea of what they’ll be getting, and they can use their own computer to bookmark the page and consider the offer at their convenience. When they’re ready to buy, delivery of the file or login is nothing more than a simple e-mail. The ability for someone to offer thousands of products on a website and run the whole operation out of 10×10 bedroom, is one of the key elements to driving prices lower online. Imagine being able to offer an entire retail store showroom and never once see or ship an item. The next website you make a purchase from could be owned by a 13 year old working out of their garage.

Increased Automation

That brings us to another benefit – automation. Think about transactions completed off-line. Even the most impersonal transactions typically require several minutes of time and polite small talk with the store owner or another paid employee. It may be pleasant to some, but it’s not efficient.  With the web, you can test and create your website to address the issues that most of your customers will face. By doing so, you can make it easy for the average user to become a customer with little or no need for interaction on your part. Those who need additional help can contact you by e-mail or phone, allowing you to deal with inquiries more efficiently. Imaging having an employee who never asked for time off, never asked for a paycheck, and worked 24/7 days a week while you slept or while you were on vacation? More and more business owners like the idea of running their business from anywhere in the world

Lower Costs i.e Labor

With a traditional business, you’re forced to hire any needed help from the local business area. Depending on your location, you could spend $7-15 for unskilled labor that may not even care about the fate of your business. With a web business, labor needs are greatly reduced, and you can hire live chat or e-mail customer service agents from any part of the world. Educated labor from countries like India and Romania can be hired for as little as $5/hour, depending on the task. Transitioning a business to the internet can allow you to get rid of labor costs altogether. Your website sells your products, answers questions, and takes orders for you. A website may become your only employee.

Reduce or Eliminate Shrinkage

Traditional businesses with inventory are always vulnerable to theft from both customers and employees. By offering information products or drop shipping products from other companies, you eliminate the risk of theft completely. Even if you decide to carry and ship your own inventory, servicing your customers online means that you’re virtually invulnerable to theft from customers. Although your customers may feel like their stealing, you never have to worry about expenses related to theft.

Successfully Market to Niches

Imagine that you’re trying to sell a training video to help bakeries create effective websites to showcase their services. First, you’d need to find out how many bakers were located in your area. Then, you’d have to eliminate many of the bakers who are employed at corporate grocery stores, since their websites and marketing materials are often created internally. You might get lucky and sell a copy to the corporation, but it’s a long-shot and you shouldn’t count on it when you’re making projections. Unless you’re in a major city, you’ll probably find that you’re left with just a handful of prospects. Once you account for the cost of production, you may realize that even a 100% success rate couldn’t guarantee profitability. Now, let’s consider how things might work out if you could widen your market to include all independent bakers in the English-speaking world. With such a large market, making a sale to just .5% of the market could bring in a healthy income. By using the Internet as your platform, you can do exactly that. Niche products can now be created and distributed to far-flung regions at minimal cost. Visit Learn2promote.com for more information about this. It is still possible to make a profit with a website selling only one type of product because of a global market, and this strategy helps you compete against bigger competitors. Imagine a store today selling only plasma televisions. It probably wouldn’t be in business very long. On the internet, a website selling only plasma televisions can succeed because they can pick up customers all over the world

Affordable Advertising

In traditional business, advertising is probably one of the top expenses each month. On the internet, most advertising strategies are free. Previously, businesses were forced to rely on traditional print and radio advertising to drive traffic to their locations. Today, major search engines have made it possible to laser-target your audience and bring them to your website for mere pennies (or dollars, in some niches) per click. We’ll discuss this in greater detail in another lesson. Advertising traditionally is expensive because you have to force your ad down the throats of everyone, and hope that a few interested parties contact you. On the internet, you can focus your advertising to those people who actually want to buy what you have. We will teach you how to focus your advertising and marketing to only those people inclined to buy your product, where most website owners try to get everyone in the world to their site, and then hope some of those want what they offer.

Lower Cost of Failure

“Would you like me to give you a formula for… success? It’s quite simple, really. Double your rate of failure. You’re thinking of failure as the enemy of success. But it isn’t at all… you can be discouraged by failure — or you can learn from it. So go ahead and make mistakes. Make all you can. Because, remember that’s where you’ll find success. On the far side.” –Thomas J. Watson, former head of IBM

Failure and success occur no more or less often on the Internet than in traditional businesses. There’s just no way to pick the perfect business and course of action the first time, every time. What makes the Internet different than traditional businesses is that it costs much less to fail online. Most traditional business owners work harder at their business then they ever would if they had a job. This is because in most cases, if the business fails, the business owner loses everything. His business, and his home. On the internet, if your business fails, you just take your website down, change it around, and your back in business. You may lose a little time and money, but you can typically dust yourself off and try again. If you market your product to the wrong people via search engine ads, you can simply stop the ads and try something else. If you buy a six-month run in the local newspaper, that’s not exactly an option. Even if your entire business turns out to be a bad idea, it’s likely that you haven’t lost as much as with a traditional business that includes a building lease or employees.

Flexible Hours

In the “real world”, you have to do business when your customers are ready to buy. If you’re a bar, you stay open for weekends and evenings. If you’re a retailer, that typically means day and evening hours during both the week and weekend. Dealing in a global economy it is a great feeling to get an order at 3:00 am in the states, while someone in Australia is in the middle of their work day and purchasing from you. More and more business owners like the idea of not working around their customers schedules. With the Internet, you can leave your website up 24/7 and deal with customer issues at regular intervals that you choose. If you want to spend the day playing with your kids or golfing with friends, you can do it. You can’t put a price on benefits like that.

Improved Tracking

When you place a traditional ad in a newspaper, it’s hard to track your response rate. For that reason, thousands of businesses across the country continue their advertising efforts without having any clue about their effectiveness. They might get just 1 visitor for each $1000 ad, but they’ll never know it. Although it’s possible to use coupons to track response, that can get expensive quickly, depending on your margins. With web advertising, you can track each visitor’s activity from initial click right up until they make a purchase, request more information, or abandon the site. That lets you know which channels are driving quality leads and which ones aren’t worth continuing. It also gives you immediate results, saving you costly weeks or months of ads that don’t work.  Given the benefits of doing business online, there’s no good reason not to consider starting or expanding your business in cyberspace. By minimizing your initial investment and risk, you can afford a longer learning period and give your business a greater chance of surviving the crucial first years.

To learn how to succeed on the internet and for more articles like this one, please visit www.learn2promote.com.