The Article is contributed By Lucas Johnson, Associate Vice President, Zippo Global Marketing
The ecommerce industry is constantly evolving, and this year has witnessed several interesting trends. More than ever, brands are creating and improving their ecommerce businesses to become accessible to customers wherever they are. An aftermath of the pandemic, the work-from-home policy has encouraged changes in consumer behavior, driving offline customer footfall to online stores.
Here are few trends which I think will share the ecommerce in the coming future.
A majority of eCommerce businesses are building mobile-first strategies as mobile traffic continues to rise. Mobile peer-to-peer (P2P) payment systems make it easy and convenient to conduct business from smartphones, while SMS (text-based) marketing makes it easier to connect with customers to drive repeat business, provide order information, and reduce abandoned carts.
The real frontier here is personalization. This not only refers to product personalization (“Nike by You”, for example), but also personalized experiences on e-comm sites for consumers. Smart brands are tailoring their owned e-comm content to each consumer based on their buying cues and interests.
People love eCommerce loyalty programs because they reward regular customers for repeat purchases in the form of cash-back, discounts and next-purchase coupons. Loyalty programs provide brands with user data which help them understand their customers’ buying behavior and accordingly curate special offers for customers based on their unique purchase history. These programs help improve the rate of customer retention and contribute to increase in sale.
Trend 3: Social Selling
Social media gave rise to the influencer and their ability to promote brands and products to a devoted audience. Social media platforms are now blurring the lines between e-commerce shops and social media, making it easier for both brands and influencers to convert followers into customers via shoppable posts. Instagram and Pinterest are two strong examples of where social selling is flourishing, but now TikTok takes this a step further with the rise of livestream selling, where brand representatives or influencers offer live, sometimes around-the-clock, video of product demonstrations, testimonials, and exclusive reveals. This new form of selling has taken over China and has begun to appear in other global markets and regions through Amazon Live and other sites.
Growth of Indian Advertising Industry
Trend 4: Sustainability
Driving a business to achieve eCommerce sustainability means building a brand that supports environmentally friendly practices; from green packaging to more eco-friendly shipping. Not only is it the right thing to do for the planet, but it’s a critical concern for many consumers. Going green might help brands expand their market share while helping make the earth more habitable.
Trend 5: Integration within Metaverse and other Gaming Platforms
Meta’s social VR platform Horizon hit 300,000 users – a 10x increase in just about three months. Although it’s not quite ready for advertising and in-world eCommerce sales, that’s coming soon! Many popular global brands are planning to sell virtual, branded goods to consumers via this new age platform. Meanwhile, other gaming systems will open their platforms to eCommerce sales. This is an innovative space that offers tremendous visibility, especially for reaching younger demographics
Brands today are facing a world of opportunity to evolve, with success coming from big and small steps alike. Most successful brands are setting themselves apart by selling direct to consumers while aligning themselves with a broader sensibility. This includes their approach to product development, customer experience, marketing, community building and distribution strategies. It is imperative for e-commerce business owners today, to keep abreast of industry trends to stay competitive and identify new opportunities that will drive growth for the business in the near future.
“We live in a world of advertisements”. This quote is aptly said as it constantly reminds us of advertisements everywhere. They are like gods, Omnipresent. You open a youtube video, an ad appears, you go to social media, an ad appears, you say “F you” to the online world and switch on the television and, yes you are guessing it right, an ad appears.
They are so omnipresent that we now think that they are the reality. Guess, they’re not. Advertisements are all a marketing technique and the purpose is to make a product look like a blessing. It was cool and all until advertisements were manufactured claiming they were ads. In this digital hyper-connected world, we have arrived at a junction where we don’t know what is advertisement and what is not. This article is about marketing that is diffused within other forms of content, especially movies and TV shows. Let us read and see how cleverly we are made-to-believe products.
There are many forms and types of advertisements. We can see examples of ad print media, broadcast media, Online social media advertisements and many more. As technology evolves we tend to see it everywhere. We can see newspapers filled with advertisements, we can see our dish TV filled with all sorts of advertisements. Now, when the world is online, we can see ads everywhere online. They are on our social media timelines, on our Youtube account, on websites we travel and much much more.
Except for every other factor, there is always one thing that is sure. We can immediately tell that we are watching an advertisement when we see one, but this surety is vanishing gradually. Now we can’t really be sure if we are watching an advertisement or an actual real thing that we would like to watch…
Product Placement in Films
What we are seeing is that brands are trying to diffuse brands even in the content we want to watch. Imagine watching your favourite actor Hrithik Roshan saying “I love coke” in a movie, how weird is that? This is a very common trick that brands apply to our favourite types of content. This feels like getting backstabbed. Whatever you can say about it, we can clearly see signs of it everywhere. However, it is a super-risky thing to do but can do very well wonders if done smoothly.
Share of Product Placements
Welcome to the world of “Product Placement”. Where you cannot tell if something is real or it is an advertisement. Brands and movie directors do it so smoothly that it is often left behind in the scenes and no one notices them. In fact, your brain (That smart little organ) does notice that and subconsciously notes it down for future use. Like you see an actor drink ‘Coke’ in a film, you don’t really notice it but your brain does. You will then most probably and most likely order a coke when you go for lunch after that movie. Tweaks like these, here and there, are supposed to make a lot of difference in the long run. Brands are crazy about this and are paying huge sums of money to make this happen as smoothly as possible.
Need for Product Placement
We are going to see some examples to prove the fact that ‘Product placement’ is a real tactic of marketing. The reason for this is that normal people don’t really pay that much attention to these little “stranger things”. Let us see some unnoticed brand placements that only your subconscious mind notices,
No matter your age, a Bollywood movie that almost everyone knows about is Koi Mil Gaya starring Hrithik Roshan and Preity Zinta. The movie is famous for the appearance of an alien named ‘Jaadoo’. Apart from this, the movie makes for a great example of the product placement of Bournvita. In this movie, it is shown that the young Rohit (Hritik’s character) loves to drink his milk with Bournvita in it. In some scenes, he even boasts about it to his friends and also offers some Bournvita to a winning kid in a game.
Koe Mil Gya Movie Scene with Bournvita
Another example from a movie starring Hritik is the Bollywood film “Yaadein”. It was a hit, like all other movies that star Hrithik Roshan. He is an all-time favourite actor in the business. But could you notice Coke’s ‘Product placement’ throughout the entire running time of the movie? This one rigid frame tells the same story, the “Coke in hand” almost everywhere. You might not remember but your brain must have noticed, “Cool people like Hrithik drink Coke”.
The popular movie franchise “James Bond” did it all the time. Since the release of Dr No in 1962, the James Bond franchise has been associated with a number of brands. Many brands came in line to pay for promotions in future instalments for the famous cinema piece. The early films featured Pan-am Airlines and smith and Wesson firearms. The early films feature tie-ins with popular companies like Pan-Am Airlines and Smith and Wesson firearms. The iconic cigar that Bond fashioned is also a very popular brand placement. It is reported that Lark Cigarettes paid as much as $350,000 to feature their brand of cigarettes in Licence to Kill. Besides the aforementioned brands, some of the other popular brands to be associated with the franchise are Microsoft, Gillette, Playboy, Toblerone, 7Up, and KFC.
James Bond with an Aston Martin
Even after we have talked about so much brand placement in the movie, we can still remember the iconic ride of James Bond. It was the luxury car brand Aston Martin that was honoured with bond’s feet on their product. Aston Martin, the luxury car brand jumped at an opportunity to be associated with the British spy. Starting from Goldfinger in 1964, this partnership has endured the test of time.
Benefits of Product Placement
Why does this happen? Why do brands want to create a persona of a famous/popular actor using a brand product as an advertisement in product placement? This is a legit question and it has to be answered.
Social Proof
Social proof is a real thing in the marketing world. It is a social and psychological trick that business people use. Social proof means that people tend to believe whatever fellow people are using without a rationale. That clearly means that if you watch a crowd do a certain behaviour with a certain product, then you are most likely to follow the trend without asking for a reason or a why.
For a quick example, we can take the case of Redbull. Redbull is a carbonated drink maker and the company sells by packaging it as a power drink. The company knew the phenomena of social proof and its drinks were not famous among the masses in India. So what they did was they threw empty cans of Redbull outside every club and pub. This little activity added a lot of value to the brand red bull and made its revenue very high. What the ‘little hack’ did was it took the value proposition of red bull and made it appear “cool” in society. Once it was established that people “who visit clubs and pubs drink red bull”, then everyone started mimicking the behaviour by actually drinking red bull. This small trick can do wonders without even letting people think about what they are actually doing.
Indirect But Subconsciously Strong
As we mentioned before in the article, these types of advertisements are silent and much more effective than regular ones. It is quite evident from the society that we live in. We are most probably a collectivist society and we love to have status to show off. If we see a movie star do something, we are most likely to mimic it. This raises questions about whether brands can pay movie makers to make them do certain activities.
If code is something that scripts machines then it can be clearly said that media is something that scripts human beings. Balaji Srinivasan said in a report that he shared on Twitter that media is what scripts human beings. It is thus, whoever controls the media, controls the mind or can control the mind. Media here is any sort of media, it can be print media, a film, a piece of content on youtube, or anything that can hold attention for a significant amount of time.
Wayne’s world super product placements.
Problems with Product Placement
Imagine being a trusted brand and then losing all the trust that you generated from all the years of hard work. That is so bad but most easy to happen. Imagine cinema and over-the-top content giants selling screen time to brands for product placements. This little rash on the smooth road to great revenues can derail the growth train. People could just boycott anything that feels like backstabbing.
When we watch a movie we don’t think or expect that we will be interrupted by an advertisement or a brand showcasing their product. We go to theatres carefree as we pay for that sort of entertainment. If moviemakers dilute this excitement for us by including ads in the movie then it can most likely spoil the mood of many cinephiles.
However, Netflix clearly mentions that it does not allow brands to show anything or any sort of advertisements on their show, there are many unnoticed instances of them being caught with product placement. Well, according to the reports, Netflix one hundred per cent refuses the question of “Product placement”, and they will never cheat the paying user base. As we know that Netflix is a paid or subscription-based platform and if its users find it selling advertisements to them, this can lead to a huge slowdown. The company always says that it supports and protects user rights and works with dignity, no brand has ever paid anything to Netflix for any sort of product placement.
