Business Model Key to E-Commerce Survival

As anyone knows who follows the demise of Internet-based businesses, more often then not, these failed companies did not have a solid infrastructure, hired too many people too quickly or generally lacked customer service skills to get the job done right.

A solid business model should be the number one objective, according to CFO Paul Williams of Cyberian Outpost, a vendor of software, hardware and electronics. He has re-engineered the company's strategy, and is focusing on lowering the cost of acquiring new customers, improving relationships with suppliers, and guaranteeing customers good service.

These are all solid initiatives, but will they work? At least in the short run, Williams realizes that one of the business models that does not work is selling below cost. Too many Internet-based companies get into trouble when they sell items or services below cost, hoping to make up the difference with ad revenue.

As mentioned above, one of the other key components of the solid business model for Williams is to find a way to decrease the cost of finding new customers. Since August of this year, his company has been able to cut the cost of acquiring a new customer from $100 to $38.

You may like these other stories...

Russia races to dodge sanctions by adapting law to FATCARussia is in a race against the clock to adapt its laws to the Foreign Account Tax Compliance Act (FATCA) and save its banks from financial sanctions, Peter Hobson of...
The following list highlights 10 apps that that may be of interest to you, your clients, or your clients' clients. They were featured during a session of AWEBLive!, the 12-hour CPE marathon, and presented by Gregory L....
I am a recent MS Accounting degree graduate and I am looking into a programming/IT related career. Anyone here have experience or know any accountants that diverted their careers into IT/Programming/System design, etc?...

Upcoming CPE Webinars

Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.
May 1
This material focuses on the principles of accounting for non-profit organizations’ expenses. It will include discussions of functional expense categories, accounting for functional expenses and allocations of joint costs.
May 14
Save your relationship in those few situations where your performance falls far from perfect. It’s easy to want to brush service failures under the rug, hope no one notices and assume that somehow everything will be all right. In this workshop, Kristen Rampe, CPA will give you the tools to strengthen your professionalism in the face of the worst-case-scenario. Don’t let experience be your only teacher on these topics!