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Pro or Con – Sell a Product or Service?

What Are the Pros & Cons of Selling Your Product or Service on the Web?

f you’re contemplating setting up a new enterprise with an entirely online presence or adding a Web presence for your existing company, the decision to put your business life on the Internet involves more than flipping a coin or choosing a website designer. Like any business opportunity, Web-based sales offer both pros and cons. Just because your employees, family or customers think that everyone has a website doesn’t mean you need one. Weigh the advantages and drawbacks for your specific situation and decide whether you want an Internet presence — and if so, what kind.

Costs

Without a well-defined objective to accomplish on the Web, all you’ll have is a website to list on your business cards. If you don’t depend on a purely local clientele to support the kind of business that doesn’t reach beyond a narrowly defined geographic market, a website makes sense as a primary conduit through which to make sales. Even a website with a custom-coded shopping cart, high-quality product photography and professional design can cost less than the ongoing price of a bricks-and-mortar presence if your customer base doesn’t and can’t reach beyond your local market, however, think of a website as a marketing tool, not a storefront.

Website Visibility

How you garner a customer base for a new business website depends on whether the site supports a new business or an existing one. Despite the potentially modest cost of setting up an online presence to market your services or wares to a far-flung clientele spanning the country or the globe, you still face the challenge of attracting customers to a website that’s invisible until people know it’s there. You may find yourself using a direct mail or email campaign to attract visitors. If you’re active on social media, you may be able to leverage your connections to publicize your website. Relying on viral success requires a well-crafted Plan B. Despite all the Cinderella stories you read about viral marketing transforming a startup into a success, those exceptional successes are just that: the exceptions.
Online sales make great sense when the product you sell matches the medium itself. Using a website to sell your downloadable music, book, coaching advice or other click-to-buy products shortens the time and distance between you and your customers to the seconds it takes them to enter their purchasing details. Tangibles require shipping, however, and shipping requires time. You’ll need to find the quickest, most cost-effective way to put your products in customers’ hands and give them feedback about the progress of their orders, especially if you sell drop-shipped goods that you don’t ship yourself. Regardless of which of these scenarios fits your business, timeliness makes the difference between customer kudos and complaints.

Rules and Regulations

Website-based commerce demands your compliance with regulations. Collecting personal information means providing a privacy policy that delineates exactly what you do with the data, who sees it besides your company and what a customer can do to get off your mailing list or correct errors in the information you hold. You must back up that privacy policy with data security designed to protect your customers’ personally identifiable information. If you advertise special offers or pricing, these terms must pass muster under laws designed to regulate fraudulent advertising practices. Just as if you were selling through any other medium, your products or services can’t make pie-in-the-sky promises and claims. Once you understand the rules of the road, you may find that compliance poses no burden, but ignorance of the laws won’t defend you if your offers don’t pass muster.
Source: Small Business Chron

The Pros And Cons Of Selling A Product Over A Service When Marketing Online

You’re wondering whether a product or a service would be better for your online marketing efforts. You’re not alone. Many marketers have started out asking themselves this very question. The thing is, the answer isn’t cut and dry. You can’t tell one marketer that a product is better than a service no more than you can tell a marketer that email marketing is more effective than social marketing. It’s all relative and there are tons of variables to consider. Still, you can help your decision making process by thinking about the pros and cons of offering both products and services online. The following points should provide you with the help you require.

Pros Of Selling A Product

There are many benefits to offering a product over the Internet. For one, you can offer your products to anyone, anywhere. No longer are you limited by a store front and no longer do you have to mail out brochures and catalogues so that your prospects and customers know what you’re offering. Instead, people need only log onto your website and they can order any amount of whatever you’re selling and they can have the order shipped conveniently right to their front door.

Cons Of Selling A Product

The drawback of selling products online is that you will be required to keep enough product on hand to keep up with demand. Do you have warehouse space for all your product? Do you have a deal set up with a shipping company? These are all things you will need to consider before you start selling your product.
Of course, you could be offering information products like Ebooks. While you won’t have to worry about inventory or shipping information-based products, you will still need to consider the product creation process, the marketing and advertising process, the download process, the payment processor and security so that nobody steals your products without your permission.