Conclusion
We know that product placement is a very bumpy ride and can be a huge interruption for a movie or series fan. Moviemakers know it very well. However, if done smoothly and carefully, it will go unnoticed by the audience and it will also make revenue for the brand. Thus, product placement in movies or series can do wonders for a brand, if done correctly.
FAQ
Which TV show has the most product placement?
A study conducted in early 2022 found that the U.S. version of “The Office” was the TV show with the highest number of product placements worldwide.
Does Netflix use product placement?
Since Netflix doesn’t sell advertising, the most common way that brands get into Netflix originals is through product placement. Brands and agencies work directly with the productions to place products in Netflix shows, similar to other streaming shows.
Does Coca-Cola use product placement?
Coca-Cola is one of the most visible brands in Movies and TV. Coca-Cola has a relatively long list of product placement appearances. One of its most obvious plugs is in American Idol, one of the most popular shows on American television that hosts a competition to find new solo singing talents.
What are the 3 types of product placement?
There are many ways of using product placement on TV: it can be physical, virtual, seen but not used, mentioned, contextual or even unbranded.
Small business owners play an important role in the U.S. economy. They provide many of the goods and services that consumers rely on, and they also create jobs. Small businesses are typically defined as having fewer than 500 employees, and they can range from sole proprietorships to large corporations. The benefits of small businesses include flexibility, innovation, and responsiveness to local needs. Small business owners are often more willing to take risks and try new ideas than large corporations, leading to greater innovation. Additionally, small businesses are often more connected to the local community and may provide better customer service than larger firms. Small businesses can help to create a vibrant and diverse economy, and in many cases, they can provide jobs and other economic opportunities for people in underserved communities.
So it is important that this lifeline of the economy lives on and flourishes in the future. If you see a business, you may notice that there always stands a pillar of risk associated with the business. In these scenarios, it is hard to develop the venture to greater heights. However, with the onset of the internet in every sector and using computers to automate processes, there has been some relief. This article deals with some related issues. Issues and resolutions on how to grow business online to increase customer base and sales. a positive online reputation can be a key factor in their decision to do business with you.
The US government has adopted a number of online businesses in recent years, including online payment and banking services, online shopping and e-commerce, telemedicine, online education, and cloud computing. The government has also taken steps to encourage businesses to use and adopt new technologies. The Small Business Administration (SBA) offers various grants and resources to help businesses launch and grow their online operations. Additionally, the Federal Communications Commission (FCC) has put in place net neutrality rules to ensure that all internet users have access to the same content and services. The US has also made efforts to promote the use of digital currency, such as Bitcoin.
On the other hand, a negative online reputation can be damaging to a business. It can discourage potential customers from doing business with you and hurt your bottom line. That’s why it’s important to monitor and manage your online reputation and strive to maintain a positive image online.
The Internet is a network of private, public, academic, business, and government networks of local to global scope, linked by a broad array of electronic, wireless, and optical networking technologies. In short, the internet is something that has connected everyone in the world. This is a pretty amazing thing to see in our lifetimes. It makes everything more accessible.
The internet has changed the way businesses operate on a global scale, allowing companies to reach a much wider audience, create new markets and streamline operations. It has allowed companies to communicate with customers and employees, purchase materials and services, advertise, and access data more quickly and easily.
Internet and Its Relevancy to Business
Well, it is the most relevant thing to the business world. There are endless ways how a business can use the internet to reach its customers and increase revenues. The internet has made it easier to do business than ever before. Business owners can now easily communicate with customers, suppliers, and partners, as well as advertise their products and services to a global audience. They can also quickly access customer and market data, allowing them to make informed decisions. Additionally, payment processing is faster and more secure than ever before, allowing for quick and easy transactions. Finally, the internet has opened up new opportunities for businesses, such as e-commerce, social media marketing, and digital advertising. Let us see how the Internet affects businesses.
Increased Market Reach
The internet allows businesses to reach a global audience, enabling them to expand their market and customer base. If you have more information or data, you can ride the customer’s tide, which is always beneficial to the overall business.
Number of Small Businesses in US
Lower Costs
An internet business eliminates many of the costs associated with a traditional brick-and-mortar business, such as overhead expenses, rent, utility bills, and staffing. Lower costs help the business to earn more premiums and serve the customer in better places to increase customer loyalty.
Increased Profits
The ability to reach a global audience helps internet businesses generate higher profits than traditional businesses since sales can be made around the clock and to a larger customer base with significant margins, profits also rise.
Increased Efficiency
With the ability to automate many processes, an internet business can become more efficient and streamline operations, resulting in better customer service and increased profits. The Internet is efficient, even more, efficient than humans. Making the internet a great medium to use and utilise.
Flexibility
An internet business can be run from anywhere, allowing entrepreneurs to work from home or while travelling. This makes the physical problem of having a business disappear.
Ways to Use the Internet for Business
As mentioned before, there exist endless ways how you can use the Internet for your business. The internet has enabled businesses to collaborate with partners and customers in real-time, regardless of geographical location. Additionally, the internet has allowed companies to use social media platforms to interact with customers, build brand awareness, and increase sales. We are listing some of the most common stuff that you can do to go about it.
Target Audience
Before launching any online marketing campaigns, it’s important to understand the target audience and what their online behaviours are. The Internet offers great help to businesses to understand their audience. The reason we are calling this a great help is that once you get more understanding of your audience, you can tailor-make products and offers for them.
Create a Website
A website is the foundation of your online presence, and it’s important to create one that accurately reflects your brand and values. A website allows a business to reach a wider audience and increase visibility. It can be used to provide information about a business, such as products or services offered, contact information, and company history. A professional-looking website can help build trust with potential customers.
Leverage Social Media
Social media is one of the most effective and cost-efficient ways to reach your target audience and build relationships with them. Social media platforms allow businesses to reach a large audience and increase brand awareness. It allows businesses to interact with customers and respond to their questions and concerns in real time. It also can be used to build a community of engaged customers around a brand.
Utilise Online Advertising
Online advertising can be an effective way to reach potential customers who may not otherwise find your business. Online advertising is a form of marketing that uses the internet to deliver promotional messages to a target audience. Utilizing online advertising can help increase brand awareness and drive website traffic.
Invest in SEO
Search engine optimization (SEO) is an important tool for driving organic traffic to your website. Search engine optimization (SEO) is the process of improving the visibility and ranking of a website or a web page in search engine results pages (SERPs) through organic (non-paid) means. Investing in SEO can help increase the visibility of your website and drive more traffic to your site.
Average Business Owner Salary in US
Monitor and Analyze Data
It’s important to keep track of the performance of your online marketing campaigns and adjust your strategies accordingly. Monitoring and analyzing data is an important step in understanding the effectiveness of your marketing efforts and making informed decisions about future strategies.
Leverage Email Marketing
Email marketing is a great way to stay in touch with customers and generate leads. It is a cost-effective way to reach and engage with customers and prospects. It involves sending targeted, personalized messages to a list of subscribers via email. Some strategies for leveraging email marketing include
Leverage Content Marketing
Content marketing is an effective way to boost brand awareness, build relationships, and drive conversions. Content marketing strategy involves creating and distributing valuable, relevant, and consistent content to attract and engage a clearly defined audience with the goal of driving profitable customer action
Search Engine – Google
It is impossible to not talk about google when talking about the internet. Google is the website that makes all the information in the world accessible to each and every one. The good part is that It also helps businesses grow their online presence.
Let us see how? Google helps online businesses build their presence, reach new customers, and generate more sales. Businesses can use Google’s suite of products and services to create an online presence, advertise to potential customers, and track their performance. Google Ads gives businesses the ability to create and manage campaigns to reach potential customers searching for the products and services they offer. Google Analytics allows businesses to track how their website performs, so they can make changes to improve their website and increase sales. Google My Business helps businesses create a profile for their business and manage their online presence across Google. Businesses can use Google Search Console to optimise their website for search engine rankings, and Google Tag Manager to track user interactions on their website. Finally, businesses can use Google Reviews to interact with customers and get feedback to improve their products and services.
How to Use Google for Business?
This point is not an easy task but it is simple. You should know that Google employs some of the best in class tech to help its business friends. There are many ways you can use to make your business skyrocket with the internet. Here we are listing some of the most thought-out ways of doing so –
Google Ads
Google Ads is an effective way to reach potential customers in the US. Advertisers can target customers in specific geographic areas, as well as by interests, demographics, and more. Google Ads can be tailored to different budgets, and you can measure the success of your campaigns with detailed reporting.
Utilise Google My Business
Google My Business is a free tool that allows businesses to manage their presence on Google Search and Maps. By setting up a profile, you can provide potential customers with information about your business, such as hours, location, and contact information.
Optimise Your Website for SEO
Optimising your website for search engine optimization (SEO) can help improve your rankings in Google Search. This includes optimising content and metadata, as well as building backlinks from other websites.
Leverage Google Trends
Google Trends is a great tool to help understand what people are searching for in the US. You can use this information to create content that resonates with customers, as well as to identify emerging trends.
Use Google Analytics
Google Analytics is a powerful tool that can help you understand how people interact with your website. You can use this data to optimise your website and improve your sales.
How to Improve Online Reputation in Us?
Online reputation refers to the perception of a business or person’s character and trustworthiness based on their online presence. This can include things like their website, social media accounts, and customer reviews. Having a positive online reputation is important for businesses because it can help in lead generation and establish trust and credibility. In today’s digital age, many people turn to the internet to research businesses before making a purchase, and a positive online reputation can be a key factor in their decision to do business with you.
On the other hand, a negative online reputation can be damaging to a business. It can discourage potential customers from doing business with you and hurt your bottom line. That’s why it’s important to monitor and manage your online reputation and strive to maintain a positive image online. Let us see some suggestions that we can utilise to improve our online business perception in the US and elsewhere.
Monitor your online presence regularly and respond to any negative reviews or comments promptly and professionally. This shows that you care about your customers and are willing to address any issues they may have.
Encourage satisfied customers to leave positive reviews on your website and on popular review websites like Yelp and Google My Business. This can help to balance out any negative reviews and show potential customers that your business is trustworthy.
Make sure that your website is up-to-date and easy to use. This will help to create a good first impression with potential customers and make it easy for them to find the information they need.
Be active on social media and engage with your customers. This can help to build relationships and create a positive brand image.
Create high-quality, engaging content for your website and social media pages to attract potential customers and show off your expertise in your industry.
