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Post for August 9, 2021
Shop owners ask me:
Ryan, since the internet came into use, my business has experienced such a hard time. Why is this so?
Trust me... You are not alone... Many business owners face this problem!
Yet many mistakenly assume that the cost structure advantages of selling over the internet are so significant that they too must start selling over the internet. However, there is ample data to show this is NOT the correct conclusion to make (see here).
So what is it about the internet that has caused so much pain for traditional retailers?
Price Transparency!!!
For many products, customers can go on the internet and, with a few searches, determine roughly how much a seller paid for a given product and what the cheapest price to the consumer is for that very same product.
This Price Transparency causes tremendous downward pressure on the price of a good. Quickly, Brick & Mortar Shops feel this pressure and respond by cutting prices, accepting reduced profitability per sale rather than risking a reduction in number of sales.
And here is where online sellers do have an advantage... Often their business model is premised on achieving economies of scale through rapid expansion and market domination... So they do not care if they take a hit is the short-run, so long as it helps them enact their chosen business strategy. And if they run low on money, they can get more from investors or the stock market.
But if you run a single store (or a small chain of stores), you do not have this flexibility. You need your store to be profitable.
And for many stores... Especially with the added pressure caused by the pandemic... Time is of the essence, so decisive action must be taken to solve this problem now.
To this end, we offer solutions to this very serious problem! So please signup for our email list below so you can learn more about what we can do for you!