One doesnt have to look much farther than www.cufflinks.com, which sells, well, a variety of cufflinks, or www.animalwrappers.com, one of dozens of sites selling clothing for dogs, to see that people have wasted no time staking out their own little corners of the e-commerce universe.
Eighteen months ago, Bill Levy, the owner of Levy Media Group in Cleveland, was toying with an idea of his own. He wanted to launch a hometown foods portal on the Web, which would allow people across the country to buy their favorite hometown brand of chips, pickles and cakes from thousands of miles away.
If you live in Dayton, Ohio, and you move to Los Angeles and you want Mike Sells potato chips, what do you do? explains Levy. How do you find your hometown favorites?
He was sold on the idea. So sold, in fact, that he visited a snack industry trade show and asked a number of vendors whether they would be interested in such a venture. At the same time, Levy hired Scott Rafferty, president of Sagamore Hills-based Rafferty Market Research, to evaluate the viability of his e-commerce idea. It turns out there were already sites on the Web ,such as Homesick Gourmet and Home Town Favorites, that offered similar services.
Ultimately, Levy abandoned his food idea and invested in a new video streaming Web venture, www.flashstream.com, which more closely ties in with his media company.
The report was actually positive, says Levy, of his hometown food idea. But, theres only so many hours in a day you can do this stuff. So I decided I wasnt going to go along with it.
Rafferty, who has worked with everyone from small business owners to executives for large corporations such as Key Bank, says what people often forget when it comes to developing e-commerce applications is the fact there is always a chance of failure.
Just because you put the Web site up doesnt mean its your field of dreams, he says. Just because you build it, people arent necessarily going to come.
Rafferty suggests three steps for business owners to take before watching their e-commerce dreams, not to mention money, go up in cyberflames.
Decide on a niche
If you do jump into the always-uncertain waters of e-commerce, Rafferty advises you to stick with products or services that stand out from the pack. Selling Nike shoes will likely end in failure against the dsports.coms of the world. Custom-made jewelry or antiques, on the other hand, may be more likely to find a receptive and loyal audience.
There are pockets of small companies that are making money on the Internet, says Rafferty. People who sell antiques are making a tremendous amount of money auctioning them off over the Internet. If you look at some of the people who are spending millions of dollars, they probably arent making a profit yet, but if people kind of have a homegrown idea, chances are they probably are making money.
Do your homework
Before moving forward with your e-commerce idea, Rafferty suggests checking out the competition. Most companies that sell online will be listed with popular search engines such as Yahoo!. Evaluate the aesthetics and pricing structure of competitor sites, says Rafferty, to see if there is a way to gain a competitive edge.
Heres my evaluation of how well they are doing it, he explains. Is the site secured or not? Is it easy to navigate? Does it look good? Does it flow well?
One part of the equation that cannot be ignored when selling on the Web is designing the site with customers in mind. That means inviting people to evaluate how customer-friendly your site is before you spend your marketing dollars. It also means determining whether your target audience even likes your e-commerce idea.
Find out their needs in terms of how comfortable do they feel doing it, says Rafferty. Just because you set up a Web site doesnt mean a purchasing agent for an engineering firm is going to feel comfortable doing it over the Internet.
How to reach: Levy Media Group, (216) 861-6778; Rafferty Marketing Research, (330) 468-7773
Jim Vickers (firstname.lastname@example.org) is an associate editor at SBN.