These sites have two big problems that skew all their data completely out of context. Number one, they are all heavily focused on a US based audience. Their sampling of non-US originating traffic is infinitesimal. So, unless you are competing for visits from the US audience, they would give you completely skewed reports. Second, some, like Alexa specifically depend on people who have downloaded and installed their tool bars or have created accounts with them. And there is no information on what demographics of people have done so. So, for all you know, the information and ranking of your site selling software as a service to large corporates in South Asia could well be based on the surfing habits of stay at home moms in the US!

I have come across instances where traffic ranks at such sites fluctuate wildly, in the thousands one day and down in the dumps of double digit lakhs the next. So, use such websites sparingly, knowing fully well that they could be completely, completely off track.

10. Beautiful pictures make people read your emailers
Talking of beautiful websites brings me to beautiful emails about beautiful websites. One of the standard ways of promoting a website or article is to send out emails. Unfortunately, most such emailers are cut and paste jobs of the print creative- just put the print advertisement into an email and send it out. Now, most email clients are configured not to show pictures in emails unless the recipient specifically asks for it by clicking on a button.

So, effectively, when you send out picture ads as emailers, you are depending on the subject line piquing the attention of the reader and making her want to see your ad.

11. People read emails
An even bigger problem is that your emailer may never reach your intended audience in the first place. Let us assume that over time, you have collected an impressive number of subscribers to your mailing list. Now, you face three significant problems in communicating with them.

One, a significant portion of your email list is invalid. As people move jobs or move from one free email service to another, they rarely update the information at the various websites they visit – at best some of them will re-subscribe from the new email address. Good list manager software will remove email addresses after a given number of bounces to give you a more realistic picture of your database size. Empirical evidence seems to suggest that as much as 20% of your email database could get invalidated like this every six months. But then you need to be using such list managers and should have enabled bounce management!

Second, an email has to go through multiple spam filters before it reaches the inbox of the intended recipient. Most mass mailings, particularly those with only graphics in them or those with suggestive titles in them will never reach the intended audience.

Finally, the reader has to open the message and read it. People typically do not read a large number of emails they receive, due to a variety of reasons including lack of interest or time.

To sum it up, you should consider yourself very lucky if you consistently get around 5 -10% open rate for your emailers and if you hit 20% or more, you should be in email marketing heaven!

12. Google is the only way to advertise online
Ok. So you have got some budgets for getting visitors to your site and you decide to put all that into Google’s Adwords program. Why? Because everyone else is doing it?

Wrong.

Most of the bigger web properties have their own sales teams and would at best be running Adwords ads as a backup, to finish off surplus inventory. So, it is likely that the target audience you are looking for – particularly if they are not the adventurous types - may not be even seeing your ads if they are run only on one network.

Even if you are looking for ad networks, - services that place your ads on multiple websites, there are a number of other ad networks out there that you need to explore, if only to find out if any of them would offer you a better deal. And chances are that you may even get better targeting, better click-throughs or even better conversion rates.

13. Adsense will make me rich
This is the other side of the “Google is the only ad network” argument. There are any number of content creators, publishers and aggregators who believe that all they have to do is subscribe to Google’s Adsense advertising program and their site will be full of ads and they will be laughing all the way to the bank.

They are partly true. Their site will be almost full of ads (There are some limits to the number of Adsense ads you can serve per page). But it is highly unlikely that your banker will have to deploy extra manpower to keep track of your account.

To put it bluntly, it is highly unlikely that you will even break even with just Adsense. Adsense is designed for Google to make money, and for small time websites to get some pocket money. It is not for businesses that will depend on online advertising for significant revenues.

At best Adsense can be used by small websites that cannot afford their own sales teams or to fill in unused inventory and generate a supplemental income, something that will not even make a significant difference to your P&L. You will need your own sales team to bring in advertising revenues if that is your business model.

14. People will buy stuff online
There is a lot of retail happening online and you should easily get a small percentage of that pie. Right? Lets get our facts right first. According to internetworldstats.com, just 3.7% of India’s billion population had Internet access in 2007. And a Survey by Visa in November 2008 across six countries in Asia Pacific placed India fifth in per capita spends online.

And what do they buy online? According to the same Visa survey, “In India, purchasing digital downloads was the most popular form of consumer e-commerce. Seventy-six percent of respondents from India, the highest among Asia Pacific, have bought a form of digital entertainment over the Internet in the last 12 months. Music downloads (63 percent) emerged as the most popular digital entertainment purchase”.

