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

Think of 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 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 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 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, Internet has matured; there are a thousand sites just like yours and search engines are much more selective about resources they index.

Whilst, your first challenge is getting indexed in 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 profit from a sale does not cover cost of 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 cumulative profit from repeat sales may well cover 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 same thing but just better.

As a technology matures, opportunities to leverage that technology to create competitive advantage generally decrease. This happens for three reasons. The cost of technology falls making it more accessible to masses; as more people opt into technology more ways to utilise technology are found and technology becomes more user friendly which drives further take up, until eventually technology becomes commonplace - as does 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 technology. 

By way of example, consider telephone. These days nobody, at least in 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 days shortly after Alexander Graham Bell invented 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 same skills or knowledge could compete with you. The more specialist knowledge on which you build your e-business more difficult it becomes for competition to enter 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 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 technology as soon as it launches. You should expect to offset some of advantage you create, with 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 same thing but just better. On 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 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 shelf auction website and take on might of ebay? Will your classified Car Ads website give Autotrader anything to worry about? Might we all be searching web via your new search website instead of Google in a few months time? 

Improvement opportunities should all focus on customer experience – like ease with which they can use website and service level they get via 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 ebay logo for your own auction website. Perhaps you could, but this is unlikely to improve customer experience.

Keep 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)

I wasted quite a lot of time due to my ignorance and hunt for free money. I still remember that period when I would spend hours to earn few cents. Just because I did not want to take risk of investing

There will be many a people who were more informed when they started their business. But there are lots of people who are still going round and round while making nothing out of their time consuming activity.

I wish I could speak to them and warn them. Stop wasting your time on get paid programs and stuff like that. You will not make anything that can be called money. Are you satisfied with pittance they offer?

Majority of them are scams. Genuine programs cannot afford to give you more than few cents per day. If you want to make good money you should start your own home based business. A business that would earn you actual money. A business that would earn what you work for.

I would recommend to start with affiliate programs as they provide you with readymade product and you have to deal with marketing part only. If you are new to marketing like I was affiliate programs will give you good launch pad. When you advance you will get aware of your interests. You can work on your products while you learn about basics.

Your time is a precious.

Are you wasting it on a worthless pursuit?

Please do not.