Almost everyone has considered becoming their own boss at some point in their lives, but being self-employed comes peppered with its fair share of stressors. However, with a good idea and sound plan in place, the roller coaster ride’s rewards often outweigh the road bumps. The promise of the satisfaction that comes with seeing your own idea grow is, more often than not, worth its trials.
The Internet has probably been the biggest catalyst in history to make the business world more accessible to entrepreneur hopefuls. With technology and innovation developing at breakneck speeds, entrepreneurs have access to tools and platforms that weren’t previously available to their predecessors.
Challenges that Plague Traditional Businesses
Many developed countries have seen a shift in attitudes towards shopping, and leaving one’s house to shop has become more of an occasion than a habit. Offline retailers have suffered due to the fact that consumer preferences and behaviours have changed rapidly.
Retail establishments are forced to become more experimental, with business owners constantly evolving in terms of their overall offering to customers. The Adidas store in Hong Kong, for example, has become a venue for visitors to train onsite. This encompasses considerably more planning while needed to keep up with consumer trends across the industry one is catering to.
Brick-and-mortar stores also require relatively large capital outlays in rental and utilities (the lease for a store alone will require commitments that stretch a minimum of 12 months), that can add up to quite a sum for those that are just entering the industry. Maintaining a physical storefront also comes with having to constantly maintain on-premises inventory. Products that don’t sell often force owners to part with them at a loss to make room for new merchandise, as there’s only so much stock that a physical store can hold.
Although traditional stores benefit from foot traffic, merchants are also made to maintain a budget for marketing and advertising that can chip away from their revenue considerably. Another challenge that retail stores face is in recruitment. The environment is not the most inspiring, with turnover across the industry relatively high due to such factors as a lack of engagement and limited career progression.
How to Start that Online Business
There are a few ways one can go about this. Even if one doesn’t have a breakthrough product, one can access a host of online platforms to see what is currently trending and popular. Social media sites such as Pinterest offer sellers windows into what consumers want at any given moment. Websites like terapeak also provide insights into what buyers are searching for as it has access to US$230b in eBay transactions – invaluable data that will go a long way towards one’s success.
It’s also important to ascertain the platform that is most suitable for one’s products. Etsy, for example, is great for handmade novelties as well as arts and crafts. Consumer technology (both new and used) sells well on eBay, and different platforms also work better in certain countries. Once again, the correct research is necessary to see if the intended target audience taps the platform being used.
Many online sellers use the dropshipping model to generate profits. This essentially absolves the seller from handling any physical item – products are sent directly from a warehouse to the buyer. The popularity behind this is obvious, as one can list an item with a click of a button and make money without ever having to handle any inventory.
If items don’t sell, the only cost will be the negligible listing fees and the trial and error process can add to the market research phase. Sellers can either contact websites directly to ask if they will be agreeable to such an arrangement or do a simple Google search for popular dropshipping directories.
Platform Case Study: eBay
The pioneer of the online auction world, one major advantage of eBay is that it offers sellers a large pool of active users who are constantly trawling the Internet to shop. One doesn’t have to set aside considerable budgets for marketing; the company takes care of things like search engine optimisation (SEO) while displaying relevant products to shoppers. Its revenue comes from charging sellers a fee to list items in either an auction format or at a fixed price before charging a final value fee that is a percentage of the selling price.
eBay also allows sellers to open an online store (with a monthly subscription) where listings can stay live for longer periods. The store function provides free monthly sales reports, recapping one’s sales activity by category. One is also able to access information such as monthly gross sales, conversion rates as well as number of buyers – making it easier to factor in these analytics to target one’s customers.
In terms of knowing what has the propensity to sell, a simple search via the website’s homepage will show how much items have sold for in the past under the completed listings option. One can then go about contacting distributors to negotiate purchases of these items in bulk at relatively lower prices to make profits.
The above information will prove to be useful in giving one a foot into the e-commerce playing field. That being said, as with any venture, the journey will be a journey riddled with ups and downs. It’s essential to be mindful of the fact that starting – and running – a business involves a lot of trial and error that constitutes the learning curve that is entrepreneurship.