Provide excellent customer service and go above and beyond to make sure that your customers are happy. This can help to create a positive reputation and encourage customers to spread the word about your business.
Be transparent and honest in your business practices. This can help to build trust and improve your online reputation.
Build an Online Presence
With the rising popularity of the internet, businesses are now looking for ways to increase their online presence. This is because having an online presence can help a business reach a wider audience, increase brand recognition, and generate more leads. Here are some effective strategies for increasing your business’s online presence.
Develop a Strong Social Media Presence
Social media platforms like Facebook, Instagram, and Twitter are some of the best places to start building your online presence. With millions of users, these platforms offer businesses a great opportunity to reach a large audience. You can use them to engage with potential customers, post content, advertise your products and services, and build relationships with your followers.
SEO Strategies
Search engine optimization (SEO) is an effective way to make your website more visible on search engine results pages. SEO involves optimising your website’s content and structure to make it more visible to search engines. You can also use various SEO tools to optimise your website for specific keywords and phrases that your target audience is likely to search for.
Online Advertising
Online advertising is a great way to reach a large audience quickly and cost-effectively. With platforms like Google Ads and Facebook Ads, you can create targeted campaigns to reach potential customers who are likely to be interested in your products and services.
Publish Useful Content
Content marketing is a great way to build brand recognition and attract potential customers to your business. You can use content to provide useful information about your products and services, as well as build relationships with potential customers. You can publish content on your website, as well as on other platforms like social media, blogs, and online publications.
Participating in Online Communities
Online communities are a great way to engage with potential customers and build relationships. You can join forums, discussion groups, and other online communities related to your industry, and participate in conversations. This is also a great way to build relationships with influencers in your industry, as well as to learn more about your target audience. By following these strategies, you can effectively increase your business’s online presence. However, it’s important to remember that it takes time and effort to build an effective online presence. It’s also important to be consistent and to monitor your progress regularly to ensure that your efforts are producing the desired results.
Conclusion
Online Business has many advantages for both buyers and sellers. It is a cost-effective way for businesses to reach a larger audience, as there are no expensive storefronts or physical locations that need to be maintained. Additionally, online stores are open 24/7 and can handle a large volume of transactions at any given time, making it easier for businesses to meet customer demands. For customers, e-commerce offers convenience, as they can shop at any time of the day or night, from the comfort of their own homes. Furthermore, customers can compare prices and shop around for the best deals, as well as read reviews and check out ratings of products and services before making a purchase. So shifting to an online medium is both effective and efficient.
FAQ
What are the 5 key elements for building a successful business?
At the core, every business is fundamentally a collection of five Interdependent processes, each of which flows into the next such as
Value-Creation
Marketing
Sales
Value-Delivery
Finance
What is the biggest key to success for a small business?
To succeed in business today, you need to be flexible and have good planning and organizational skills. Many people start a business thinking that they’ll turn on their computers or open their doors and start making money, only to find that making money in a business is much more difficult than they thought.
What are the 7 pillars of business?
The 7 Strategic Pillars Of Your Business
Financial Growth & Stability
Marketing & Visibility
Product Offers & Innovation
Operations & Efficiencies
Scaling & Team Growth
Personal & Professional Care & Development
Customer & Client Experience
What are the 4 strategic pillars?
The 4 pillars of the strategy are Vision, Analysis, Target & Plan. A strategy needs to build on the foundation of an overarching vision that it is meant to achieve. In this sense, it is important to acquire guidance on the vision from the supervisory authorities of the strategy.
California is a state located on the west coast of the United States. It is the most populous state in the country, with a diverse and vibrant culture. California is known for its sunny weather, beautiful beaches, and mountain ranges. The state is home to many iconic landmarks, such as the Golden Gate Bridge in San Francisco, Hollywood in Los Angeles, and Yosemite National Park in the Sierra Nevada Mountains. California has a strong economy and is home to many leading technology and entertainment companies. It is also a major agricultural producer, with a variety of crops grown throughout the state. California has a diverse population, with a large Hispanic population and a significant Asian American and Pacific Islander population. The state is known for its progressive policies and has a long history of social and political activism. Overall, California is a unique and vibrant state with a rich history and culture.
Starting a business in California can be an exciting and rewarding experience. With its diverse economy, skilled workforce, and supportive business environment, California is a great place to start a new venture. However, starting a business in California also comes with its own set of challenges, including high costs and a complex regulatory environment. California offers a number of resources to help entrepreneurs start and grow their businesses. These include business incubators and accelerators, venture capital firms, and business development organisations that provide training, mentorship, and other support.
California is a state located on the west coast of the United States. It is the most populous state in the United States and the third largest by area. California is known for its diverse geography, which includes everything from mountains and forests to beaches and desert regions. The state is home to many national parks, including Yosemite National Park, Sequoia National Park, and Death Valley National Park.
California is also home to a large and diverse population. The state is known for its vibrant culture and is home to many ethnicities, including Hispanic, Asian, and African American communities.
Business Environment
California has a diverse and dynamic business environment, with a wide range of industries and companies operating within the state. The state is home to many Fortune 500 companies and is a hub of innovation and entrepreneurship. One of the main strengths of the business environment in California is the state’s highly educated and skilled workforce. California is home to many top universities and research institutions, which produce a steady stream of highly educated professionals. The state also has a large number of immigrants, who bring diverse skills and cultural perspectives to the workforce.
Newly-Funded Startup in California
California is also home to a number of major industries, including technology, entertainment, and agriculture. Silicon Valley, located in the San Francisco Bay Area, is home to many of the world’s largest technology companies, including Google, Apple, and Facebook. The state is also home to Hollywood, the centre of the American film industry. California is also the leading producer of many agricultural products, including almonds, avocados, and grapes.
Despite its many strengths, the business environment in California is not without its challenges. The state has a high cost of living, which can make it difficult for businesses to attract and retain employees. The state also has a complex regulatory environment, which can make it difficult for businesses to navigate. Additionally, California is prone to natural disasters, such as earthquakes and wildfires, which can disrupt business operations.
Overall, California’s business environment is characterized by its diversity, innovation, and skilled workforce. Despite its challenges, the state remains a popular destination for businesses and entrepreneurs.
The Famous Silicon Valley
Silicon Valley is a region in the San Francisco Bay Area of California that is home to many of the world’s largest technology companies and start-ups. The region got its name in the 1970s when it was home to a number of semiconductor and computer technology companies. Today, Silicon Valley is known for its innovation and entrepreneurship, and it is home to many of the world’s most successful and influential technology companies, including Google, Apple, Facebook, and Intel.
Silicon Valley is a hub of innovation and creativity, and it is home to a large number of technology incubators and accelerators, as well as venture capital firms that fund new technology ventures. The region is also home to a number of research institutions and universities, including Stanford University and the University of California, Berkeley, which produce a steady stream of highly educated professionals who contribute to the region’s dynamic and innovative business environment.
California has a long history of supporting innovation and entrepreneurship, and Silicon Valley is a key driver of the state’s economy. The region is a major contributor to the state’s GDP and provides employment for a large number of people. Silicon Valley has also had a major impact on the global technology industry, and it continues to be a driving force behind many of the world’s most innovative and influential technology companies.
Benefits of Starting a Business in California
Diverse Economy
California has a diverse and innovative economy, which can provide a range of opportunities for new businesses. The state is home to a wide variety of industries, including technology, entertainment and tourism, agriculture, and manufacturing.
Access to Funding
California is home to many venture capital firms and other sources of funding, which can make it easier for businesses to secure the funding they need to grow and succeed.
Talent Pool
California is home to many highly skilled and educated workers, which can make it easier for businesses to find the talent they need to succeed.
Supportive Business Climate
California has a supportive business climate, with a range of resources and support systems available to help businesses succeed.
Tips for Successfully Launching a Business in California
Starting a business in California can be an exciting and rewarding experience, but it can also be overwhelming for new entrepreneurs. Here are some tips for how to get your business up and running in California
Choose a Business Structure
The first step in starting a business in California is to decide on a business structure. Some common options include sole proprietorship, partnership, limited liability company (LLC), and corporation. Each type of business structure has its own advantages and disadvantages, so it’s important to choose the one that is right for your business. Choosing the right business structure is an important decision for any business, and it’s especially important in California due to the state’s complex legal and regulatory environment. The business structure you choose will determine how your business is taxed, how much liability you have, and how much control you have over your business. In California, the most common business structures are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations.
Different Industry’s Share in Market
Choose a Business Name
Next, you’ll need to choose a business name that is unique and reflects your brand. In California, you’ll need to register your business name with the Secretary of State’s office. The name of a business is important because it is one of the first things that potential customers and clients will notice about your company. A good business name can help to differentiate your business from competitors, establish your brand identity, and make it easier for customers to remember and recommend your business. A business name should be unique, memorable, and relevant to your business. It should also be easy to spell and pronounce, and should not be too similar to the names of other businesses in your industry. In addition, it’s important to make sure that the business name you choose is available to use, which means checking to see if the name is already in use by another business and whether it is available as a domain name for your website. When choosing a business name, it’s a good idea to consider the type of business you are starting, your target audience, and the image you want to project. You may also want to consider the potential for growth and expansion, as the name you choose should be able to grow with your business.
Obtain All Necessary Licenses and Permits
Depending on the type of business you’re starting, you may need to obtain various licenses and permits in order to operate legally in California. These can include sales tax permits, business licenses, and occupational licenses. Obtaining the necessary permits and licenses is an important step in starting and operating a business in California. These permits and licenses help to ensure that businesses in the state are operating legally and in compliance with relevant regulations.
One of the first permits that businesses in California need to obtain is a business license. A business license is issued by the local government agency in the city or county where the business is located, and it allows the business to operate within the jurisdiction. Business licenses typically need to be renewed annually.
Another common permit that businesses in California may need to obtain is a sales tax permit. If your business sells taxable goods or services in the state, you are required to collect and report sales tax on behalf of the state. This can be done by obtaining a sales tax permit from the California Department of Tax and Fee Administration (CDTFA).
