Learning Hub | Maintaining Your Website
Four Signs Indicating Your Business Might Need An eCommerce Store
July 8, 2014 | Jon Teodoro
eCommerce stores offer a great opportunity for businesses of all sizes to expand online. To put things in perspective, think of the Internet as a gigantic mall that never closes. Building an eCommerce store allows you to sell products in this mall which is great because you are open 24/7. Although this sounds nice, it’s not all sunshine and rainbows once you first open the doors of your first eCommerce store.
Startup, marketing and operating costs could vary dramatically based on a variety of factors, such as the number of products you plan on selling, what platform you decide to use and and what niche you are in. These costs could range anywhere from a few hundred dollars per month for a hosted solution versus a few thousand dollars to millions up front for a self-hosted solution. (What is the difference between a hosted and self-hosted eCommerce store?)
Trying to put all of these variables together can be overwhelming, especially if you are considering opening up an eCommerce store for the first time. To help make the decision a little bit easier, here are four signs to help you determine if you should take that leap of faith.
1. Your business serves a small, niche market
Selling a unique product or service that benefits a small, laser-targeted demographic is a popular motivator for entrepreneurs to enter certain markets. Often, a small niche market also means low competition.
On the other hand, low competition can also come at the expensive of low sales due to a proportionately smaller market size. Selling your products or services online can help you overcome this problem by reaching out to other markets that are not in your local area, thus opening up new avenues for potential sales.
2. There is demand for your products/services outside of your local area
This is actually the opposite side of the coin in relation to reason number one. The previous example demonstrates an instance where the demand for your product or service is low in your immediate local area. Conversely, you may experience a problem where the demand for your product or service is high, but not locally. You may also have a competitive advantage by running your business outside of your target market for a variety of economic reasons such as lower cost of labor, tax breaks, etc.
Starting an eCommerce store allows you to potentially have the best of both worlds. If you are doing business interstate or internationally, make sure you consult with a lawyer and/or CPA to determine the legality and guidelines of operating a business in this manner.
3. Your product or service is easily scalable
If you have a subscription-based business or if you have a patented manufacturing technique that allows you to mass produce your goods at a relatively low cost, an eCommerce site is a great way for you to sell your products or services.
Opening up an eCommerce store can cost substantially less than opening up multiple, nationwide retail locations, allowing business owners to take advantage of economies of scale. Combine this with the ability to sell your products worldwide at any time and any place without the need for a cashier, and the possibilities are endless.
4. Your business process takes too much of your time, or you are wasting business resources
Is your business overstaffed? Or maybe you have too much inventory sitting around that you need to get rid of quickly. How about your sales and logistics processes? Are they overly inefficient? If so, opening up an eCommerce store could be the right decision for you.
A basic eCommerce store configuration has the ability to take orders, process payments, deposit money to your bank account, reconcile your books, send receipts to customers, generate shipping labels, and much more, not to mention the ability to display your products at all times to people from all around the world.
This implies that a properly built eCommerce store could take on the job of an entire team – and do the job faster. Isn’t technology great?
eCommerce stores aren’t a good fit for a lot of businesses, but if it has been an option that has crossed your mind recently and if you have experienced at least one of the problems above, building an online store could be a great business decision for the long term.
What are some other business problems that you have solved by building an eCommerce store?