Can You Escape the Giants in an Online Business?

[James Klymus]

The thing that all of the big businesses have is data. They control the data and no one can take it from them.

The small players, what you are talking about in the post, are the guys who base their data on other peoples platforms. Youtube - your subscribers and videos. Facebook - your lookalike audiences.

These platforms also, obviously, provide reach, which if taken away can cripple your business literally over night.

This is what happens when you build a foundation on sand.

So what should you do? In my opinion, Collect data like the big guys.

Get the emails and or phone numbers from your potential clients and customers. Offer them free value in exchange for an email/number.

You'll have to collect the data, for the most part, from the big companies like facebook and google by advertising on their platforms, but the whole point is to gather data to build your own platform to communicate with your customers, not build your platform ON someone else's platform.

For example, I have seen a few youtubers start creating their own sites and communities where their fans can go and interact. If you have your own website completely separate from youtube, you're pretty much immune from whatever is going on on that platform.

The smart ones also sell merchandise and products on their own stores and collect emails (as opposed to teespring or something like that, where you don't have access to your customers info)

But they leverage another platform to build their own.

YES YES, I understand that you can get banned from these platforms, but I've been advertising on Facebook since 2015 and the only time I've ever had accounts permanently banned, was from breaking their rules.

These platforms are for the smart people who leverage them, NOT just build an audience on them and do nothing with it.

Edit: A good example of this that I just thought of, is this forum. MJ could have made an entrepreneur facebook group in theory (I realize the forum is older than FB groups). MJ has his own platform that he controls. Sure the SEO helps, but he has a platform that could be isolated and still do fine, because he has a lot of data.

 

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[BellaPippin]

Get the emails and or phone numbers from your potential clients and customers. Offer them free value in exchange for an email/number.

I agree with this. I believe MJ also says in TMFL the control commandment is to not put all your eggs in one basket, not just NOT to use them. So you can gather the data but work on building a brand that stands on its own. Have your own website. Attend trade shows or farmer markets etc etc. Be present besides just looking for your audience in these platforms. I think if you lose all your reach because one of them banned you then you did it wrong, gotta adjust.

 

[Matt Sun]

If PPC cost were really low what would you invest in ?

 

[Dami-B]

These are basically channel sources for traffic and there are numerous traffic sources out there, don't let FB banning you stop you from exploring other options.

It's scary when I see people who's total life income is dependent on Facebook ads consulting and they end up getting banned, it's really depressing.

I had a similar issue recently which led to a breakthrough, about 30% of my income was coming from FB ads consulting and then I got banned with no explanation and lost a whole chunk of revenue.

Right there and then, I started working on a new solution that wouldn't be so risky.

Today, my main product is marketing analytics which I sell to companies on a subscription license. One client today for me is worth about 10X my FB ads consulting gig back then, more profitable, more control, less risk, less stressful and more exciting to sell in the market because of the response of potential buyers.

FB ban might just have been the best thing that happened to me this year.

 

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[Redwolf]

I lost a sale a few weeks ago to Amazon (most likely thousands), customer said they found the same product for $2 cheaper!

I'll spend even more to buy on Amazon because the delivery process is fast and hassle free.

More on topic, I use Mailjet to email my customer list - I made a couple of changes to my account and their automated filter flagged my account the other day even though I've been a customer for 7 years. I was trying to send out an email before Christmas to offload some inventory. Now, I'm sitting here waiting for support to unflag my account.

There's always going to be potential roadblocks, no matter what, unless you have your own server hosted in your own datacenter, then someone, somewhere can always flip a switch.

 

[Xeon]

You can escape the clutches of those companies by buying media the old fashioned way: direct mail. Buy lists from SRDS or any other list service, and do mass mailings to aquire the customers email or just sell to them direct through the mail.
You can't get banned from direct mail.

Problem with direct mail is that it's expensive AF. And I'm not sure how much those lists will cost. I assume one would need several thousands or hundreds of thousands.


Side note: I got several of my FB Pages and ad accounts banned. I tried to get workaround that by using different browers and going incognito mode, try it on mobile devices, using VPNs and whatnot. But FB's algo is smart enough to somehow detect it. In the end, I paid a guy who sells FB accounts to create a business Page on my behalf and all I need to do is to upload cookies and login. Good so far.

