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Internet Marketing ImageWhen we specifically apply marketing to the Internet channel, we tend to think of doing business world-wide.  We tend to segregate the E-portal as a separate business entity with its own challenges and complications for how to conduct business over that portal. E-Marketing has been widely advertised to make it look easy for a mom-and-pop store to suddenly become international business enterprises.  If it was that easy everyone and their uncle would be international entrepreneurs, but the reality is that for something to happen at that scale you have to offer something truly unique, and you need a model for your business operations to easily adapt to the market(s) you serve.

Our focus is on “click and brick” that highlights a website (click) supplementing a store or other place of work (brick).  What that means is to pursue strategies that offer more opportunities for contact with prospective customers:

  • Use the website to increase awareness of what you have to offer in the store;
  • Supplement store-sales with web-sales, using the store as a warehouse;
  • Use the website to expand your market, competing against yourself (Amazon).
  • Amazon bookstores and their website now operate as separate entities that together are market dominators.  This brings up the opportunity for a business alternative model:
  • Operate a virtual store with web-sales, using a fulfillment warehouse facility.
  • This is entirely possible although people may be reluctant to order from a virtual store if there is no physical address that they can look up and confirm.  It will take longer and it will take perseverance to establish a reputation that puts people at ease to do business.

Diverse Markets

For a neighbourhood store to take on the world is no small feat.  It can be done, but to be effective you need to transform your website to be multi-lingual and directed at the individual markets you serve.  You need to understand the unique selling proposition to market your products elsewhere in the world, as there are many barriers to overcome.

Canada is fairly unique in that we have a multi-cultural environment in which prospects can be addressed mostly in English, and the balance mostly in French: most immigrants will have mastered one or the other language, even though the nuances that can exist in an advertising message may get lost in translation.  Depending on whether your product lines are high-end or low-end, and what product lines have more or less appeal to these immigrants, the most concern you may have is to avoid complicated terminology.  You learn to keep the descriptions simple when you reflect the product in advertising, and on your web pages that are aimed at a multi-cultural market place.

If you truly want to expand world-wide at some point, you need to take that thinking to your entire website, considering that in those diverse markets English will only be their second language at best.  It is one thing to intercept misunderstanding in person and to clarify information, there is no other thing when all people have is access to a browser that opens up your virtual store and order processing windows.  If people cannot grasp what you are selling, they cannot buy, which means lost opportunities.

Diverse Models

We cannot regard the Internet as a singular market: it is a portal that is accessible from a number of distinct markets that create potential challenges for doing business.   As we noted in the introduction, there are different models for operating on the internet, as in the diagram below:

Assuming you already operate a store it has 3 paths that reflect the use of the Internet as a vehicle for increasing your volume of sales.  In this model we show the potential outcome of different options:

· Web advertising is simply focused on maximizing the volume you can handle in a physical store by drawing attention to your location, etc.;

· Click and Brick is a similar focus that adds on-line ordering capabilities based on a fulfillment model that uses the physical store as the base;

· Expand store is also a Click and Brick alternative that seeks to dramatically grow the volume of business not limited by the physical store as the base;

·Emphasize Internet is a model that establishes a completely separate business, like Amazon, that ultimately competes with the store at some level.

Cultural Diversity

One of the tenets of marketing is to connect with your customers.  This can prove to be a challenge with the wide range of cultural diversity that makes commerce rife with the opportunities for misunderstanding and orders that disappear in never-never land, one reason many smaller businesses opt for the “Click and Brick” model to stay grounded, and focused on doing business locally.

Cultural diversity is not about judgment but about acceptance and tolerance for the fact that things are done differently abroad.  With local marketing experience it can become surprisingly difficult to translate that model into a foreign culture that you are not quite intimately familiar with.  Many advertised examples of E-Business suggest that there is no difference except to engage Federal Express or United Parcel Service, but being able to deliver the product does not mean you have an easy time selling the product.

Unless your product is virtual and easily delivered over the Internet, like training, there are all kinds of challenges beyond the physical delivery of product.  You may end up with your product destroyed at a foreign border because it is illegal to import: is that your fault or the fault of the purchaser?  When you create a drop-down list that includes the name of a country that has banned your product the customer may successfully argue it was a misrepresentation on your part, even though you used a standard drop-down.

