Archive for the ‘General Business’ Category

In my last post, I talked about how it is not the right time to get into ecommerce in China. And a lot of people asked me, “As an entrepreneur, aren’t you supposed to solve those problems?”

Yes, entrepreneurs are supposed to solve problems. But not if the cost is too big.

Here’s why you don’t want to be a market pioneer in the digital age:

1. Exponentially higher development cost - in the industrial age, where productions rely on machineries and physical infracstructures, the development cost of market followers are not that much lower than the pioneer. The reason is developing and producing a machinery requires component and parts which cost money. For example, if it costs $10M to produce the first automatic cleaning machine, it will still cost $3-4M to reproduce it.

However, in the digital age, when what businesses need are more information technology, online services, and software programs, there is an exponentially higher cost of development for the market pioneer. For example, while if it costs $10M to custom made a software, the cost to reproduct it? Almost zero.

2. Less customer loyalty - in the digital age, when one store to another just barely a click away, it is becoming harder to build up customer loyalty. That means even if you company’s market share is 30% this year, it may very well be much less than that next year. Because of this lack of customer loyalty, the benefit of being the first one to enter a marketplace has significantly reduced.

Combining higher initial risk and lower potential reward, I hope you see why you no longer want to be a market pioneer in the digital age.

Technorati Tags: China business opportunities, ecommerce, China, Internet Marketing Consultant,

When I was in Hong Kong this summer, a lot of people asked me if I will try to setup some sort of presence in China for my ecommerce company. And I will always tell them no.

Here’re the problems I see associated with doing ecommerce in China or Hong Kong at this moment (in order of importance):

1. Lack of supporting industries - the supporting industries of ecommerce is pretty well developed in North America and in Europe. E-commerce’s supporting industries include shopping cart system, fulfillment centers, payment processors, inventory management, marketing venues… Without these supporting industries, enterprises have to build these infrastructures or programs from ground up, and it is very costly to do. I’ll elaborate more on this point later.

2. Problem with financial infrastructure and logistics - do you know it is STILL a pain in the back to pay online using credit card or Paypal in China? It is even harder for them to take out money from Paypal, not to mention the exuberant fees. This alone can deter a lot of online shopping activites. Besides, the postal service and logistics are far behind in China than in North America. If you think USPS is bad? Think again. Some areas in China don’t even have roads or addresses.

3. Can they afford spending that much yet? - While there’re more and more high income families and a surge in the no. of middle income households, the spending ability in China is still relatively low compared with Europe, N. America, Australia, Japan, and Korea. The avg. income are about USD$500/month. Without the kind of profit margin we achieve elsewhere, it is hard to justify going into China.

4. New Rich Mentallity - Many people tries to bring up the point that, “But there’re more and more rich Chinese families”. That is true. But you have you understand that because they are new rich, they prefer going OUT to shop to show their wealth, NOT hiding at home and purchase things online.

5. Denser Population - The population of China is concentrated in the coastal area, in particular the higher income group. With denser population and denser cities, offline shopping is often preferred with more convenience and wide enough selection of choices.

6. Internet is about widening, not narrowing - another problem with setting up an ecommerce website in China is that you’re limiting yourself with Chinese reading population. When I setup a website in English, not only am I selling to all native English speakers but everyone else from other countries who are able to read English. O and the cost of setting up a web presence is the same everywhere.

Now I’m not saying that ecommerce is not going to be a huge business opportunity in China sometime down the road, but at least not now, and not for the next 3-4 years to come.

Another question I get a lot is - “So why can’t you be the first one to solve those problems? That’s what an entreprenuer does.” I’ll explain to you in my next post why I believe it is no longer beneficial to be the market pioneer in the digital age.

Technorati Tags: China business opportunities, ecommerce, China, Internet Business,

There’s a recent launch (or re-launch) in the information marketing industry called the Dominiche. The guy behind it is Ed Dale, who’s a veteran information marketer, and one of the faculty member of Stompernet.

What Dominiche teaches you is essentially how to profit from buying and selling websites (or building & selling, flipping…). Now before we get into what I think about Dominiche, let me talk about whether I think Website Equity is a good business model.

In short, YES.

Here’s why: How much would you have to pay for a investment real estate property in order for it to pay you $1000/month in rent? Its going to be about $100,000. How much do you have to pay to buy a website which pays you $1000/month in profit? Um.. about $15,000.

