05 Jan 2012

Closing Windows of Opportunity

by Jason Greenwood

eCommerce No Comments

Fame and Fortune

The Internet is the way to fame, fortune and the gilded lifestyle you have always dreamed of right? If you could just think of that ‘brilliant idea’ or invent the ‘perfect product’ your problems would be over right? You’d slap up a website, put it online, put your products on there and wait for the wads of cash to roll in right?


Hard Graft

The reality is much more challenging than that. In the’early days’ of the Internet, the above may have been more accurate but it was never EASY to get rich quick using the Internet. In those early days (think early 90′s here), there was not as much online demand as people were just getting used to what the Internet even WAS, how it worked, how to find things on it and what it was good for.

As personal computers became more prevalent and proper Internet browsers and search engines became widely available – the Internet rapidly expanded beyond its early academic roots and spread to become (along with email) one of the most widely used communcation mediums of modern society.


Great, so now we have HUGE online search demand. Now what? The early forays into ecommerce were not pretty. Most were single pages that were designed to look and act as a simple business brochure. These early ‘brochure’ sites merely provided contact details for an existing brick and mortar business. When the first true ‘buy online’ eCommerce site went live is up for debate but according to Internet lore it may have been a Pizza Hut in California in 1994. With this huge demand came competition.


Since then the Internet has burgeoned and now you can buy almost anything online, from nuts and bolts, to baby diapers, sports cars and even entire islands! By far the most common payment method has become the credit/debit card and this has accelerated online adoption as it has sped the payment clearing process so that there is little delay from purchase to delivery. Now there is not just one site for each product offering but typically there are hundreds. The multinationals have understandably sat up and taken notice and this has led to the next phase of Internet and eCommerce development…


It was always clear from the outset that due to the geographic reach of the Internet as well as modern courier services, there did not need to be as many ‘stores’ operating online as there were in the ‘real world’. This has meant that not only were the early online players typically those that carved out niches for themselves but like all businesses they had to do right by their customers or face rapid extermination as better and brighter shops popped up online. Now the main players and online stores in common business verticals are well entrenched and have good brand recognition and good search visibility.

Some niche industries and truly unique ideas can seemingly spring from nowhere and even create a new business opportunity where there wasn’t one to begin with. These businesses create their own demand as opposed to trying to exploit and capture existing demand. However, the name of the game online today is ‘consolidation’. This ultimately happens in all mature business models but the Internet due to its rapid growth has reached a level or maturity much sooner than previous business models. As such, the big players are either out competing and eliminating their rivals or buying them up and either shutting them down (effectively absorbing them) or running them under the umbrella of the parent company with revenue accruing to the parent as a business unit.

Getting Found vs. Getting Online – Barriers to Entry

Establishing an online business is still not all that hard or costly. Well it doesn’t have to be anyway. There are very basic platforms out there that can see you have an online store operating at your own domain name inside of a month. This includes the systems to allow you to take secure credit card payments from within your store.

The problem is not opening your virtual online doors, it is getting the word out to potential customers that not only are you open but you are their best supplier of choice for what they are looking to buy. And remember, you are still competing with legacy brick and mortar stores too and some products simply lend themselves to being more easily sold in person. This includes items such as anything with a fragrance (perfumes and soaps are but 2 examples). Yes, some shoppers will do their browsing in a physical shop and then look for the best deal online but you can’t count on that and savvy salespeople know this and will aggressively close a deal in person if they can.

SEO & PPC – the Pot of Gold?

The reality is that the top free search results (SERPS) for almost every existing vertical and product are already dominated by someone. And since search engine users do not typically look past the first few search results or ads, if your store turns up on page 2+ of the search results, forget it, you may as well not even be in business online.

And with the ever increasing competition and cost of Pay Per Click advertising (rising at circa 12%/year), trying to survive on ad traffic alone is not viable for many businesses. As such, it is in the best interest of your potential online business to do plenty of research before you consider selling online. This extends from determining what the overall search demand there is for your target products but also how much competition already exists in your intended vertical. That online ‘Pot of Gold’ is more elusive than ever.

Closing Windows

The longer you wait to open your online business, the more challenging it will become. You will have to deal with either more competition with better brand recognition or competitors with very deep pockets, or all of the above. So, if you have always had a passion for business and the Internet, our recommendation is don’t delay. Act sooner rather than later. Make sure YOU are the barrier to entry to your competitors instead of the other way around.

The Good Life

Who knows, if you do very well you could become an acquisition target to a multinational and then you will be in the drivers seat. You will be able to write your own cheque and retire living the good life you always thought the Internet could provide you. Or you might keep your business and let others run it, retaining ownership and an income stream for you to live ‘happily ever after’ on.

Either way, the longer you wait, the harder it will become so if you have a great idea, great suppliers (or you are one) and a knack for sniffing out opportunity, then do at least one thing every day that will make your online dreams come true. Unless you know everything there is to know about eCommerce, I recommend that you engage with an agency that can help you thread your way through the minefield of online business, minimising your risk and helping to maximise your potential returns.

Jason Greenwood
Digital Account Manager
Exceed Online

Exceed Online is a full service eCommerce and Online Marketing agency serving clients throughout New Zealand and Australia.

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