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E-COMMERCE CLINIC: Fossicking online

E-COMMERCE CLINIC: Fossicking online

Despite the cloud of doom and gloom of the market that has been hovering over the tech industry for the last year, industry analysts are still forecasting huge growth in the online sector. According to ActivMedia, firms that do business both on and offline project that by the end of 2000, 25 per cent of their revenue will come from the Web.

Businesses are increasingly looking for new ways to turn their Web site into a profit centre. Recently, LookSmart, a pioneer in this industry, realised that they could no longer rely on advertising revenues to turn a profit. They decided to establish an Express Submit service whereby clients are guaranteed an editorial revue within 48 hours. For this service, businesses pay a small fee. By e-commerce enabling their site, LookSmart is able to drive revenues through their existing distribution channels.

So what strategies can small-to-medium businesses employ to drive revenue through their Web site?

Offering paid value adds

The LookSmart example is a perfect illustration of this point. Clients can get the regular service free of charge, but for a small fee they can receive value-added services that people are willing to pay for. For example, Fairfax offers a search facility of past articles. This service is only available online and users pay for the privilege of being able to download past articles.

Shopping on the Web

Offering discounts for services bought through your Web site is another great way to push revenues through your site. For example, some of the new airlines, such as Virgin and Impulse, offer "Web hot" fares where customers receive discounted airfares for purchasing online. The Web site offers lower overheads, which can sometimes subsidise product costs.

Paid areas of your Web site

Offering restricted-access sections on your Web site that provide exclusive content can be a way to drive revenue through your site. For example, if you have specific research that people would pay to receive, this could provide an additional revenue stream.

But charging for things that used to be free is not always a positive exercise. I recently went to a favourite resource site of mine (www.wilsonweb.com) only to discover that now I have to pay for the information I used to receive for free. The information was a helpful resource, but it I didn't use the site enough to warrant paying for it. Perhaps if they had enticed me by giving me a week's free trial, and only gave me access to certain parts of the site, I would have been more willing to spend my money. This is the basic psychological principle of reciprocity. That is, you are more willing to do something for someone else if you feel that they have done something for you.

Selling your goods online

This may seem the most obvious, but it is surprising how many companies have a Web site that merely showcases their products. e-commerce enabling your site to sell your wares is another way to use your existing channels to distribute more of your product. As we have learnt from the mistakes of the Internet pioneers, the Internet cannot be used as the sole distribution mechanism, but it is a great way to reach a wider audience and augment your existing sales channels.Amanda Mason is the PR & Marketing manager for Pure Commerce. Reach her at amanda@pure-commerce.com


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