Winning with ecommerce
Here's the thing about the Internet: the Genie is out of the bottle.
Yes, the E-Commerce Genie burst out of its bottle like a miraculous apparition over a decade ago.
It seemed to instantly takeover the world. It took everything we know about business and marketing and made it 'old news.' The old paradigm was swept out, and the new paradigm rushed in. Suddenly, no company without 'dot.com' behind its name could get an ounce of attention from the media. Venture capital and investment sources diverted their mighty flow away from passé 'brick-and-mortar' operations to the mighty new dot.com gods. Millions of millionaires were made overnight, many of them young computer geeks with no college educations, a large percentage of them not old enough to legally buy a beer. In a period of just five years, one million new millionaires were created by Internet based start-ups. Names like Amazon, Lastminute and Yahoo dominated our attention. Thousands of copycats scrambled to become the 'next Amazon.com' or the 'future Yahoo.' Investors bought dot.com shares faster than a pack of wolves chasing down a deer. The stock market swelled with new Internet-based companies, and stock market investors hungrily bought up shares of any company with dot.com behind its name.
And suddenly, the bubble burst. Just as Dorothy in The Wizard of Oz finally gets to meet the wizard, only to find a silly old man running a phoney smoke and mirrors show, the dot.com Genie turned out to be little more than a wisp of smoke curling from the top of a bottle. The Genie looked exciting and powerful, but he had no true power, no staying power, and he certainly wasn't able to just sweep away all that had come before him, replacing everything with a new way of doing business.
Thousands of dot.coms went bankrupt, taking down billions of investment money with them, and knocking stock markets back on their heels.
And what did those markets fall back on after the dot.com debacle? That's right! The markets were anchored by all those supposedly passé bricks-and-mortar operations that had fallen so disgracefully out of favour just a few years ago! You see, these old established companies had tangible assets -buildings, commodities, factories, fleets of transportation vehicles, ships, oil in the ground, infrastructure, solid bases of loyal customers, cash flow - all things most dot.com company owners were laughing at in their sadly brief heyday.
What did the dot.coms have? They had ideas. They had a new selling proposition and method. They had a new medium. They had the aura of a new exciting technology. They had a lot of theories.
Most of the dot.coms also had this extremely bizarre idea: profits are optional. Profits are not to be worried about. The downright cynical (if not criminal) strategy of most of the dot.coms was this: 'Let's get enough investors excited about what we say we can do, with the ultimate goal of issuing an IPO. After we become a publicly traded company, we'll all be millionaires. After that we don't care what happens!'
And we all know what happened.
In the end, an idea is not an oil well. An idea is not a cargo ship loaded with wheat. An idea is not a factory churning out cars, furniture, refrigerators, beef, lumber, televisions and steel. You can eat wheat, you can't eat an idea. Refined oil will keep your house warm in the winter, but an idea can't. You can build a skyscraper with steel - but with an idea?
Yes, a single idea can change the world - and has - but that idea has to be made into something real and tangible before it can change anything! And that's the lesson behind the spectacular rise and fall of the dot.com empires. They captured the world's imagination with new possibilities, new ideas, new ways of thinking. But, for the most part, they failed to go all the way. In the end, they didn't really produce anything. They only promised to make profits - and many didn't even do that!
Yet, and yes - the Genie is still out of the bottle! Nothing is going to stuff him back in! Furthermore, the Genie is not as powerless as all those bruised investors probably think he is. The fact is, the Internet HAS given us a new way of doing business, a new way of looking at things, and all kinds of exciting new possibilities. And to be fair, a few of those dot.coms have managed to come out the other end of the experiment as success stories. After almost nine years, Amazon.com finally reported its first quarterly profit. eBay is doing brisk business, and making a profit. Google has emerged as the massive search engine winner of choice on the Internet. It's a cash-rich operation. It makes a profit, and it's growing.
So the key to using the Internet and successful E-commerce is to embrace this exciting new technology, and ground it in the good old fashioned principles of marketing, such as:
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