Make sure you don’t do business with foreign countries just because the drop-down has the right name in it: manually create a list of target countries after you have researched what it takes to do business with their citizens.  Don’t subject yourself to a pile of grief by getting caught making illegal shipments – you never really know how your products are perceived until you get that information from their trade representative.

Market Research

We need to be realistic about the geographic areas where we can conduct business.  It is fine for large corporations with international distribution networks to think globally, the same strategy emulated by a small company can be detrimental.  You need to develop a good understanding of the different countries you want to do business in to know what accommodation will be required (extra cost) and you need to estimate what sales levels you may expect (extra revenues) to make this investment worthwhile.

Write4hire.com builds websites and marketing collateral, but we do not perform market research even locally.  There are simply too many variables to consider, and we suggest that you pursue market research before you establish a business anywhere.  Understand your market and what investment you have to make, and how quickly you attain a level of business to deliver a good income after you take all the expenses into account.  We should caution that if a “brick and mortar” operation is failing the reason can be the lack of interest in the product.  A website will not change that, but it may expand the volume of sales for a small business that is only moderately successful with a store operation.

Where the Internet can be of help is in the creation of a unique new business without many peers to research.  Setting up a “virtual store” is much easier than a real “brick and mortar” operation.  There is nothing to stop you from starting with a website to explore the demand for your products and to discover if there is enough local pull to make a “brick and mortar” operation viable, and/or to solidify your Internet business by migrating to a “click and brick” model that assures people there is a physical business to go to and to get the products right away:  in some cases even a kiosk will do the trick.

Markets Selection

We recommend that business enterprises plan ahead for the different markets they want to serve.  We need to publish in advance lists of countries that we accept orders from / ship merchandise to.  You don’t want orders at risk, at least not unnecessarily, so you can explore different shipping arrangements through companies like FedEx or UPS to see where in the world you can reliably ship to.  You need to take shipping costs into account as a percentage of the value of the merchandise.  If that percentage exceeds a set percentage (say 15%) it may become too expensive to ship the merchandise to that destination.  If the merchandise is relatively high priced that may be less of a concern.

When you operate from a “brick and mortar” operation it can be tempting to categorize the same overhead aspects as applicable to the “click” operation: what you really must do instead is think in terms of closing the store and exclusively operating on-line - which overhead aspects (like warehousing and fulfillment) will remain associated with that set of conditions as opposed to overhead that disappears after the store is closed.  There are unique “click” costs, like FedEx/UPS shipping that do not apply to the store and are exclusive to the Internet operation.  International shipments will involve duty and extra paperwork to collect those costs from the customer if not prepaid and forwarded.

Where we are heading is that you need to make a mini business plan for each market to determine your bottom line: is it worth getting into those markets by investing in proper websites that are aimed at those markets.  Do you want to hit those markets up-front, or do you want to create a growth model that defines a gradual expansion to address all issues that arise from expanding into one market before you tackle the next?  We can help you with these analyses and help you determine what you can bite off and chew at one time before you end up a victim of your own success.

Market Segmentation

Before you tackle your primary website to make it multi-culturally friendly remember a virtual store is just a URL on the Internet.  Many large companies have separate sites for business units operating in different countries.  Typically the site is reflected in a native language – that may be a tall order for a small business operation, but there is nothing to stop you from running “Mystore.com” locally and “Mystore_International.com” for your foreign business markets.

The “Mystore_International.com” site could be in simple English to accommodate users with less than perfect command of the language.  You can also expand your website at some point with “Mystore_International.nl” or “Mystore_International.de” for targeted foreign editions in Dutch or German.  Sometimes you can franchise the operations and work with a local distributor or drop-ship with Federal Express or United Parcel Service from your primary fulfillment site (adding the shipping cost to the price of the goods).

Decisions you make now (to accommodate foreign buyers on the main website or for an international website to be created in the future) will affect your options in the future, or you may simply want to focus on the local market that you are familiar with to learn the ropes of E-marketing.  Either way we can be of service to you in creating alternative sites if required so you can postpone decisions to commit to that much larger customer base until you are ready to deal with the distribution logistics.