 

[Pinnacle]

• self-publishing - Amazon controls almost the entire market and people are unwilling to buy books if they're not Kindle books. Consequently, as an author your fate is mostly in the hands of Amazon (particularly in fiction). Whatever changes they make to their platform can ruin your business (been there, done that).
• content marketing (in various ways) - you're dependent on Google (when you want to rely on SEO or YouTube traffic), social media sites, or if you use paid advertising, it's most likely ban-happy Facebook. As for monetization, it mostly comes down to Google (AdSense) or Amazon (Associates).
• mobile apps - Google or Apple (good luck selling your app if they don't like it).
• most product-based businesses - Amazon, who's happy to steal your business if they discover it's profitable.
• podcasts - Apple (good luck growing your podcast if it's banned on iTunes).

It's not that serious.

Self-publishing
Build funnels that sell your books and don't make them available in stores or Amazon

Content marketing
Why do we REALLY do this? Brand awareness? If you need to build an audience, then do this or use conversation marketing on social media or on forums like these. Who controls the traffic is less important than whether traffic exists for your business in the first place.

Mobile apps
Never made one.

Product-based business
Build funnels

Podcasts
Player FM is a free app that aggregates the world's podcasts whether they are on ITunes or not. Don't know why we have it in our heads that Apple is the only game in town. You don't need Apple. I promise. If someone can play an MP3 file on their phone, they're good.

YES, you can escape the giants, but like a J.O.B., they're the gateway to something better for you.

 

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[MTF]

@Pinnacle, you're underestimating the convenience the big platforms offer.

Not even 1% of readers will buy a novel if it's not available on Amazon (or another big platform synced with their e-reader). It's just too inconvenient and most people don't even know they can send files to their Kindle. Non-fiction is a bit easier because some people do read them in PDFs.

Same with podcasts. It's too much work to download an MP3 if you can use iTunes.

 

[MTF]

Find another way, but don’t avoid those channels.

Makes sense, thanks for your insights.

The idea that you need to rely on the big 4 sounds like a limiting belief. You might want to tap into Jay Abraham's stuff, and ask questions like "who already has my clients/customers?"

Guilty as charged. There ARE other options, but you probably need to combine several of them to match the power of the big platform.

Haven't read other replies, but an online model where you don't rely on a platform;

That's a very smart and creative business model.

So what should you do? In my opinion, Collect data like the big guys.

Email lists are definitely helpful, though you're still dependent on Google (deliverability issues with emails going to spam even if you did nothing wrong).

I think if you lose all your reach because one of them banned you then you did it wrong, gotta adjust.

Definitely, though that's very hard in some niches.

Today, my main product is marketing analytics which I sell to companies on a subscription license. One client today for me is worth about 10X my FB ads consulting gig back then, more profitable, more control, less risk, less stressful and more exciting to sell in the market because of the response of potential buyers.

Nice story, thanks for sharing. There might be very lucrative opportunities in looking past the big platforms.

I'll spend even more to buy on Amazon because the delivery process is fast and hassle free.

That's exactly my point. The convenience is worth it and small players often can't offer the same level of service.

 

[Andy Black]

@Pinnacle, you're underestimating the convenience the big platforms offer.

Not even 1% of readers will buy a novel if it's not available on Amazon (or another big platform synced with their e-reader). It's just too inconvenient and most people don't even know they can send files to their Kindle. Non-fiction is a bit easier because some people do read them in PDFs.

Same with podcasts. It's too much work to download an MP3 if you can use iTunes.

If someone has information I want and I can’t buy it on Amazon then I’ve no hesitation buying it from their site. For what I do I would consider a book on Amazon to already be out of date.

 

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[MTF]

If someone has information I want and I can’t buy it on Amazon then I’ve no hesitation buying it from their site. For what I do I would consider a book on Amazon to already be out of date.

Yeah, how-to is an exception, but even in how-to it depends on how badly you want it. There are a lot of books I didn't buy simply because they were only available on paperback with no Kindle version or the author wanted to charge me three times the amount for the inconvenience of buying it directly on his website.

 

[SparksCW]

I lost a sale a few weeks ago to Amazon (most likely thousands), customer said they found the same product for $2 cheaper!

