Web Site Design

10 Secrets of Online Selling

by Paul Graham

What sells online? That is probably the question we get asked most. At the risk of being repetitive, what sells online is work. In our experience, the difference in success between one store and another depends a lot more on how hard they work than on what they are selling.

I know of two stores, Store A and Store B, that are selling exactly the same products. Store A sells five times as much as Store B. The reason is, Store A works a lot harder. They work on their site almost every day, and they also do more to promote it.

But although work is the decisive factor, what you sell matters too. As a general rule, whatever sells in print catalogs will also sell on the Internet. If the customer has to see something before buying it, then you probably can't sell it in a print catalog, or online. Otherwise, you should be able to sell almost anything.

It's true that more men use the Internet now than women, so if you sell something that men buy, you are likely to have a slight edge. Someone who works with computers is almost certain to have Web access, so anything computer-related is likely to do comparatively well. And Internet users are richer and better educated than the population as a whole, so luxury items may do well.

But these trends are not set in stone. When televisions first became available, the first buyers were probably richer and more technologically inclined than the population as a whole. But TV rapidly became mainstream, and the same thing is happening to the Web.

More important than the type of products you sell is the size of the niche you choose.

In the physical world, niches are based on geography. I often buy food at the corner store near my house, despite the small selection and high prices. If this store were more than 100 yards away, I would never buy anything there. But in the physical world, proximity is king.

Not on the Internet. Geography is almost irrelevant on the Internet. Niches on the Internet are based on what you sell, not where you are. And whatever you sell, you have to be the place to buy it, because your customers can just as easily visit any other online store.

So you have to choose a niche small enough that you can dominate it. For example, if you are a tiny company, it would probably be a mistake to try selling top-40 CDs online. You would have a hard time competing with CDNOW. But you would probably have a chance at becoming the site for European folk music.

One certain way to dominate a niche is to be the manufacturer. For example, Harbor Sweets is going to be the site for buying Harbor Sweets, because they make them. Manufacturers may be the biggest winners on the Internet, especially small manufacturers who have till now been at the mercy of the channel.

Text copyright © 1999 Paul Graham. Feel free to reproduce any of this text on your own Web site, so long as you reproduce it verbatim, and include this message. For any other use, please contact the author. Yahoo! and Yahoo! Store are trademarks of Yahoo! Inc. All other trademarks are the property of their respective owners.