In the e-commerce era, product pricing transparency has improved a lot and profiting from arbitrage activities has become a lot more difficult. Nonetheless, technology also makes new business models possible.
Dealing in niche products, for instance, can become a big business in the e-commerce world.
Traditional brick-and-mortar shops have limited space, and they largely display popular products. As a result, niche products would gradually disappear.
However, internet can unleash the great potential of these niche products.
Chris Anderson, chief editor of Wired, has put forward “The Long Tail” theory. He believes one can make the so-called long-tail products even more successful than mainstream products by targeting the right customers.
For example, Lego launched Star Wars Millennium Falcon in late 2017. Initially priced at US$800, this largest brick set from Lego has 7,514 pieces.
The bidding price has zoomed above HK$14,000 on eBay’s Japan site, implying a huge premium.
The same rule also applies to limited edition sneakers, T-shirts, accessories, etc. Some started a business by collecting various limited edition goods from different websites and selling later at a premium.
There are also new business opportunities in mass-market products.
One of my friends plans to sell computer, communication and consumer electronics products under his own brand, by sourcing from the internet and then personally visiting the suppliers as well as testing the products himself.
In another example, a Hong Kong mom started a business that helps online shoppers save delivery costs.
Since courier charges can be very expensive, and some shops simply do not offer international delivery services, this startup owner arranges for goods to be shipped to certain US destinations, pooling the goods into a consolidated lot before shipping them.
Her company has grown rapidly and its service now covers countries like US, Germany, Japan, UK, South Korea and Taiwan.
Technology has become the game-changer. Even a simple business idea can generate good profit, if one can execute it correctly and offer reliable and personalized services.
This article appeared in the Hong Kong Economic Journal on Feb 23
Translation by Julie Zhu
[Chinese version 中文版]
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