E-Commerce: A New Profit Center for Your Business?

Internet commerce, or "e-commerce," is becoming real. The market-research firm of Cowles/Simba forecasts $28.2 billion in e-commerce revenues this year, an increase of 57.7 percent from 1997. And Forrester Research estimates that Internet-based sales will reach more than $73 billion by 2000.

If research companies' forecasts leave you skeptical, consider these numbers from real-world buyers and sellers:

• General Electric says it will purchase $1 billion in goods from some 1,400 suppliers via the Internet this year.
• Dell sells more than $1 million dollars' worth of PCs on the Web every day.
• Amazon.com, the Web's largest bookseller, had sales of $116 million in the second quarter of 1998 alone—a 316 percent increase over the same period last year.

There are several good reasons to add e-commerce to your company's sales repertoire:

• Markets are growing exponentially across the board. Computer sales, a Net mainstay, have leaped from $140 million in 1996 to an estimated $701 million this year. But other categories have grown, too: travel from $126 million to $572 million, apparel from $45 million to $163 million, and food & drink from $39 million to $149 million.
• There are no geographic boundaries. A manufacturer or dealer in Poughkeepsie can sell to buyers in Mississippi, Sardinia, and Singapore without opening branch offices.
• Entry and overhead costs are relatively low. It's cheaper to launch a functional e-commerce site than it is to open a new sales office or retail store—and if you already have an established business, the additional overhead is minimal.