Last Updated on Mar 12, 2020 by James W
When it comes to small business, Australia has a problem. Too many of theirs are failing. According to news.com.au:
Small business statistics from the Department of Industry reveal 40.3 per cent that began in 2007 did not survive until 2011, higher than the failure rate of 24.2 per cent for medium businesses and 25.7 per cent for large businesses.
With such an untenable failure rate, entrepreneurs from Down Under have abandoned the streets and taken to the highway: the Internet Superhighway, that is. In doing so, they are finding their niche. Crafters can sell their wares on sites like Etsy for a fraction of the capitol and risk of selling in a local storefront. The news piece goes on to briefly profile some of those enterprising business owners. For anyone who has ever started a small business, parts of their story will sound very familiar.
Even if the failure rate of small businesses were not so high, there would still be tremendous risks and challenges such as:
- The high cost of leasing and maintaining a physical location
- The reliance on foot traffic and good weather for consistent sales
- Limited customer base in the local area
These concerns mostly go away when the business goes online and finds a strong niche. Here are a few of the lessons we can learn from Australia’s online entrepreneurs:
A small niche can mean a big market online
100% of a small pie can still leave you hungry for pie. But 1% of a giant pie can be more than enough. Once you take your product or service online, you are essentially marketing to everyone capable of buying your product. Even a fraction of a percentage can mean more business than you can handle. That means that you can afford to go super niche, and super serve that niche.
For example, a company like PilotMall.com sells pilot supplies to people who own their own airplanes. Worldwide, there are over 20,000 registered private jets. With good search engine optimization, there is a good chance every one of those owners will happen across the Pilot Mall online storefront. Compare that to the number that would find them locally, wherever locally happens to be.
Online, physicality is not a barrier
Serving your niche online removes all the challenges and barriers of physicality. Prejudices and biases come in all shapes and sizes. Would a woman buy intricately knitted crafts from a 6’5″ bearded man of color wearing a turban? I don’t know. But that could be a problem for some people in some places. Online, such things are non-issues. Would you rather buy from a storefront that is slightly run down, in an older neighborhood with questionable looking characters hanging about, or from a beautifully crafted storefront online? I would much rather brows the nice, neat shelves of amazon.com than to spend five minutes looking for the same item at Walmart. Advantage, online.
Online, there is a shorter path from search to sale
One of the biggest advantage serving an online niche has over brick and mortar is the short bridge between search and sale. Online, a person looking for an authentic replica of the communicator badge worn by the crew of the Enterprise during the second season of Star Trek the Next Generation can type a few letters in a browser, click on a link, and have it ordered and on its way with just a few taps of the keyboard. They never have to change out of their hand-stitched, Captain Picard pajamas. As a bonus, they spend more when shopping online.
As for your storefront, are you sure it is even searchable from a browser? Will it have the correct address and phone number reflecting your recent move? What if it is a Sunday? Are you even open on weekends, at night? Do you have the item in stock? How long will it take to order it. Online, your customer has spent money before your storefront customer can even confirm your address. That is a big advantage.
None of this is to suggest that retail is dead. But with regards to small businesses, Australia has a problem. They are not alone. The good news is that in Australia and the world over, small businesses are finding their niche online.