[Excerpt from OPC newsletter 2001-06-18:]
Last week, we kicked off our series on Portable Trades and Occupations by covering the various ways in which you can make a living from writing. Because "writing" these days ties in so closely with the Internet, this week (and next week) we're going to talk about e-commerce and how you can make a living in that area.
Just to re-cap: the object of the portable trades game, of course, is to earn a decent income that isn't geographically tied-down. That is, you don't have to be in a specific area of the world in order to do your chosen job effectively and efficiently.
Once you've achieved geographic "independence", you're free to live wherever you please and enjoy the best of the world's various climates, recreations, cultures, and other attractions. This is the offshore dream come true, and here's how it can be done using e-commerce and the Internet.
More Hype Than Reality?
After the dotcom blowout that's effectively cratered the NASDAQ and Silicon Valley for the time being, many of you may be wondering if there's any real hope for e-commerce.
We think there is, but the future of successful e-commerce is not quite what Wall Street and CNBC had in mind. The investment banking model of e-commerce was based upon magnificently structured and complicated websites selling everything under the sun at lower prices than physical retail outlets and racking up millions, if not tens of millions of dollars, in low-margin profits through sheer sales volumes.
The dotcom crash happened when this vision of e-commerce utopia for the big boys was proven to be a myth. There were many mistakes made that wasted billions of dollars in venture capital and other hard-earned funds. Here's what we believe went wrong:
1) It was thought that once people discovered Internet shopping, they'd just forget about buying stuff in bricks and mortar stores, thus transferring the bulk of their purchases online from the "real world."
This was quite naive as many "real world" products simply can't be sold effectively online. Let's face it - how many of you really feel comfortable buying clothes online (when you can't try them on first), or stereo equipment (when you can't hear how it sounds), or even books (when you won't get the book for at least a week, and can pay only a dollar or two more to buy it at a store where you can take it home immediately).
In other words, the convenience of buying online isn't much of an advantage when you have to wait to get the product in the mail, or you can't "kick the tires" in ways you're used to in the "real world." And since you can't evaluate merchandise with your own eyes and hands, making returns of unwanted products is definitely a hassle over the Internet.
In the same vein, people were not happy at the distinct lack of customer service. Sales people - love them or hate them - can be valuable sources of information and assistance when making a purchase. Customer service at most e-commerce websites was more or less non-existent. Waiting two or three days to get a return email is not the way to seal a impulse purchase (which most purchases actually are!)
Thus the "shopping" experience to which most people are accustomed simply can't be replicated online (at least not at this time). So much for the myth of e-commerce putting all the "real world" stores out of business!
2) There was another common belief that shoppers would be happy using only one, single mega-site for all their purchases, and therefore attracting eyeballs to a particular site (to build loyalty) was more important than generating profits. This line of reasoning was quite stupid for the very simple reason that the big "perk" of online shopping was that you could go anywhere on the Internet with a few clicks and keystrokes.
"Real world" department stores can be all things to all customers because it's frequently too much trouble to go driving halfway across town to get a piece of hardware or some munchies while shopping for clothes. Even if it costs you a dollar more to get Item X at the store you're in now, so what if it saves you half an hour of travel, a parking fee (or a bus fare), and further shopping?
On the Internet, people can be ruthless about searching out the best prices because it takes only seconds to see who's offering the best deal. Whether a website offers everything under the sun (or not) isn't relevant if the customer can effectively go "across town" in seconds to get a better deal elsewhere.
3) Fraud fears on the Internet killed a lot of sales, especially when websites made some high profile blunders with confidential customer information. Either the information was inadvertently exposed to the public, it was easily hacked, or a combination of factors rendered customers' vital financial details vulnerable to fraud.
This didn't exactly reassure people who were uncertain about a new medium in the first place.
And it didn't help at all when some sites (notably Amazon) changed their customer privacy policy in such a way as to allow them to sell data that was once confidential.
4) Most of the dotcom companies had no real business plan of exactly how they were going to make money. Their "plans" were based more on hope and dreams than actual business acumen. "Build it and they will come" was deemed a sufficient reason to invest tens of millions of dollars into a website that might one day make some money.