This is because your offer is not as good as Amazons offer so a $2 difference + a better offer = Amazon win. If your website portrayed a much better offer than Amazon then the $2 difference becomes irrelevant.

It's hard, but we have the same issues and generally if we can't communicate that our offer is the best then we'll lose out on price to Amazon.

 

[YoungPadawan]

Problem with direct mail is that it's expensive AF. And I'm not sure how much those lists will cost. I assume one would need several thousands or hundreds of thousands.


Side note: I got several of my FB Pages and ad accounts banned. I tried to get workaround that by using different browers and going incognito mode, try it on mobile devices, using VPNs and whatnot. But FB's algo is smart enough to somehow detect it. In the end, I paid a guy who sells FB accounts to create a business Page on my behalf and all I need to do is to upload cookies and login. Good so far.

It may be a bit more expensive than online advertising, but it isn't too horrible. Like in the US, you can mail a postcard for around $0.38, you could capture their email, and then market to them for free through email. This can be very effective in very competitive markets with very high CPCs.

Plus, according to the Direct Marketing Association, direct mail has a higher response rate compared to any digital medium. Though, that depends on the quality of the leads.

 

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[StrikingViper69]

It may be a bit more expensive than online advertising, but it isn't too horrible. Like in the US, you can mail a postcard for around $0.38, you could capture their email, and then market to them for free through email. This can be very effective in very competitive markets with very high CPCs.

Plus, according to the Direct Marketing Association, direct mail has a higher response rate compared to any digital medium. Though, that depends on the quality of the leads.

I got some of my best clients through direct marketing... depending on your client LTV, it's not to be sniffed at.

 

[ChickenHawk]

This is because your offer is not as good as Amazons offer so a $2 difference + a better offer = Amazon win. If your website portrayed a much better offer than Amazon then the $2 difference becomes irrelevant.

This sounds so logical, but in 99.9% of the cases, this simply isn't how it works in the real world. If you write a book that sells for $3.99, you've very limited in price-competition. But it's not even about price.

Even for authors who have a huge, eager fan-base, very few of those fans will buy books from the author's own Web site. And why? Mostly, it's because one-clicking from Amazon is seamless. In contrast, buying a book from an author Web site means that the reader has to input their credit card info and then go through the hassle of getting the book onto their Kindle (or whatever). And then, they have to worry that their credit card info isn't quite safe. It's a big hassle, at least compared to that seamless Amazon one-click.

Let's say I offer one of my best-selling books for 99 cents on my Web site. If it's for sale on Amazon for $3.99, my readers will STILL buy it from Amazon. And if it's NOT on Amazon? Those readers will simply skip my book entirely and choose something else to read.

Plus, if you sell off your own site, you lose the discoverability that Amazon offers. I have an impressive group of fans. But if I only sold my books to established fans, I'd never make enough to support my family. So "Get new fans," you say? Sure, I do that all the time. But 99.9% of the time, a new fan will not buy from an author's Web site, with the possible exception of how-to books and specialty information items. I once paid $100 for a book directly from the author, but that was because it was highly specialized and available nowhere else. In contrast, my romance novels are a low price commodity.

As we all know, to succeed in the Fastlane, you need to scale. With the vast majority of authors, this is done by selling in huge numbers, volume wise. There is no way on Earth I could replicate that volume on my own Web site, even if it is such a pretty thought.

 

[Walterbl]

Side note: I got several of my FB Pages and ad accounts banned. I tried to get workaround that by using different browers and going incognito mode, try it on mobile devices, using VPNs and whatnot. But FB's algo is smart enough to somehow detect it. In the end, I paid a guy who sells FB accounts to create a business Page on my behalf and all I need to do is to upload cookies and login. Good so far.

Incognito mode does not hide your IP, it only makes it so the data is not stored in your browser.

Where did you find the guy who sells FB accounts?

 

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[John Clancy]

This sounds so logical, but in 99.9% of the cases, this simply isn't how it works in the real world. If you write a book that sells for $3.99, you've very limited in price-competition. But it's not even about price.

Even for authors who have a huge, eager fan-base, very few of those fans will buy books from the author's own Web site. And why? Mostly, it's because one-clicking from Amazon is seamless. In contrast, buying a book from an author Web site means that the reader has to input their credit card info and then go through the hassle of getting the book onto their Kindle (or whatever). And then, they have to worry that their credit card info isn't quite safe. It's a big hassle, at least compared to that seamless Amazon one-click.

