I wrote a post on Starlit Citadel’s business blog. Yeah, yeah I should write more article here too. I will…
Anyway, the discussion was with relation to how some of the major e-commerce businesses out there can run losses for a much longer period than we can, and as such structure their company in such a way that they can / will make those losses.
I mean, when a public company is losing 80% of their revenue to COGs and Fulfilment, even minor variations in things like IT, Marketing and the like can seriously affect the profitability of the business.
I’m not sure I’d call it unfair per se – it is the field we entered and created in many ways, but it’s still a playing field that is heavily weighted in their favour. So the trick for a small business is to learn to not compete directly against them.
Whether it’s entering a business sector that they have no interest in or perhaps taking advantage of a geographic benefit, you need to be able to compete on things other than free shipping and price.
What’s your answer to the Amazon’s & ThinkGeek’s of the world?
One of the most amazing aspects of business that I find is the lack of follow through by so many individuals who run their own business. Time and again, I’ve met numerous consultants, individuals or businesses who lack the ability to follow through and achieve a sale. Some personal examples:
- 2 different businesses that I’ve offered to help set their e-commerce websites up at no cost
- a restaurant that was supposed to help us schedule a party / dinner
- logistics companies that don’t follow through on contact forms
- a gateway provider we met in person who never followed through with a quote
- a freelance content writer who we were looking to hire
All of the above are real world examples of individuals and businesses who missed out on an opportunity for business. In many of the cases, we were ready to buy and just needed a little follow-up. Instead, we received silence. So, remember – follow through whenever someone offers – you never know where it’s going to lead.
And those who don’t, consult. Or teach. Depending on who you ask.
A lie, of sorts. There’s a million reasons why someone would consult or teach.
- Lack of capital to start a business
- Lack of desire to learn the other areas of business (e.g. logistics or accounting or HR)
- Enjoyment of the act of consulting / teaching
- Insufficient time to run a full business
- Using consulting / teaching to boostrap capital
Yet, like most things there’s a grain of truth in there. Be careful about the consultants and teachers you find, always check their previous references and check what they’ve done. Many aren’t able to run a business because really, they just aren’t that good.
You’re Not a Business Owner if…
- You work for an Multi-Level Marketing company. You’re a commissioned sales person
- You do less than $30,000 a year. It’s a hobby that pays. Caveat – if its your first year, I’ll give you a pass
- You have an idea and are ‘working on it’
- You have no plan on how you’re going to get paid.
- You don’t have skin in the game.