Professional licenses may also be required for businesses that provide professional services, such as legal or medical services. These licenses are issued by the appropriate regulatory board and are typically specific to the profession. In addition to these general permits, businesses in California may also need to obtain special permits or approvals for certain activities, such as selling alcohol, operating a food establishment, or operating heavy machinery. It’s important to research and obtains the necessary permits and licenses before starting your business in California. Failure to do so could result in fines and other legal consequences. You can use the California Business Navigator tool to help you determine the permits and licenses that your business needs. It’s also a good idea to consult with a lawyer or other business advisor to ensure that you are in compliance with all relevant regulations.
Set up your business finances: You’ll need to set up a separate bank account for your business and obtain any necessary insurance. You’ll also need to decide on a pricing strategy and figure out how you’ll handle taxes.
Create a Business Plan
A business plan is a document that outlines your business’s goals, target market, and marketing and financial strategies. It’s a useful tool for securing funding and staying organised as you start your business. Launch your business: Once you’ve completed all the necessary steps, it’s time to launch your business. This might involve creating a website, opening a physical location, or starting to sell your products or services.
Starting a business in California can be a complex process, so it’s a good idea to seek the advice of an attorney or business coach. Additionally, it can be helpful to connect with other business owners or join a business networking group to get support and guidance as you start your business. A business plan is a detailed document that outlines the goals, strategies, and action steps for starting and operating a business. It is a roadmap for your business and helps you to stay organized and focused as you work to grow and develop your company. To create a business plan, you’ll need to do the following
Define your business: Start by clearly defining your business, including its purpose, target market, and the products or services you will offer.
Conduct market research: Research your industry and target market to understand your competition and the needs and preferences of your customers.
Set goals and objectives: Identify the specific goals and objectives you want to achieve with your business, and outline the steps you will take to reach them.
Develop a marketing plan: Determine how you will promote and sell your products or services, including your target market, marketing channels, and budget.
Create a financial plan: Establish your financial projections, including your start-up costs, revenue, expenses, and profit.
Outline your operations: Describe how your business will be run on a day-to-day basis, including details on your management team, location, and logistics.
Review and revise: Regularly review and revise your business plan as your business grows and changes.
A business plan is a living document that should be updated and revised as your business evolves. It’s important to be thorough and include as much detail as possible, as your business plan will serve as a guide for your business and help you to stay focused and on track.
Challenges in Starting a Business in California
High cost of living: The cost of living in California is generally higher than in other parts of the country, which can make it more expensive to do business in the state.
Complex regulatory environment
California has a complex regulatory environment, which can make it challenging for businesses to navigate the requirements and compliance issues.
California has high state and local taxes, which can be a burden for businesses. Overall, while starting a business in California can be challenging, the state’s diverse economy, access to funding, talent pool, and the supportive business climate can provide many opportunities for businesses to succeed.
Conclusion
In conclusion, starting a business in California requires careful planning and a solid understanding of the legal and financial requirements of running a business in the state. By following the steps outlined above, you can set your business up for success and begin the exciting journey of entrepreneurship. Remember to seek the advice of professionals, such as attorneys and business coaches, and to connect with other business owners for support and guidance. With hard work and determination, you can turn your business idea into a thriving reality in California.
Whether you are a seasoned entrepreneur or a newbie just starting out, it is important to do your research, seek advice from professionals, and be prepared to put in the hard work and dedication required to succeed. With the right mindset and approach, starting a business in California can be a rewarding and fulfilling experience.
FAQ
What is needed in California to open a business?
Choose a Business Idea
Decide on a Legal Structure
Choose a Business Name
Register Your Business Entity
Apply for California Licenses and Permits
Pick a Business Location and Check Zoning Regulations
Register and Report Taxes
Obtain Insurance
Is California a good state to start a business?
Yes, it has the highest number of businesses with fewer than five employees, the highest annual payroll for employees, and the best survival rate for entrepreneurs.
Can a foreigner open a business in California?
You can start a company in California as a foreigner in a variety of sectors but you will need to obtain a business license or permit first. Applying for and obtaining a business license basically means that you have permission to operate your business or transact in the state of California.
Is it hard to start a business in California?
Creating a California business of your own can be challenging. You will need adequate funding, time, personal support, and professional support in order to move forward successfully with your entrepreneurial dreams
Money is a medium of exchange used to purchase goods and services. It has been used as a medium of exchange for thousands of years and is still in use today. Money is essential for most people in order to purchase basic needs such as food, clothing, and shelter. Money is also used to buy luxury items such as vacations, cars, and jewelry.
The value of money is determined by the demand for it and its supply. The demand for money is affected by the level of economic activity, the rate of inflation, and the interest rate. The supply of money is determined by the government, which can increase or decrease the amount of money in circulation by printing more money or buying back existing money.
Money is also used to store wealth. People save money in banks, investments, and other financial products in order to have money available in the future. Money can also be used to borrow money from a lender in order to purchase something that is not currently owned. In this article, we will discuss how you can use debt to make money.
Debt is money owed by one party (the debtor) to a second party (the creditor). Debt is usually evidenced by a contract or a promissory note and can be in any amount. It is usually repaid over an extended period of time with interest. To have debt, you can borrow money from a bank, credit union, or other lender and agree to repay the loan with interest over a set period of time.
You can also take out a loan from a family member or friend or use a credit card to make purchases and pay off the balance over time. Debt is generally subject to contractual terms regarding the amount and timing of repayments of principal and interest. Debt can be secured by collateral or be unsecured.
Robert Kiyosaki is an American businessman, investor, self-help author, and motivational speaker. He is best known for his Rich Dad, Poor Dad series of motivational books and other material. His books advocate financial independence and building wealth through investing, real estate, starting and owning businesses, and increasing one’s financial intelligence. He has a lot to say about good and bad debts.
Key Debt Statistics for US Consumers
According to him, “good debt” is debt that is used to acquire something that will increase in value over time or generate income. Examples of good debt include student loans, mortgages, business loans, and investment loans. On the other hand, “bad debt” is debt used to finance something that will not appreciate in value or generate income. Examples of bad debt include credit card debt, car loans, and payday loans.
Robert defines debt as mainly consisting of two kinds, good and bad. Here we are going to learn how to differentiate between them.
Good Debt
Good debt can be defined as money borrowed to purchase items or services that will increase in value over time. Examples of good debt include mortgages and loans taken for education or starting a business. These debts are considered good because the goods purchased, such as a house or an education, will increase in value over time and can be used to generate income or provide other financial benefits.
Good debt helps individuals build wealth, increase their financial security, and become more successful. When used responsibly, good debt can provide individuals with access to new opportunities and help them achieve their financial goals.
It helps individuals manage their finances better by allowing them to spread out their payments over a longer period of time. Good debt can also help individuals build better credit, which can help them get better rates and terms on future loans. By taking on a smart loan, individuals can build a better credit score, which can open up new financial opportunities.
However, good debt should be managed responsibly and individuals should be mindful of the amount of debt they take on, the terms of their loan, and the interest they will pay. Individuals should only take on debt that they can comfortably manage and that will help them achieve their financial goals.
Bad Debt
Bad debt is a term used to describe debt that a person or business is unable to pay off. It is also known as a “non-performing loan” or “uncollectible debt.” Bad debt is typically the result of a debtor not being able to repay a loan or financial obligation due to either an inability or unwillingness to pay.
When a loan becomes delinquent or a debt is written off as uncollectible, it typically falls into the category of bad debt. This could be the result of the debtor being in financial distress, fraud, or an inability to pay the loan due to some other factor. It is important to note that bad debt is not necessarily the result of a bad decision on the part of the debtor but could also be due to circumstances out of their control.
The consequences of bad debt can be significant, especially for businesses. When debt is written off as uncollectible, it reduces a company’s income and profits, which can lead to decreased financial stability.
In addition, bad debt can affect a company’s creditworthiness, making it more difficult to obtain financing or loans in the future. For individuals, bad debt can also have a significant impact. It can reduce an individual’s credit score, making it more difficult to obtain credit cards, loans, and other forms of financing. It can also lead to increased stress and anxiety, which can have a negative effect on an individual’s health and well-being.
Fortunately, there are strategies that can be used to help manage bad debt. One of the most effective strategies is to negotiate with creditors to reduce the amount of debt owed. Additionally, it is important to keep track of payments to ensure that all debts are paid on time. Finally, it is important to develop a budget and stick to it in order to make sure that all debts can be paid in a timely manner. By utilizing these strategies, it is possible to successfully manage bad debt and improve one’s financial health.
Generating income from debt involves taking out a loan and using the borrowed funds to invest in an income-producing asset. This could include buying bonds, investing in stocks, or purchasing real estate. The income generated from this investment can then be used to pay off the debt. Other ways to generate income from debt include taking out a loan and investing it in a high-yield savings account or a certificate of deposit (CD).
Income generation through the use of debt involves borrowing money and using it to generate income through investments or other business ventures. This can be a risky strategy, as it involves taking on debt with the potential of not being able to pay it back.
Average Credit Card Debt of Top 6 Counties
There are several ways that individuals and businesses can use debt to make money:
Investing with Debt
Borrowing money to invest in stocks, real estate, or other assets that are expected to appreciate in value is a great way to make money using debt. This can be a way to leverage limited capital and potentially generate higher returns. Borrowing money to invest in stocks involves taking out a loan or using a line of credit to purchase shares of stock in a company. The hope is that the value of the stocks will increase over time, resulting in a profit when they are sold. This is known as “leveraged investing,” as the investor is using borrowed money to amplify their potential returns.
For example, if an investor has $1000 to invest and borrows an additional $1000 to purchase $2000 worth of stock, the investor is leveraging their investment by 2x. If the value of the stock increases by 20%, the investor would make a profit of $400 ($2000 x 20% = $400). If the investor had not borrowed any money, their profit would only be $200 ($1000 x 20% = $200).
Start a Business Using Debt
You can also generate income via debt by starting a business. Yes, it has its own benefits to start with little money and use debt to fuel growth. Debt financing allows a business to access capital that it may not have on hand, enabling it to invest in growth opportunities or cover unexpected expenses. It is also often more flexible than equity financing, as it does not require giving up ownership stakes in the business.
You can also expand your current business by leveraging debt to finance investments or expansion; a business may be able to generate higher returns on its capital. However, it is important to carefully consider the risks and potential drawbacks of using debt financing.
Expand a Business Using Debt
Taking out a loan to start or expand a business. If the business is successful, the income generated from the business can be used to pay back the loan and potentially generate additional profits.
Credit Card Arbitrage
Using credit cards to make purchases that can be resold at a profit. This is known as credit card arbitrage and can be a way to generate income, but it also carries the risk of high-interest rates on unpaid balances.
