Welcome to the e-marketplace. You have an exciting new product to sell or a great service to offer and you’re ready to enter the world of e-commerce as a business-to-consumer (B2C) seller, business-to-business (B2B) seller, or consumer-to-consumer (C2C) seller.
What could be better than running your own online business? After all, online retail sales in the United States are projected to soar to $548 billion by 2019. This certainly is an encouraging sign of the ongoing success of the e-commerce, right? But, this also means there is a lot of competition. Only the best will survive.
Anyone can start an online business, however, not everyone is successful. About half of all businesses fail within five years. Regardless of the actual product or service for sale, many e-commerce sites ultimately fail. Building a successful e-business is difficult. Often times the inability to turn a profit has nothing to do with what is being sold, but rather because of mistakes or oversights in running an online business.
Many entrepreneurs face similar challenges when launching e-businesses. Being proactive at the start of your e-commerce venture and addressing these common pitfalls can lead to a successful online business.
Take a look at some common challenges that nearly every e-commerce entrepreneur faces:
- Low profits in the beginning: Online retailers often say their businesses don’t turn a profit until after the first year.
- Identifying customers: You have a great idea, but do others agree? Who, specifically, will buy your product or services?
- Reaching your customers: You need to identify how you will market your product or services to your customers by first identifying how your product or service is relevant to them, and then, where you can find them.
- Product differentiation: Is your product or service unique? How will you differentiate your e-business from others that are similar?
An entrepreneurial spirit
These, of course, are in addition to struggles that all entrepreneurs, regardless of whether they operate a traditional brick-and-mortar storefront or a virtual one. Like anyone preparing to take the leap to become his or her own boss, ask yourself:
- Do I have what it takes to be an entrepreneur? More specifically, to start an online business, you need the right mindset and skillset. Are you willing to work around the clock to launch your e-business? Are you comfortable not making a profit immediately?
- Do you have realistic expectations? Know your own strengths and weaknesses as well as what you can realistically accomplish.
- Have you considered online security to protect your online business as well as your customers? Don’t assume you aren’t at risk for hacker attacks or information breaches, both of which can harm your e-commerce.
- Do you know your market? Beyond identifying your customers, be sure you know how to reach them with your product or service.
Advantages and disadvantages to e-commerce
There are differences between brick-and-mortar businesses and online business, regardless of whether you are operating just one of these retails platforms, or your product or services are available both in a store and on a website.
There are many advantages to e-commerce for business owners. Because this type of business is electronic, many costs that traditional brick-and-mortar businesses have are eliminated in the e-marketplace. This includes rent and staff salaries. Furthermore, e-transactions can take place any day at any time, and are not confined by the typical operating hours of a store or service provider. But, perhaps the biggest advantage of an online business is its breadth and flexibility in reaching customers. Sellers can connect with customers around the world, offering immediate access to products and services.
Oftentimes, online business owners underestimate the time and energy necessary to open and run their e-business, which is not as simple as having a web presence. This maintenance includes creating content, marketing and monitoring site traffic. It is essential to stay abreast of their sites’ ranking, traffic and branding.
An e-business operator needs more than the basic knowledge of the Internet, such as knowing how to set up a website for business purposes and how to market your business online. Otherwise, an Internet marketing company can be hired to handle the set-up.
Even though the Internet reaches customers worldwide, it can be difficult to establish and maintain business relationships because there are often very little face-to-face interactions, if any. Video conferencing certainly helps, but can lack the connection of in-person meetings.
Security and privacy
The Internet is still plagued by security concerns and privacy breaches, especially in the area of e-commerce. Online business operators face the possibility of their sites being hacked and their customers’ data stolen. This could lead to fraudulent charges or identity theft, not to mention the headache of recovering monetary losses and customers’ confidence.
Because the Internet quite literally spans the globe, there is no one, single set of laws that govern its content and use in all these different countries. As such, you may find others in the e-marketplace copying your ideas, the business model and the web content.
