Home-based e-business - an option for the self-employed?

3.4. Services

Hong Kong is services based economy to many, offering services through the Internet is an attractive preposition. A broad range of services are available through the Internet nowadays e.g. financial, medical and legal advice, stock brokering, real estate, travel, web design and secretarial services. Needless to say, not all of these opportunities are suitable for everyone who wants to start a home business. Some require a large amount of investment whereas others require highly specialized skills. However, even if one does not have any professional knowledge or capital or connections to a particular service industry, it is still possible to enter the business through re-seller schemes. In this section, two different home business opportunities will be examined.

When choosing a service business, it would somehow limit your income potential. First of all, you have to spend most of your time completing the chores you're offering your customers. This leaves very little time for advertising. However, if you want your business to grow, promotion should always be your main concern. The second reason is that you'll have limitations on the number of customers you can handle. If you hire people on the job, you will have to train them so that they can offer the same level of service to your customers.

3.4.1. Travel Agency in a Box

This program is offered by Global Travel International (GTI) [16]. One can act as an outside agent when he is paying a joining fee of US$495 (the annual renewal fee is US$99). GTI would provide you with a training manual and most importantly, a photo ID with Global's IATAN number. (IATAN stands for the International Association of Travel Agents) . This number can earn you discounts on hotels, car rental agencies, cruises, and commissions on airline travel. An outside agent can earn up to 50% GTI commission plus steep discounts on his own travel packages. Agents can also receive a referral fee between $100 to $150 per each referral depending upon the current promotion for every new agent that he refers. It is claimed that with Travel agency in a box package, anybody can become a full-time travel agent. The independent agents do not carry out any actual booking themselves, all orders are referred to 120 full-time consultants in one of several departments such as domestic travel, international travel, cruise, packages and tours, group and meeting planning, and corporate travel.

Although touted as a potentially profitable home-based business. It is very difficult to make a decent amount of money. Besides the high joining fee, each agent has to pay an annual renewal fee (US$99). According to an article in the New York Times [35] on October 24, 1999, only four agents have earned more than US$5,000 in 1999, roughly 1 in 6,500. Therefore, this program is more suited to owners of small and mid-size businesses who wish to cut down the traveling costs for their staff. Indeed the biggest customers are often the agents himself, his friends and family. Therefore it appears that Travel Agency in a box operates in a similar manner to Vshop, where many members end up being the customer. (GTI)[16] accepts application all over the world. At present, it employs some 40,000 agents in 21 countries. However, since this is a US based company, it may not be able to offer the same discount for travel package outside the country. This is surely a disadvantage to overseas agents. Nowadays, because of the keen competition, the prices for some advance-purchase fares inside US (available to anyone) are already lower than the prices from the GTI. (The New York Times on October 24, 1999 ).

3.4.2. Web Hosting Re-seller

Web hosting re-selling is often touted as one of the basic stepping-stones into a home-based e-business. It allows anyone to enter this fast growing market without having to make expensive and highly risky investments in buying servers and data centers, and be involved in the upkeep of the equipment By signing up as a reseller, one is able to start a web hosting company quickly. Most of the time, it is not possible for prospective customers to know whether he is buying web space from a reseller or not. Web hosting services are often offered in conjunction with allied services such as search engine submission and web site design that could bring in extra revenue.

There are lots of re-seller plans for one to choose from in the market, and the prices are highly variable. Some hosting companies may charge a fixed fee for a fixed or unlimited number of domains, whereas others charge a fee for each domain. The choice should be made carefully because it could bring disaster should the need arise to switch to a different hosting company. All your clients' data may be affected or lost during the transfer. Moreover, your clients will not be amused if their site goes down regularly. Some web hosting companies such as donhosts.com [10] and fasthosts.com [15] offer unlimited domains, unlimited web space, and unlimited e-mail accounts for a very low fixed monthly fee of GBP 35-49. In theory, these accounts offer unlimited potential for profit: a reseller based in Hong Kong would be able to undercut the prices charged by all local web-hosting companies. However in practice, there have been a lot of complaints about their services and business practice. Accounts are often shut down suddenly without notice because the hosting company felt that the account was consuming too many resources. In order to have the account re-opened again, the reseller is asked to pay an exorbitant fee. A more reliable bet would be reseller schemes that offer much less on paper but ones that guarantee a 99.99% uptime. However, the potential profits would be much less. Therefore it is quite true that one gets what one pays for in purchasing reseller schemes.

 In selecting a web hosting re-seller program, there are two major criteria other than price, capacity and speed, these are the up time guarantee and the technical support. If your clients' web sites are always down, it will surely affect their business and lead to dissatisfactory. Web hosting companies that can provide an up time guarantee are more reliable and can save its re-sellers a lot of potential trouble. Since web hosting is a service business, it will inevitably get a lot of customers' requests and inquiries. If you are a re-seller with little technical knowledge in this field, it is better to choose a main host that can offer 24 hours technical support. Some host can even provide an unbranded support center where they can answer all technical inquiries directly from the end users. One should also be aware of the fine print in any re-seller agreement, such as restrictions on the web sites that can be hosted, bandwidth use, and the right for them to terminate any account without notice.

Summary

There are many e-business opportunities available for home businesses. They are broadly be divided into joining affiliate programs, selling physical products, selling soft products, and services. The requirements of which vary widely depending on the particular business. In the following chapter the essential components that goes into a successful e-business will be examined and discussed with regard to the different types of e-business opportunities.