Leverage
Leverage is the use of borrowed money to increase one’s potential returns on investment. It can be used to increase the potential return of an investment, but it can also increase the potential risk of that investment. Leverage can be used to purchase assets, increase the return on existing assets, or hedge against risk.
Benefits of Leverage
Increased Buying Power: Leverage increases buying power, allowing traders to open positions much larger than their account balance would otherwise allow.
Reduced Margin Requirements: Margin requirements are substantially lower when using leverage, which means traders can open larger positions with a smaller account balance.
Increased Potential Profit: Leverage allows traders to increase their potential profit by investing more money than what is initially deposited.
Increased Risk: Leverage also increases risk as it amplifies potential losses just as it does potential gains.
Increased Liquidity: Leverage increases liquidity in the market as it allows traders to open large positions with a small amount of capital.
Harms of Leverage
Leverage’s primary harm is its potential to increase losses. Leverage magnifies both gains and losses, meaning that a small change in the underlying asset can result in a large change in the returns of a leveraged position. This makes leveraged positions more volatile than traditional investments, and losses can quickly spiral out of control.
Additionally, leveraged positions can be subject to margin calls, meaning that traders are required to add additional capital to their positions at short notice or risk having their position liquidated. This can cause significant financial losses in a short period of time. Finally, leveraged positions may incur higher costs due to the additional fees and charges associated with using leverage.
Conclusion
In conclusion, generating income from debt can be a viable strategy for investors. By carefully selecting the right debt instruments and using appropriate risk management techniques, investors can earn a steady stream of income while potentially also benefiting from capital appreciation. However, it is important to note that investing in debt carries risks, such as the risk of default or changes in interest rates.
Thus, as with any investment, it is crucial to thoroughly research and understand the risks and potential rewards before making any investment decisions. Additionally, it may be wise to diversify one’s portfolio to include a mix of debt and other asset classes in order to manage risk. Overall, generating income from debt can be a useful tool for investors, but it is important to approach it with caution and due diligence.
FAQs
What is debt?
Debt is money owed by one party (the debtor) to a second party (the creditor). It is usually repaid over an extended period of time with interest.
What is good debt?
Good debt can be defined as money borrowed to purchase items or services that will increase in value over time. For example, mortgages and loans are taken for education or to start a business.
What is bad debt?
Bad debt is a term used to describe debt that a person or business is unable to pay off. It is also known as a “non-performing loan” or “uncollectible debt.”
What is leverage?
Leverage is the use of borrowed money to increase one’s potential returns on investment. It can be used to increase the potential return of an investment, but it can also increase the potential risk of that investment.
How can I use debt to make money?
There are several ways that individuals and businesses can use debt to make money, like:
Ever wonder what happens behind the scenes of a successful sale? It all starts with understanding the process of selling. Sales are the process by which goods and services are sold. When business and sales are combined, it is possible to create a powerful combination that can be used to drive success.
It is also important to understand the strategies and tactics that can be used to make the most of these two forces. With the right knowledge and understanding, business and sales can be used to generate success in any organization. There is one organization that has taken the principle of sales to new heights. That company is Ikea and is so famous that its tricks are a benchmark in the sales world.
The IKEA effect is a cognitive bias in which consumers place a disproportionately high value on products they partially created. Consumers tend to have greater satisfaction with the products they partially assembled than with the same products when fully assembled by the manufacturer. The IKEA effect is seen as a form of the endowment effect, in which people overvalue things simply because they own them. Shocked by this? There are plenty more business tricks in the belt of IKEA.
IKEA is a multinational group of companies from Sweden that designs and sells ready-to-assemble furniture, kitchen appliances, and other home accessories. It is one of the most popular eCommerce and recognized home furnishing brands in the world. It is famous for its modern designs, low prices, and innovative flat-pack assembly system. The company’s furniture is designed to be disassembled and reassembled easily so that customers can fit it into their homes.
IKEA has become a global leader in home furnishings and is renowned for its commitment to style, affordability, and sustainability. It is also famous for its wide selection of stylish yet affordable furniture, along with its clever and efficient use of space. Products are easily recognizable for their modern, minimalist design, and its reputation for providing quality furniture at a low cost has made it a favourite of consumers around the world.
Additionally, IKEA’s flat-pack furniture, which is designed to be easily assembled by customers, has made it a popular choice for those who want to save money on furniture, as well as those who prefer to build their furniture themselves.
IKEA’s Psychological Tricks
IKEA, like many retailers, uses a variety of marketing techniques to attract customers and encourage them to make purchases. These techniques can include creating a visually appealing store layout, offering discounts and promotions, and using persuasive language in advertising and signage. Some specific psychological tricks that IKEA use are as follows
The IKEA Effect
The IKEA effect is a cognitive bias in which consumers place a disproportionately high value on products they partially created. It is named after the Swedish furniture company IKEA, which sells many do-it-yourself products. The effect implies that consumers typically place a higher value on products that they have invested effort into assembling or creating themselves, rather than products that are sold pre-assembled. This is because they feel a greater sense of ownership or pride in the product they have created.
The IKEA effect named after the Swedish furniture retailer IKEA, which sells many ready-to-assemble furniture products that require the customer to assemble them.
IKEA worldwide Retail Sales Share
Location
Store locations: Stores away from the town centre often have lower overhead costs due to the lower rent and property taxes. Store location is one of the key factors to attract more customers. This allows them to pass those savings on to their customers, resulting in lower prices and more competitive offerings.
Less Competition: Many stores located away from the town centre may have less competition, as most local businesses tend to be located closer to the town centre. This can benefit business owners as it allows them to have a more competitive edge in their local market.
More Space: Stores located away from the town centre often have more space for customers to move around and for the store to be laid out more attractive and organized, which can help boost sales.
Better Parking: Stores located away from the town centre often have more dedicated parking, making it easier and more convenient for customers to park their vehicles.
Better Customer Experience: Stores located away from the town centre may be able to offer a better customer experience with less rushed shopping as there may be fewer customers in the store at any given time.
It is through sales that customers are attracted to a company’s products and services, and it is through sales that a company can generate revenue and profits. It is through sales that a company can increase its market share and gain a larger share of the market.
The Long Maze
The IKEA stores are designed in a labyrinthine fashion, with customers having to pass through several sections of the store before reaching the checkout. This encourages customers to stay in the store longer, exposing them to more IKEA products. The layout of IKEA stores is often referred to as a “maze” design because it guides customers through a series of winding paths and corridors that lead them through the different departments and product displays.
The purpose of this layout is to encourage customers to spend more time in the store and to expose them to a wide range of products. One reason IKEA uses this layout is to create a sense of discovery for customers. By guiding them through different areas of the store, IKEA can showcase different products and create a sense of excitement and surprise as customers encounter new items.
Another reason for the maze design is to increase the likelihood that customers will make impulsive purchases. By leading customers through a series of twists and turns, IKEA can expose them to more products than they might see if they were able to walk straight to the items they came to purchase simply. This can increase the chances that customers will see something they hadn’t planned on buying and decide to add it to their cart.
The maze design is also intended to create a sense of disorientation for customers, making it harder for them to keep track of where they are in the store and how much time they have spent there. This can make it more difficult for customers to make quick decisions and leave the store, encouraging them to spend more time browsing and potentially causing more purchases.
IKEA Global Retail Revenue
Guiding arrows
When you see directions, you relax and give your decision-making skills to the GPS. This is the same with IKEA. Its stores are designed to guide customers through a series of winding paths and corridors that lead them through different departments and product displays. To help customers navigate the store, IKEA provides a variety of directional aids, including:
Maps: IKEA stores typically provide maps near the entrance that show the layout of the store and the location of different departments and amenities. These maps can help customers plan their route through the store and find the products they are looking for.
Signage: IKEA stores use a variety of signage to help customers find their way around. This includes directional signs that point the way to different departments and product displays, as well as signs that indicate the location of restrooms, customer service, and other amenities.
Floor markers: IKEA stores often use floor markers or markings to help customers follow the correct path through the store. These markers may be arrows, dots, or other symbols that show the direction to follow.
Staff assistance: IKEA stores also have staff members who can assist customers with directions or help them find specific products. Customers can ask for assistance at any time if they need help navigating the store or finding a particular item. All these tricks help not only the customers to navigate but also the company to navigate to higher revenues.
Fully closed stores
Customers lose the sense of time while shopping at IKEA. The combination of the store’s layout, the wide range of products, engaging displays, and customer amenities can all contribute to people losing track of time while shopping. The stores offer a wide range of products, including furniture, home decor, kitchen and dining items, and more.
This can be overwhelming for some customers and make it more difficult for them to stay focused on shopping goals. These stores often use visually appealing and interactive displays to showcase their products. Customers may be drawn to these displays and spend more time exploring them, which can cause them to lose track of time.
Listing help
Writing down a shopping list can be a useful psychological sales trick for retailers because it helps customers focus on their specific needs and goals and can encourage them to make more thoughtful deliberate purchases. Some specific ways that writing down a shopping list can be a psychological sales trick include:
Clarifying priorities: By writing down a shopping list, customers can prioritize their needs and focus on the items that are most important to them. This can help them make more targeted, efficient purchases and avoid unnecessary or impulse buys.
Creating a sense of commitment: When customers write down a shopping list, they are more likely to feel committed to sticking to their plan and making the purchases they have listed. This can reduce the likelihood of them being swayed by other items or promotions that they encounter while shopping.
Increasing perceived value: By writing down a shopping list, customers may perceive the items they purchase as being more valuable because they have taken the time to carefully consider their needs and make a plan. This can increase their satisfaction with their purchases and their loyalty to the retailer.
In-house Dining
IKEA offers free meals in its restaurant, which encourages customers to stay in the store longer, increasing the chance of them making a purchase. In-store dining is a common amenity offered by retailers, including IKEA, and it can be used as a psychological sales trick to encourage customers to spend more time in the store and potentially make more purchases. One way in-store dining can be used as a psychological sales trick is by creating a sense of comfort and relaxation for customers.
When customers feel comfortable and relaxed while shopping, they may be more likely to spend more time in the store and explore different products. This can increase the chances that they will make impulsive purchases or simply spend more time browsing and potentially making more purchases overall. In-store dining can also create a sense of community and socialization, which can be appealing to customers. By offering a place for customers to sit and relax, retailers can create a sense of belonging and encourage customers to stay in the store longer.
