A rejection that led to a million dollar business
Back in 2000 I had a call from a guy who was making his own product in his garage and wanted to sell it on the Internet. He had been searching for a while for distributors of his product, with little success.
I went and met with this guy and his wife and we discussed at length what they wanted the web site to do. I gave some recommendations on what the site could have to complement their wants.
I went away and developed a proposal to meet their needs. I returned a few days later and went through the proposal bit by bit.
As you do after a pitch, I asked for the business.
“That meets all the needs we’ve identified together. Would you like us to work with you on developing a site to sell your product?”
Nope, the kid up the street is doing it for $300
“No. We’re going with the kid up the street. He’s doing it for $300. He is still at school – he’s apparently a computer whiz.”
I tried to discuss how our proposal met their needs better than the kid up the street, but to no avail.
Six months later I was surfing the web when I remember these prospects. I logged on and took a look at their site.
Basic principles of web design
Now, there are some basic principles you have to follow with web sites.
- It must load very quickly
- If you are selling products, your shopping cart must be fully secure
- Need lots of information about products
- Need to be optimised for search engines
There are more aspects of course, but I could go on forever.
The site that the kid up the street did was designed in such a way that whatever visitors did manage to stumble onto the site would very quickly leave. I rang the prospect and suggested a few changes that might help the site (it took over 2 minutes to load!).
His words were, “I know the site is shocking. It’s done nothing. I’ve been trying to get the kid to fix it, but he hasn’t. I’m trying to get my $300 back.”
I kept in contact with the prospect, sent him a Christmas card, sent our newsletters, etc. Then just over 18 months ago, I met the prospect again.
I asked him how his sales were going and he said,
“Hopeless. You can’t sell our product over the web. People just won’t buy over the web.”
I suggested to him that the US was a very viable market for his product and that it might pay to target that market once he sets the site up properly. I asked him if he wanted me to requote.
“No thanks. If you think a web site could be so successful, then you set up a site and you can be our Internet distributor.”
We hadn’t really started our own web shops yet (like most web developers, we talk about how good we are. We never like to actually have to be able to back that up!!).
But I thought it was about time we did.
So we developed our own site. My costs were something like this:
- Web site design – $0. We did that ourselves. Took a few days.
- Web site hosting – $18 per month
- Secure web site shopping cart – $30 per month (first month’s trial free)
- Programming on the site – $250
- First bit of PR the site received – $0
I’ve made that sound very simplistic. There was a lot of time spent on the concept of the site, along with developing information for the site, writing copy, getting testimonials, optimising the site for search engines, etc, etc, etc.
Just four- (4) weeks after we launched the site we got our first bit of PR. It was on a current affairs show that featured the product and its benefits. That program finished at 7 pm and I wandered into the office at 8 pm.
Just before I left home I asked my wife how many orders that program would have generated. Her guess was 20. Mine was 50. Our average sale was $50.
The telephone was ringing as I walked in. I answered that – it was a lady wanting to order our product. The same time as I was dealing with her the fax was receiving. That was an order too.
I picked up the telephone to ring my wife to let her know we had made at least 2 orders.
The message bank tone was on the line. So I checked the messages.
“You have 53 messages.”
I thought we might have been onto something!
I had a separate email account that the orders came into. I pressed the ‘Send/Receive’ button on my email program. I was hoping to see ‘Downloading 1 of 50′. I didn’t get my wish.
“Receiving 1 of 4,182″
All orders.
After those emails had downloaded, I pressed “Send/Receive’ again.
“Receiving 1 of 854″
All orders.
I kept pressing that button all night long. And the orders kept on pouring in.
And on and on it went. For days and days and days. For months (even now, 18 months after the show was on, we still get enquiries generated from it!)
The orders didn’t stop for three- (3) months.
Our fax machine went 24 hours a day for a week.
We put in two- (2) extra phone lines to deal with the enquires.
We employed a dozen people to pack and post our products.
It was a fluke!
Well, I’d probably agree with that, except for this next point.
We did it again about three- (3) months ago. Not quite to the same extent, but great sales nonetheless.
And we are going to do it yet again via a different medium (free offline publicity again) in about four- (4) weeks.
We continue to make great sales each and every day for a few different reasons.
- Because the product is one that is repeatedly purchased (it’s a cream)
- Because we constantly provide our customers with great information
- Because we constantly provide our customers with offers (a recent free shipping offer sent sales through the roof)
- Because we have 10,000 email newsletter subscribers who receive regular updates
- Because we have 8,000 Free Report subscribers who receive an information-packed and very valuable report every six- (6) months
- Because we encourage repeat visits to the web site
That web site is one of the world’s best web sites in it’s niche (if not the best).
We have a person employed full-time to add content to the site. Another takes care of the orders each and every day (the process is perfectly streamlined). And yet another markets the site.
I’ve been involved with some very successful businesses. From public companies to massive chains. But, without a doubt, the best business model I have ever seen is a web based business.
Done correctly from the very start, a web business can give just about any business a tremendous advantage over their competitors. And it can be the perfect sales and distribution channel as well (not just an exercise in branding or information provision).
When you select a web developer to develop your site, look for a track record. Have they developed successful sites before? What’s their track record like? Do they have any work you can look at? What is their area of expertise?
Hope that helps.
Cheers
