How Much of Your Business is Really Sales?

Put simply, there are two kinds of businesses: those that sell products and those that offer services. Think about it. Even the simplest travel blog that carries paid advertising is offering a service. It consists of providing interesting stories about exotic places in exchange for readers viewing advertisements on the side of the page. A more straightforward “product” site might sell (or resell) gourmet chocolates directly to their customer base.

Product-oriented businesses obviously have to focus more of their marketing effort on old-fashioned sales. Finding customers who want to buy cookies is quite different than scouting for clients who need architecture services. A healthy percentage of online businesses are primarily about selling and marketing rather than the delivery of specialized services like writing or architectural design. People who want to build a successful online business need to take a hard look at their goals and decide whether they will be a “sales” or a “service” organization. Both kinds can be successful, but the point is to know the plan before diving into the marketplace.

Product vs Service: The Age-old Question

There are thousands of online businesses that sell both products and services, and still thousands more that sell just one or the other. Part of the decision-making process for every entrepreneur brings this question to the fore: should I sell a product, such as clothing, computer parts, or appliances; or should I sell my services as a professional painter, consultant, attorney, accountant or writer?

Of course, much depends on where one’s skills lie. Top tax consultants can make a killing online provided they acquire enough clients. The same can be said for many service-oriented endeavors. Those who excel in the art of selling or reselling often gravitate to the product side of online ownership. In many ways, there is no “right answer” to the question.

However, it is worth noting that service-oriented businesses are often limited by the number of hours the owner can give to the enterprise. Those who sell products, like paint, blenders or books, have no real upper limit on their income. Other than that one caveat, the choice of whether to sell products or services is a judgment call at best.