Internet presents a new market
February 06, 2012
SAN ANGELO, Texas If you are like most small business owners with a brick and mortar storefront, you think of your market in terms of those customers who will walk or drive to your store to purchase your goods.
It is easy to think of our market in that limited way, but when we do, we are placing our market in a box.
One of the benefits of the Internet is that it can enlarge our market, if we are willing to think outside of that box.
Chris Anderson, editor-in-chief of Wired Magazine, wrote an article that later was published as a book called The Long Tail. The premise of this book was the Internet had changed our markets, or at the very least, how we should view our markets.
The title of Andersons book is a statistical reference to the tails of a bell curve. A bell curve is used to graphically represent statistical probabilities. Inside the main part of the bell curve is where most of the market lives, with only a few markets in the tails.
As storefront owners, you have limited floor and shelf space. Consequently, you try to sell items that will appeal to the market area inside the bell shape of the curve and ignore the tails. Why? Simple economics. You are trying to take advantage of the section of the market that offers the best chance at generating revenue. That is how we box ourselves in.
We base our inventory selection on what the majority of customers are most likely to buy. We have to know our market so we know what to offer. Sometimes we do that really well, and sometimes we dont.
Do you have any leftover inventory from last year? What are you going to do with it? Dust it off and try to sell it again this year? Donate it to charity? Sell it to a resale store at large loss?
Why not expand your market into the tail of the curve by moving it to the Internet?
For businesses that have learned to use the Internet, their bell curve is flatter. What does that mean? It means their markets now extend into the tails of the curve. It means they have learned to market and sell products online. They have broadened their market from their small town, or their small section of town, to the whole world.
There are a number of websites that will allow you to broaden your target market for a minimal fee. You can offer your leftover inventory online at regular or slightly discounted prices to a market that now can encompass the world.
Sites such as eBay allow you to sell almost anything online. On eBay, you can even buy a working business or sell a business. Such sites allow you to move your market further into the tail and flatten your bell curve.
So, before you decide to unload that unsellable inventory because you think you do not have a market, consider moving outside the box and selling it on the Internet. You might be able to protect your profit margin, or at least hurt it less than you would by dumping it in someone elses lap.
If you have questions about how to expand your market to the Internet, contact one of the advisers at the ASU Small Business Development Center.
Business Tips was written by James Leavelle, business development specialist of Angelo State Universitys Small Business Development Center. Contact him atJames.Leavelle@angelo.edu.