So in terms of cashflow, this is GREAT.

How about in terms of increase in property value?

Well, let’s see, if you buy a house, no matter WHAT you do to it, renovating it, market it better… it will be almost impossible for you to flip it for more than 100% within 6 months. However, for websites, you can easily promote or monetize a site better and achieve a 100% increase in income - therefore increasing the website’s value by 100%.

Why? Because as of this moment, the value of websites are almost only based on its income.

There’s only one problem. With real estate, you can leverage. You can borrow money to purchase a property you can not otherwise afford, and thus you will gain much more in terms of increase in property value (that is if it increase).

As of now, there aren’t very many mortgages available for buying websites.

The potential I see here is not just with flipping websites itself, but the secondary industries that are going to be generated because of that. How if you become a mortgage company that specializes in provide mortgages for website acquisitions? How if you become a major broker in the area? How about an appraisal firm for website equity?

Does that excite you?

Now I’m not a member of Dominiche or Stompernet, and do not intend to join. But from what I’ve heard, those guys know what they’re doing. And for just $2000 something, its worth a shot at it and I look forward to hearing from your success.

Technorati Tags: Dominiche, flip website, Stompernet, Website Investment,

As promised last week, we’re launching a new ecommerce site again today, www.BabyGiftsUnique.com, which will focus on selling baby gifts and maternity related products.

This is our company’s 5th ecommerce site and we’re going to launch at least two more at Febuary 2008. We’re really pumped and excited to see how this new site will do because the pet site we launched last week is already doing great.

So if you are a parent with a baby or soon to have a baby or if you are attending a baby shower soon, go check it out and give me your thoughts; and if you’re not, that’s ok too, just tell your friends about it. If you can even blog about it or link to it from your website, that would be fantastic. Again - anything is welcomed!

Technorati Tags: Baby Gifts, Unique Baby Products, Baby Shower,

I’m glad to announce that we’re launching a new ecommerce site today, www.PetPetSupplies.com, which will focus on selling pet supplies and related products.

This is our company’s 4th ecommerce site and we’re going to launch another one next week and at least two more at Febuary 2008. Needless to say, we’re really pumped and excited to see how well these new sites will do.

So if you are a pet lover, go check it out and give me your thoughts; and if you’re not, that’s ok too, just tell your pet loving friends about it, or you can even blog about it or link to it from your website. Anything is welcomed!

Technorati Tags: Pet Supplies, Online Pet Store, discount pet products,

I just read an interesting report today saying that an astonishing 25 percent of all products sold from Zappos.com were returned.

Are they happy? For Zappos, that answer is yes.

In case you don’t know, Zappos is the largest online retailer for shoes and apparels (mainly shoes), and is the pioneer in offering free returns for their products.

Lesson of the story: if it makes sense for your business, encourage contrarian behavior that creates a larger amount of comfort.

For Zappos, that means encouraging returns with free shipping. NPR says this has helped Zappos grow by 6x from $100MM to $600MM a year.

“Some of our best customers are people who return a lot of shoes,” said Craig Adkins, vice president of operations at Shepherdsville, Ky.-based Zappos.com.

Technorati Tags: Zappos, ecommerce, adwords consultant

One of my favourite activities when I’m on a long flight is browsing the SkyMall catalog. Their selection of products is very unique and as a retailer, I read it for purchasing inspirations.

It is not until this time around that I get to scrutinize the catalog, its marketing message, as well as comparing some of their products’ pricing to ours. And I came to the conclustion that:

SkyMall is a Big Fat Liar

When you flip through the first couple pages, you will soon see the sign “SkyMall’s price is the best price, gauranteed!” on the very top. So I decided to take a look and compare the prices of some products that both SkyMall and we sell. I know for a fact that we both sell products from the Helman Group, so I flipped to that page.

O, they didn’t…

Yes they did sell the Margarator, an awesome Margarita Machine, for $99.99. At which they’re selling on Walmart for $78 and on our website MyPopcornMachine.com at this price.

Um… lowest price guarantee? I don’t think so.

Technorati Tags: retail, ecommerce, skymall, margarator, outsourcing

Last Saturday was my college class’s graduation (I graduated early last year) and I had lunch with some of the co-years that I entered the college with. In the middle of conversation, a sister of my friend asked me this question:

“Dominic, most people work for a corporation for a couple years after they graduate before they start a business, why do you start a business so early?”