I wonder what kind of impact the rise of some third party payment system (like Google Pay, Apple Pay, Amazon Pay) could have on people's reluctance to buy direct from different sites.

If the payment is handled by a trusted third party (I.e. I trust Google, and they'll handle the processing), maybe selling stuff direct via your own site is more viable. And maybe it's almost as seamless as buying something from Amazon itself.

You're still vulnerable. Still reliant on the T & C's of the processor. But perhaps it's more flexible.

 

[ChickenHawk]

If the payment is handled by a trusted third party (I.e. I trust Google, and they'll handle the processing), maybe selling stuff direct via your own site is more viable. And maybe it's almost as seamless as buying something from Amazon itself.

I see what you're saying. But even if you could totally conquer the credit card aspect, it wouldn't change the fact that Amazon's ebook delivery system is seamless compared to anything an author could do. Plus, there's still the factor of discoverability. And volume. Lots and lots of volume.

 

[Xeon]

you can mail a postcard for around $0.38, you could capture their email, and then market to them for free through email.

Sorry, I'm confused : you mean you can capture their email after sending a postcard? Something like you send them a nice postcard, they write their email on it and mail it back?

Where did you find the guy who sells FB accounts?

Google, my friend.

 

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[biophase]

Just to add another comment about this thread. I don’t know why you wouldn’t want these giants out there. You are probably too young to remember the internet without a search engine.

Back in those days you needed to know the URLs or happen upon a page through a link.

What would you do without these giants? You probably wouldn’t have a thriving business right now. Maybe you would be on CDbaby or Books a million. But after finding out they have 1% of the internet traffic you would wish there was a big online site that everyone went to to look for books!

Every business wants exposure and a distribution system. So unless part of your business is distribution you will need someone else.

 

[MTF]

@biophase

The problem isn't that they exist, the problem is how much control they have over everything and how arrogant they are with the rules they force others to follow while ignoring them themselves.

If certain industries are pretty much dominated by one company, it's very difficult to run a healthy business in them. Of course, nobody forces you to do so.

Don't get me wrong, I'm very grateful that Amazon exists as it has changed my life. It just sucks that it's not really a reliable business partner. Then again, why wouldn't they make decisions that favor their business, even if at the expense of others?

The big lesson from this thread for me is to be more creative and look beyond the usual options.

 

[YoungPadawan]

Sorry, I'm confused : you mean you can capture their email after sending a postcard? Something like you send them a nice postcard, they write their email on it and mail it back?



Google, my friend.

So, you could entice them to give you their email by creating a unique URL on the postcard that they would type in online that leads to a free report in exchange for their email. Then, once you have their email, you would market to them through email.

Or, just put in your company's email address to have them email for more information about your product, then you would have their email address. (Or something like that.)

 

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[Bhanu]

I personally feel earlier there were publishers guarding the gates .Now we have tech giants doing the same.(speaking in context of authors)
However present scenario is way better than earlier as we have more options and easy entry .

 

[loop101]

Virtually every online business model I analyzed recently relies to a large extent on one of the giants: Google, Amazon, Facebook, or Apple. It seems like with each year it's getting harder and harder not to base your online business on one of the big companies. Just to give a few examples:

• self-publishing - Amazon controls almost the entire market and people are unwilling to buy books if they're not Kindle books. Consequently, as an author your fate is mostly in the hands of Amazon (particularly in fiction). Whatever changes they make to their platform can ruin your business (been there, done that).
• content marketing (in various ways) - you're dependent on Google (when you want to rely on SEO or YouTube traffic), social media sites, or if you use paid advertising, it's most likely ban-happy Facebook. As for monetization, it mostly comes down to Google (AdSense) or Amazon (Associates).
• mobile apps - Google or Apple (good luck selling your app if they don't like it).
• most product-based businesses - Amazon, who's happy to steal your business if they discover it's profitable.
• podcasts - Apple (good luck growing your podcast if it's banned on iTunes).

This is also visible in other industries such as music where payments from music streaming services like Spotify and Apple Music made up 75% of all US music revenues in 2018.

