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ECT News Community   »   E-Commerce Times Talkback   »   Re: E-Commerce's Long Journey From Free to Fee



Re: E-Commerce's Long Journey From Free to Fee
Posted by: Paul A. Greenberg 2001-08-02 10:56:08
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Of everything e-commerce participants have learned so far, one rather
retro lesson has taken on new meaning: There is no such thing as a free lunch.


Or free anything else, for that matter. Although Internet users used to love
and even expect free connections, shipping, e-mail, and other assorted products
and services, it was a primitive notion to count on something for nothing.


Re: E-Commerce's Long Journey From Free to Fee
Posted by: A. Bulgakov 2001-08-07 04:11:45 In reply to: Paul A. Greenberg
The costs of doing business online related to technology/infrastructure expenses, if viewed as a parabola graph (costs/time) with three distinctive phases quality-wise (downward-, horizontal-, upward-sloping) are currently approaching the middle stage of the 1st phase. My question to the board is: if during this particular period of time, when technology becomes more accessible to the SME segment, the “long journey” starts to gradually turn “from free to fee” (which is, naturally, more true of small business with little resources to be devoted to primary development), where would the freed resources go – expansion, profits, internal improvement? How would a knowledgeable e-customer react to this trend in case the latter indeed exists?

Best regards,
Alexander Bulgakov
Quantum Art
aleksandrbulgakov@artq.com
http://www.artq.com


Re: E-Commerce's Long Journey From Free to Fee
Posted by: TedDrew 2001-08-07 13:49:33 In reply to: A. Bulgakov
I think the freed resources would have to necessarily go toward customer acquisition and promotion. After that I would suggest more attention to infrastructure. The available technology keeps altering itself and the public continues to lift its expectations. We have to meet those expectations. More streaming video, etc.

Re: E-Commerce's Long Journey From Free to Fee
Posted by: Ajit Damle 2001-08-04 22:34:44 In reply to: Paul A. Greenberg
Paul Greenberg's statement towards the end of his article that 'there will be no such thing as free in ecommerce which is as it should be' is judgemental subjective and patronising. Ecommerce sites have been put up by the owners for all kinds of reasons and have failed for all kinds of reasons. Why try to introduce rights and wrongs.

Re: E-Commerce's Long Journey From Free to Fee
Posted by: Anne 2001-08-06 11:01:12 In reply to: Ajit Damle
I am amazed that anyone would say what was just said in another post...that "ecommerce sites have been put up by the owners for all kinds of reasons..." Ecommerce is about buying and selling. I would never have established my site just for the heck of it. I'm online as a commercial venture. Greenberg is right. What is to be gained by giving anything away for free? It's counterproductive and it will lead to nothing.

Re: E-Commerce's Long Journey From Free to Fee
Posted by: Mark Burton 2001-08-02 15:55:02 In reply to: Paul A. Greenberg
The article makes a lot of terrific points. One issue to think about for newer or emerging products and product categories is that "free" may still have a place -- as long as it is connected to a predetermined path to "for sale". To mitigate the perceived risks of trying cutting edge products and build a core group of enthusiastic customers, companies may want to make their offering free at the start. In doing so they should, however, follow a few rules...

1. "Give and Get" - Offer your product for free in return for something of value from your customers that facilitates improvement of the product and/or marketing messages.

2. "Heads Up" - Let your customers (and competitors) know as soon as possible that you plan to migrate to a payment-based model and the rough time frame in which you plan to do so.

3. "We don't want you if you want something for nothing" - Always, always, always remember that true early adopters try new products for a variety of very important reasons - none of which are price-related. Pay attention to attracting and retaining this valuable early core. A freebie may bring them in, but it sure won't keep them around.


Re: E-Commerce's Long Journey From Free to Fee
Posted by: Ben 2001-08-02 17:45:55 In reply to: Mark Burton
While there is strong pressure to charge for services, providers should move very cautiously. If everything has a fee, users will stop browsing and begin concentrating on a small number of providers, which would make it very difficult for the industry to expand its subscriber base for any given service. More "fee services" will play into the hands of the larger ISPs, such as AOL, which will be in a position to negotiate blanket access for their members, something that AOL already has done. If switching to service fees is a shock to users, it will be nothing like the shock to providers when they find out how few people value some of the marginal services enough to pay. It also will be a boon to advertisers who will be able to base what they pay for an ad upon who cares about a service enough to pay for it.

Re: E-Commerce's Long Journey From Free to Fee
Posted by: Sean 2001-08-02 10:59:02 In reply to: Paul A. Greenberg
I couldn't agree more with this article.

Just the other day I was explaining to people that the biggest mistake the Internet ever made was treating itself like a different business model than the rest of the world.

We've learned in a few short years that people WILL pay for services, because that's the way the world works.

The Internet is so young, and I think we forget that sometimes, we have no perspective. So just like those disastrous failed attempts by man to fly before the Wright Brothers finally got it right, we're learning every day what we've been doing right, what we've been doing wrong, and what direction we need to go in to succeed years from now.

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