There Is A Better Way
From an examination of the above, readers can begin to formulate some ideas of what not to do. Some don'ts:
1) Expecting to make mega-bucks by selling online is unrealistic, despite all the websites out there offering you products that will make your online sales "go crazy." So don't expect to get rich overnight, or to make a million dollars a year from your web business.
2) Don't be too much of a generalist. What you want is a highly specific niche market. Trying to be a "Wal-Mart" of the Internet means you will interest virtually no one in what you have to offer. Aim instead for a specific target market. More on this in a moment.
3) Unless you have a really innovative and great product, forget about selling "real world" products over the Internet. The hassles involved with storing items, shipping them, and dealing with returns are not worth the trouble. Remember that customers typically don't like to buy "hard" items online, so why bother selling them?
4) Don't play fast and loose with customer data, especially the financial stuff. Make sure any visitor to your site understands that you have taken strong measures to keep their information secure and confidential. Repeat this several times so that customers know they have nothing to fear from buying from you. Always let people know that they can get their money back if they're not happy with what you're selling!
5) Don't go into e-commerce with only a vague idea of how you will make a few bucks "eventually." Plan everything to the greatest detail possible. You should understand exactly who your target market is and why they would want to buy from you. Generating traffic for the sake of traffic is useless - you want to be generating sales and you should have a very clear idea on how to make those sales happen!
Laying Down A Plan
Now let's talk a little bit more about how you should be planning an e-commerce business. Since "hard" goods should be off the drawing board, you're left with two choices: selling your professional services, or selling products which can be downloaded (or viewed) by the purchaser while online.
Here's the pro's and con's of each:
Services: If you're a qualified professional in a specific field (and you can dispense your advice via email, fax, or the telephone) it might be worthwhile for you to sell your services online. The disadvantage is that you have a specific time commitment for each client that must be discharged before you can proceed to the next client. Therefore your earnings are limited by the amount of time you have available to spend on work. The advantage is that you might be able to work more efficiently (and cheaply) from home than from an office. This is an especially good idea if you already have clients who know you and trust you and won't worry about doing business with a person (or firm) they've never personally met or visited.
If you feel you need an address to offer your services online (but don't want or need a real office) then use a maildrop that offers faxing, mail forwarding, and other ancillary services which will help you run smoothly.
Downloads: This is the best way of offering information to the public, in our opinion. People can order and get what they pay for - right away. You don't have to have a warehouse, an office, or an address for returned merchandise. You don't have to be online, or on the phone, to make a sale!
Your downloads can be configured for minimum size (and therefore download time) without sacrificing quality or relevance. The only real disadvantage of downloads is that people with very slow connections might have trouble staying online long enough to receive your material. One way around that problem is to offer your material as a series of members-only web pages (like the one you're reading right now)!
You could offer a combination of both services and downloadable material for maximum profit and attractiveness to customers. Put your basic and intermediate information into a downloadable e-book and leave the advanced, personal stuff for a one-on-one consultation conducted via phone, fax, or email.
Your Target Market
Now that you have some idea of the product(s) to offer, who's going to buy it/them? Think about this very carefully because if you don't, your e-commerce venture won't last very long.
Your market should be somewhat specialized. In your hometown, there might be only 50 people interested in your highly specific topic (and no viable business is possible). Online, there might be a half a million or so potential customers who will rabidly devour what you have to offer.
Furthermore, your business idea should cater to this specialized need in a way that isn't easily satisfied offline.
As an example, let's say you're an expert on high performance bicycle parts of interest to competitive racers. You can write a downloadable e-book informing potential and actual racers of what they need to make intelligent choices while buying their bike parts. (Try finding that on any library or bookstore shelf!) Additionally, offer purchasers the opportunity to download any revised editions of the e-book within one year from the initial date of purchase. Throw in a subscription to a bi-weekly email letter devoted to high-performance bike racing too!
