Don’t Keep All Your Eggs In One Basket

I have told my customers for years to diversify their chosen providers of domain names… web hosting services… development services & other internet related services.  This simple concept can be applied to many more facets of your business though.  In this post I would like to offer some advice on this concept as well as give real world examples of what can happen when much of your online presence is tied to one service provider.

Secure The Control Of Your Domain Names
I can not stress this enough.  There are some providers who may offer free domain registration in exchange for design… ecommerce or other services.  Do not fall for this gimmick… instead choose an ICANN approved registrar and register all of your domains there.  There are many registrars which will register domains for around 10 dollars a year or lower and will provide a control panel which gives you full control of your domain name’s contact information and DNS records.  The low price that you pay is worth it to ensure that you can easily move your website if you decide to go a different route in your business.

Be Wary Of All-In-One Hosting & Design Services
Although my company previously offered both development & hosting services in the past… I now recommend to keep these services separate.  Although it may be convenient to have one company handle both of these needs… you must always look at the possibility that unhappiness with one of those services will transcend to unhappiness with the other service.  Many website developers also offer hosting services and some developers even require that you host your website with their company.  The majority of the time a person is better off finding a larger reputable host with 24-7 support than hosting the site through the developer.

Multiple Revenue Streams
The concept of keeping all your eggs in one basket can also be applied to revenue sources.  This year our struggling economy has taken its toll on nearly everyone.  If your entire web presence is based on the sales of one line of products or one type of service offering… your business will be in dangerous times if what you are offering is not considered a necessity due to the economy or other reasons.  Even in a booming economy… if your main line of products is a seasonal line of products such as baseball equipment or a seasonal service such as lawn care… you should find other lines or other services that can be offered to customers when your primary line is not in demand.

I’d like to offer 3 real world examples of the concepts that I have mentioned…

  • From the years of 2000 to 2004… I worked as the main web developer for a web hosting company.  It was during this time that I learned the value of good domain names.  The first domain names that I registered were done through the company I worked for… and at time I did not know very much about purchasing domain names as investments.  My relationship with this company ended due to a dispute over the direction of the company as well as other reasons… and it would be correct to say that it ended in a very heated & negative way.  I had major issues in the next month after leaving the company when I tried to transfer the domain names that I owned and had rights to.  The owner of the company would not approve the registrar requests to transfer the domains and I was stuck.  Luckily… I still had a friend within the company who approved the transfers of the domains… unbeknownst to the owner.
  • Just recently… I was involved in a similar situation in regards to transferring domain names for the main company I work for now as my dayjob.  This company was using an all-in-one ecommerce system provided by a company that shall remain nameless… so lets just refer to them as Company Z.  One of the owners of the company had worked for Company Z for many years in a relationship that was mutually beneficial to both parties… and one of the perks of the job was free domain registrations.  After building a new system for this company… we planned to move our website on a certain date and then problems with moving the domain off Company Z’s system began.  We experienced blatant lies about dns changes that were never made… derogatory heated emails attacking the character of our entire company and other childish actions.  We then realized that we were getting nowhere with Company Z.  We finally had to go over their heads and go direct to the actual registrar of the domain names & prove that we owned the domain name in question in order to get anything at all changed.  A process that should have taken less than 5 minutes ended up taking up nearly a week to get straightened out.
  • An example of multiple revenue streams in action comes from my own business in the last year.  During the years of 2007-2009… one of my main revenue sources was affiliate marketing.  My company owned a network of affiliate stores which would showcase products from various merchants and then send the customer to the merchant’s website to complete a purchase… giving our company a percentage of the sale.  We did very well in this venture until the middle of 2009 when the state of North Carolina passed an affiliate nexus tax which seriously decreased the amount of revenue that our company could make from affiliate sales.  Internet companies usually do not have to charge sales tax on purchases if they do not have an actual location in that particular state.  The affiliate nexus tax was worded so that affiliates of a company are considered to be a sales force in that particular state and the merchant would have to charge sales tax.  Amazon was one of the first merchants to oppose this ruling and decided to cancel all affiliates in states that passed the affiliate nexus tax instead of paying sales tax on those sales… and many other larger merchants followed.  My affiliate revenue started dwindling down immediately following this law being passed.  Luckily… my company was already running our own network of stores selling our own products so we converted some of the better affiliate based sites into actual merchant sites selling products from our own inventory.  Had our company’s only source of revenue been based on affiliate marketing only… our company probably wouldn’t still be online today.

Comments Closed