When you plan to make money, all sorts of process start to happen that are necessary steps in the money making grand scheme of things. This post takes a sideways look at some of the ways in which you can plan to make money and some of the ways in which you can totally mess it up by not planning.
First, how to totally mess things up.
Lets take an example. Think about an already successful business that has proven itself over time to be long term and able to sustain growth thanks to a solid foundation laid at the original planning stage. Oh, I don’t know, an online company like, eBay for instance. Now eBay were doing very well under their original management team because they knew what they were doing and they proved it by creating the worlds biggest and best known online auction site.
Then changes happen and a new management team walk in and decide they want to change things because that’s what new management teams always want to do, just to prove they know better than their predecessors.
Except, in this case, the new team decided they were bigger than the affiliates that were driving all that traffic to their site and who helped the company to become what it had become. They decided they could expand the business their way and prune back the money they were paying their affiliates and keep it for themselves.
What they didn’t plan for, and this is and will be their biggest downfall, was that no matter how big or well know your company, if you are an online based business you need traffic to visit your website and keep on visiting your website in order that you can maintain the sales. Their first move was to take control of their affiliates, who previously were working through Commission Junction. EPN was created and eBay started handling their own affiliate affairs with the general consensus that reporting would get better. It got worse.
So then EPN started getting rid of all their biggest affiliates who were making the most money. Money that the eBay management team wanted to keep for themselves. Amazingly enough, they saw a drop in traffic to their website and a drop in sales.
To counter this, they changed the way in which affiliates sales were reported with the slant on more money for us, less for you. That rankled a lot of the remaining affiliates but they were in no position to argue, because it had become patently clear that any affiliates that started making waves seemed to quietly lose their accounts.
In the latest debacle, EPN sent all their affiliates an email yesterday (19th August) outlining a new reporting and assessment structure for affiliates, taking the onus away from a sale percentage, which in any affiliate program is the incentive to drive the traffic to make the sales, to be replaced with some kind of algorithmic assessment of the quality of the customer sent by the affiliate.
It sounds like and probably is the last nail in the coffin of the affiliate income derived from eBay and will force affiliates to change allegiance to programs where they can make money on sales, which is what they do. The upshot of all this is that because of ill considered planning, EPN will kill its business slowly as affiliates start promoting rival company products and filter customers away from eBay and towards companies such as Amazon. Would this have happened had they decided to seek professional assistance from a company that offers Ecommerce solutions instead of doing things themselves? Who knows, but one thing is certain, the old saying “if it ain’t broke don’t fix it” certainly applies in this example, because the new guys came along and took a successfully working business model and messed around with it until they broke it.
So there is a real life reason for careful planning in business. If you get it wrong, you stand to watch your business go down in flames. But if you get it right and carefully weigh up all the alternatives and possible outcomes of your actions, then you can strengthen your business in all directions and build a better, more sold foundation for growth and success. By making use of the services of an experienced Ecommerce consulting company, you can iron out any potential problems before they manifest. Or you can go it alone and hit and hope for the best.
Well, not all businesses will fail for being tweaked to see what works best and in fact some can truly blossom with the right kind of tinkering. One small change can see profits explode overnight and running a business is all about taking chances. But its also all about taking chances that might work and if they patently don’t work, then make sure you have a contingency plan up your sleeve or be ready to bit the bullet and revert back to a previously successful working model if it will save your business from going under.