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There may be a fortune to be made online,
but nobody is sure yet just how to do it.
Sometimes, somewhere, a fortune apparently is waiting
to be made in retailing on the Internet.
The potential certainly is there: 23.4 million users
worldwide (8.7 million more than last year) and an estimated
$2.3 billion in transactions expected to grow to $6.7
billion by 2000.
But no one is quite sure exactly how the money can be
made, by whom, or exactly when.
Those questions were addressed by a lineup of speakers
last week at a meeting of the Seattle World Trade Club
focused on ideas for making money on the Internet.
All agree that any new medium requires a new method
of selling. That method will not necessarily be an electronic
version of methods that work now, like shopping malls,
flashy advertisements or colorful brochures.
What, then, will the new method be? Truth is no one
really knows for sure. The lessons learned so far relate
more to what does not work rather than what works.
The most widely quoted example of
making money on the Internet usually is Seattle’s
Amazon.com, which sells books exclusively on the World
Wide Web. But the
company lost $3 million in the first quarter and lost
$6.7 million in the second quarter of this year, and
says it does not know when it will make a profit.
Sales are being made by established
companies that set up sites on the Internet, but most
of those companies – as
with Amazon.com – would not be profitable if they
were only on the Internet and were not backed by regular
sales.
Steadily, almost daily, however, companies are learning
new ways to reach people on the Internet and new ways
of marketing their products and services.
And, points out Eva
Chiu, president
of Bellevue’s
InfoAdvantage, most businesses of any sort don’t
make a profit from Day 1, and we should not expect that
to be different for companies on the Internet.
"It takes a number of years for most new businesses
to break even," she added. "We have to take
that into account. You still have to think about aspects
such as planning, marketing and having enough capital."
Chiu and other speakers at the trade
club meting listed a number of factors for businesses
to take into account
when considering trying to make money on the Net"
Businesses need to devise a marketing strategy for the
Internet.
Virtual shopping malls on the Internet might be a great
idea, but so far they have had mixed success and are
not a guaranteed formula, pointed out Chiu.
Shopping 2000, one of the first attempts
at a virtual shopping mall, closed some time ago and
another, IBM’s
World Avenue, closed a few months ago, she said.
"We are still thinking around that concept," Chiu
told the club meeting. She pointed out in an interview
that some shopping mall sites are still active and that
marketing appears to be a key factor in their success.
New technology could help.
"
Push technology," which brings messages to the attention
of the computer user, rather than the user having to
seek them out, might be a wave of the future.
The jury still is out on that, too, Chiu said, but this
technology holds promise.
The slow speed of the Internet is causing many not to
bother to investigate sites, particularly those that
have a lot of graphics. But that could change with potential
new technology that makes it possible to download information
in 15 seconds that now takes 15 minutes, Chiu said.
Research the market.
"
Find out what worked and didn’t work on various
sites," suggested Philip Ness of 21st Century Software
in Seattle, which has developed a number of sites, particularly
for biotechnology companies in the Pacific Northwest.
Translate material if you want to sell in foreign markets.
"
When you do business with Japan on the Internet, you
should have a site in Japanese," pointed out Kenichi
Uchikura, president of Bellevue-based Pacific Software
Publishing Inc. "People often will misunderstand
you if you have a site only in English."
Be patient.
"
Take a long-term approach to this as you would with any
business product," Ness suggested. "It is emerging
and the potential is incredible."
Uchikura advised, "Set your
goal high, but do not expect overnight success."
Written by Graham Fysh and published
in 1997. Reprinted with permission from The News Tribune.
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