Thursday, February 14, 2008

Internet Facts and Practices

Everybody thinks internet and web-based business changed business. I think so, too. It changed life style in many ways. It was said that revenue total from web-based business will reach up to 18.9 billion dollars and growth rate will be 15-18%. Internet base business are soaring. It was when late 1990's when legacy business people were confused and upset. When companies opened up their own e-commerce web sites, then existing distributors, agents, channel people were gambling, complaining, and upset. We all were aware that it will change sales channels, business practices, price settings, etc... Suppliers of products could no longer control their existing channels. Since I was in a position to make a decision of channel policy of a manufacturer, I received 10 - 15 phone calls from channel people a day that time. They were concerned, worried, and upset. Their worries and concerns were not groundless. Most of their worries burned out to be true, since supplier companies needed to give higher priority to this growing business practice, called internet.

10 years have passed since then. e-commerce and web-based business is growing and more stable than those days. But, my wife keeps telling me that she does not trust internet sales and browse products in using internet and go to street shops to find the products which she found in the net. There are lots of hypes and frauds existing in the other side of internet and for ordinary people it is not easy to know who is real and who is not. Rakuten, largest Japanese e-commerce site, paid back apx. 1 million dollars to their customers who paid for products never delivered to real customers. This happened 2-3 years ago.

What really changed in the net business? Sometimes I think back it might have been same as street shops were replaced by large scale retail stores, large scale retail stores profits were eaten by low-cost warehouse shops. Actually, taking a look at the promotional products inside of direct e-mails, products promoted have not been so much changed. Funny things are that they tries to sell me some women staff. They also send advertisement of men's staff to my wife. We carry Japanese and Chinese names, so it may not be easy for people to distinguish if we are male or female. But, still, it is like machine-gun marketing shooting their own people targeting at the other side of enemy. It will never get favorable result, I assure you. It looks like even the direct marketing behaviors have not been much changed. Cold calls became spams. They say that the loss from spamming in Japan reaches up to 17 million dollars last year and increasing. They establish foreign company, therefore, for Japanese police it is not easy to arrest them, even when they do illegal marketing.

Japanese government plan to enforce laws to bans illegal commercial actions and reduce spams significantly. I hope US and the rest of the world should act to stop spamming and illegal e-commerce actions since they are harming sound growth of internet marketing business and hurting reputation of internet marketers who are trying to properly use and practice the business. I believe that despite of hypes and tricks, illegal conducts, frauds, internet business will stay and keep growing coming 10 years and if connected to proper organization, a lot of internet marketers will be benefited.

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Anonymous said...

E-commerce has exploded the internet market with many successful businesses that exist solely on the web. The main reason behind this is that with a virtual storefront, the overhead costs of running a business are greatly reduced. Therefore, with effective marketing, these businesses can hang on during the difficult early stages of a new business and are less dominated by cash flow while trying to stay afloat.

Shaw said...

Thank you for your comment Alastair027. People has evolved by challenging something new. I believe that lots of legacy system will be merged and comingled with Internet System. Especially, internet business has grown with many successful start up businesses and small business. It will stay that way, while it will shift established people's way of business.