Pros Of Selling A Service

Selling a service is much different than selling a product. With a service, you don’t have to ship anything or create anything up front and you can sell as many services as you need to, as long as you have enough personnel on hand to fulfill all of your orders.

Cons Of Selling A Service

The biggest drawback when it comes to selling a service is customer service. With a product, even an information product, you are sending out the same thing to people. If someone doesn’t like it, you can usually chalk it up to personal preference and you can refund their money or give them a discount off your next product, or however else you want to handle the situation.
With a service, you might have ten customers with ten unique experiences. You must train your staff to be customer service oriented so that your reputation grows with each service you sell. Otherwise, you could find yourself with a PR nightmare if your customer service is ever lacking with your online service sales.

Conclusion

You see that there is no right or wrong answer when it comes to selling a product or service online. The answer depends on you, your abilities and skills, your connections, your interests and tons of other factors. If you feel that a product would be better suited for you, you had better start thinking about creation, storage, shipping or download services and the payment processor.
If you are thinking about offering a service, you need to think about training your customer service team and getting your personnel in order so that you can fulfill as many orders as possible.
There are both pros and cons to both product and service sales. The one you choose is completely your choice. Make the right one and you could find yourself part of a very lucrative venture like so many online marketers before you.
Source: Bill McIntosh

What kind of product or service can I sell?

Neville Chamberlain

When you decide you want to build your own business, one of the first questions you have to answer is “what am I going to sell?” You probably already have an idea of what you would like to sell — you have specific interests and skills others could find valuable — but narrowing down on how you’re going to package and present your products or service to the world is still not easy.

A service business is one of the easiest businesses to start — all you need to do is hang out your shingle (metaphorically speaking) and start selling your services. The downside is that a service business only makes money while you’re delivering your services. Alternatively, you could build an app — build it once and sell it a thousand times, passive income at its best. The downside, in this case, is that you have to spend a lot of time and money developing the app before you can start making money.

But those are only two examples of the kinds of products and services you can sell. In total, there are six kinds of products or services you should be considering — they are:

  • apps or tools;
  • products;
  • done for you services;
  • teaching a skill;
  • consulting; and
  • coaching.

There are of course more kinds of products or services you can sell, but I’m focusing here on the types of products and services you should be considered for a smaller business. I’m going to explain what each type of product or service is and the pros and cons associated with each. I hope this will help you get clarity on the kind of business you would like to build.

Before we start

  • First, you have a skill or expertise. It doesn’t matter what the skill or expertise is — you can be an interior designer, a personal fitness expert, a web developer or just know a lot about a specific area of business.
  • Second, there is a need in the market for your expertise. People want beautiful homes or to look and feel great. Businesses need websites and expertise to get stuff done faster and cheaper.
  • Third, you have a passion for what you do. Building a business is hard enough — if you don’t have a passion for what you do you’re going to find it difficult to stick through the tough times.

So with that in mind, let’s look at the six types of products or services and the pros and cons of each.

Business type 1: Apps (tools)

The easiest kind of app to build is one that doesn’t require post-sales support from you. These are typically tools designed to accomplish a specific task — one of my favorite examples is called Magnet (for Macs) which helps you organize windows on your computer screen. You buy the app, install and configure it and you’re done. The developers don’t have any back-end work to do outside of continuously updating the app to maintain compatibility with the operating system.

On the other end of the scale, there are “apps” that require a lot of back-end work. Think Uber’s apps, Salesforce or dating apps. Each of these apps requires a large and complex back end that needs continuous maintenance, and there’s a lot of marketing required to grow the number of subscribers. These are no longer just apps — they’re platform businesses that deliver a lot of value and have huge growth potential, but require a correspondingly large support organization.

Pros

More complex apps have bigger growth potential — you can literally build a million- or even billion-dollar business based on ecosystem or platform apps.

