Taking your Retail Business Online…
Demystifying the different flavors of e-commerce setup available for your Online Store
We are all well aware of Amazon reaching a trillion-dollar economy in a mere 25 years, and Flipkart selling to the global giant, Walmart for a whopping 20 billion dollars in little over a decade. Udaan started in 2016 and got to a market value of 7.5 billion dollars in 3 years, becoming the fastest start-up to achieve the Unicorn status. Retailers need to come to terms with digital commerce and use it to their advantage or risk getting replaced by the next online portal around the corner.
I’ve been a student of the retail industry for over 10 years now — ever since technology and the Internet disrupted the retail industry and the era of e-commerce started. Through a series of articles, I will share what I have learned about selling online and the various processes involved in running a successful e-commerce setup.
If you are a retailer with an online presence or are inclined to take your business online, read on. This article talks about different online platforms available to you, so you can decide on what works for your business.
Getting in the GAME
As a seller, when you bring the online strategy to your growth plan and start to look for the best solution out there, and more importantly, the best solution for you, you get bombarded with a range of choices, one better than the other. Of course your decision will be driven by two primary questions; what is it going to cost you and what’s the return on your investment going to be like? Well, read on and find for yourself!
Following are the different mediums with which one can start to sell online.
Social Media
This is the easiest way to get your products to your customers. You share a product that you want to sell on your social network; Facebook, Instagram, Twitter, Pinterest, TikTok, etc. and hope it will reach the buyer you have intended it for. Your products get exposed to your network and if they like it, word-of-mouth makes sure it reaches many more. You can increase your chances of this happening, by spending some money on promotions to increase the number of people it reaches.
Third Party Marketplace
These are the Amazons, Flipkarts, and Myntras of the world which allow you to create a seller account on their platform and list your products. They bring your products to their large customer base and charge a commission on every dollar you make. The platform commission depends on the product category and your negotiation skills. It could be anywhere from 5–50% of your revenue. You do save some money on product marketing because the platform brings the customer for you. Problem is, these marketplaces will never share your customer data with you. You are also at their mercy when it comes to whether they keep showing your products to the customer or your competitor’s or come up with their own product line, leaving you at the risk of cannibalization. You need to weigh your options to see whether selling on a Third Party Marketplace works.
Hyperlocal Store
This set up is very similar to the marketplace. The difference is, you get a unique presence on an online platform and your customers know exactly who they are buying from. This model was popular with online food ordering in the beginning but has made its way to other retail product lines as well. You still pay a good sum for the virtual space that the hyperlocal platform provides for you, but you still don’t have your customer data. What you do have is loyal customers who keep coming back to you for the quality of service that you provide.
Your ‘Own’Line Store
This option is for retailers who want to establish a brand for themselves in the market. They want to create an identity for themselves and present a portal that their customers identify with.
You have a range of digital-commerce platforms available; Shopify, eqomOS, 3dCart, WooCommerce, BigCommerce, Magento, and many more. You need to decide the right platform for you. Most digital commerce platforms provide a range of products and services that make your life a lot easier with the order processing lifecycle, and you need to be careful about the partner you choose so that you concentrate on being a retailer focusing on your products, and don’t turn into a technology company managing an online platform. There is a good switching cost involved if you plan to switch platforms, so you need to be very strategic while choosing the one that works for you.
This model also allows you to have sellers on your platform and become a marketplace in yourself. I will cover this in my subsequent articles.
Conclusion
By going through this article I hope you have an understanding of the different setups with which you can start selling online. They all come with their own sets of pros and cons and you need to decide what works best for you. So before getting in you need to understand your own business set up and where you would want to go in the next 3 months, 6 months, 1 year, 2 years, and 5 years. That will be crucial in deciding the right platform for you.
With the way the world has changed in the last 3–4 months because of COVID-19, it is crucial that you make online retail a part of your business plan and proactively select model(s) that truly identify with you and your customers.
Keep Safe! Keep Selling!
