Why you should have a online store
If you have a business that sells physical goods and that business does not yet have an active internet presence, consider this. In 2008, online retail trade turnover in the US measured somewhere around $230 billion, which represented some 10% of total US retail sales!
Even with the recent economic downturn, the percentage of retail trade that is transacted online is set to keep growing throughout the commercialized world as the internet becomes more sophisticated and efficient, while ‘high street’ businesses are constantly on the lookout to expand their customer base still further.
In fact, if you have a real world, ‘bricks and mortar’ business that is not represented online, there has never been a better time to get your business online. Even if you already have a web site, unless you keep abreast of the latest online business trends and thinking – and you are probably too busy running a business for that – the chances are that your site is not doing what it should do.
What if you are thinking about starting a business that supplies physical goods, but you have not yet done so?
Once again, there could be no better time to think about doing so (and therefore no better time to be reading this book) because despite the phenomenal growth of online business over the past few years, we are only scratching the e-commerce surface at the moment.
There seems little doubt that in the next few years, there is likely to be a global explosion in e-commerce as potential consumers become more accustomed and comfortable transacting business online.
There is an awful lot to think about when you are considering taking your business online, an array of questions and alternatives that you need to address before diving in. This is a given, but it is not something that you need be too concerned about, as I am going to analyze and discuss these aspects of e-commerce as we move through this book.
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, and why now more than ever…
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. From your own business’s 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.
While there are some potential problems in dealing with the global marketplace – arranging delivery, accepting online payments and things of that nature – these problems are far less troublesome nowadays than they were even a couple of years ago. Online security is better than ever, so whereas accepting secure online payments for transactions conducted online might have given you cause for concern in the past, it should no longer do so because online payment systems have improved since those times.
Added to this is the fact that global markets are becoming inherently more open, meaning that it is becoming more normal for people to trade across borders. Nowadays, it is not that much more difficult to buy goods from China than it is to buy goods from a town 20 km down the road.
If you are thinking of starting a new business, then cash flow is always an extremely important consideration, and once again, operating an online business has significant advantages over running a business from a high street store or an office in a tower block.
Firstly, in contrast to running a real-world business, you do not need significant amounts of start-up capital to launch an online business. There is no need to rent premises (removing a drain on your income), you do not need bank loans to fund inventory purchase (another cash drain) and staff are for the most part something that other people need to worry about (although taking on staff once your business starts to generate an income is certainly something that you will need to consider).
As a general rule, most businesses that sell their products online will get paid more quickly when they do so than if they were trading locally. This makes a good deal of sense, because in many situations, if you are dealing outside your locality or even outside your country, you’re not likely to release the goods until payment is received, but if you are trading locally, it is probably far more common to extend credit terms to your customers.
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.
This is noticeably different from the way it works in the real world, where customers will often deal with big businesses rather than small ones because of (an often misguided) belief that by doing so, they are getting the best prices and dealing with the most professional operators.
However, it is not only your business that will benefit from your e-commerce enabled website, because as well as opening up markets that you had no way of accessing before, it also makes life far easier for your existing customers.
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?
If you have no e-commerce website, those people are never going to become your customers, because between you and them there are likely to be lots of places where they can buy what they need – but now, they can do exactly the same as your local customers. They can order online and have the goods delivered to their door.
What you are offering to your customers with an e-commerce site is convenience and a high-quality buying experience.
You are allowing them to do everything in their own time from the comfort of their home, while also ensuring that they are not put under any pressure to buy by some high-commission salesman.
There is another extremely important aspect to this as well.
One of the most amazing aspects of having an e-commerce site is the ability of that site to impact on your sales and marketing efforts almost immediately.
Because web-based sales recognize no national or international boundaries, you can publish your e-commerce site on the net today, and have new prospects approaching you from the other side of the world tomorrow.
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.
Here is why I believe there might never be a better time for starting your own e-commerce website (or upgrading an existing website so that it can offer e-commerce facilities).
With every passing generation, the populations of most developed western countries are becoming more and more comfortable and familiar with the computer as representing the centre of their life.
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 via the computer, make VOIP calls to family and colleagues through the computer, and to generally rely on a computer to organize their life.
There is another thing here, something that is very specific to the times in which we live. For most people, life has got significantly more difficult over the last year, and unless there is some worldwide economic miracle very soon, this is not likely to change in the foreseeable future.
In short, there are millions of people all over the world who are struggling financially, and as a result, they are looking to cut costs in any way they can. What better way could there be of cutting costs than buying online, negating the necessity to spend money on gas to get to the store, paying additional mark-ups and so on.
We have already seen from established research that running an e-commerce site helps you to cut the costs of running your business, and by passing on some of those cost savings to customers, you can provide exactly the kind of service that millions of potential consumers are desperately looking for.
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 there are many businesses that are finding times very tough at the moment as well.
If you are in a position to offer the businesses that you currently supply (and any new businesses that come on board in the future) improved efficiency and lower prices because you have an e-commerce web site, you can be confident that they are going to be happier dealing with you than they are with any of your competitors.
For all of these reasons and perhaps contrary to popular thinking, I would suggest that there has never been a better time to establish an e-commerce enabled website.