Online Competition

If you are starting an online business now, you’ll realise that you aren’t gong to find it that easy to build traffic. Nevermind getting your message out there; you’ll also need to deal with competitors.  It’s easy and cheap to start up an online business; and the real costs don’t really start factoring in till later.

Need a website? Sure – pay $50 and you can host a website.  Oh? Your server is having issues? I guess you’ll need shared hosting.  We start at a small price of $100 a month…

Oh look, you need a credit card processor.  PayPal works right? Sure, if you don’t mind losing customers and 0.3 – 0.5% of each transaction.  Bah, that’s not much! Except it is when you are processing $50,000 a month.

And on, and on.  You can’t work out your garage anymore, you need a storage space.  You can’t just walk-in and drop the packages off, but Canada Post isn’t picking up from a storage lot so you need a warehouse.  Oh look, you need at least 1000 sq ft for a warehouse.

On the other hand, your competitors are starting up small.  They don’t have to worry about paying themselves a salary yet or the higher cost; so they can be lean machines.  There’s an inflection point there where it goes from a hobby to a business and some never pass it, but till they hit it they’re your competitors nibbling at your heels.

Remember, hold tight to what you know and what you are.  Build it right, it’ll get there eventually.

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