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The following article
was written by Coleman Patterson and
appeared in the Business section of the Abilene Reporter-News.
Businesses must be where customers are,
September 14, 2006, 2D.
Location, location, location. When choosing where to set up
shop, this old adage still holds true. Because
organizational survival depends upon regular and profitable
exchanges with consumers, it is critically important that
they locate where their consumers are. Selecting a proper
location, as it will be discussed here, is more complex than
simply finding a storefront on a busy street.
critical that organizations offer their goods and services
where consumers want and expect to find them. A
manufacturing business can be located in a relatively remote
area as long as its goods are offered in locations where its
consumers shop. Things to consider when choosing a proper
location for a manufacturing facility include access to raw
materials and a skilled workforce and the ability to quickly
and efficiently distribute completed goods to consumers.
Restaurants, retail stores, and other organizations that
depend on drop-in customers need to locate in high-traffic
areas, like a mall, which are also typically some of the
most expensive locations in which to operate a business. A
benefit of a highly visible location is a reduced need to
advertise the company’s location to area consumers.
Conversely, organizations that locate away from
high-visibility areas need to spend more money on
advertising to make consumers aware of their presence.
company’s facility requirements are as important as its
geographic location. A specialty apparel shop requires
different facilities than a factory, a tanning salon, or a
veterinary office. An ideal geographic location might be
undesirable if the proper facilities are not available.
Building from scratch or remodeling existing structures
might be needed to make a location ideal.
companies that engage in e-commerce, location is also very
important. Because much e-commerce involves customers
ordering products and companies shipping products, ideal
physical locations for e-commerce businesses are ones near
shipping, delivery, and distribution centers. The challenge
for e-commerce companies is to make consumers on the web
aware of their websites and offerings. Potential customers
do not regularly “drive by” and notice sites on the web like
they do in a town with bricks-and-mortar businesses. On the
web, it is highly unlikely that a significant stream of
interested customers would stumble into a stand-alone
company’s e-commerce website without significant effort
given to marketing and advertising—as with bricks-and-mortar
companies that locate away from high-traffic areas.
e-commerce equivalent of locating in a shopping mall is to
locate on high-traffic websites. Amazon.com and Ebay are
some of the most visited e-commerce sites on the web and
both offer businesses opportunities to establish merchant
accounts and sell products to the website’s shoppers. For
that opportunity, merchants typically pay fees to establish
and maintain their “shops” within the websites and fees on
each item sold. In many cases, the fees paid by companies
to establish and maintain e-commerce merchant accounts
through high-traffic websites are more advantageous than
incurring the costs of establishing and promoting
stand-alone e-commerce websites.
the old adage states, proper location is critically
important for business success—traditional and e-commerce.
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