As technology continues to advance, the trading mindset has started to shift towards online marketplaces becoming more and more dominant and many traders want to enter the vast realm of e-commerce. While the simplicity and ease of launching your own website may be appealing, actually being successful is much more difficult. Many newcomers to the online marketplace often misunderstand or underestimate costs, competition, time, and the need to practice fundamental business practices.
Entering the industry, marketers often fail to understand their target market, including what the buyer wants along with their motivations for purchasing the product. As with any business model, it is extremely important to do extensive market research to understand who to target before entering. You can launch a site with a compelling product and content, but still be virtually ignored if you didn’t fully understand the consumer.
Competition within the marketplace creates numerous barriers that can affect the potential success of a new eCommerce website. While there are few to no barriers to entry, the main challenge is gaining a piece of market share among other popular and well-established companies. In addition to the need to anticipate these barriers, it is also important to anticipate the competition’s response to the entry of your new company. These problems can be alleviated with in-depth market research and competitive analysis before entering.
While creating a website to launch a business can be easy, many underestimate the many initial start-up costs. One might think that these costs will be substantially lower because it’s online, but that doesn’t take into account how much it may actually cost. Hiring a web design company to create an A+ store front can typically cost $2,000 up to $10,000. Additionally, you should consider the cost and time involved with product management data entry. Hosting costs should also be taken into account, depending on your websites traffic, this should range from $20 to $50 per month for you, our virtual private server.
Perhaps the most expensive and most overlooked cost is merchant services, or the cost associated with accepting credit cards from your website. Typically, you’ll need to spend 2-5% of your earnings plus transaction fees to be able to accept credit cards Visa and Mastercard from your website. If customers decide to refund or refund a product, there will be more fees involved.
The process and timing that a new business implements are equally important, but are often ignored or unplanned for. Starting any business, whether online or in a physical location, requires a strong plan and process to be in place and followed in order to be successful.
As in other business models, it is extremely important to consider a team of employees who are knowledgeable about the overall plan and mission of the company. Sufficient communication to subordinates about the planned process and the time needed to achieve those goals creates vital intrinsic value in employees. New businesses need to understand that profits may need to take a backseat in the first few vital months when establishing the foundation of your business is the most important variable for future success.
The big picture is that e-commerce models should not deviate too much from traditional business models. There are necessary and required processes, research, and components to consider in order to create a successful online business from scratch. While some may find it difficult and risky, the Internet provides numerous opportunities for business owners that might otherwise be unattainable. Regardless, a firm understanding of the target market, competition, costs, and timing will make or break your potential for success.