Should You set up an online store?

Within a few years of my working experience in creating e-commerce a lot of people came asking if they should set up an online store. Perhaps this may sound suprisingly, but the usual answer is…

No.

An Online store is one of the most demanding businesses at extremely high competition and the main tool as well as competitive factor is the price. Of course, despite the fact that it is so in most cases it does not mean that running an online store is completely devoid of meaning and possibilities of earnings. There are three situations in which it is useful to open his own shop.

Hobby

I do not mean here about finding yourself some classes at retired to make money, but rather to have some specific competencies (each hobby needs to be supported by the knowledge and idea) which give us specific competitive advantage. An example of this might be conducting courses such as diving and knowledge of the selection of the equipment and its subsequent maintenance which makes you be able to interest potential buyers.

The manufacturer or distributor

When the seller has the potential to offer very attractive prices, generally it must be a direct manufacturer or distributor of the product. In this way it is possible to obtain a satisfactory profit margins, even in a situation of strong competition in the market. This situation is particularly well illustrated by the electronics industry, where large distributors receive at the end of the quarter so called cashback, the refund of money paid for your order. This is the task of rewarding the best distribution points. These limits are so high that they are unable to meet them small shops, while the payment of such importance that a properly thriving shop can easily be maintained with this type of bonus. Unfortunately, the consequence of this situation is exacerbated price war on sold products, only to the end of the quarter receive adequate compensation from the manufacturer. Therefore, the margin on the product above hundreds ₤ may be only a few percent, taking into account the need to consider the complaint, missed shipments or goods need storage makes for a small shop selling not receiving profits is not profitable.

Supplement sales of stationary points

This case involves particularly well-known brand now, which enter into additional online sales channel, in principle, is doomed to success. The product you wish to sell is already well recognized in the market and has a group of customers who are ready for its purchase. Opening an online store is reduced in this case to allow properly meet the needs of existing customers.

Success in e-commerce

Of course it is also possible to open an online store successfully in situations not involving the above three cases, however, you should realize that it is a difficult task and the potential success requires extra effort in addition to the sales strategy appropriately constructed. A few strategies that are good for setting up an online store and that in my opinion, can successfully influence the effective increase in sales in the long run will write in the next article. Finally, I would only add that the persistence perseverance and hard work can be a guarantee of success in any industry, even the most difficult. Keep in mind that the e-commerce industry still has a huge potential for growth, and evidence of this can be at least such as Tesco in the UK that sell via the internet there are now more than a stationary chain.