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MatthewKeath
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Steve_Minshall, post: 147735 wrote:
The fundamental question for any business is: “what can I offer that is difficult for most other would-be competitors to offer?”.

While setting up an on line store is easy, satisfying the above on line is much harder unless you have a unique product or truck loads of cash.

A B&M store on the other hand will always be able to offer personal service in a specific location as a competitive advantage. The only way this can be really countered by the competition is to set up their own B&M store in that proximity.

My B&M store was opened nearly 10 years ago. I have never really embraced on line sales for the following reasons:

1. For a small business to be successful you need to specialise. By the very nature of a specialist business customer’s need help with the details to help them choose. You can put all you like on a web site but only a small percentage of the population study rather skim content on line. Sure you can try and add electronic assistants on line but I have used them and not been impressed and now you are eating into the theoretical cost savings of online.

2. Dealing with issues at a distance can absorb a huge amount of time on the phone. Trying to actually understand the problem to start with is harder than just getting someone to return to the store.

3. Couriers have been very disappointing. I have had goods lost (signed for by a scrawl and a first name), I have had goods destroyed. I have had to pay hundreds$ to re-send the goods. The couriers show no responsibility.

I am really well placed to move product on-line. My website is by far the most dominant on-line in the Sydney market for my niche, with 25000+ hits a month. I do next to no PPC because my organic ranking works so well. Yet the frustration I have had from selling goods at a distance has held me back. I could sell simple products on line that will be easier but then I fail on my fundamental competitive advantage and just compete on price with the consequence of having to lower my store prices to match.

I have spent 10 years studying on-line marketing and I have the following conclusions:

  • Setting up an on-line store is easy that does not mean selling on line is easy
  • Beware the BS. “Successful” online business are much more ready to quote turn-over than return on investment.
  • Selling on line isn’t cheap. “Catch of the Day” is running on a mere $80M investment so don’t use this type of business as a case study unless you want a similar VC sponsored entity. My B&M business was set up with a since paid back, $28k investment. Obviously different league but this is a small biz forum.
  • Don’t underestimate the burden of returned goods which will have damaged packaging, lost and wrongly ordered goods, confused customers.
  • Unless you compete on price it is very hard to get a competitive advantage.

I have been to several conferences on online selling and online marketing and of all the people I have listened to the most relevant in terms of a profitable online/B&M business that has not lost what is special about a small business are these guys.Interesting comments Steve.

I think a lot could come down to your industry.

The clothes store you mention as an example is in a lot better position product wise to be a success online.