Now you're not only catering to a niche market, you're doing it in a way with which an offline business can't effectively compete.
But don't run off and start a business just yet!
Your specialized market has to have the income to afford whatever it is you're trying to sell. For this reason, items of interest to low-income earners (such as the unemployed, or college students) are not likely to make you a lot of money.
Additionally, is your target market even going to spend any time on the Internet?
Continuing with our bike parts example, we're reasonably certain that anyone who's going to spend thousands of dollars on an expensive bike and all the accessories can afford forty or fifty dollars for an e-book that might save them hundreds of dollars on purchases and repairs (don't forget to market it that way)!
But are those racers likely to be on the Internet? Only you can decide from your first-hand knowledge of the market. There's ways around this problem - such as the offline advertising of your website in magazines and newspapers - but if no one in your market is ever interested in going online you have a big problem.
Know your customer before plunging ahead with your e-commerce idea. The more you know about what he or she wants and expects from you, the better your chances of success.
Giving Them What They Want
In the next installment on e-commerce, we're going to go into some detail about how your website should look and how it should be selling to your target market.
For now, we're going to give you some general ideas to get you started creatively, and then we'll flesh everything out next week.
KISS. If you don't already know what this means, it's: Keep It Simple, Stupid! Don't make anything more complicated than it has to be. This seems obvious right now, but check around the web and you'll be unpleasantly surprised by the number of sites out there that are a testament to complex web design... but don't do anything except bedazzle and confuse a potential customer. Leave the flashy graphics, animations, pop-ups, and similar crap to your competitors, who will definitely be selling less than you if they should happen to use these ideas.
You are not in the business of impressing your customers with the design of the web page (unless you're a web page designer), so don't waste your time (and theirs) by going overboard. Your web page(s) should look pleasant and professional, but don't make them any more sophisticated than they absolutely have to be! Before adding any graphic (or other item) to your pages, ask yourself the question: "Is this helping my site make a sale?" If not, leave it off!
Fix their problem! Because you know your target market (we hope!) you should know exactly what problems your market is facing.
Now everything on your site should be focused on one thing: solving that problem for your customer. People never buy anything because they've got nothing better to do. They buy only to satisfy a need or to gratify a want.
If you're selling an e-book on high-performance bike parts, your entire site should be devoted to telling people:
1) How much money they're going to save by buying the best parts for less
2) How much money they're going to save by avoiding costly repairs to replace inferior parts (faulty parts could also cause dangerous injuries!)
3) How much better performance they're going to get by buying the best of the best (this means winning more races and making more money, if they're pros)
4) How much more knowledgeable a racer they'll be than their competitors, thanks to you
5) And anything else you can think of to demonstrate that the fifty bucks you're asking for your 250 page e-book is worth a lot more than that... should they buy it.
If you can convince your customers that you can solve their problems, they will buy your product if they feel the price is reasonable. It's that simple!
Be Exclusive! Be sure your customers understand that you -- and only you! -- can solve their problems. Or at the very least, demonstrate that you are the cheapest/most reliable/most accessible/etc. solution. If they think they can go somewhere else and get help, you've lost a sale.
Offer Extras! Seal the deal by offering extras that no one else does. Give them a subscription to an ezine, or a secret email address they can use to ask you specific questions, or a discount at a supplier that is good only until a specific date, or free upgrades, or all of the above. People love freebies! The more value you can give them for their fifty dollars (or whatever you're asking) the more likely they are to buy.
OK, enough for now! That should be enough to get you started creatively on some ideas and concepts that might make good e-commerce ventures.
Next week, we're going to get more specific about how your website should look, how to sell, how to promote your site, and where you should go on the web to get more detailed information about e-commerce than we can put into one of our weekly articles. Stay tuned, it's all coming next week!
[Excerpt from OPC newsletter 2001-06-25:]
This week, we're going to talk some more about e-commerce on the web. This article will have fewer words than last week's Part I, but has a lot of useful links you can check out and read in detail.
As a prime example of how to sell on the web, we recommend you check out the following website and its affiliated products.