Cons

If you’re heading in the direction of a complex app (most SaaS, or Software as a Service, apps fall in this category) you will have to build a highly scalable back end. Not a task to be tackled without deep pockets or the ability to raise funds.

Business Type 2: Products

Own products are (as the name suggests) products you create yourself. At the smaller end of the scale are hand-crafted products typically found on marketplaces like Etsy. The possibilities here are endless — everything from books to ashtrays to jewelry (and a whole lot more). Depending on the type of product you’re selling you can potentially reach a worldwide market. If your product is perishable (all food products are), or is more difficult to transport, your market is going to be more local (think craft beer).

Curated products are products you source from somewhere else and curate into exclusive collections. Again, the possibilities are endless and well suited to your passion. If you love hammocks you could build a business just around sourcing and supplying the world’s best selection of hammocks. If you’re into model trains you could source hard-to-find parts and make them available to the small (but well-defined) model train enthusiast market.

Pros

Cons

If you’re curating products it may be difficult to find a supplier that can deliver the same quality consistently — especially if you’re using drop shipping (the supplier or an intermediary delivers the product to the buyer — it doesn’t go through you). Because you don’t have eyes on the product, quality can vary and you may have to deal with sub-par products, return shipping, refunds, and customer complaints.

And if you’re manufacturing, you may have to invest in raw materials, equipment and staff — sometimes substantial amounts that you will only recoup over a longer period of time.

Business type 3: Done for you (DFY)

Businesses (your clients) need a lot of stuff done that they don’t have the time or skill to do themselves. When you offer to do it for them you can do it faster and better than they can, and if you do it right this can be a lucrative business.

Some DFY business types deliver the product of their work once and you’re done (think building a website). There may be some future income from that work — after all, websites need maintenance. Other kinds of DFY businesses are based on repeat activities — think bookkeeping or accounting.

Pros

A DFY business is also very well suited to productized services. Sell your services as well-defined, fixed-price “products” and you make it easy for your clients to select the option best suited to them.

Cons

The biggest downside of a DFY kind of business is that when you stop working, your revenue stops as well. Unless you can capture a very specific, lucrative section of the market you may end up competing on price, and that’s a no-win for everybody involved.

Although it’s not a “con” I would like to mention that you will have to get very good at marketing your expertise. You can make a good living from a DFY kind of business, but getting clients to find you and justifying a premium price can be a challenge.

Business type 4: Teach a skill

Teaching a skill is attractive when your clients need (or want) to do a task themselves, and the task has to be done repeatedly. Many businesses want to do their own social media marketing but don’t know how, so teaching them how to do it themselves can be a great business.

Info products are another way of teaching a skill or helping people solve a problem. One of my most popular info products is Productised Services — an info product that helps solopreneurs and small business owners package their services so they can work less and earn more.

Of course, teaching people a skill requires that you know enough about the topic to be able to teach it. But more importantly, you have to have a knack (or skill) for teaching, and not everyone is good at that.

Pros

The second big advantage is that teaching a skill is highly scalable — if you turn your course into something that can be delivered online. You may start off teaching your skills to individuals or groups. Once you have your material stable you can turn it into an info product or online course — and in principle you now have passive income.

Cons

The first is competition. Unless you’re teaching something really esoteric, chances are there are similar courses out there. It’s easy to become discouraged when you see how “polished” the competitors’ courses look (at least from the outside). You will need to stand out in some way, and finding that difference can be tough.

The second problem appears when you want to turn your live teaching into an online course. Creating a quality course is not a trivial task, though platforms like Teachable and Thinkific (and others) make this a lot easier. And once you have the course, your next problem will be marketing. It’s not that easy to attract thousands of students to your online course, but if you can do it you will have a great passive income.

Business Type 5: Consulting

Most consulting engagements turn out to be a combination of advising and doing. For example, if you are a mechanical engineer and you help small manufacturing businesses improve production quality, your advice may help them improve the quality of their products. But it’s only when you actually start showing them how to do something they get the full benefits of your expertise.

You can turn almost any competence into a consulting business — if there is a market for it and provided you can sell the value of your services. Filmmakers will use lots of “consultants” or advisors to make sure their film is at least somewhat true to life.

