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Ecommerce basics for building a successful online business

Starting Your Business

Learn how to open an online store.

Get to know the basics of
starting a business online

There are thousands of success stories about online business,
but there are also many online stores going out of business.
The biggest cause for the business failure is jumping into the ecommerce industry
without strategic business planning or accurate information.

01Benefits of selling online

There are many advantages of running a store online.

1. Lower startup costs

Starting an offline store requires large investments for retail space, interior design,
and many others whereas opening a store online allows you to start your business on a small budget with basic equipment like a laptop.

2. 24/7 operations

Offline stores are open only during their operating hours.
They are also affected by various factors, such as weather, holiday, and staff availability,
which results in limited time to sell products.
On the other hand, online stores can operate around the clock.

3. Borderless markets

Location is one of the most important factors when you decide where to open an offline store.
That's why business owners try to choose a location that attracts customers the most. On the other hand,
there are no geographical restrictions when you run an online store,
which allows you to easily promote your business and sell products to people all over the world. Moreover,
it is easier to focus on your target customers, facilitating your PR and marketing activities.

4. Product diversification

Running a physical store involves high fixed costs including rent.
This prompts business owners to mainly sell basic products that make a stable profit.
Although the cost varies, operating an online business costs lower in comparison to a physical store.
The low costs allow you to sell not only everyday items but also unique products that target a specific group of people,
making your store stand out from others.

5. Growth of related services

Ecommerce is a rapidly growing market that holds great potential.
The growth has contributed to the rise of related services, such as web hosting and website building,
and lowered their fees. For many entrepreneurs, startup costs are the biggest concern,
and the low startup costs of online stores enable them to start their online business as their second job or hobby.
If you're on a tight budget, try opening your store online first.

02Challenges for e-commerce businesses

Along with the benefits, there are many challenges you may face when selling online.

1. Planning, marketing, and PR activities

The mere presence of physical stores can help to promote brands to potential customers,
whereas online businesses need to employ more proactive marketing and PR strategies to earn customer attention.
Some businesses that do not have planning skills just copy PR and marketing campaigns from others in vain,
ending up wasting time and money. To avoid this, you should take your business finances, products,
and the target audience into account before planning and running PR or marketing campaigns.
However, it is not easy even for experienced marketers and PR experts.

2. Unpredictable sales

Sales forecasting is essential in securing stock in time. It involves an array of variables,
such as market trends, annual growth rates, seasonality, and PR and marketing plans;
therefore, business acumen and hard work are needed to avoid inaccurate estimations.
Along with these traits, you need to use whatever methods available,
from conducting regular inventory adjustments to creating backup plans for potential risks,
to make an accurate sales forecast.

3. Customer management

Goods and services are traded face-to-face at physical stores, which allows you to deal with customer inquiries one by one.
However, you have to juggle multiple transactions and inquiries at online stores, which makes it difficult to handle them promptly.
Some e-retailers are overwhelmed by customers pouring in, even losing touch with some of them. This mistake may seem small,
but it can lead to losing customers' trust because building a bond with customers online is more difficult than it is offline.

4. Competition with businesses in a similar field

With the ecommerce market growing, there has been a surge of online stores that sell products and services of similar concepts.
Unless your store has products that distinguish it from competitors, you would have to face relentless competition with them.
Similar products and services typically compete on price because customers choose lower-priced ones when there are products of the same quality.
Furthermore, price comparison sites allow customers to easily compare price offerings for the same product,
which may result in intense price competition and profit loss for online business owners.

5. Time and effort for stabilization

Building a successful business requires not only time but also patience.
Many ecommerce entrepreneurs run their business without staff and many of them find it overwhelming
when they realize there is much more work to do than when they run a physical store.
For example, adding new products online requires more time and effort than when you replace products on the shelves in offline stores.
While you just display products and add price tags in offline stores,
you have to shoot product photos and add product details and prices when uploading new products on online stores.

6. Securing a stable supply chain

It is challenging to find a supplier or manufacturer that produces or delivers products on time
because there are always unexpected events that cause supply interruptions.
Finding the right supplier is the most crucial job that requires a lot of effort when you open an online store.
Try to find robust suppliers and manufacturers that offer quality products at a reasonable price.