What % of business fail in internet marketing

by szaby
25 replies
Anyone know of any statistics as of how many business fail in internet marketing is it something like the stock market where there is 90%.

Thank you
#business #fail #internet #marketing
  • Profile picture of the author Alexa Smith
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    Originally Posted by szaby View Post

    Anyone know of any statistics as of how many business fail in internet marketing
    How and by whom would such figures be collated? It isn't possible to measure, is it?
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    • Profile picture of the author prem khaira
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      Originally Posted by Alexa Smith View Post

      How and by whom would such figures be collated? It isn't possible to measure, is it?
      EXACTLY! Plus statistics change every freaking millisecond...
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      • Profile picture of the author Dave Everett
        The figure that generally gets bandied about is 95%, but where it originated from or whether it is accurate (doubtful) I don't know. As far as I can tell there is no way to tell unless you carry out a survey with a very large sample size.
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        • Profile picture of the author Steve B
          My career in small business development included tracking business startup information put out by the federal government.

          The statistics were drawn from local business licenses and state business registration data.

          The striking national figures that I remember (which were very consistent from year to year) came out in the Census.

          Only 1 in 5 new businesses survived for a second year (20%). Of those that did survive, only one in 5 was still going after 3 years (4% of the original group). Said another way . . .

          96% of all startups are gone within 3 years. I realize the numbers for Internet businesses are not the same and that tracking them would be nearly impossible.

          That said, it wouldn't surprise me in the least if the same numbers, or worse, applied to IM.

          Steve
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    • Originally Posted by Alexa Smith View Post

      How and by whom would such figures be collated? It isn't possible to measure, is it?
      Agree with you. It is not really possible to measure.
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  • Profile picture of the author Tsnyder
    I doubt even the 90% figure cited in the OP is legit... lol
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  • Profile picture of the author Stevie C
    Like Alexa says 'impossible to measure' and at what stage do you class it as a failing business? I'd say the majority of people who have tried their hand at IM don't get to the stage where they have anything like 'a business' for that business to fail in the first place.
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  • Profile picture of the author brutecky
    I agree with Stevie C who says that most Internet business's where probably never business's in the first place. But I do not agree with the 'its imposable to measure' anything can be measured if you set clear definitions of what you are measuring and take a large sample group.

    I think the answer by Steve B is probably the best one. All business (at least here in the US) have a fairly large failure rate. Failure can be defined as 'the owner stops doing it with the expectation of making a profit'. Im also going to guess that online business's have a even higher failure rate than brick and mortar business. The logic in that thinking is that on online business has a much lower entry barrier so it is more easy to get into. Think about it. If you mortgaged you house and spent $200,000 to open a restaurant your going to work your tail off to make sure it succeeds, but if you spend $12 on a website it is easy to just walk away from it without putting any real effort into making it work.
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  • Profile picture of the author Rod Cortez
    Originally Posted by szaby View Post

    Anyone know of any statistics as of how many business fail in internet marketing is it something like the stock market where there is 90%.

    Thank you
    Nobody really knows this figure, though there are companies who gather this type of information, but as far as how statistically valid it is that is another thing entirely. These numbers are all over the place, depending on which research firm you hit up.

    According to the Internal Revenue Service's 2009 figures an average of 27% of small businesses were still operating after 4 years. And when broken down by industry the numbers were all over the place. If you look at an industry like real estate and finance, 56% of those companies are still in business after 4 years, off course that's not internet marketing.

    Another thing to think about when it comes to "failure rates" is how you define it too. Let's say someone started an infoproduct business and they put in 3 years of blood, sweat, and tears and they made some money, but not to the level that they desired.

    So they shut down that corporation, do some soul-searching and then 8 months later they start a new corporation as an offline SEO service that also builds mobile websites for businesses. That company goes gang-busters and does extremely well.

    The first business wasn't really a failure, but because it got shut down some statistic hound might view it that way.

    People like to cite the 90%, 95%, 98% and 99% failure rates, but really, they're just repeating what they've read from someone who was doing the same thing. According to the Small Business Administration roughly 48% of business start ups are still operating at the 5 year mark.

    To confuse people further, if you were to look up the figures from the Census Bureau and the Bureau of Labor Statistics the vast majority of new business start ups are not operating at the 5 year mark. Hmmmmmmmm..........

    Now let's talk about something a bit more positive. From my own life experience of being in business for myself for nearly 2 decades, the success rate of someone who has clarity, a business plan, tests and tracks their ad campaigns, and has the proper mindset has a 99% success rate.

    People quit business for many reasons. For some, it's pure laziness, they don't want to pay their dues. For others, they cave into peer pressure as family and friends who are not supportive can take a toll on them. For some, they quit because they don't acknowledge what they might be doing wrong or they have character defects such as blaming everyone and everything for their lack of success.

    So don't focus on the % of businesses that fail. Focus on the ones that succeed and emulate what they do, because ultimately, that failure rate figure is meaningless because it's impossible to know why all of these businesses fail and it makes more business sense to focus on the ones that do well.

    RoD
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    • Profile picture of the author JennySweets
      It would be better phrased as "what's the likelihood that a person starting in IM will be gone within 2 years".