Another way in-store dining can be used as a psychological sales trick is by providing an opportunity for retailers to upsell or cross-sell products. For example, If a customer is dining in an IKEA cafe, the retailer may suggest that they purchase a particular item or offer them a special promotion while they are there.
Overall, in-store dining can be a useful tool for retailers to create a positive shopping experience for customers and encourage them to spend more time in the store, potentially leading to increased sales.
Mirrors everywhere
Mirrors are a common feature in retail settings, and they can be used for a variety of purposes. One psychological sales trick retailers may use mirrors is to create the illusion of more space in the store. By strategically placing mirrors, retailers can make a small space feel larger and more open, which can be appealing to customers. Another psychological trick retailers may use mirrors is to create the illusion of increased activity or interest in the store. For example, If a store has a lot of mirrors, customers may see reflections of other customers and perceive the store as being more popular or busy than it really is. This can create a sense of social proof, making customers more likely to feel that they should be in the store too.
Retailers may also use mirrors to influence how customers perceive themselves and the products they are considering purchasing. For example, if a customer sees themselves in a mirror while trying on clothes, they may be more likely to focus on their appearance and how the clothes look on them, rather than just considering the clothes themselves. This can make the customer more likely to make a purchase.
Overall, mirrors can be a powerful tool for retailers to use in their marketing efforts, as they can create the illusion of increased space, activity, and self-perception, all of which can influence customers’ behaviour and purchasing decisions.
IKEA color codes its products and store sections to reinforce brand recognition and make it easier for customers to find what they’re looking for. One way that color coding can be used to influence customer behaviour is by creating a sense of order and organization. By using different colors to indicate different categories of products, retailers can make it easier for customers to navigate the store and find what they are looking for. This can create a sense of calm and control for customers, which can make them more likely to make purchases.
Another way that color coding can be used in marketing is to associate certain colors with specific emotions or meanings. For example, Retailers may use the color red to indicate a sale or special offer, as it is often associated with feelings of excitement and urgency. Retailers may also use color coding to create a cohesive brand image by using specific colors consistently throughout the store.
Limited Edition Products
IKEA releases limited edition products to create a sense of urgency among customers and encourage them to buy the items quickly. The principle of scarcity is based on the idea that people value things more when they perceive them as being rare or hard to obtain. By creating a sense of scarcity around a product, retailers can increase its perceived value and encourage customers to make a purchase. They may look like these headings
Limited-time offers: Retailers may create a sense of urgency around a product by promoting it as a limited-time offer. This can make customers feel like they need to act quickly to take advantage of the deal, which can increase the likelihood of a purchase.
Limited quantities: Retailers may create a sense of scarcity by promoting products as being in limited quantities. This can make customers feel like they need to act quickly to secure the product before it runs out, which can increase the likelihood of a purchase.
Rare or hard-to-find items: Retailers may promote certain products as being rare or hard to find, which can increase the perceived value of the product and make it more appealing to customers.
Sold-out items: Retailers may promote products as being sold out or unavailable to create a sense of scarcity and encourage customers to purchase similar or related items.
Smells
IKEA uses the smell of cinnamon buns in its stores to encourage customers to stay in the store longer. It is common for retailers, including IKEA, to use various sensory elements, such as smells, as part of their marketing strategy. The use of pleasant smells in retail environments can be a form of sensory branding, which is the practice of using sensory elements to create an emotional connection with customers and strengthen the brand’s identity.
In the case of IKEA, the use of smells can be an effective way to create a positive shopping experience for customers and influence their behaviour. Some specific ways that IKEA and other retailers might use smells in their marketing include
Creating a welcoming atmosphere: Retailers may use pleasant smells, such as the aroma of coffee or baked goods, to create a warm and inviting atmosphere in the store. This can make customers feel more comfortable and encourage them to spend more time shopping.
Enhancing the appeal of products: Retailers may use smells to enhance the appeal of specific products, such as by using the scent of freshly baked cookies to draw attention to a display of kitchenware.
Triggering memories and emotions: Smells have the ability to trigger memories and emotions in people, and retailers may use this to their advantage. For example, the scent of pine trees may be used to create a festive atmosphere during the holiday season, or the aroma of lavender may be used to create a relaxing atmosphere in a bedding department.
Conclusion
Business and sales can be used to attract customers, generate revenue, and increase market share. In order to be successful in business and sales, it is essential to understand the power of these two forces. IKEA uses a variety of psychological tricks to attract and persuade customers to make purchases. These techniques include creating a visually appealing store layout, using scarcity and loss aversion to create a sense of urgency, and leveraging the power of social proof to encourage customers to follow the lead of others. IKEA uses techniques to create positive shopping experiences and inform customer purchasing decisions, as part of their overall marketing strategy. These techniques are not deceptive or unethical.
FAQ
What is unique about IKEA’s strategy to attract customers?
Using mono-segment, adaptive and aesthetic types of product positioning. The furniture retailer targets a cost-conscious customer segment that prefers to get value for the money they pay. Accordingly, IKEA has adapted as the unique selling proposition of the brand.
What is the Ikea effect in psychology?
The IKEA effect, named after everyone’s favourite Swedish furniture giant, describes how people tend to value an object more if they make (or assemble) it themselves. More broadly, the IKEA effect speaks to how we tend to like things more if we’ve expended effort to create them.
What are the key factors for the success of IKEA?
At the heart of Ikea’s success is value: You know what you’re going to get when you shop at Ikea, and it’s going to be affordable. In fact, price is so important to Ikea’s strategy that the company first decided on the price of a piece of furniture and then reverse engineers the construction.
What is unique about IKEA’s business model?
IKEA uses the services of around 1400 suppliers from over 60 countries. These suppliers form a big chain and also help IKEA in venturing into fresh markets. Additionally, it uses semi-skilled and skilled labour that becomes an integral component of its supply system.
For those who deserve commendations, American Express Co. leads the page! One of the biggest credit companies in the world, American Express has been serving its customers with absolutely free offers and services for ages now.
The company has come a long way ahead of its competitors. American Express gathers its revenue through the transactions made by merchants’ partners along with annual membership fees and interest income.
In the market, there isn’t any potential company that can offer such services and a great formation of cash rewards, hotel upgrades, theme park admission, gift cards, and rental cars. Customers can get these facilities very easily, just by purchasing the essential goods.
American Express is considered remarkable when it comes to customer service and profit revenue. It holds two major sources of revenue, that is merchant partners and cardholders.
Although the merchant fees are quite high with such great rewards programs, no one put its service down. Its rewards program is incredible and brings out tremendous results and a customer base. In this article, we will be discussing the incredible business model and revenue sources of the very prominent credit card company, American Express. Let’s begin!
American Express, also referred to as Amex, is one of the biggest multinational financial services companies in the world. The company is headquartered in New York City, United States.
American Express was founded in 1850 and holds the weight of one component among the count 30 of the Dow Jones Industrial Average. Stephen J. Squeri works as the chairman and CEO of American Express, alongside Jeffrey C. Campbell holds the post of Vice Chairman and Chief Financial Officer.
Forbes mentioned American Express as the most valuable brand in the world with the 23rd position, based on the net valuation of the company worth $24.5 billion in 2017.
By the time of late 2019, American Express carried over 114.4 million cards active among which, 54.7 million active cards were in the United States with average annual spending of $19,972 each.
Later in 2020, American Express was ranked 9th on the list of Top 100 Companies to Work for 2020 by Fortune Magazine. This ranking was based on the survey for employee satisfaction.
American Express actively functions in around 175 countries with a total of 2,300 offices in the world. American Express initiated three major companies, The American Express Bank Ltd. (AEBL), American Express Travel Related Services (TRS), and American Express Financial Advisors.
Key Products and Services of American Express
When it comes to American Express services, the company is very promising. It offers financial, travel, and insurance services to its customers.
Its key products are as follows:
Charge Cards
Traveler’s cheques
Credit cards
Corporate banking
Target audience of American Express
American Express has a huge customer base. The company mostly has affluent customers. American Express targets the customer group that considers business as their biggest opportunity to convert. It targets its audience with great services and reward programs.
Business Model of American Express
There is quite a broad range of customer groups in American Express. The company categorizes its customers into multiple sections including large corporations, small businesses, consumers, and mid-sized companies.
Basically, its business model is a two-sided market that activates the interaction between the cardholders and merchants partners. For its consumers and small businesses group, American Express provides a diverse variety of credit card products and charges, stores value, travel-related, and co-brand cards.
Credit cards: It exemplifies the company’s wide range of payment terms, rate & fee structure, and grace periods.
Charge cards: Cards with no pre-set spending limits. These are primarily designed for payment methods, not for financing purchasing.
Prepaid cards: Payment cards that are pre-loaded with money for later purposes.
Travel services: Offers premium vacation travel along with real-time services provided by the company’s proprietary network.
American Express generates the largest fraction of money through discount revenue streams that exemplify the transactional earnings from merchant partners. Alongside, the company has many other revenue sources including cardholders who are charged with little amounts of fees through annual membership fees, conversion fees, and interests on notable balances.
American Express follows the spend-centric model which aims to increase the total transactions number on its card through specific offers and fewer fees. The major revenue sources of American Express are as follows:
Discount revenues: Generates the largest fraction of money for the company. In this, the company charges little fees from the merchants when a cardholder pays for a purchased item from the merchant’s shop, through their card.
Travel commission and fees: The transaction fees and management fees that are charged by the customers as well as suppliers.
Net card fees: The annual card subscription fees from the cardholders.
Loan interests: Certain interests are earned from cards with notable balances.
Other commissions and fees: Charged on foreign exchange conversions, loyalty coalition-related fees, card fees, and other service fees.
Conclusion
American Express follows a very distinct business model and strategy. The company holds a very strong position in the global market with an immense customer base. American Express sells its products and services through numerous channels such as direct mail, third-party sales, online applications, and others. The company is working towards its global expansion more vibrantly and increasing its consumer base.
FAQs
Who is the founder of American Express?
American Express was founded by William Fargo, Henry Wells, and John Butterfield in 1850.
Who is the CEO of American Express?
Stephen Squeri is the current CEO of American Express.
How does American Express make money?
American Express makes money from interest income, annual card fees, and payment processing fees.
