The benefits of eCommerce – selling your product or service online – are huge. No longer restricted to your local market, you now have the opportunity to easily put your business in the eyes of a national or even an international audience.
Selling online, however, is not always an extension of what you’re currently doing offline – in your shop for example. Sure, eCommerce presents you with lots of opportunities, but there are also risks.
1. Too much, too fast.
If you are currently making 100 sales per day in store then online might provide you with another 100. You could even hit 1000 sales – it’s possible if you have a good product. So imagine your business grows by 500% – that means you’ll need more staff to cover the workload.
Solution. You could use temporary staff to start with to test the water or you could outsource your web fulfilment to another company. Outsourcing means that you can keep the core of your business under control whilst having the flexibility of a specialist company handling your online orders.
2. Managing your Stock
If your website shows you have 1 product left and somebody orders it online at the same time as somebody buys it in store then you’re going to either have to get more stock quickly to fulfil your order, or you’re going to have to let the online customer down which is not good for business – the online customer can easily go elsewhere.
Solution – You could allocate stock for online and offline or could integrate your offline and online stock systems so the chances of this happening are slim. You could also ensure that once your product reached 5 in your online store then you would get a reminder to replenish the stock.
3. Shipping your product
Before, you sold your product exclusivley in store. You may have wrapped it up or put it in a box but then it’s the customer’s responsability to get it home. Now you’re selling online, you need to work out the best method of delivery and you need to think about covering the costs, either by charging the customer or by offsetting it against the fact you’ll have more orders.
Solution – If you know you’re going to be shipping 1000 orders a month you may be able to get a deal with a shipping company. It’s worth shopping around as there is big variation from the services/price that each of companies offer.
4. Online/Offline propositions
One day you are competiting with a few shops in your local area, the next you’re dealing with market leaders on a global scale. The proposition therefore is different online to offline and you’re going to have to reflect this, otherwise you will fail in at least one of your channels.
Solution – Doing your homework is important with other online competitors. If you can’t offer anything close to what they are then maybe you need to refine your offline business before you proceed with your online ventures.
Normally you may take cash or credit card but now the customer is going to be able to have to deposit money into your account without the use of physically handing over the cash/credit.
Solution – Set up an eMerchant. There are plenty available. Some charge per transaction and some charge a flat fee. Take a look through some such as PayPal or SagePay and see what’s best for you.
6. Customer service
A customer would normally bring your product back into the shop but the process is not the same online. You’re going to have to first discuss over e-mail or the phone and then you’re going to have to replace/refund the customer by the same method they paid with originally.
Solution – Learn to use the computer and get involved in how your online shop works. This way you can answer support questions straight away. You’ll also need to think about your returns policy and any other terms and conditions when selling online.
Do you have any experience of selling online? What were the biggest risks for you? Comments below, please.
Posted on June 14, 2011 in eCommerce