The Internet: a small business opportunity

The Internet: a small business opportunity

There is little doubt that the Internet has huge potential for small businesses. After all, this is a brand-new medium. Just look how radio, television and video have progressed since they were launched.

But the really great thing about the Internet is it is a great leveller. Because no one owns the Internet, there will be no Internet media barons. With just your word processor and a once-off $25 connection to the Web you can publish alongside the biggest companies in the country. You also get worldwide and permanent coverage at no extra charge.

Who can benefit?

There are probably three types of businesses that can use the Internet at this stage:businesses with goods they can sell by phone orderbusinesses that provide information, andbusinesses that need to be seen when consumers are looking for suppliers.

Products that sell over the phone are typically generic or well known (for example, Microsoft software) so people don't have to see what they're getting. Since they are well known there are probably many suppliers competing with you. Your marketing edge may have to be price to attract buyers.

Those businesses which sell information, like stock market tips, can really benefit from the Internet. It is virtually free to publish on the Net versus the cost of print publishing. The data can be updated instantaneously whereas paper copies have to be printed and circulated. The principal difficulty is receiving payment for the information provided. Much of the ground-breaking work overcoming this has already been done. Ironically, some of the earliest demand for a payment system came from sites with "girlie" pictures so they could charge to view their pictures. There are still problems charging for once-off visits and collecting payments too small to go on a credit card but these will be solved shortly.

The third group is those businesses in competitive markets where the consumer likes to look at what is available before making a choice. These are the businesses that pay for big ads in the Yellow Pages to attract the window shopper. Restaurants and motels are good examples.

The beauty of the Internet to this group is that they can publish as much as they like about their business on the Internet at virtually no cost other than desktop publishing expenses. The consumer can be attracted to the site by skilful signposting on the Net and can then view as much as they want. The Internet can present a glorious full-colour interactive brochure that can even send video, sound and voice clips to the (admittedly higher tech) consumer.

Where do resellers lie in this scene?

Let's focus first on selling directly over the Internet.

A number of resellers are successfully selling over the Internet, especially in more phone-oriented markets like the US. At this stage of the Internet in Australia, you probably won't sell enough to pay for your expenses if you just have generic products. The Australians who are making money this way almost invariably have a specialised product of their own like Tasmanian Internet millionaire Steve Outtrim with his world-famous Hot Dog program.

If you have something special which can be bought sight unseen you could do well. The acid test: ask yourself if you would buy this product yourself over the phone. Of course, with the international reach of the Internet, your market need not be just Australia - you can sell worldwide. Hot Dog sells $100,000 worth of product a week and 98 per cent is exported to 30 countries.

In fact the ease of selling software this way means that resellers can be cut entirely out of the loop. Best-sellers like Hot Dog and the Eudora e-mail package are now principally sold over the Web, cutting resellers out of revenue from these "hot" products.

With the introduction of the Internet programming language Java, marketers are now saying the days of the monolithic spreadsheet and similar packages are limited. Soon consumers will pay for and download little modules from the Internet to carry out just those spreadsheet tasks they need rather than buy a huge package with lots of functions they never use. Resellers may lose a big chunk of this packaged software market in just the next couple of years.

So, what to do?

If you have products that are worth paying serious money for print advertising, you can list those same products for just a small amount more on the Internet as well. The Net isn't a substitute for print (unless you only have a small budget) but it's so economical that it's hard to see why you shouldn't put them up on the Net as well. The sceptics will say that you won't sell anything on the Net. But then your magazine ads don't take orders either. They simply encourage people to visit or telephone with an order. Think of the Internet as dirt-cheap display advertising. How cheap? Cowleys does a whole Internet page including photos for as little as $150!

Later I want to look at the other ways to use the Internet mentioned above. We'll also talk about how to get started publishing on the Net.

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