Product or service limitations
There are some products and services that are simply more suited to be sold in person. It may be difficult to sell new perfume fragrances online, for example. Or, some customers may just want to make certain purchases in a physical store because they are expensive, such as a new car, and they feel somewhat uneasy about completing the transaction online.
Overcoming online business challenges
There are many things e-business operators can do when facing obstacles in the online world of commerce.
- Create consumer confidence in your website: Whether your product is large or small, or your service is expensive or cheap, customers will not do e-business with you if they do not trust your website. You can add several small details to your webpages to legitimize your e-business, including a physical address and phone number, your contact information and photo, customer feedback or product reviews, and related membership organizations.
- Improve your site’s search engine optimization (SEO): Oftentimes e-commerce sites only include their products and services, along with prices. E-commerce sites should also have detailed product or service descriptions of 100 words or so. This is an opportunity to mention keywords, unique content and customer reviews, as well as short video clips or a picture. You may even consider including interactive tools or e-books, too.
- Use social media appropriately: Platforms such as Facebook and Twitter can spread awareness and increase your customers. However, when social media is used too much, it becomes ineffective. Customers do not want to be bombarded and will block the e-merchant. On the other hand, infrequent posts will not have a significant impact with customers either.
- Protect your site and your customers: Most e-businesses experience security issues at some point, and it is likely that you will, too. Whether your site is hacked and you are locked out or your profits are being redirected, or you experience a data breach that compromises your customers’ personal information, you must invest in proper online security.
- Implement mobile commerce options: Customers use smartphones and tablets for product and pricing information. They make comparisons and read customer reviews. And then, they want to make a purchase or book a service. Be sure you are available to shoppers in the mobile device market, too.
Nearly all entrepreneurs will be challenged by any number of obstacles specific to the e-market, in addition to the hurdles entrepreneurs face in general. Unfortunately, a common misconception is that having a successful online business is as simple as setting up a website and collecting money from all its visitors.
Remember, about 50 percent of all business fail within five years of inception – and you want to be in the other half of this statistic. Diligently execute your operating procedures for your online business with the same gusto as you would a brick-and-mortar store. After all, the details of your business plan makeup the foundation of your online company. Remember to be flexible along the way. It is almost certain your plans will change over time.
Keep in mind you will constantly be working to attract, maintain and grow your pool of customers. Drawing in your customers takes significant effort; don’t let them get away. Continue to devote effort and resources to secure repeat business and their referrals, which of course is new business.
As such, marketing is a continual process for your online business, just as it is for a brick-and-mortar shop. E-commerce operators should be diligently using promotions, sales and advertising specific to the online world. This means maximizing Internet marketing, such as keywords, search engine optimization, online ads, email ads, blogs and social media posts.
More likely than not, the most successful approach to online marketing is a combination of a variety of these approaches. Be sure to track your site’s marketing, which can be easily accomplished with website traffic trackers, such as Google Analytics. These tools record key information, including where your site’s visitors came from, which of your web pages they visited and for how long, what type of device (smartphone, laptop, tablet and the like) they used, and more.
That information is essential for marketing. Not only can e-businesses learn about their customers and their behavior, but also use this information to stay ahead of competitors.
Whether you are selling a product or service online only, or in addition to a brick-and-mortar store, there will be challenges to face and obstacles to overcome. Accepting this, in the beginning should be the first step in developing your e-business plan’s model. The details of this plan serves as your guide, reminds you what direction you are going and focuses you on your ultimate goals. Furthermore, a good plan also oversees the management of daily operations, but allows for flexibility as your e-business evolves and changes through time.
Remember that your model needs to include marketing strategies that address both customers and competitors. Also, keep in mind how quickly the e-marketplace – and the World Wide Web, in general – changes. It is vital to keep pace, so you can amend your online business accordingly. Seek help when you need it. You’re not the first entrepreneur to venture down this path, so learn from the successes and mistakes of others and tap into the resources already out there.
Finally, use your gusto to help you persevere. After all, you decided to launch an e-business based on your drive, determination and, most importantly, your great idea to sell a product or service through the Internet.