Geek News: What sells online? Books, horse semen

I recently spent a little while chatting with a group involved in revitalizing dying rural towns.

We were talking about how Internet connectivity can be used to unite a community in its efforts to rebuild, and to bring business to the town … which led me to think about what types of products can be sold online. Now that we’re over the Internet bubble, now that everyone finally knows that much of what we’ve heard over the last few years is hype, we can start to think in a rational manner about what works online.

Just because you can, technically speaking, sell something online, doesn’t mean that it will actually sell very well. (My favorite example: Pets.com spent $55 million in TV ads, to sell $13 million worth of goods for $6 million.)

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So what does sell? And how does a small town decide what’s worth selling online? It’s worth thinking about the characteristics of the types of products that are sold online successfully.

Books, for instance. Now, before you think to yourself, ³books may be sold online, but not successfully,² let me agree with you that the major bookstores are unsuccessful; that is, they don’t actually make profits, regardless of how many books they sell. But that doesn’t mean many smaller booksellers don’t do well. My own publishing company’s Web site earns, from book sales, many times the cost of the site.

Show and tell

What is it about books that makes them easy to sell online? First, you can show a representative sample very easily. I can place sample chapters at my Web site, for instance. When people buy books, they really don’t care much about the quality of the paper and binding — I’m not saying that ³touch and look² isn’t an issue at all when selling books, but it’s fairly minor, especially when compared to products such as furniture and clothing.

Another important aspect is cost; in most cases books are a relatively minor purchase. You’re quite willing to risk $20 to $30 online without worrying too much about it. You might think twice before buying a $1,000 sofa or $200 dress online, though.

Another characteristic is that books are information products, and the Internet is great for providing information. Most books are nonfiction, and nonfiction books are sold based on need or interest; either I buy a book so I can learn what I need to get something done, or the book is about a subject in which I’m interested.

So most of the buying process is deciding if the book satisfies my needs or interests — not whether the book has a pretty cover or nice paper. Online stores can quite easily satisfy this requirement by providing chapters, tables of contents, reviews and so on.

It’s interesting to note that books have all these characteristics because they are really forms of software. The words are the software and the paper is merely the media.

Specialty products

Fortunately, these are not the only characteristics that make products viable for online sales. For instance, I recently heard about a farmer selling horse semen (apparently a very expensive product) online. What are that product’s characteristics? Well, it’s a specialty product, something that’s probably hard to find at the corner store. Going online may be the only way a horse breeder can find the particular species and pedigree he wants.

What’s that leave us with? Products that are, in effect, software. Products for which almost all the customers’ questions can be answered online. Unusual products that are hard to find locally. Low-priced products.

Products that have the opposite characteristics are often hard to sell; products for which more information is required, particularly touch and feel. Very expensive products. And products that are easily available locally.

By the way, there’s another form of ³software² that’s often ignored when we talk about products being sold online — consulting services. I was selling my consulting services online years ago, before anyone outside academia and a few high-tech companies had ever heard of the Internet. I used CompuServe to find clients (Amgen and MasterCard) way back in 1992.

I believe the Internet is one great way for small towns to bring money in — teach the kids how to program, write, and create Web sites, and then teach them the business and marketing skills they need to find work online.

Peter Kent is the publisher of the Poor Richard’s series of technology & Internet books. Visit http://TopFloor.com for more information.