With the rapid development of the Internet in Vietnam over the past years, which is becoming increasingly familiar in people’s lives, now is the ideal time to start or enhance your e-commerce foundation.
However, there is a reality that quite a few online businesses have not achieved the desired results over the years, prompting many companies to ponder: How can dot-coms avoid becoming dot-bombs?
Surely you all want to know what the difference is between dot-com and dot-bomb. This is indeed an interesting question. Did you know that from 1999 to 2004, online shopping worldwide increased by 1,200%? That is a fact.
Now, think about this: Online customers cannot help but be concerned about the dot-coms that are fading away, yet more and more people are shopping online, and the amount they purchase each year is on the rise. According to Forrester Research, new online shoppers in the U.S. make nine purchases each year, while those with more experience (over five years) make 20 purchases annually.
Thus, online shopping is increasing at an astonishing rate. E-commerce has become a habit in consumers’ lives. However, what we are discussing now are the failed dot-coms.
Companies like Furniture.com, Pets.com, MotherNature.com, Toysmart.com, Living.com, Mortgage.com, Garden.com, etc., have all had to close their doors. Promises of easy wealth and overnight success have now turned into obituaries for dot-coms.
That is why the statistics above are important. If online shopping has increased by 1,200% in the past three years, and if online shopping is becoming popular in consumers’ lives… then all this money must be filling someone’s pockets. But whose? By examining the failures of the dot-coms – the “dot-bombs,” you can draw many lessons by analyzing common mistakes.
Common Mistakes
First Mistake: Trying to Cover Everything.
Take the case of Pets.com as an example. The target market for pet owners was too broad. This was a barrier to achieving profitability. “Pets” is a general market. There are dog and cat owners, as well as owners of small mammals, birds, fish, etc. Each of these groups has different needs when purchasing food, supplies, and toys for their pets.
Marketing to and meeting the needs of these different groups with diverse products and services is not an easy task. This does not mean it is impossible, but it requires a lot of money.
This leads us to the next mistake…
Second Mistake: Poor Investment Decisions.
Throwing piles of capital into an untested business plan requires significant effort to achieve profitability. Creating a widely recognized product demands substantial money and patience… which means you need investors with truly strong financial backing.
When this market weakened last year, many investors became discouraged, even panicked, as dot-coms continued to consume vast amounts of investment without showing any signs of profitability. Could these companies succeed if investments continued? For many, this was possible. But when investors pulled out, they never had a chance again.
Third Mistake: Spending Too Much on Ineffective Advertising.
The simple fact is that large banner ads abroad are no longer as effective as they once were. Ads that previously attracted 5-10% attention now barely receive 0.6-0.8%. Unfortunately, while this change was happening, many dot-coms blindly threw piles of money into pointless, unfocused advertising.
Lessons for Long-Term Success
Rule 1: Focus on a Clearly Defined Niche Market.
Narrow your focus to a specific niche market, such as parrot owners or motorcycle maintenance enthusiasts, rather than trying to dominate a large, general market like pet owners or car owners.
The reality is that running two or three websites, each targeting a specific market, is the easiest way to make money on the Internet. Everyone wants to earn a lot of money, but often overlooks markets that align with their capabilities.
From there, we can summarize a complete process to continue for other market segments: Identify the niche market → Understand customer desires → Develop the product → Deliver the product → Automate the business.
Rule 2: Implement Special Sales Strategies.
If there is significant competition in your business area, you need to deploy a special sales strategy. Emphasize what will help you stand out from your competitors. Clearly explain to your customers how and why they benefit from purchasing from you. For example:
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Your product or service is cheaper than elsewhere.
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Your product or service is of higher quality, and you can charge a reasonable price.
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You offer better warranty services than others.
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You can target a specific age group, industry sector, or demographic.
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You advise or inform customers about things that others do not.
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You encourage customers in ways that others do not.
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Your customer service is better than your competitors’.
The key when promoting your product or service is to highlight what makes you special and unique. Find a gap in the market and fill it! Adjust your company or product to meet a specific need, and then turn it into your unique selling point.
Rule 3: Advertise Reasonably and Effectively.
Once you have identified the market and implemented a special sales strategy, consider the audience you will advertise to and where to place the ads for optimal business effectiveness. This means you should strategically place ads to attract more customers.
Rule 4: Learn from the Success of Others.
There are many steps to building a profitable e-commerce foundation. You need to design a strategic website, have quality products or services, write compelling sales copy, and have a complete sales process. Additionally, you need a sharp marketing campaign to outperform your competitors.
That is why you must do better than others if you take the time to refine and learn. There is no need to reinvent the wheel when you can learn from someone who has been there, spent the money, researched the techniques, and made mistakes on your behalf.
Rule 5: Have a Good Business Plan.
When planning your business, you must clearly define how to achieve profitability. It is unfortunate that too many people rush into a plan without taking the time to research, test, and accurately outline how to make money.
An “idea” is not a business plan. An idea only becomes a plan when you research it, define your market, outline your market entry strategy, and plan for profitability over a certain time frame.
The global Internet economy is self-correcting after a period of uncontrolled rapid growth. This is a great opportunity for you to learn from the mistakes of others and develop your business plan. Take advantage of every opportunity and leverage, increase market share by identifying the right market, and implementing special sales strategies. Be proactive in advertising, self-educate, emulate the success of others, and plan to profit.
When you dominate a niche market with this strategy, you can begin to expand your investments or explore a completely different approach. Whatever you decide, as long as you pursue and experiment with a viable plan, this is a significant opportunity for profit as consumers increasingly embrace e-commerce.
Bích Nga
