There’s gold in them thar web sites. As businesses flock to the web to get it they join new businesses who have responded to the call to stake out their land in the belief that very small companies can act big, appear big and challenge the model of large unwieldy companies that take to an online presence at the speed their overweight cigar smoking executives play an occasional game of squash. The tiddlers have had a good run. But it’s over. As large, well funded companies gradually take the higher organic listings through search engine optimisation, those smaller companies are forced out to the edges of the eBay bazaar, online shopping malls, business directories and worst of all - the search engine feed fest – PPC. Or in other words – they pay online rent to multiple online landlords. An’ it aint cheap.
Adwords and other PPC
Most successful adwords campaigns have a price tag per month similar to the rent for a high class store in the High Street or Mall. This is a recipe for weak business models to thin out like bees in winter. They either have a good profit margin that allows the advertising overhead or they retreat to the edges to pick up the scraps from bargain hunters. Further, whilst rent for physical premises generally stays the same throughout the year – this online rent easily trebles in November and goes to five or six times normal in December if it’s gift related. Does the profit allow that? For many, it has done so far – but as larger, better and higher funded companies see the profit areas and stake their claim too – the product or service competition increases and the margin possibilities decrease. To compound the problem, more companies advertise through the pay per click model and
Directory charges
Whilst there are many thousands of directories on the web, the free ones aren’t much good, though in years to come they may blossom into good sources of web clout. Generally the course of wisdom is to outsource directory submissions to good (and growing number of) submission experts who work at something like the rate of $25 per 200 or so directory submissions. It’s a good underpinning tool of any SEO campaign. Directories that know they have any weight in influencing rank to any tiny degree whatsoever are very expensive. It only takes submissions to 20 or more to find funds easily sucked up into the hoover of ‘our listing will get you better organic ranking’ promise and the bank account hole getting larger. Directories, at least good ones, are expensive.
eBay and other eShopping Malls
Pushed to the margins of adwords, squeezed by the organic presence of the big fellas, ahhh! An oasis – eBay and other similar bazaars! E-tailers sell their wares through eBay and eek out a profit through volume. Like yet another expensive landlord, eBay take a commission and like any gambling house – always win. eBay is the cheaper option and one that does at least show some result – other leech-like stores like eDirectory operate with a more expensive listing price, take significant sums in advance and provide little in return. eDirectory charges close to £1000 up front and takes 10% commission from each sale with further charges along the way for in-site banners that might help sales after complaints of no ROI. At least Adwords worked although expensive – these dubious landlord malls/stores promise much but soon the tenant realises that it’s all sales talk with negligible return – they go from e-tailer to e-tailer with empty promises because the desperate retailer will put up with a sleazy place to sell just as they’d put up with a sleazy place to live if nothing else were available. As retailers fail to renew the second year, these companies have already moved on to the next retailer with their promises and evidence of existing, albeit soon to depart, listings.
How the future looks
Take a look at your local mall or high street – that’s what web eCommerce iss shaping up to be. Is there a boutique store there? A few. If they can generate interest and buzz they can survive. The same is true on the web. African beads? Maybe. But if you sell laptops, better get it prepared to sell the business off rather than compete with the big boys, who’ll make sure you are squeezed out. That’s how things will change. Don’t like it. Where will you buy your iPod? Dan’s bazaar? Sleazy eDirectory? Or Virgin Megastore’s lowest price, free shipping, free return super-store? I know where I feel safer. The web is already resembling the High Street, recognise this and take appropriate action to take advantage of the trend to survive. Because as in the High Street, the web’s landlords are taking the real money from their internet real estate – it’s generally proving difficult for most Mom and Pops to justify the rent.
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