11 Nov Is the Internet destroying small businesses?
Given that the Internet is no longer new and almost everyone uses it on a daily basis, it’s amazing how much misinformation there is out there. Buyer’s perceptions are significantly different than that of sellers. This fact became obvious to me at a recent party I attended, and the conversation revolved around the Internet.
It seems that my friends believe that people shop offline in physical stores to get the information they need, then they go online to buy the product on the internet because they can get it cheaper. As a result, retail stores are suffering and will soon be put out of business! Wow, I never realized people thought this was the case. In reality, the opposite is often true – people go online to research a product, find out what they want, then go to a physical store to make their purchase. If they do purchase online, they often buy from a mom-and-pop shop anyways, thus helping the small retailer, rather than putting them out of business.
The sad truth is that retail stores have always struggled. The overhead costs of leasing a building, investing in inventory, and hiring help so that you can stay open during peak times puts an incredible strain on small stores. Malls tend to make matters worse, because they often take a percentage of your overall sales. An online presence call help mitigate this and is often the reason why a small retail shop can survive, rather than being the reason for going out of business.
At the same time, the Internet does invite price comparison. Because your overhead is lower than a physical store, prices do tend to be less. But the number one reason people buy online is convenience – not price. As a retailer, you simply need to find ways to add value so that you can keep your margins high enough to make a profit.
Another huge misconception is that Google will drive traffic to a website, and the best way to get noticed online is to be number one on Google. This is like the Field of Dreams thought, “If you build it, they will come.” Anyone who has been managing a website for over 6 months soon realizes this simply isn’t the case. The way to get people to visit your website is to do lots and lots of creative marketing to generate word-of-mouth. YouTube videos that become viral, emails that get forwarded, press releases that get picked up and blogged about, social networking links, newsletters and other marketing efforts that provide links back to your site all help to drive traffic. Using coupon sites, your own blogs, and marketplaces like Amazon, eBay (and soon Walmart) help you to establish your own presence. Then, once you have already become popular, Google and the other search engines start to notice you, and your position begins to move up. You don’t get to be popular by being number one on Google – you get to be number one by being popular in the first place!
In other words, an Internet business is still a business and you are going to have to work at it to be successful. The good news is that small businesses can still compete with large business on the Internet. If you own a small retail store and are not selling on the Internet, or you want to improve your online sales, visit WebStores Ltd. today!