Especially:
Ken Evoy, M.D. (author or co-author of most of the e-books on the site) is an excellent commentator and advisor on how to get the most out of your time and effort spent selling on the web.
A review of his flagship product "Make Your Site Sell" can be found here:
http://www.wilsonweb.com/reviews/myss.htm
and it concurs with our own opinion of this excellent e-book.
We have no official or unofficial affiliation with Mr. Evoy, but we do like his work very much! In essence here is his (and also our) blueprint for how to make your website actually sell products and produce money for you:
1) Decide exactly what your site is intended to do. Yes, in most cases you want to sell a product, but in some cases (e.g. you're marketing your consulting services) you can't expect a purchase without a personalized contact. Perhaps the site's ultimate goal is to get a qualified lead for a sale, and not make the actual sale. Whatever you decide this "Most Wanted Response" (MWR) should be, everything on that site should be tailored to getting it from as high a percentage of customers as possible.
2) Approach the goal of getting MWR's scientifically, and look at cold, hard facts. Determine how many people visit your site and how many actually give you the MWR. You now have a percentage you can use as a base level for comparison purposes. As you make changes to your site, you can objectively determine what's improving your MWR and what's hurting it. Don't change too much too quickly or you won't be able to sort out the good from the bad.
3) Construct your site in a similar way to a direct mail piece. How to do this is an entire future article in itself, but here are the essentials:
Headlines are very important. They should always offer a clear benefit to the reader, and should be as specific as possible. Never use "snappy" or "silly" headlines that don't inform. "Save 30% On Your Grocery Bills In The Next 30 Days" will attract a lot more interest than "Eat Up the Savings" or similar fare.
In the text below the headline, highlight the reader's problem immediately in such a way as to appeal to his or her emotions. Common emotions/ploys that evoke good responses are: fear, greed, sex appeal, and vanity. You must emotionally hook the reader right away on how serious the problem is, and drop a hint or two on how you can solve it. This doesn't have to be very long - in fact, it shouldn't be more than a few sentences to arouse the reader's interest. A sample: "Right now, you're probably spending too much money buying food in the local supermarket. Your overspending could reach hundreds of dollars a month if you're feeding a hungry family. Wouldn't you like to keep that money for other things by discovering something most shoppers never learn?"
Now paint a picture of how much better the reader's life is going to be once this problem is solved. If you can't do this, you can forget about making any sales, because no one ever buys anything if it won't make them more secure, more wealthy, more important, more attractive, etc., etc. It's up to you to paint a rosy (but truthful) picture of the reader in his or her new lifestyle once the problem has been solved. A sample: "Imagine shaving as much as 30% off your monthly food bill without cutting corners on quality or convenience. That could amount to hundreds of dollars that you could use to buy a new car, save for a vacation, or invest for your retirement. Instead of spending endless hours in a checkout line and dealing with all the hassles of a supermarket, you can stay at home in your favourite bathrobe and slippers while sipping a cup of premium coffee."
At this point, you've got to start adding some specific claims and credibility to show the reader exactly how your product can make "the picture" actually happen. Explain what your product is, and show exactly how it can do what you say it can. Use facts and figures to make your claims as specific and credible as possible (e.g. don't say "save lots of money soon" when you can say "our average customer saves 28.6% within 28 days." And always stress benefits, not features. A feature holds no appeal to a reader, a benefit does. For example: "Save your time, avoid endless typing, and get exactly what you want with our simple point and click shopping database of all the household products you use every day" works much better than "Easy one-click database for your convenience."
After you've demonstrated some benefits to the reader in a clear, specific, and friendly way, now give them your Unique Selling Proposition (USP). Your USP is what distinguishes you from all other competitors and makes you the very best choice for solving the customer's problem. Sample: "buyfoods.com is the only online shopping site that has exclusive access to wholesale prices at no less than 33 major domestic and international distributors. No one else has our carefully-developed network, and no else even comes close to giving you the wholesale prices we do!"
