Let me refer you guys to a potentially life changing document called The Perfect Business– by Richard Russell.You’ll find that internet businesses meet many (maybe even all) of the characteristics of a perfect business.
The reason why I feel that e-commerce is the best is because of low high start up costs with a huge margin for potential.
- “2004 online retail sales rose 23.8 percent to $89 billion, representing 4.6 percent of total retail sales. Including travel, online sales also rose 23.8 percent to $141.4 billion. Online retail sales will reach $109.6 billion [in 2005]. Online sales including travel will rise to $172.4 billion this year.” — Forrester
This means that the internet is a great place to do business, and it’s constantly growing. It can be just as profitable as running a brick and mortar (real life) store, but is easier to manage because of a variety of programs that you can use.
The fruits of labor show almost immediately, compared to traditional brick and mortar companies. You can monitor traffic at pin point accuracy and know how you’re doing, where people are coming from and where they are exiting from. This allows you to plug holes that you might have, that you wouldn’t otherwise be able to see in real life.
There are dozens of monetization methods on the web like Google Adsense, Yahoo Publisher Network, Azoogle, just to name a few.
I now believe that the worst thing you can do when selling a product is to sell what everyone else is selling because it’s hard to turn a profit. You’d have to slash your prices to match your competitors over and over, until no one makes much of anything.
The idea is that if you’re selling kitchen cabinets and they’re selling like hot cakes, it doesn’t necessarily mean that you can tap into that market because the people who sold it first have already built up their name, loyal customers, contacts, and are a step ahead of you.
The power in differentiating yourself and offering something special is that you’ll have very little competitors. That means anyone who wants what you sell will buy what you have because you’re the one of the few that have it.
Drop shipping is where you sell a product to a customer, and a warehouse ships it directly to your customer, saving you shipping fees and inventory space. You make money off the difference between the retail price and the wholesale price.
Everything would be fine and dandy, but the problem is that there are so many scams and so much competition out there that it isn’t worth the effort to sell some items. However, if you can find your own wholesaler in a good niche, you can make much more money.
You can read more about this from Eli’s post in the Net Business Blog. He offers a really long but good article on drop shipping and e-commerce.
You’ve probably thought of this business strategy at one time or another: “If I start a youtube, myspace, or some other already established giant, I’ll be able to succeed by just getting a few of their users/customers!”
However, the problem with this is no one has a reason to switch over to your service. They’re already established, what would differentiate you and them?
So what you look for in a niche is a small, untapped market that they haven’t fully encompassed. Whenever somebody looks for THAT market, they’ll find you. For example, baby pianos is a very broad market. It probably has a lot of competition that you want to avoid. It’s hell if you want to sell the same thing as everyone else, I know from experience.
When you say a brand specific piano like, Kawai then you have Kawai Baby Grand Pianos, and whenever someone looks for a Kawai Baby Grand Piano, they’ll find you!