Fashion business or how not to succumb to the herd instinct

You saw in the subway or on the internet advertising of the next coupon site? Look - these sites like mushrooms after the rain, every day more and more. People see the advertising of these sites, read about the success of Groupon and think that this topic is great, very fashionable and also profitable, and make a new website - easy!

Will open the site for pennies - a few thousand dollars to build a site, some for promotion and on. Easy money can be done quickly and most importantly - make a lot of money! As a result, in most cases, these entrepreneurs are left with nothing.

Examples - in every industry and every region has businesses that are becoming popular and then start to spread like an epidemic. Many of you are aware of the epidemic such as Internet cafes, photo developing, sms-ringtones on TV and in the newspapers, sms-affiliate in runet, clones inContact and classmates enterprise for production of plastic windows.

Once launched the site Groupon, and more became known in the press, most first-time entrepreneurs interested in the topic and began whittling clones of the day. But the total number of buyers interested in coupons, it will be limited until the number of sites increased 10′s time, number of customers coupons has not increased 100-fold, but instead remained about the same, but the money was brought by them to share not the original site for 2-3, and the dozens, and the following year, and hundreds or even more! Learn more at http://shopate.com/de/store/sunsky-online/.

So it was with plastic windows. To attract new visitors, companies began dumping and give more publicity. And just dumping hastened the collapse of the market at times. The next few years, most factories were working windows in the negative. In parallel, the company opened new production of windows, their owners watched the existing market and thought - maybe we can make money on this business, the more such a fuss. Wherever you look - everywhere eurowindows buy and sell, so not a huge demand and a huge + importantly, we are not idiots, like other businessmen from the market, and we are better and give more advertising, as other owners just miser on advertising spend, and we is smart! Attacks prices low margins to kill the other competitors, but then we’ll start making money. As a result, these companies could not earn by small margin or even unprofitable models (when they worked in the logic of the “main enter the market, it is possible to spin and less work to discourage customers from competitors and to attract their clients”). And as the costs for expensive advertising sverhkonkurentom market that is not even enough to cover current expenses, burn for a few months. I think all the experts LESBIAN advertising recall that a few years ago, the most expensive words in Yandex contextual advertising was - “windows” and “euro-windows”, the words reached tens of dollars per click and seo-promotion for the sweetest seo-queries about eurowindows cost tens or even hundreds of thousands of dollars! At one such advertising rates to attract buyers through Yandex Direct or seo for beginners market of plastic windows, which can not work with conversion cost under $ 1,000 at times, or at the same competition, but with experience with online advertising for hundreds of dollars - clearly less than the profit per order! The papers from the real world and does a paradox - if you advertise through Eurowindows, in some cases (I know this from advertisers and advertising sales managers, from various media) operated double-triple surcharge for advertising euro-windows over advertising another product!

It is easy to explain - there were so many willing, and advertising space is small, and that the newspaper advertisement could only be about some new windows (though some newspapers, such as Extra-M and those that rush to the post newspaper boxes, 3-4 years were only a promotional catalog company in 1001 with plastic windows), so the editor of a limited amount of advertising, and still wanting to get into a hot topic business selling eurowindows hlystali Prices for ads from the higher prices.