Pros

Many consultants are forced into the role. The 2015–2016 oil price downturn saw huge layoffs in the oil and gas industry, and many highly-qualified engineers were forced into early retirement or had to fend for themselves. Many of them became consultants to the same industry they worked in before.

Cons

One phenomenon that I see often in the consulting world is the whale client. You start out as a consultant, land your first engagement and it seems to keep going for months or even years. When you lose the client (as you inevitably will) you have no sales funnel, no marketing, and you effectively have to start from scratch again.

Knowing that all clients come and go and that you have to market your services to be able to land the next one, is critical to ensure you don’t end up with dry spells.

And of course, when you stop consulting your income stops as well. No paid holidays here if you are a small business.

Business Type 6: Coaching

I know executive coaches who earn high 6-figure incomes. These coaches have been doing it for a long time (20 years or more) and for the right clients they can make a huge difference in performance. Pro sports players usually have multiple coaches, each focusing on a specific performance area.

Pros

Because of this low barrier to entry, some types of coaching can have a bad reputation. Most reputable coaches are certified by some kind of organization, which also gives them the frameworks, tools, and knowledge they need to deliver high-quality coaching.

Cons

Coaching is a discretionary expense and is often one of the first things that gets dropped when your clients are under financial pressure. Unless you target a high-end market, you will have a high client turnover. Continuous marketing will be key to eventual success.

Other kinds of businesses

  • Buying a franchise can be very lucrative but usually requires a high up-front investment. On the upside, you get detailed how-to guides (manuals) on how to run the business and your supply chains are set up for you; on the downside, most franchises are incredibly hard work and long hours and require a substantial up-front investment.
  • Real estate is another potentially lucrative business, ranging from property development through to starting a real estate agency. Your upfront investments may be high and you will have to cope with local and global economic shifts.
  • Personal services, such as a hair salon, are a variation of the DFY (Done For You) business type, but in this case, your target market is the consumer rather than a business.

But you don’t have to stick with just one type of business.

Mixing and matching business types

One of the methodologies I use with my clients to brainstorm how you can expand your business potential is called the 3-Prong Strategy. The strategy looks at three ways you can deliver your products or services to your clients:

  • The first prong is 1:1 — you deliver your product or services personally to one client at a time. You (the 1 on the left) work with one client (the 1 on the right) at a time. DFY, consulting, and coaching businesses fall into this category.
  • The second prong is 1:n — you deliver your product or service to multiple clients at the same time. If you’re teaching people skills in a workshop setting, you’re delivering a 1:n service. Very often, you can take an expensive 1:1 service and turn it into a less expensive (but still lucrative) offering.
  • The third prong is 0:n — you build a product once and sell it many times with little or no time spent with individual clients. Apps and info products fall into this category.

Using this strategy you can take almost any business idea and see if there is another way to create revenue or perhaps even start your business in a different way. Teaching a skill to a group of clients can be a relatively fast way to start your business while turning that into self-study courses can take a lot longer but potentially open up the opportunity for passive income.

So what kind of product or service can you sell?

While competition can discourage you from considering a particular product or service, there will always be competition in any market. My recommendation to aspiring entrepreneurs is to niche down — find a particular niche that is under-served by current offerings and specialize in that niche. For example, selling web development services is likely to run into a lot of competition, but if you specialize into web development for dental practices you immediately stand out from the competition.

Think carefully about what your clients need:

  • do they need to be able to do it themselves (in which case you need to teach them a skill)?
  • If they just need it once, you can do it for them.
  • If they need a tool to do something faster or better, an app is the better way to go.
  • If they need to improve how they do stuff, you may want to offer to consult.
  • and if they need to get personally better at something, you may want to offer coaching in some form.

I hope that this article helps you think about the endless possibilities for building a business. Finding the right balance between your skills, passion and a market need can be tough, but there are enough successful small businesses out there to prove it can be done.

If you’re not yet on my mailing list, be sure to sign up now for more articles like this. And good luck building your business.

Source: Medium
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