DOING BUSINESS ONLINE
The question on many people's minds is, "Can you make money doing
the Internet?" Recently Learn the Net examined three businesses --
retail store, an Internet-based clearinghouse for information and
products, and a
non-profit organization -- to find out. For these businesses it made sense
online. But the bottom line is no one is getting rich. In coming articles
be presenting more of our findings on how they implemented their Internet
strategy and how it has paid off.
The prevailing myth is that once
flock to a website, the money rolls in. Unfortunately, it's not that easy.
Hundreds of thousands of websites are already online; hundreds more spring
every week. Getting people's attention isn't easy, unless your website is
with a name like MTV, Disney or Time Warner. So don't count on your site
becoming the Times Square of the Internet unless you really work at it.
But as we
discovered, you can make money in cyberspace. Here are three ways
Selling Products Online
Thousands of cyberstores now thrive on the Web, providing people with a
purchase goods and services electronically. For even the smallest
Internet can deliver a global market. Depending on which survey you
that's anywhere between ten and thirty million people. If the demographics
online community are a good match with your customer profile, that's a lot
potential customers. Let's take a conservative 1% response rate to your
catalog, comparable to direct mail, but at a fraction of the cost. That's
minimum of 100,000 new customers. Of course the trick is to get your
their computer screens, no mean feat. What kind of products are selling?
learned that people are reluctant to buy big ticket items online, like
furniture; they are buying software, music CDs and books. Sales aren't
yet, but it takes time for people to adopt new technology and modes of
transactions. The Automatic Teller Machine wasn't an overnight success
Most analysts predict healthy growth for online sales. What do you think?
you be seduced by the lure of cybershopping?
If you've spent time online, you've undoubtedly seen advertisements all
Web. Companies like AT&T, Microsoft, Saturn and Delta Airlines pay for
advertising banners and links to their websites from other companies'
Advertising rates vary wildly, from a few hundred dollars a month to many
thousands. If you want to know specific rates websites are charging,
Advertising Resource Guide. What determines which websites will
advertisers? Websites that attract the right demographics. For instance,
are selling telecommunication services to businesses, you want to pitch
message to executives making decisions in that area. If that's who
visits a website, it becomes a prime candidate to sport an electronic
for a phone company. To put it bluntly, you're selling eyeballs. The more
targeted your audience is, the better.
Once again, the
the Web are a key factor in determining whether this strategy will work
It's vital to understand who's on the Internet and who's visiting your
irony is that although computer technology makes it possible to gather
specific data about visitors to a website, other demographic information
gathered by doing an old-fashioned reader survey. That's why many websites
require you to register. They're trying to figure out who you are.
information, it's difficult to tell, so traditional polling techniques are
used. As you might expect, no two studies agree; like most new phenomena,
is on-going debate over Web usage. For one analysis of who's online and
they're doing, read a report from
Nielsen Media Research. For another perspective, see the user survey from Find/SVP.
Some websites now charge subscription fees, starting as low as $5.00 per
Subscriptions can be on a monthly to yearly basis. One company doing
this, Cognito, offers full-text search of
of articles in its database. The
Center, an electronic publication of the San Jose Mercury News, has
pricing for its daily fare.
Subscriptions run contrary to the
traditions of the Internet, where most information has been free.
According to a
survey from Jupiter Communications, a majority of respondents claimed that
were unwilling to pay a monthly fee for website access. Apparently
don't perceive enough value from the experience to pay for it, at least
That could change dramatically as multimedia hits the Web. But some
even text, does have value and some people are willing to pay dearly for
Lexis, a legal online database, charges $2.00 per minute. While
billing isn't practical on the Web right now, it soon will be. For a look
is actually making money online and future trends, read Activ Media's survey statistics.
check out CommerceNet, an all around
resource for Internet business.
The Internet is still in its infancy, an unexplored territory with great
potential and few rules. Although there is great uncertainty and high
thing is sure -- opportunities abound for electronic entrepreneurs. But to
the Internet as a motherlode of instant riches would be a mistake.
making money? Let us know
so we can
spread the news around.
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