The Internet era kicked off a new way of reaching potential buyers of a product or service. The World Wide Web has emerged as a powerful e retailing and marketing channel. The Internet also offers a unique opportunity to keep in check certain costs such as overheads and real estate space. As a result, quite often there is a significant reduction is business costs when running an internet business compared to a traditional brick and mortar set ups. Let’s see how. 

Take for instance an online bookstore. An online bookstore no longer needs a large physical store area to display its wares, since the books can all be displayed online in the virtual world and thousands of titles can be listed within almost unlimited virtual space. 

Thereafter, visitors can search hundreds of titles by simply using the super-quick search engines tools that are available to us today. So, within seconds an entire range of books within any given topic is available for the reader to choose from, literally at the click of a mouse! 

An online bookstore therefore has the advantage of being able to use virtual space to display the books and does not have to spend the large amount of money that would be required to either buy or rent floor space to operate a physical store. 

An online store would usually require storage area or a warehouse to stock the books just like a traditional store would. It would require a very good delivery system to deliver the books to customers. A good case study example in this category is Amazon.com. 

Jeff Bezos started Amazon.com in 1995. It was a unique concept at the time and offered a unique customer experience. It was an immediate hit with Internet users. The first book was reportedly shipped from Jeff Bezos' garage in Seattle. In fact, in their first month of operation, Amazon.com fulfilled customer orders across 50 states and 45 countries.

All these orders were apparently shipped from Jeff Bezos' Seattle garage. Today amazon.com visitors have access to millions of books and other products. 11 years later, in 2006, amazon.com operates through 21 fulfillment centers around the world and uses more than 9 million square feet of warehouse space.

For certain types of internet businesses, even the necessity for warehouse space and delivery systems is circumvented since the suppliers directly ship the product once the order is placed at the website. 

However, all online businesses have one basic requirement. They require a foolproof online ordering and payment system. Therefore, the shift in investment is towards computer hardware, software tools and online security systems, rather then real estate in a prime location. 

Coming back to the issue of running a business and earning a profit from it – anyone who plans to kick off an internet business must necessarily follow the same basic tenets that are essential for running any type of business but it has to be combined with ingenuity, smart thinking and unique approaches to turn their internet business into a resounding success. 

To start with, a business plan is a must. The importance of a business plan cannot be stressed enough. This is at the crux of running a successful business. It’s definitely pivotal in helping you establish a new business and to eventually drive your business forward on to a growth path. A business plan is not some intricate and complex document that only those with a business education can understand. It is for everyone. 

The business plan is the nuts and bolts of the manner in which your Internet venture will begin its operations and start functioning professionally.  A business plan ensures that there are no nebulous areas and you are clear on what needs to be done to move forward with your internet business idea. A sound business plan increases your chances of running the business smoothly and profiting from it. 

A business plan can be a rudimentary document that you write out on a few sheets of paper, but it has to be meticulously done and carefully written so that you know exactly how to proceed, and you know exactly how your business will earn revenues and profits. The business plan takes on greater significance if you hope to find an angel investor or venture capitalist to finance your business.  

What kind of product or service should you offer? 

Look for your ‘BIG IDEA’:

The first hurdle is finding your own Internet business idea that would be commercially viable and profitable for you

You will find that it is simple ideas and yet at the same time unique specialty products or services that are thriving and flourishing on the Internet. These are numerous sites started by entrepreneurs that have made a place for themselves and coexist alongside the larger players who have deep pockets and greater financial wherewithal. 

On the Internet, the more unique your offering is, the greater your chances of making a success of it. Remember, there are millions of people sitting in the comfort of their homes surfing the net. They are not looking for the products that are easily available in their neighborhood stores and malls. There is a general consensus among Internet experts that niche businesses have a greater potential to thrive and prosper on the Internet.

A well-known exponent of web marketing, Dr. Ralph F Wilson, wrote the 5 mutable laws of building and marketing web sites. This was way back in 1999. The lessons are still relevant today. The first law in building and marketing a website is called the ‘The law of the Niche’ 

• According to Ralph Wilson, small businesses succeed by finding niches that are either unfilled or only partially filled, and then filling them with excellence. He cites the example of JustBalls.com that saw an unfilled niche in selling sports equipment.

• Instead of trying to sell the whole range of sports equipment, JustBalls.com zeroed in on a single product and went on to set up “The Biggest Ball Store on the Net”, selling sports balls, toy balls, baseballs, softballs, footballs, volleyballs and so on.

[Dr. Ralph Wilson is an E-Commerce Consultant and Editor of magazines such as Web Marketing Today, Web Commerce Today, and Doctor Ebiz.] You can read the entire article written by Dr. Wilson at http://www.wilsonweb.com/wmta/basic-principles.htm

The more niche or distinctive a website is, the greater its chances of survival. ‘Big idea’ does not imply a big business with a large capital investment. It can certainly be a small enterprise, but with a unique idea or a highly specialized service that has the potential to draw shopper attention.