Indian academic Brahma Chellaney coined the term ‘Debt-trap diplomacy’ in 2017. A term used in international finance, it describes a creditor country or institution extending debt to a borrowing nation, to increase the lender’s political leverage.
The conditions of the loan are not made public knowledge and, often, benefit the lender. The borrowed money commonly pays for the contractors and materials that are sourced from the creditor country. The creditor country will then extract political or economic concessions when the debtor country is unable to fulfill its repayment obligations.
Unsurprisingly, the allegations of ‘debt-trap diplomacy’ are commonly associated with China.
China’s “debt-trap diplomacy” refers to the practice of providing large loans to developing countries, often for infrastructure projects, with the alleged intention of trapping those countries in a cycle of debt and dependency on China. The theory is that if a country is unable to repay the loans, China may use that as leverage to gain control over the country’s resources, land, or strategic assets. This has been alleged to be the case in several countries, such as Sri Lanka, Pakistan, and the Maldives. However, the Chinese government denies that it engages in “debt-trap diplomacy” and argues that its lending practices are transparent and beneficial to both parties.
Is China using debt-trap diplomacy to wield its influence around the world?
Allegations against China
China has been under a dark cloud of suspicion for almost a decade now. It’s the ambition to become a global power is not unknown on the international stage.
Brahma Chellaney coined the term ‘debt-trap diplomacy’ to describe China’s predatory lending practices. He alleged that China overwhelms poor countries with unsustainable loans and then forces them to cede strategic leverage to China. It is all a part of a geostrategic game on China’s part.
China’s Development Plan
In the year 2013, China launched one of the most ambitious projects ever conceived. It was the Belt and Road Initiative (BRI). President Xi Jinping launched the initiative as a vast collection of development and investment initiative. It would stretch from East Asia to Europe which would significantly expand China’s economic and political influence. Sometimes, referred to as the second Silk Route, it has been touted as a trojan horse to expand China’s military power.
The President’s vision for the BRI included creating a vast network of railways, energy pipelines, highways, and streamlined border crossings across two regions. One was through the mountainous former Soviet Republics and the other was southwards – to Pakistan, India, and the rest of South East Asia. According to him, such a network would “break the bottleneck in Asian connectivity”.
China also had plans to build 50 special economic zones in addition to the physical infrastructure. Continuing the benevolence, China will also invest in port development along the Indian Ocean from South East Asia all the way to East Africa and parts of Europe – all to accommodate the expanding Maritime trade traffic.
The staggering Chinese ambition and vision for BRI have seen almost 60 countries that have either signed on to projects or have expressed a keen interest in participating.
The Spider-Web of debts and How China Uses it
China has, under the guise of the trillion-dollar Belt and Road Initiative, provided large debts to nations wanting to create infrastructure projects. The catch is that China is eager to lend, without conducting creditworthiness due diligence. In fact, China has been blamed for specifically lending large loans to countries that are resource-rich or have geostrategic locations but low creditworthiness.
China is believed to keep the project negotiations a secret and charge non-competitive prices. Contracts are then awarded to the Chinese government or state-linked contractors that over-charge. All the while, allegations of bribing top leaders in return for infrastructure investments, continue.
1. Sri Lanka
The Sri Lankan Administration and China Merchant Port Holdings Company entered into a contract in July 2017. The contract specified a loan for 1.2 billion dollars in return for a long-term lease on the Hambantota Harbour and 15,000 acres of Sri Lankan territory.
The COVID-19 Pandemic hit the country’s economy hard and, to date, Sri Lanka is battling its worst economic downturn. It has defaulted on most of its foreign debt including China’s loan. China had, earlier, safeguarded its preferences by acquiring a large number of project assets. Hence, in view of Sri Lanka’s inability to pay off its debt, China has grabbed the assets.
2. Pakistan
Already a very weak economy, Pakistan has also borrowed heavily from China and awarded strategic projects to China’s BRI. In yet another setback, China has demanded repayment of approximately USD 55.6 million for the Lahore Orange Line Project. In addition to this, Pakistan owes approximately USD 1.3 billion to Chinese Power Producers.
China has been very stringent in recovering money from Pakistan. Pakistan faces a scenario, similar to Sri Lanka’s economic crisis and China is all set to take full strategic advantage in its bid to spread its power and influence.
Apart from these two countries, other Asian nations like Malaysia, Maldives, and Laos are all in debt to China. All these countries are either resource-rich or have geostrategic locations. They all form a part of the hidden political ambitions of China.
African Continent
Between 2000 and 2014, African countries increased their borrowing from China in a bid to end their dependence on IMF and World Bank. In 2016, African debt to China was to the tune of USD 30 million. The countries which owed the largest debt were Angola, Ethiopia, Zambia, the Republic of Congo, and Sudan.
The Outcome
In the years since BRI has been launched, China has offered loans to various countries, disguised as help. However, in each and every case it has gained tremendous leverage, either in terms of resources or political leverage. One report states that BRI participant countries owed approximately USD 385 billion to China in hidden debts.
Conclusion
China is neither new nor a novice at playing political games on the international stage. Its ambition to grow into a global power is well-known. The BRI initiative is one such addition to its ambition to steadily gain power.
However, the COVID-19 pandemic hit the Chinese hard. It led to a steep decline in China’s loan disbursement program. Coupled with growing skepticism and doubt over the seemingly benevolent Chinese government, many BRI projects are being scaled-down or scrapped by partner states. A lack of transparency in construction and financing, growing cases of corruption and malpractice, and a lack of financial viability have negatively affected the BRI’s image. It is also facing a growing challenge from a strategic security dialogue between India, Japan, Australia, and USA.
In any event, it looks unlikely that the BRI’s glory will return. However, the Chinese government is capable of launching a new initiative with the exact same hidden agenda. Countries and economies should remain vigilant of Communist Countries.
FAQs
What is China’s debt trap?
The term was coined by Indian academic Brahma Chellaney to describe how the Chinese government leverages the debt burden of smaller countries for geopolitical ends.
How many countries are under Chinese debt?
According to Forbes, 97 countries across the globe are under Chinese debt.
Is China in a debt crisis?
China is facing a full-blown debt crisis with $8 trillion at risk as Xi Jinping eyes an unprecedented 3rd term.
Does the US have a debt to China?
China owns roughly $1.08 trillion worth of U.S. debt.
How does China’s “debt-trap diplomacy” work?
The theory is that if a country is unable to repay the loans, China may use that as leverage to gain control over the country’s resources, land, or strategic assets.
Does the Chinese government deny the existence of “debt-trap diplomacy”?
Yes, the Chinese government denies that it engages in “debt-trap diplomacy” and argues that its lending practices are transparent and beneficial to both parties.
What are the consequences of falling into a “debt-trap” with China?
The consequences of falling into a “debt-trap” with China may include losing control over resources, land, or strategic assets, as well as becoming dependent on China for financial support.
Is there any way to avoid falling into a “debt-trap” with China?
Countries can take steps to avoid falling into a “debt-trap” with China by being cautious and transparent when taking loans, and by ensuring that the terms of the loans are fair and sustainable.
Building your own startup is a craze nowadays, people in the USA with innovative ideas are ready to take a risk and start their startup once. But there comes a stage in the journey of every startup when they need huge capital to sustain and boost their business growth, and this is where they start looking for ways to get those funds.
Business loans and Equity fundraising are the two main ways to accumulate funds to start or grow a business. Since both of them have their advantages and disadvantages, as a business owner, it depends on you which one you choose.
To choose the best option from these two, you need to be aware of their pros and cons. For some people, business loans come out to be the best option while for others Funding is the best option. So, here in this article, we mentioned the advantages and disadvantages of business loans and funding. This will give you a roadmap for choosing the best one.
A business loan is a kind of loan which you take from lenders to fulfil your working capital needs. The lender may be a bank, financial institution, or investor. They charge a fixed interest rate on the principal amount of money, after a certain period of time. Interest rates are not fixed and it varies from lender to lender. you might get a loan at a low-interest rate from any lender or sometimes you need to pay a high-interest rate depending on different factors.
Advantages of Business Loan
Flexibility for loan repayment
Paying off the existing loan amount will remove a huge burden from an entrepreneur. You’re more focused on your business growth and management when you are not in debt. Although you’ve taken a loan to fulfil the working capital need for your business, if your business performs very well and you are capable of paying the existing debt, then a business loan has the flexibility to repay the loan early.
Keep in mind that when you pay the loan early, many lenders charge a prepayment fee, which is around 1% of your loan amount. Also, you might miss the benefit of tax exemption on the interest you pay for your loan. So do your math and decide whether you should pay the loan early or not. If the total interest on the loan is higher than the prepayment fee, then you can pay the loan early and free yourself from debt.
Availability of Government scheme for loans
US Government always tries to promote businesses because they give a boost to the economy. The ways are different but the intention is the same, to promote the business. Providing loans to small and medium businesses is one of the ways the American government supports the newly born business.
In 1953, the Small business administration (SBA) was formed in USA to support small businesses in terms of capital and counselling. So you can leverage the benefit of this government scheme to easily get a loan from an SBA-accredited lender. The interest rate may vary from lender to lender based on your credit score and other factors.
Ownership remains intact
One of the most important benefits of taking a business loan is that your ownership remains intact, and there is no dilution of your equity. You have full control of your business and you’re free to take any business-related decisions without the interference of any investors.
You are the decision maker and you don’t have to share your profit with any third-party investor. So go for the business loan if you have faith in your business plan and at the same time you don’t have to dilute your ownership.
Disadvantages of Business Loan
You need to prove your creditworthiness
Everyone wants to earn some money and the same is true for lenders also. They are providing you with the money because they expect some interest in it. so to make sure that they are not giving their money to the wrong person, they see your creditworthiness.
A credit score is the one factor that every lender considers, but at the same time, they also see your assets and your past credit behaviour. Your business plan doesn’t put much influence on the lender because they don’t have to do much with your business, they only need their money back with interest. So you need to prove your creditworthiness to the lender to get a loan, otherwise, you might end up taking a loan at a higher interest rate.
Difficult to acquire a loan
Since you need to prove your creditworthiness to the lender and if your credit score and credit history are not good, then most probably your loan application will be rejected. It is not easy to get a loan at a cheaper interest rate without proper credit behaviour.
Lenders also check your assets, and if you lack in this also, then it’s very difficult to get a loan. You might arrange a loan from somewhere but the chances are the interest rate would be higher than expected.