That’s a great question and she’s perhaps the first person that has asked specifically about it. I gave her a true but partial answer because my full answer would bore any human being and drive them insane.

Thinking about it, it is a FUNDAMENTAL question and will dictate:

1) Should you even start a business?
2) What kind of business should you start?

It is a question each and every entreprenuers need to address to themselves, so I invite you to visit my thought process as to why I start a business, why I start the type of business I had, and in particularly why I chose to start one so early (while I was at college).

Reason #1 - Opportunity

You can want to be an entrepreneur all you want, however strong your desire is, if you have not yet seen an opportunity, you would not start a business. My opportunity (and my 1st business idea) came when a “guy” literally called Guy, approached me with a business plan to buy and sell used books on campus during my freshman year of college.

One thing leads to another, we recruited another partner into the venture and started this thing called Owlbooks at our school and that kind of get my feet wet in selling college textbooks (yea I’m still selling college textbooks now) as well as entrepreneurship. I went on through several other opportunites shortly after including real estate investing (inspired by Robert Allen) and Senior Care (saw some business plan online), both failed miserably, and now finally successfully settled in E-commerce and internet marketing.

Reason #2 - Take my fate in my own hand

This is the partial reason I shared during the lunch conversation - 2 of the schools I really wanted to get into for college rejected me when I was at high school. Being the same confident Dominic, I thought to myself, “I’m the greatest person you can ever admit, why am I rejected?”

So I came to the conclusion - institutional admission system is subjective and flawed!

So, ok, if I were to try to get a job, wouldn’t I fall back into this flawed system? Having a couple people decide whether I’m good enough for their company? Having a couple other people decide how much I’m worth?

No thank you.

That’s why when I started my online business, I’m determined to make it B2C. In my consumer retail business, whether or not my customer buy from me have absolutely NOTHING to do with what they think about the owner of the site (me), which school I went to, how brilliant I am, or what I have achieved in the past. ALL they care is the product quality, the price, and the customer service. All of which I have 100% control over and my success is a direct consequence of my every single decisions and actions.

I love it: if I succeed, I’m not just lucky; if I fail, I have no one to blame.

Reason #3 - We can all be winners

Being brought up in a competitive environment, I was taught at a young age that (not just through teachers and parents, but through the environment) there’re winners, and there’re losers. If you win, it’s kind of cool; if you lose, it kind of sucks.

Success, in that world, is measured in terms of scarcity. It’s always true that if you’re successful, you’re doing it at the expense of others - directly or indirectly, more or less, sooner or later. I.e. If you get an A, that means someone else will be pushed out of the curve and get a B. If you get into Harvard, that means someone else didn’t get into Harvard.

Since I get into starting my own business, man is this a different world. In this world, you are NOT trying to win by making someone else lose (contrary to popular believe)! Here, you want to create value in your industry so that you, your vendors, and your customers all benefit from your venture and the relationship.

I urge you, all entrepreneurs or aspiring business owner, to think hard about why YOU start(ed) a business and if its the right thing for you. Share your story with me!

Technorati Tags: entrepreneurship, start business, Outsource internet marketing, Internet marketing consultant

This past week, I’ve been spending my vacation on a Norwegian Dream Cruise line, visiting 4 cities including Progresso, Playa De Carman, Cozumel, and Belize City.  While I was enjoying my vacation, I was still noticing the marketing aspect of things of the cruise line.

What I noticed about the cruise is – they did a great job selling for the next cruise.  It does not just depend on individual salesmanship of crew members (although there were some great sale people there), what impresses me is the selling system that was being implemented.

For example, at the end of every show, the MCs will ask you to come back.  At the end of the cruise, they ask you to fill in a satisfactory form.  And the best strategy of all I believe is an on-cruise booking special at which you will get a special discount if you order your next cruise while you’re still on one.  All these are embedded in their standard crew procedures and is part of their whole selling system — the bottomline is, they place a HUGE effort retaining current customers.

I understand as a consumer, you are used to seeing these promotion strategies and take it as a grain of salt.  As an entrepreneur though, how many of you actually use these simple tactics in your business?  How much effort do you use to retain your current customers?  There’s a reason why some companies are successful — they must have done something right.  Focus on their strength, learn from them, and then implement them in your own business system.