Leading Web Incubator, IForce Ecommerce LLC, Announces Expansion Plans

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This article details the business model of the web incubation firm, IForce Ecommerce LLC, reviews its upcoming growth plans, and compares its web development philosophy to other firms in its market and its competitors.

While many businesses in today market have initiated or conducted programs for business contraction, one firm in the internet field is experiencing stable and ongoing growth. Based on current demand of its products and services, IForce Ecommerce has announced plans to initiate an additional hiring campaign to further expand its operations, beginning in October of 2012. With current offices in San Diego, Salt Lake City and Hawaii, IForce Ecommerce plans to ramp up its staffing efforts here in United States, especially within the areas of web engineering, content production and product upload work.

While the firm did review proposals from several major India based web development firms to outsource some elements of its web production and product upload work overseas, IForce has concluded that it will increase its own operations internally here in the United States to retain oversight through its operations and to ensure consistent work product quality for itself and its clients.

The firm’s Managing Director Alex Prince states, “as with many comparable firms within our market, the pressure existed to look for lower cost options to reduce payroll and company overhead. We have determined, however, that outsourcing out of the United States may put work product at risk. In short, outsourcing is not for us. We have decided instead, to beef up our own staffing here in our office in the United States so that can retain control of the various aspects of our website development and incubation, and to continue producing best in class work product.”

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IForce Ecommerce LLC has carved out a market leading niche for itself by focusing on the production of niche or mass commerce web companies that are built upon a solid traffic base. The primary bottleneck for the vast majority of web based retail stores, is the production and development of a reliable and consistent source of traffic. Traffic or total number of unique visitors generated, is paramount to the success of any online firm and is a covariant factor with net cash flow and gross revenues. While pay per click, sponsored listings, and outside advertising can augment any traffic strategy, the bedrock of any successful retail store is stable and consistent organic traffic. Prince states, “In many industry’s we are finding new online retailers entering markets with aggressive advertising budgets. Because the advertising rates for any industry is based on what existing retailers are willing to pay for traffic, this has actively driven up the costs for pay per click. This competitive bidding process will put ongoing pressure on inorganic e-tail firms, until many will find that marginal cost of operation will be equivalent to marginal return or that the cost to own and operate many of these store is negative. We perform heavy front loaded investment to avoid this as a potential eventuality.” Prince, a graduate of Cornell Business School and former Graduate Professor at the Gore School of Business at Westminster College, has reviewed hundreds of online models of the years and is well qualified to judge and prognosticate for upcoming trends. Based on industry data examined, pay per click bid rates have been steadily climbing in the last 5 years with some other industry experts anticipating another 20% increase in the next 12-18 months. This will mean a fundamental transformation to the business models for many online companies.

While IForce Ecommerce plans on building out a broader management and customer service capacity in the medium term, its current model has been to develop and then make its stores available to outside investors, “While many web based companies develop their ecommerce sites, and retain them within their portfolio, we have found strong synergy by allying ourselves with private investors who lend a strong retail focus to these sites.” This retail focus could involve enhancing customer service efforts, adding new products, benchmarking pricing against the competition, as well as other retail activities designed to increase conversions. Prince continues, “these types of improvement can often double or triple sales and cash flows when higher conversions are applied to existing traffic. Many of our buyers have seen double digit growth even with the first month of ownership.” This has led to a solid track record with clients and often a waiting list or queue for new clients interested in buying one of IForce Ecommerce’s web sites. Prince has also put a hold on engagement activities for outside clients as part of its historical consulting work to focus on its own portfolio of assets.

According to industry data, global business to consumer e-commerce sales is expected to hit 1.25 trillion dollars by 2013. It is further projected that the total number of Internet users will increase to approximately 3.5 billion from around 2.2 billion at the end of 2011, according to a new report by the Interactive Media in Retail Group (IMRG), a U.K. online retail trade organization. Firms with well developed models will be effectively positioned to capture that growth. Many US based etailers are leading that push by focusing more of their efforts not only on the North American market but also international ones by offering programs for international shipping. The organic strategy to reach that traffic however is essential to the format of these firms to reach these visitors and obtain foreign traffic.

As part of this concern, one of the central strategic advantages of IForce’s model is the incubation format it follows in the production of its sites. This is either derived through heavy front loaded investment over a period of years to build a site up the search engine placements, or takes place through reviewing acquisition based sites using its own proprietary modeling. “As a company we have allocated the bulk of our resources in the incubation of strong authoritative sites that have organic, search engine directed traffic as their base.” This is a critical driver in building in long term sustainability with these companies. This is also one area where the company has further distinguished itself from other web firms. This has further allowed the company to provide or convey the strongest web stores to its clients to propel and support their success. “We look forward to continuing to pioneer new positive relationships with our clients and to further expand our portfolio of web companies as the internet environment for retail continues to evolve.”

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J. Sanders
IForce Ecommerce LLC
800-530-6209
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