Lenders have the first right to your assets
Finally! After so much hassle and paperwork, you get your loan money in your hand and you are now using this money to fund your business. But suppose, your business is not performing well and doesn’t meet your expectations. If you are not able to repay the loan in time, then you might be shocked but the lenders have the first right to your assets. They have the right to sell your assets and recover their loan. So these are the few disadvantages of taking a business loan you must be aware of.
What Is a Funding?
Funding is one of the most prominent ways to raise funds for your business in the USA. You have to approach an investor and showcase your business plan. You need to convince the investor that you and your business plan have the potential to convert this startup into a giant company. Once the investor is ready to invest in your business, then they will become a part owner of your startup by owning some equity shares.
Advantages of Funding
No burden of repayment
Equity fundraising comes with many advantages and the most prominent one is – you don’t need to repay the money you’ve raised. By giving equity shares to investors, you basically made them part owners of your company. Hence, if there is any loss in the business, it’s not only your loss but the loss of investors also. Similarly, if there is any profit, then that is not only your profit but also the profit of your investors. Since you don’t have the burden to repay the capital you’ve raised, then you become more focused on your business growth.
Guidance and help from the investor
As a new US-based startup, you might not have much experience with how this startup economy works, here the guidance and expertise of an investor will help you to accelerate your business growth. Since investors have some sort of experience in the field, their guidance and help will act as the cherry on the cake for your business.
You are the one who is responsible for your business, investors don’t only invest their money in your business potential but also in you and your faith in your business growth. They will help you with their valuable advice, but at the end of the day, it’s your business and you have to take care of it.
Increase in the valuation
Whenever you raise money from funding, the valuation of your startup increases simultaneously. The valuation of a company is the clear-cut indicator of business growth, revenue, and size. In different funding rounds, you and the investor agree on a certain valuation of your company based on how your business is performing.
If the business growth is extraordinary then you can ask for a large number of funds by diluting less equity. The higher valuation of your startup will help you in future fundraising and also provide benefits in acquisition and merger.
Disadvantages of Funding
Equity is diluted
In simple words, Equity means ownership, how much you have the right in a company. Whenever you raise money, the dilution of equity shares happens, which will decrease the percentage of ownership in the company. So you need to be conscious that you should not be the minority shareholder in your company, because this is your startup.
Let’s take an example, suppose there are a total of 100 shares in your company and 5 shareholders with 20% each. It means each of them has 20% ownership of the company. Suppose you want to raise money and offer 100 extra shares, and a single investor comes and buys all the shares.
Now understand the new shareholding pattern, the total outstanding share becomes 200. Since the new investor has 100 shares, so he becomes a 50% owner of the company while the other 5 shareholders become 10% each. As you can see, the ownership of the existing shareholders reduces from 20% to 10% because of share dilution.
You need to prove your business potential
To win the trust of the investor and convince them to invest in your business, you need to prove the potential of your business. For example, how your business is different from other businesses in the industry, what is your USP, what is your future plan, and a lot more.
Investors only invest in the businesses where they see growth in their investments. Now it’s your duty to convince the investor that you and your business have the capabilities to generate multi-bagger returns on their investment.
Decision conflicts
When there are more decision-makers in the company, there are chances of conflicts in the decision. Everyone has their point of view, some might agree with your point and some might not agree, hence more decision-makers turn out to be conflicted in their decision-making.
Lengthy and Complex process
The process of equity funding is complex and lengthy because a lot of paperwork goes hand in hand. Before pitching the investor you need to take care of the financial reports of your business that indicates your business performance.
You need to take care of the different compliance before and after funding. It’s better to hire a professional who takes care of all the paperwork and focuses on pitching the investor efficiently so that they become ready to invest in your startup.
Business Loan vs Funding: Which One Is Better for You?
Both options have their advantages and disadvantages as we have mentioned above. Which one is better for you depends on which type of convenience you want, like, if you don’t want any burden of a loan repayment then go for funding but if you don’t want to dilute your equity shares then go for a business loan.
Figure out which type of advantage you want and select the option based on that. Every coin has two sides, if there is a benefit in something then might be they have a certain downside.
Conclusion
The US government always tries to promote businesses with different schemes. Business loans and funding, both are great options. Because you are a startup and creating a foundation to build your empire, so you must choose the option very carefully. If you take care of all the above-mentioned facts into perspective, then most probably you will make a better decision.
FAQ
Is it a good idea to get a loan to start a business?
Loans help your business grow and a business loan will cover the upfront costs of expansion and allow you to make profitable growth.
How much can I get for a startup business loan?
Startup loans typically range from $9,000 to $20,000. Startup loan decisions are made differently from other forms of business financing.
What do I need for a startup business loan?
If you’re starting a business, you need money. So having a strong personal credit score and stable income will help you qualify for financing. A good credit score starts at around 690 to get a loan.
Do you remember the days when you shared MP3 CDs with your friends? Back then, listening to your favourite music was a hassle.
Then came iPod, which changed the way we listened to music.
In 2001, Apple introduced the iPod under Steve Jobs, who transformed Apple from a business on the verge of bankruptcy to a $3 trillion company. On May 10, 2022, almost 20 years after releasing its first iPod, Apple said it would no longer produce the device. But, the iPod touch will continue to sell until supplies run out.
Why did Apple stop producing iPods?
Discover the journey of a whopping 40% revenue share in 2008 to a meager 1% revenue share by 2014 – The success and decline of the Apple iPod.
The Introduction of Apple iPod: A Love Story Between Music and Computers
1999 was the best year yet for the US music industry. Two things were expanding during this period. There were computers in more than 40% of homes.
Additionally, internet usage was multiplying.
People were burning CDs and listening to their friends’ mixes. They downloaded songs from Napster and then bought MP3 players. But they were bulky – gray rectangles that weighed down your purse or pocket.
Apple introduced a portable music player iPod in October 2001. The iPod mp3 player, with a 5GB hard drive, promised to hold 1,000 songs in your pocket. It was easier to use for loading and purchasing music.
Apple offered a physical portable music player compatible with iTunes’ online platform. The iPod allowed users to scroll through songs with their thumbs in a circular motion. People took notice of this easy-to-use control scheme.
Due to its high cost and only being able to be used on iMac computers, the device was received with mixed feelings.
As a result, Apple opened the Itunes music shop in April 2003. The Windows version was released six months later. It allowed customers to start their music libraries for $0.99 per song.
The Sony Walkman had been the standard portable music player before the iPod mp3 player. With Apple’s iPod product, Sony’s device became obsolete since it could only hold 250 songs with no expansion or more storage options. Apple’s device allowed for up 1500 songs on one device alone.
With an iPod, you can listen to only the music you want when you want it. You don’t have to buy the entire tape to listen to the one song you want. You don’t have to wait until you can afford your favorite CD. You can listen to music while doing something else.
Now you have a tool that allows you to change the parameters of the tape and select only songs you enjoy. In turn, it had a ripple effect on the economy and how music was produced.
Apple Taking a Risk With iPod to Achieve Success
In 1999, CD sales accounted for $21 billion in US music sales. But CD players and early portable music players had many issues, including being big and clunky, skipping during playback, and holding few songs.
Apple saw an opportunity to create something small and powerful but needed to know what it was. Until former head of hardware, Jon Rubinstein met with Toshiba at a Macworld expo in Tokyo, who displayed a 1.8-inch hard drive. This small but revolutionary hard drive combined portability and storage.
On October 23, 2001, the first iPod was unveiled.
The iPod underwent design iterations throughout its existence. From a music player with a hard drive to a screenless fob to a scaled-down iPhone. It acquired several other capabilities over time.
The iPod Shuffle had only a few controls. It was called the “radio station” of iPods, making sense by its motto, “Controlling your radio station.” The Nano, Mini, and Touch models followed. The Classic has a scroll wheel and is relatively large compared to its counterparts.
Apple kept the momentum going by introducing the iPod Mini and iPod Nano in 2005. Apple sold 22.5 million iPods in various configurations that year. It doubled its previous record from 2004 and four times the volume moved in 2003.
During its peak, iPods captured 80% of the market share. The true rivalry occurred when cell phones began to get data and MP3 capabilities. The co-creator of the iPhone, Tony Fadell, said that cell phones started to be 2.5G and started to resemble Sidekicks when they began putting on MP3s.
Before Apple introduced the iPod touch in 2007, they offered another device. It was known as the iPhone and included a phone, internet communicator, and iPod music app. It’s not an iPod with an antenna. It allows users to browse the web, make phone calls, and play music.
The above graphs show the global sale of Apple iPod from 2006 to 2014 in million units
In 2008, Apple introduced new iPod models. But the sales started to fall off when the iPhone experienced rapid expansion. There was a gadget with all the features of an iPod combined with a cell phone and internet capabilities.
Apple sold 14.4 million iPods in 2014, down from 55 million in 2008. The iPod only contributed 1.25% of Apple’s revenue that year (2014). Apple stopped making the iPod classic, shuffle, and nano in 2017.
The iPod touch was last updated in 2019. It has stayed popular among kids and app developers as a low-cost iOS device. The upgrades were insignificant, though, appearing more like a feeble attempt to prolong the life of the last iPod.
Conclusion
Apple’s iPod had a massive impact on music. It was the first device to popularize the concept of having music on the go. Although it is no longer for sale, the iPod touch pioneered that now-commonplace ability.
It’s exciting and sentimental to remember what the iPod meant to us. It was an era when you could access music through infinite possibilities of streaming services.
FAQs
Does iPod still exist in 2022?
Yes, iPod does still exist in 2022 as Apple still has an availability of the 7th generation of iPod touch which was first released back on May 2019.
What replaced the iPod?
Some of the devices that replaced the iPod are iPhone, Sony NW-A105 Walkman A Series, Aiworth, M17 Media Player, etc.
Why were iPods so popular?
iPods were popular for multiple reasons. The best reason for it being popular was that no other company was able to introduce such a product in the market before Apple integrated iPods. iPods were way much easier to use and carry. The iPods were connected to iTunes stores for easy services.
Why did Apple stop selling iPods?
Apple slowly declined the production of iPods primarily because of the declining sales rate of iPods. Another reason was the introduction of a device with better abilities being made available in the market by Apple led to the shift in focus of customers that eventually closed the doors for the iPod market.
Dev Gupta
