Thursday, December 29, 2005

How To Fail Or Succeed, As A Business And As A Customer

This piggybacks on a couple of my previous posts.

How to fail:
1. Don't bother determining your unique value proposition to the marketplace.
2. Plan to be the lowest price (woo-hoo!)
3. Put up an amateurish website.
4. Sell the same old, tired crap. (just cheaper! woo-hoo!)
5. Your reason for being in business is to get rich! (woo-hoo!)
6. Believe all suppliers can't wait to sell you product.
7. Have no previous sales experience. (seriously, your business is already dead)
8. Take days and days to ship your orders.
9. Don't bother supplying customers with tracking numbers.
10. Not knowing your products.

How to succeed:
1. Have a successful sales background.
2. Be willing to work 12-14 hours days - every day, every week, every month.
3. Pick a niche (!!) Know it better than any other company.
4. Ally with a few key suppliers.
5. Treat your Customers better than their mothers do.
6. Do some friggin homework and discover some unique products (!)
7. Always be available to your customers.
8. Fire customers that waste your time or haggle on pricing.
9. Turn a profit. Without it, you cannot afford to add value.
10. Add value. The bitterness of poor value lingers long after the sweetness of low price has been forgotten.

There is one reason to be in business, that is to provide value to your Customers. If you provide value, your business will grow.

Too many business wannabees are in it for themselves. Or they have this sense of entitlement, that the world owes them something. They have already failed, they just don't know it yet.

What you seek is a virtuous circle. You provide value to your customer, you provide value to your suppliers. Your success is the natural result.

So as a customer of a failed (or about to fail) business you might ask - "Who cares? I bought cheap, and the dumbass business went broke. That is their tough luck."

The past year saw several supplement and nootropic websites go down in flames. If I were a customer of one of these failed business, I would now be wondering what became of the personal and financial information I provided to them. You can bet there was no investment in encrypted servers or harddrives.

As a customer, were you dumb enough to email personal financial information to a failed business? Wonder who is now reading that old email? Wonder who is in possession of all that customer database information?

If the closed shop lacked business acumen, did they also lack integrity? What was really in those products you bought? How do you know? If they couldn't run a business, could they intelligently make quality control decisions?

Did they test raw materials? Did they trust supplier Certificates of Analysis? How would they know for example of the Chinese Alpha-Lipoic Acid being passed off as European R-Lipoic Acid by a leading metric ton bulk supplier?

Did they use an analytical lab that frequently offers test results conveniently similar to the manufacturers COA? (Testing labs vary in quality too!) Did they have enough profit built into the sales price to afford testing? Quality testing is very expensive, and even more so if they have to develop a method and/or buy standards.

I am not picking on any business (failed or existing) in particular in this post. The problems are universal to the industry.

Gotta hop, for the past 5 minutes I hope I made you think outside the box. Together we can make the world a better place.

Cheers!
Pete