Let's say I want to start a new online business and can afford to spend some money to promote it. What do I do? I set up a Facebook account to promote it and bam, I'm banned like that for no reason (been there, done that) with no way to get my account back. I choose to advertise on AdWords instead, but with the crazy high CPCs it's extremely unlikely to ever turn a profit. Then maybe SEO? Well, Google doesn't like new websites so it will sandbox you and then a new algorithm update can screw your business overnight even if it's completely legitimate (like Examine.com). Maybe social media? No luck—there was a new update that limited your reach to a fraction of your followers and you need to pay just to deliver new posts to them (and prepare to pay double if you want them to leave the platform and visit your site).

Wherever you turn, there's a gatekeeper who has no issues banning you overnight or changing the way it operates in such a way that your business can be badly hit overnight.

I'm beginning to think that with an online business it's now very hard not to violate the commandment of control. Of course, you can try to diversify yourself, but in many cases there are only two viable options at most and both rely on the giant companies who don't give a damn about you. The smaller platforms disappear or are consumed by the giants and there's more and more power (and less and less interest in an individual) in the hands of the big companies.

Any thoughts? Solutions? Personal experiences? Is it time to move on to offline businesses or do you think they're affected by this problem in the same way? Are there any business models where you can still feel relatively safe with your revenue coming in more equal percentages from many different sources?

I think for complete independence, you need a niche base that you can reliably target, and a product or service that has an element of viralness to it. Shareware programs (PkZip, Doom, etc), watermarked video-editing software, embedded audio ads, etc. Products that create their own advertising, I think MJ has a snazzy word for it. If the product sells itself, you skip a lot of the problems you mentioned, but you still need a core market to get started.

 

[Lyinx]

I bought a book this year for $70 ish or $90 ish dollars (can't even remember the exact number)
Any idea why I bought this book?
Care to guess?
I had a long - term "relationship" with one of the three authors that wrote the book (relationship as in I read his blog/emails/posts for a long time) and I strongly believe the guy is doing good work and knows what he is talking about.
This author himself acknowledged (after I bought the book, I might add) that they had a discussion/argument about what price to sell the book at. He wanted to sell it at $20/book because, you know, basic business sense and all that. They would maybe have made $5 or $10/book max. Selling 1,000 books at $5 profit would be $5,000 in the bank. Divide that by three authors and you come away with $1666/per author.
What they ended up doing (and he apparently didn't like at the time) was sell the book for $70 or $90 per book. Not sure on the number of books sold, but let's say they only sold 100 instead of 1,000 books, their profits would look like this: 100 books x $65 profit = $6,500 divided by three authors = $2,166/per author.
The author said that afterwards he was glad they sold them at that price. I think the largest benefit that he seen was that people thought,"if they sell it for that price, it must be good".

No, I won't tell you who wrote the book, if you bought his book then you probably know who it is, if you didn't then I'm not going to give away his secrets

Moral of the story: sell something high in demand/high quality and you will make out indefinitely better off (or so I thought till I ran the numbers below) as it's always better with numbers, even if you're not always right you always get to learn something

let's re-run the math here:

Physical:
100 books at $75 (cost $15) = $6,000 profits
1000 books at $20 each (cost $15) = $5,000 profits
1,000,000 books at $17.50 (cost $15) = $2,500,000 profits



Ebooks (low hassle, or so I would think)
1,000 ebooks at $3.99 each (cost $1) = $2,990 profits
100 ebooks at $25 each (cost $1.50) = $2,350 profits
1000 ebooks at $25 each (cost $1.50) = 23,500 profits (which allows you to advertise more, might increase costs, but overall better profits)
1,000,000 ebooks at $1.50 each (cost $1 w/advertising) = $500,000 profits

At a certain point, it becomes worth it to lower the price and sell for a lower price. However, if you price the book a lot higher ($70 instead of $10) then you have a lot higher profit margin to use for advertising and you only need to sell to 1/10'th the audience than if you are selling at the lower price (or less than 1/10'th, maybe even 1% of the lower priced book audience would buy the book at that price, but you can target that audience a lot better)

 

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[fastlanedoll]

Wouldn't pure productocracy overcome this?

I'm thinking if you have it, you would only need to advertise a certain amount of times before you have a cult following either by contacts you collect yourself or they come & find you.

Or is that too optimistic?