I keep hearing about the failures of the "dot-coms". Does this mean the Internet is not a good way to market my business?

The Internet is alive and well. Some of the companies using it, however, are not doing as well. Why? First, let’s define a few terms:

Dot-com – a company existing only on the Internet with no "brick and mortar" storefront.

E-commerce – an online storefront where customers can purchase items on a website and pay online.

Once e-commerce became widely available to the masses, many people became excited by the possibility of making money by selling products on the Internet. They formed "companies" which did not actually stock the items for sale, like a "brick and mortar" store, but simply took orders over the Internet, purchased these items from their suppliers, and shipped them out to their Internet customers. In many cases, these "companies" were simply one or two people working out of their house, since there was no need for a warehouse. There was no office, no store that a customer could drive to and "browse the shelves". In many cases, the only contact information available on the website was an e-mail address. The mailing address, if one was even available, was a P.O. box. Thus, these "companies" could appear to be large wholesale/retail facilities when in fact none existed. These companies, the ones that existed only on the Internet, are the definition of the "dot-coms" you read about.

Unfortunately, the reality of the situation is that these companies are not as inexpensive to operate as the operators expected. Huge advertising budgets, low markups on the goods sold, and too many competitors make it difficult at best to compete as a "dot-com". Additionally, consumers are (and continue to be) wary of purchasing a product on the Internet with no way of knowing where the company is, or what to do if they are not satisfied with their purchase. There may never be a substitute for being able to walk into a store and pick up an item, talk to a knowledgeable salesperson, and have a high level of customer service that has come to be expected from a high quality retailer.

We at Virtualtech believe that the companies that will survive and prosper on the Internet are those which have a "real presence" such as an existing wholesale or retail facility. Your website should be an extension of your other marketing materials, answering questions that the potential customer may have and making them comfortable doing business with you. Knowing that you have an actual store or similar facility with real, knowledgeable people will only add to their level of comfort. The successful companies will have their Web site populated with their address, telephone numbers, photos of their facility, and photos of the people who make up the company. Those companies will not be seen as "dot-coms" by the public, but instead will be seen as legitimate businesses who believe in customer service and satisfaction. And if you do offer e-commerce on your Web site, the knowledge that a customer can get in his car and drive to your store with his concerns will go a long way toward having quality, satisfied customers who will be comfortable doing business with you.

April 1, 2001

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