If you’re wondering ‘What is e-commerce?’, it’s the act of selling physical goods online. If you sell physical goods, then it’s important to have an active internet presence. Consider this:
Online retail sales in 2021 totaled $5.2 trillion worldwide, making up a large portion of global retail sales.
Online retail is growing despite the economic downturn, thanks to the internet’s efficiency. In addition, “high street” businesses are always seeking ways to expand their customer base further.
In the current digital age, it’s a great opportunity for traditional businesses to establish an online presence. What if you are thinking about starting a business that supplies physical goods, but you have not yet done so? Now is the perfect time to consider e-commerce as there is still a lot of untapped potential in this growing industry.
E-commerce will likely explode globally as more people become comfortable with transacting online. So let’s start by considering why taking your business online is such a good idea, and why there has never been a better time to do so than now.
Why E-commerce Works
There are plenty of reasons why starting an e-commerce site for your business makes a great deal of sense for both you and your prospects and customers. There might never be a better time than right now.
Advantages for Businesses
From your business point of view, if you have a way of enabling customers to transact business online through an e-commerce site, you stand to benefit from many advantages.
Firstly, being able to offer your products online instantly multiplies your market reach beyond your neighborhood or city to take in the whole of the country, or even perhaps the whole of the world.
Dealing with the global marketplace is now less troublesome than before, despite potential problems with delivery and online payments.
Global Markets and Online Security
Online payments are now more secure than ever. You no longer need to worry about accepting them for transactions conducted online.
Added to this is the fact that global markets are increasingly open, making it easier to trade across borders. Buying goods from China is now almost as easy as buying goods from a nearby town.
Low Startup Cost
Cash flow is a crucial factor when starting a business. Operating an online business has significant advantages over traditional brick-and-mortar stores or offices.
Launching an online business requires significantly less start-up capital compared to a real-world business. You don’t need to rent premises or fund inventory purchases with bank loans, which can drain your income. While hiring staff is something to consider as your business grows, it’s not a worry in the beginning.
Cost Efficiency and Level Playing Field
All businesses that operate online are playing on an absolutely level field as well. Whether you are the biggest multinational or a small, one-person operation makes no difference as far as your customers are concerned.
They cannot have any concept of how big your operation is from your website (as long as it is constructed professionally), and as long as you operate professionally, the size of your business is irrelevant.
In the real world, customers frequently opt for big businesses over small ones, often due to a mistaken belief that bigger companies offer the most competitive prices and professional services.
Convenience and Quality
E-commerce websites benefit both businesses and customers by opening new markets and making life easier.
Think of it this way. If you have an existing customer who is 10 km from your store, is it easier for them to order the products they want online and have them delivered or for them to jump in their car to come and collect?
How about someone who lives 100 km from your store? Without an e-commerce website, you are missing out on potential customers who may find what they need elsewhere. Having an online presence allows for wider accessibility to your products. They can order online and have the goods delivered to their doorstep.
What you are offering to your customers with an e-commerce site is convenience and a high-quality buying experience. They can do everything at home, without pressure to buy from high-commission salespeople.
Immediate Impact of E-commerce
Having an e-commerce site can immediately impact your sales and marketing efforts as it enables you to reach new prospects from all around the world.
Research carried out by Forrester Research a few years ago also established that setting up and running an e-commerce site is not likely to represent a negative ‘drag’ on your business. What they found in their research was that:
- 64% of small businesses that were selling their products online suggested that doing so had increased their sales and profitability.
- Nearly 50% felt that having an e-commerce site had actively expanded their market reach and customer base within the USA (And remember, this was a few years ago, so it is likely that this figure would be significantly higher nowadays).
- Three out of every four businesses that were selling products online had seen a significant fall in operating costs because of lower essential administration levels.
The Perfect Timing for E-commerce
Here is why I believe there might never be a better time for starting your e-commerce website (or upgrading an existing website so that it can offer e-commerce facilities).
The Digital Generation
Developed Western countries are increasingly reliant on computers as the center of their lives.
Because of what is known as the Web 2.0 ‘revolution’, it is becoming ever more common for people to interact (chat, send instant messages, and so on) with their friends, make VOIP calls to family and colleagues, and to generally rely on a computer to organize their life.
Just as the digital landscape is evolving, so is the way brands present themselves online. Understanding the importance of branding in this digital age is crucial for any business.
Economic Factors
Life is getting harder with no sign of relief shortly. Many people worldwide struggle financially and want to cut costs. Buying online saves money on gas to get to the store and paying additional mark-ups etc.
Running an e-commerce site cuts business costs and allows passing on cost savings to customers, providing a service millions seek. Selling your products from an e-commerce-enabled website is the perfect business model for hard times like these, especially if your business is a B2C type operation that deals directly with the end
customer.
However, even if your business is primarily targeted at the B2B market, you can be certain that many businesses are finding times very tough at the moment as well. If you have an e-commerce website, you can provide improved efficiency and lower prices to the businesses you currently supply, as well as any new businesses that come on board in the future. This will result in happier clients and an advantage over your competitors.
What you need to launch a successful e-commerce site
Minimal Capital and The Right Attitude
One thing that you do not need to launch an e-commerce-based business is a great deal of start-up capital. Starting may only require a couple hundred dollars depending on the type of business.
However, having a business idea and being determined to make it a success are essential for starting a business. To succeed, you must be passionate about what you do and have a positive attitude towards your business.
Choose Your Business Niche
What kind of business are you going to establish? Numerous e-commerce websites exist. What’s your plan?
Consider building a business based on your passion or current experience. For instance, as a nurse, you could start an e-commerce site dealing in medical supplies. You may have connections with suppliers and customers already, so it makes sense to leverage your experience.
Have you ever faced difficulty in finding a suitable online supplier for a particular product? If yes, then there may be an untapped market opportunity for you to explore.
It is also important to understand that starting an e-commerce website is a long-term commitment akin to opening a physical store.
Running an e-commerce-enabled website is a serious business, not something to play with. Although you may not pay monthly rent or employ staff (at least initially), it could be the foundation of a global business empire (yes, really!). Take it seriously from the start. Commitment and passion are about finding something you have wanted to do for many years.
Consider this before starting a business: Will you be happy to pass it on to your children in the future? If not, then you do not have complete confidence in or commitment to the business that you’re thinking about entering. On the other hand, if you would be happy and proud to pass it on to the next generation, then you are likely on the right path.
To start a successful e-commerce business, you need to come up with a business idea or a list of potential ideas. With that done, the next stage is to start planning and researching the market.