      The answer would be, a very high likelihood, because a lot of people give up before they even really have what you could call a business.
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      • Profile picture of the author Quef
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        • Profile picture of the author Spencer Jones
          I don't know...

          But one thing I know... When it comes to internet marketing, it's not the business that fails, mostly it's the people that give up or fail...

          Dr.Spencer Jones
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          • Profile picture of the author salegurus
            Originally Posted by Spencer Jones View Post

            I don't know...

            But one thing I know... When it comes to internet marketing, it's not the business that fails, mostly it's the people that give up or fail...

            Dr.Spencer Jones
            Or maybe some of the over-hyped BS that goes with it? Just look at the ad at the top of this page...

            Originally Posted by zahanega View Post

            Most people in IM fail simply because they give up. Those who do succeed are persistent and constantly learning new methods.
            There are people who have been "learning" for years who still have not made it...

            At the end of the day it's obvious that not everyone is cutout or have the skills to make it but then you can say that about any industry...
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            • Profile picture of the author hipeopo02
              I make money everyday online but want to make more. Am I failing?
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              A crappy product or service by people that disappear from the forum for a long period of time to make it look like they were working on something so when they come back you will want to click on their crappy product or service link

              CLICK HERE! LOL
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        • Profile picture of the author Rod Cortez
          Originally Posted by Quef View Post

          There are no risks if u do everything step by step, using CPA adsense, amazon , clickbank and some traffic from emails
          This is completely untrue, all business endeavors have some inherent risk, no matter how well-planned or if you are following a proven system, though there are things you can do to stack the deck in your favor.

          RoD
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          "Your personal philosophy is the greatest determining factor in how your life works out."
          - Jim Rohn
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  • Profile picture of the author mervp
    The number comes from projecting a symmetry of previously established numbers for offline regular business start ups, sales workers, and new workers in network marketing companies. About ten years ago (sorry I didn't retain the links for this), I saw a SBA booklet stating that the failure rate of new small business was 90% after one year, and 95% by 5 years. SEC filings of a publicly traded MLM company showed that 70% of sales associates made no money after 12 months, 25% made less than $1000, and only 5% made significant money (above $1000) across that time frame.

    Among new independent/individual entrepreneurs in a major sales field (real estate agents or stock brokers, etc) there is a 70% or higher attrition rate after one year, and up to 95% after 4 years, as most find they are not good at it, or not a good fit for the industry. Taken together, in whatever high risk/high reward field, and especially in anything sales related, there is a roughly 95% risk of failure within 1, or 4-5 years. Internet marketing was probably lumped in to this failure rate considering that was the consensus number from elsewhere, where the numbers are more verifiable.
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  • Profile picture of the author Fazal Mayar
    I think the percentage would be high but it would be impossible to measure as like someone else said. A lot of newbies give up because it's a lot of work or either it's too techy for them.
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    • Profile picture of the author RitaWrites
      I bet the percentage is very high but there is no way to know this for sure. Many people start out with IM and soon realize it isn't for them and simply quit. Others think it will be easy and find out very quickly that it is actually hard work and fail, etc.
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  • Profile picture of the author Tim Franklin
    I suspect the more relevant question would be Why do so many Internet Business Opportunities seem to fail so often...
    The answer to that question is lack of Innovation.

    When you see products that claim that someone else made XXXXX amount of money doing something or selling something, the truth is most of the time, its not going to work.

    The reason why is obvious, when you have thousands of people copying something that only worked for a short period of time, (call it shelf life for business concepts) then its only natural that there is no objective way to profit from these types of methods.

    A much smaller percentage of business concepts are successful and it is usually because of Innovation, Timing and Action.

    If you do not have those three things, then failure is the most likely result.

    Success is about hard work, careful planning and good management of your time.

    Just a few things to consider...
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  • Profile picture of the author zahanega
    Most people in IM fail simply because they give up. Those who do succeed are persistent and constantly learning new methods.
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  • Profile picture of the author Mark Pescetti
    Yup.

    People don't fail.

    They give up.

    Big difference.

    Mark
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    • Profile picture of the author DubDubDubDot
      Originally Posted by Mark Pescetti View Post

      Yup.

      People don't fail.

      They give up.

      Big difference.

      Mark
      What about the people who never give up but keep on failing?
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      • Profile picture of the author JennySweets
        Originally Posted by DubDubDubDot View Post

        What about the people who never give up but keep on failing?
        "Success is stumbling from failure to failure with no loss of enthusiasm." - Winston Churchill
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        • Profile picture of the author brentb
          I see lots of internet start ups, in fact I read through big lists of them all the time to see what new stuff is out there. 80+% of them are terrible business models or exact copy cats (ie groupon clone, facebook clone). Of those with a great marketable idea with at least some substantial differentiation, many fail on execution.

          So overall yes, I am sure 96% of businesses won't last 3 years.
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  • Profile picture of the author WillR
    99% of all statistics are made up.

    It depends what you are referring to when you say Internet Marketing. Are you just talking about all of the marketers out there or are you talking about all businesses that use the internet to market themselves? There's a big difference.
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  • Profile picture of the author wfjason
    I personally think that the failure rate should be quite high as most people simply do not have the right mindset when they start this business. Since there is no official stats, I will simply just use Pareto principle where 80% of the people will fail although I feel it will be much higher like 90%.
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