Should you be selling a product or a service?

The Internet is primarily used to communicate, entertain, educate and research. It is thus no wonder that nonperishable, informationintensive products - including computers and software, books, travel, consumer electronics, magazine subscriptions - are the most popular online products at present. Content-rich sites, subscription-based sites to advertiser-supported sites focusing on a wide range of topics, have been sprouting up all over the Internet.

Services such as hotel reservation, air travel and investments have successfully transitioned themselves to the Internet. Unique services such as online driving schools have been prospering too. In fact, many states in the US have already set up online payment sites for Government services. Residents can now get online to pay most of their bills and other expenses including parking tickets to local courts.

However, all kinds of services cannot be run entirely on the Internet. The Internet is less effective when face-to-face selling is needed to close a deal. The Internet can give lots of preliminary information that's useful in setting the scene for the closing. But the actual closing takes place offline - i.e., not on the Internet.

Products can also be marketed and sold successfully on the Internet. The kinds of products and services that sell best on the Internet are those that take advantage of the convenience of the Net. Remember that convenience is the primary reason consumers flock to the Internet in the first place. People can shop at any hour of the day at most sites. They can avoid crowded stores, irritating sales clerks, and even avoid pickpockets.

Offbeat or unusual products and services often attract online attention and sell strongly. You would generally not try to sell items people can get at the corner store. Thus, few toothbrushes are sold on the Net; the same thing with daily food and beverage purchases. But special cheeses, rare cigars, Turkish plates, long-aged wines, even diamonds, can and do sell well on the Internet.

Most products sold by catalog and mail order also sell well on the Net. However, people tend to buy only those products that can be shipped at a reasonable price. Higher shipping costs diminish the price competitiveness of online products and turns-off a lot of potential buyers. In fact, high shipping costs is the primary factor that discourages some people from buying online more than any other given reason. An Ernst and Young report shows that 53 percent of online shoppers are concerned with shipping costs that are too high, compared to only 19 percent who are concerned with credit card information being stolen.

As an online merchant, you have to work out the advantages as well as disadvantages of selling either products or services online. If you choose to sell a product or service online, you must evaluate your offering to ensure that the total costs of the product or service including shipping are not much higher than what is offered elsewhere.

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