Starting an Online Business? Here are Six Things to Follow to Thrive in the E-commerce Market
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
As people across the globe are spending more time in the virtual sphere, businesses are also making a robust digital shift. Other than cutting costs, e-commerce is giving businesses higher visibility than brick and mortar stores ever could. Increasing their reach both nationally and globally, the e-commerce sales grew 13 per cent in 2017, hitting an estimated $29 trillion as reported by UNCTAD. A similar surge was seen in the number of online shoppers, which jumped by 12 per cent and stood at 1.3 billion people, or one-quarter of the world’s population.
However, space which is flooded with uncountable e-commerce businesses definitely draws high competition, which makes gaining traction quite difficult. Besides the fact that starting an e-commerce business is not easy, maintaining one also takes a lot of hard work and patience. That said, less than two-thirds (64 per cent) of small businesses in the world have a website. This is because there is a set of complex processes that go into setting up a store online in order to achieve decent visibility.
Thus, before starting an e-commerce business, it is important to keep a few things in mind to ensure success:
1. Find the Gaps in the Market:
There are a lot of e-commerce platforms operating in the market, still, most of them end up serving only a limited range of customer demands. This is because they tend to miss out on their pain points. Entrepreneurs don't realize that addressing these can make way for enough business potential to thrive in the market.
Online businesses should note that for a particular product or service, even if the pain points for most customers are similar, the cause of these might be different for each individual. Thus, to identify each customer’s unique reasons behind the pain points, e-commerce platforms must employ qualitative research. This can help them address the gaps in the market.
2. Understating Compliance and Regulations
While operating a business, every company has to look at a set of legal matters. It is better to thoroughly understand the legal procedures for starting a venture. Apart from knowledge of different taxes for the sale of goods, or charging delivery, e-commerce businesses also have to look at the cyber laws. The latter includes a whole set of rules concerning online contracts, business software patenting, e-taxation, e-governance, and cyber-crimes. It is necessary to make note of website terms of service/vendor agreements to avoid any related problems that could possibly arise in the future.
3. Product Prototyping and Reviews are as Important as Product Cataloguing
The biggest drawback of shopping online is that the customers cannot touch the product they want to buy. This decreases their confidence in the products on display and even the best product pictures cannot help them. However, a comprehensive description of the material used, measurements etc., automatically increases the trust of the customer.
Moreover, it is important to test the products and identify whether they actually deliver what they promise to the customers. Most of all, giving customers the right to review the product positively affects faith in the brand. Customers go through other's reviews and decide for themselves whether they want to purchase the product in question. This increases the sale prospects of the company's products.
Meanwhile, many companies operating online today are making use of the latest applications of virtual reality and augmented reality to provide in-store experience to their customers. In order to provide better customer experience and boost the sales further, such applications can be implemented on the platform.
4. Seamless Payment Gateway Integration Support
There are online marketplaces, which businesses can turn to for services like payment collection and logistics. This implies that products can be sold online without even creating an online store website. This can help entrepreneurs focus on the core product. Some such popular sites are eBay.in, Amazon.in, Jabong.com etc.
However, in order to operate independently, it is crucial to integrate multiple payments options (net banking, credit/debit card, mobile wallets, PayPal, etc.) into your online website that can provide a smooth transaction experience to the customers.
Lastly, take all the steps to ensure the entire payments process is completely secure and compliant with the relevant information security policies.
5.Product Returns and Related Costs
Making note of returns is important as they can eat into profit margins of e-tailers. A significant 30 per cent of orders get returned to e-tailers every year. A prime reason for this is flexible return policies, which account for problems like a product not matching its description; shoppers deliberately ordering more than one product (e.g., multiple sizes of a garment); merchant sending the wrong item; product delivered in a damaged condition; incorrect address etc.
Whatever might be the reason, returns cost a fortune to the e-tailers, especially those who offer free return shipping (according to All India Online Vendors Association-a lobby group that represents small online merchants-shipping costs are INR 65 on average and reverse shipping costs additional INR 75). Entrepreneurs can avoid loops like incorrect shipment address by employing a coding system that ensures accuracy. Other than this, returns can be audited to identify immediate return on investment.
While there will always be some amount of loss in returns, making note of serial returners can also help. One can set a limit to the number of returns that can be made without charge and employ other strategies to minimize loss.
6. Using SEO and Web Analytics Support
To attract customers to a website, entrepreneurs must adopt innovative digital marketing strategies. They can leverage SEO, SMM, SEM, online advertising etc. to drive higher ROIs. This can help the businesses in gaining higher online visibility, which in turn would help create brand salience among their customers.
As the share of online retail in total organised retail in the country is predicted to grow from 0.1 per cent now to 5.3 per cent by 2021, this is indeed a good time to start an e-commerce platform. However, taking off is one thing and sustaining a business another. Staying the updated with the technology is going to be the deal breaker in increasing the business' productivity online. However, in case of foreseeing a long term growth, it is crucial to ensure a robust customer service support. After all, how you help your customers tells a lot about your company and determines its growth.
While there are lots of risks in starting a business, it is also true that a person who risks nothing gains nothing.