Connect The Dots

Decision Time

Want an easy rule of thumb to assess how your business might fare online? Jonathan Palmer, a professor at the University of Maryland in College Park, suggests three factors that shine a green light on this decision:

  • You sell a product line that can be delivered economically and conveniently.
  • You have a desire to market to customers outside your own geographical location and a product that will appeal broadly.
  • There are significant economic advantages to going online, such as lower rent, labor, inventory and printing costs.

Chew especially hard on points one and two, because if they are on your side, the profits implied in the third point will likely follow.

A fourth factor might be whether you can economically draw customers to your site. Chasing a mass market--and going belly-to-belly against Amazon.com, drugstore.com, priceline.com and the like--means you'd better bring a seven- or eight-figure advertising and marketing budget to the table, because your competitors will. But the good news is that there is still plenty of room for thinly funded players who have targeted shrewd niches and developed solid business plans. The experts agree: Those are the dot.com companies that will be thriving tomorrow.

Contact Sources

Leslie Lundquist, fax: (281) 990-0657, leslie@dwynn.com

PriceWaterhouseCoopers, 2050 N. Woodward Ave., #200, Bloomfield Hills, MI 48304, (313) 394 3939

PSSweb Inc, (972) 881-4700, mlayton@pssweb.com

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This article was originally published in the March 2000 print edition of Entrepreneur with the headline: Connect The Dots.

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