Be sure to pepper your sales pitch with testimonials from satisfied customers. Each testimonial should highlight a different aspect of your service if at all possible, so that readers can see an endorsement of the benefit that interests them the most. Never make up testimonials, because if you're ever caught out, your credibility (and most likely your business) is destroyed. If you don't have a lot of testimonials yet, then -- on the order form -- invite readers to submit their comments to the site when ordering. Never print a testimonial without asking permission from the author first.
After the USP and other benefits, outline exactly what your reader will get for their hard-earned money so that they're not confused about what they're paying for. For example, if readers to our fictional grocery shopping website become a member for $50 plus $10/month dues, they should clearly see that they get will not only get access to the exclusive wholesale price network, but also they'll regularly receive special time-limited offers available only to members, free delivery for orders over $100, and a variety of other benefits that make the total cost of the service seem insignificant when compared to what they're getting.
Now close your sale by quickly recapping your benefits, USP, and anything else you can fit into a consolidated paragraph. Ask for the order! Never forget this - readers almost always have to be told what to do, so tell them exactly how to take advantage of your incredible product or service.
Try to add a postscript (P.S.) that offers one final benefit or other selling point (perhaps a bonus if they sign up before midnight tonight?) to lure in any readers still sitting on the fence.
Now you have to put all these elements into web pages. Always have an opening page with a great headline, some picture-painting, and other basic sales tools to pull the reader into the next pages, which should be content pages selling the benefits and the USP. Your "closer" page should get the MWR (either a qualified lead or an actual order, depending on what you're selling).
Always remember that people buy on emotion (usually impulsively) and then justify their purchase with facts and logic. So structure your web page sales pitch in the same way - use emotion first, then back up your claims with numbers and facts.
Other Selling Points
If there's anything you can give to your readers for free (that doesn't compromise a sale of your paid product), then give it to them. Build trust by helping people without charge, and they'll be far more likely to buy you products and services when they need them.
Consult Part I (published last week) for some ideas on freebies and how to offer extra stuff to a prospective buyer.
A great idea for a freebie (if you're a writer) is to do a weekly or biweekly ezine on the subject of your website.
Ezines can be great marketing tools, not only to make an initial sale or to get leads, but also to entice existing customers to buy additional products and services later on.
Not only that, but also you can make money with an e-zine by selling ad space in the e-zine for additional profits. Ad rates are typically determined on a CPM (cost per thousand readers) basis. If you have 1,000 subscribers and charge $20 for an ad, your CPM is $20. CPM's vary by market and by the reputation of the ezine and reflect the value placed on the audience by both the publishers and the advertisers.
Some useful links if you are interested in learning more about e-zines are:
http://www.ezinepublisher.org/main.htm
The e-zine publisher network. Lots of useful information on marketing, copy-writing, and management of e-zine publishing.
http://ezine-universe.com/
A site listing over seven thousand different e-zines in every conceivable category. See what the competition is up to!
http://www.e-zinez.com/
Includes a feature that helps you build your own e-zine quickly and easily.
Needless to say, if you want to advertise your own ecommerce site relatively cheaply, buy an ad in an ezine that targets your specific market.
Besides ezines, you should also get acquainted with getting your site placed on search engines.
http://www.tsworldofdesign.com/search_engine/
Offers tutorials and various articles on how to get good rankings on the various search engines.
Another useful link is:
http://www.selectsurf.com/internet/advertising/
Which is a page giving you the sites of top information resources for online advertising.
We found the above resource page for Internet advertising and promotion to be especially useful.
In general, try to avoid getting sucked in by sites that offer to teach you how to market your site using their "tips & tricks". You will end up spending a fair amount of money for not a lot in return. Ken Evoy's work (links are at the beginning of this article) is both cheap and extremely well done, and he gives you a lot of material to read (hundreds of pages worth). If you were to buy both Make Your Site Sell! and Make Your Knowledge Sell! you will be well-positioned to make a good start as an Internet information entrepreneur.
Payment
We thought we'd mention that we've already published an article on Internet payments systems in the Offshore Action Manual, Article #2. It's worth reading again if you haven't read it already!
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