Supply Logistics

One option for an E-business is to operate a supply operation that serves as the delivery point from manufacturers, for example.  This is the typical “brick and mortar” operation, with a store room in the back of the business where the sales clerk can go to retrieve a packaged version of the merchandise selected by the customer.  If you have the space it is possible to operate in a similar out of your garage or a basement, but there is a twist to this: you take the risk of pre-purchasing the merchandise in anticipation of sales.

Another option is that you work with a supplier that can arrange drop-shipments, where the order invoice comes to you, while the product is shipped to the customer directly as you transfer the fulfillment part of your operation to the major supplier.  This is a model that Amway transformed into, where their front-line distributors become order-takers rather than true distributors, limiting the exposure distributors have from unsold goods.  It does make the products more expensive because many small orders cost more to ship than a single large distributor order, but it can help you build a business in small steps.

Fulfillment centers have the connections with FedEx/UPS to deliver your packages just about anywhere in the world.  They operate with independent distributors (like you may become) that sell the same products with a different angle, hopefully increasing reach and penetration to drive higher sales volumes.  Advertising and marketing are expensive parts of their business that they can offload on individuals like your that pursue a niche market and, collectively, provide more markets than a fulfillment center could pursue.

The opposite is true if, for example, your business model consists of consignment sales for local crafters and artisans that individually have only a small market potential but as a collective provide a wide enough range of products to warrant a website business.  It is possible to partner with outfits like E-bay, where your website features artists, while the products are offered up through auction.  Like E-bay you keep a percentage of those sales and remit the remainder to the artists that prefer to concentrate on creative work.

Distribution Logistics

We already touched on the challenge of delivering products to the different customers.  While the physical shipments can be delegated to FedEx/UPS or mail carriers, and while you may be able to minimize inventory by using drop-ship arrangements, we still have a lot of order management to contend with.  If you are the collective marketing arm for a local arts and crafts community, for example, you need to figure out how to get product from their studios to the customers and establish arrangements for coordinating those challenges.  If you don’t sort this out up front you can get burned as you go along.

Let’s say that you deal with a drop-ship supplier.  Let’s say the manufacturer is in India, and the customer turns out to be in Hong Kong.  Do we really need to ship products via an intermediate drop-ship point halfway across the world only to send it back halfway across the world?  Are there other drop-ship suppliers positioned internationally and are there substantial price differences that affect the cost of goods sold?  Can you sell goods like that anywhere in the world if a large percentage of the costs are transportation?  Do you have a plan for segregating different distribution points to take orders from foreign countries?  Can you reflect the price in effect for internationally sourced and sold items?

In the case of your arts and crafts community there is only the original source, the items are rare and unique, and for potential customers anywhere in the world that just have to have such an original item then transportation cost is factored in as is the exchange rate that applies.  Note that most of the E-marketing advertisement samples hint at this model – no surprise, because it is obvious and hard to challenge.   Don’t think you could use the same model as a cookie-cutter solution for your international business and hope to be as successful as depicted in those advertisements: now you know why.

Order Processing

Write4hire.com uses an on-line order processing service to simplify the transactions as they relate to website building, technical writing, and other services that can take place in cyberspace.  This is a fairly simple model that works quite well, because we adapted it to tie-in with a SOW (statement of work) order model on our website: we use on-line order processing for confirmation/authorization and to collect payment for services up front.  As explained elsewhere on this site, the work is done in installments so that the customer is not out of pocket and at risk: for us, the recorded payment is proof that the work effort is authorized.  This example is a lateral adaptation of a common service.

The traditional service consists of a catalog of items for sale, and a shopping-cart where people can keep track of the products they have selected.  When the decision is made to purchase that selection the service provider summarizes the shopping cart and proposes the final charge with a selection of on-line payment options.  Quality service providers offer standards like Debit Card, Credit Card, PayPal, or other secure mechanisms that are reassuring to the customer.  For our benefit, those service providers also handle any currency conversions, and at the end of the day the sales (less the service costs) will be deposited in a bank account of your choice.

When you get the confirmation of payment you can release the orders for shipment of the selected goods to the customer using the selected carrier FedEx, UPS, or mail.  This is a simple administrative job, because you are never in direct contact with the customer during the selling process.  The mechanism for selling on E-bay is pretty much similar but the price you fetch for items sold is set by the bidding process.  You really need to understand this mechanism before you engage in this model, because you could lose on the cost of goods sold if you do not manage your minimum bid levels properly.