It’s almost a year ago, I post Weekend Confession – Plenty of opportunities saying Google was trying to acquire Yelp.com for $550 million dollars. A year later in December 2010, Google is trying to buy Groupon for $6 billion dollar. Obviously, there were a lot of opportunities. So how am I doing on my business?
Well. From Google’s perspective, my business sucks! It’s time to look back and give my self a serious examination.
Plenty of competitions
My online stores are at the idle mode. The income doesn’t really cover my cost to bring new customers in. There are few reasons that I don’t consider e-commerce store my dream maker.
- Too much hassle to deal with customer service, inventory and drop shippers
- Too many competitions in the industry
- No proprietary technology to stand out from the crowd.
- Too easy to get in, but hard to get out!
I am not saying e-commerce is not possible to make fortune on the Internet. It’s primary due to the industry I am in and I don’t have my own brand and products. I have NO control!
My main project to promote local businesses is growing slowly. Revenue is tripled compare to 2009, but it’s not good enough to be proud of. I am far from becoming a $6B company like Groupon. The main power to drive the business rely heavily on search engine optimization (SEO). However, the biggest risk also came from SEO. The following diagram shows the search engine traffic since I launch the site in March 2009. The search engine traffic was going very well and becomes flat. I don’t know where I will be going with SEO, because the ROI is way down.
Not to mention that there was 17 competitions in just Phoenix area when I started in 2009. Now some of them went under and some of them are now behind me. Most of them are no where to be found on the major search engines, but they are doing great on social network and building viral relationship with end users. Some of them were brought out by Groupon clones. Now, there are more new comers trying to do what I do or become Groupon clones. So I’d better move faster.
Start from scratch or become a clone?
I have this debate for a while. There are about 20 Groupon clones in just Phoenix area. Every TV station and newspaper now have their own daily deals site to catch the social buying and group buying train. Where am I in the game? Should I follow the crowd and become Groupon clone too?
The fact is that almost every Groupon clone is making some money. Have I made that much?
I really suck at sales and marketing!
I truly believe that I can write the best code in the world. Some of the program I wrote years ago are still running in many International companies. I am just not good at sales and marketing.
Even I have a friend helping me out on sales and marketing, He is not much better than I am. This situation need to be changed.
Right direction with right vehicle!
Google obviously knows where the money goes. Local is the next biggest things since DOT COM era. I am in the right industry on the right direction, but I need the right vehicle. So I have a new idea that is extended from my current project and Groupon’s success.
I can’t really reveal the idea, because a good idea is just an assumption. It has no meaning until it is executed. However there are characteristics in the project.
- No front cost or low cost to local business owners
- Unique user driven content
- Create a sense of emergency
- A self-motivated sales force
- Easy to use
- No inventory and No Shipping
- Forget about SEO.
- Forget about economy
- Forget about supporting local businesses
Am I crazy? Isn’t that violate my own purpose of creating this project, if I don’t support local businesses?
To be honest, I have tried my best to support local businesses and realized that most local businesses I support don’t even care about what I do. That really really pissed me off. All they want is to get everything FREE and go cheap while I am trying to help them?
Does Groupon support local businesses? They may say so in their press release, but what they did is nothing but making good fortune off local businesses. Local business is the biggest loser.
Really. Business is a brutal world. If you are too nice and too naive, you will be eaten alive.
I can still talk about support local businesses for a great cause, but it will just be part of the Marketing strategies.
Building the team!
I have learned the lesson. The lesson is not about learning sales and marketing. It’s about learning how to run a company like real entrepreneur. If I want to achieve my goal as Lifestyle Entrepreneur, It’s about time to make that happen!
2011 is going to be a dramatic year. It’s not the year for Mr. Nice guy or the guy who take every crap dumped on him.
Goodbye 2010.
Wow this is something else that we have in common. First off, the eCommerce road is one that can possibly satisfy all 5 “wealth commandments”, however, as you said it, Entry and Control are usually violated and sometimes even Need. Books like the 4HWW are dangerous in the sense that they focus less on the idea that automation comes from thousands of hours of finding the right niche, great SEO/PPC campaigns, negotiating with suppliers and most of all customer service that SUCS(Superior Unexpected Customer Service, for those who haven’t read The Millionaire Fastlane).
In fact, despite doing what I thought was the right approach, in doing the 30DC and joining up at World Wide Brands(as well as personal mentoring with Chris Malta himself), I never could pull the trigger on eCommerce and don’t even get me started on Affiliate Marketing, lol, I took one look at the Warrior Forums and realized that any ideas I had were already being executed by experienced marketers with years of experience who also knew coding and some of whom seemed to have the morals of a used car salesman or late night infomercial guru, you know, the “I know you can’t afford this, but I’m gonna make you feel that you can’t afford to NOT buy this product/service.”
As far as the local coupons, the best way to compete is find out what Groupon is NOT doing and exploit that weakness, it’ll give you an advantage of most of the clones considering that most clones are trying to BE Groupon instead of BEATING Groupon. It’s a difficult game, but the rewards are worth the effort, especially since it’s ironically hard to find companies that can justify marketing budgets when they can barely make payroll, when in reality, an effective marketing campaign would solve all of their cashflow problems. Not to mention they’ve been brainwashed to think that the only worthwhile advertising is garbage like Billboards and DEX, who charge a boatload for CPI(Cost Per Impression) advertising(usually with NO guarantees either), as opposed to more relevant CPA(Cost Per Action) advertising like Google Adwords, Facebook Demographics or Groupon.
Twitter: TerenceChang
says:
E-Commerce is still a great way to make good living off Internet, but you have to reach the level of volume. Having your own brand is the only way that you will succeed in the e-commerce world. Zappos and Amazon are the perfect example. None of them are doing drop shipping. I am also lost the faith of CPA and CPC. Don’t even want to talk about traditional advertising platform.
You are right. It’s going to be very hard to play the game with Groupon, but there is always enough space to squeeze in.
Entrepreneurship is not just about be the first and the fastest. It’s also about flexibility and consistence.