Going back to the Visa survey, the top three on the list of transactions online are airline tickets, travel agents and travel accommodation.

How much was it that you were planning to sell online?

Comments (8)

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written by Ashish Kolarkar, December 10, 2009

Thanks for an eye opening article. The myths regarding internet and e-commerce are there from time immorial and they have to be addressed with real facts. You have done the right thing.

Although, I'm in the Banking computerisation catering to Regional Rural Banks and co-operative Banks, I was still not aware of certain facts (I was assuming freewares reduces cost). I wish in future you focus on right strategies of doing internet business especially payment channel econonics for small businesses.

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written by Sumi, December 02, 2009

Very thought provoking article.

I run a leather store and am exploring to go online now. I want to know the complete process involved, and also an appx indication of the cost in setting up an online portal. Can you please help. Where can I get this information?

Regards
Sumi

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Different Views.
written by Vivek Satoskar, July 26, 2009

Sir,

I differ from most of the points given by you. Post working in Hotels and Offline Travel companies I started my first website (online initiative) http://www.BestGoaDeals.com about 4 years back. From first month we broke even and there has been almost 200 % jump in revenues every year on this one website. Besides these we did launch 1 website on Goa tourism aspect every 3 months and each of these sites besides recovering costs have given substantial profits.....guess Online field for Specialist Travel companies there is huge potential and have better chances of growth and survival over the Offline Travel Companies.

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written by Ankur, April 23, 2009

Hello,

I am a regular reader of DARE magazine and regularly I post my comments.
Thanks a lot for wnoderful article.

I have one query, when you said Adsense is not the only way to earn money then what are the other ways that are really helpful?
Please let us know

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Great Article - Some more thoughts!
written by Mohit, April 22, 2009

Awesome article! Gives a lot of insight to anybody (novice or experienced) planning to start an online business.
I would definitely agree that building an online presence and selling online are two different things and they follow each other. To buy-sell online you need to have an online presence and you need to be continuously evaluating it.
From the customers perspective, he needs to have an uninterrupted experience when he comes at your website. He should not feel out of place or out of sync. What I mean here is that there would be negligible number of people who would type in your websites address in their browsers and come to your site. Most of the customers would be coming through some advertising/promotional/social networking channel. Keeping up the content in sync with these channels and managing them adds up to the cost/time/resources that you need to invest. For sure, a good and workable website needs a lot of thought, planning and vision.

Keep up the good work!

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written by Debarshi Datta, April 08, 2009

Sir
I am presently working in a consumer electronics MNC in sales and marketing profile and I do have plan to set up a website about the usability rating of the various consumer electroncs goods its not also on the paper as of now because I am confused about approching the business plan I would be thankful if you kindly guide me over this
regards
debarshi

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Re: Pramod - "when fortune 5m is...."
written by Krishna Kumar, February 04, 2009

Pramod, The article says at the very beginning.."These are for those who are planning to do business – as in sell or buy goods or services, including advertising -and not for those who just want a presence online".

But you do make some interesting points...

How many are looking at being the next big e-commerce site? You will be surprised by the number who are :). I have a folder full of emails from people intend on setting up the next big e-commerce site asking for advice or coverage.

Those with a small product or service -- they probably need paypal. Not many Indian small businesses have paypal integration. Part of the reason is that if you want to use paypal to pay in Indian rupees, you can't. ( https://www.paypal.com/in/cgi-bin/webscr?cmd=p/sell/mc/mc_intro-outside ). So, the transaction will attract foreign currency surcharges on both ends - the buyer and the seller.

Infact payment gateway integration is one of the biggest problems faced by Indian small businesses in doing online commerce

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When fortune 5M is considered - it's best doing online business
written by pramod, February 03, 2009

Dear Sir,

I totally agree to all the points, however my argument is that your points are relevant if one is considering to open the next eBay or homeshop18. Yes we would end up committing all the 19 mistakes. On the other hand how many are actually looking at the next big site or a eCommerce site?

Consider the companies I call Fortune 5 million - they need basic visibility. They have a small product or service to offer. They need some basic stats. They need PayPal (probably) to manage the transactions. Once in a year basic (even a css change) face lift. It's OK to have the site hosted on shared servers. They yet would do more business by a click than by a brick.

While i agree to the 19 points, i feel it's not too practical when it comes to the "Bottom of the Pyramid".

regards,
Pramod

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