3/24/2016 - #ecommerce #management
by: Ceyhun Kaplan

*Cet article est disponible en français*

The eCommerce marketplace is fast-growing and thus raises enormous interest from the investors.

Almost 75% of the Americans bought at least one time on the Internet in 2015. It is a growing trend as mobile purchases are gaining in popularity (see eMarketer’s article).

The project must be thought through before building the eCommerce website in order to ensure its viability.

Why selling online?

Before starting off by thinking of the shop itself, address what you want to sell. Will your product be sold? This question can sound insignificant, but it is the heart of your project.

All the upstream thoughts need to be focused on this question. They should all answer it.

Of course, the eCommerce market is controlled by some leaders such as Amazon, but being positioned on a niche market is a great opportunity for an online shop launching.

To know if your product will be sold, base yourself on your experience, your assessment, and your feelings about it.

But this is not enough.

This initial feeling can be misleading and should be supplemented by a market study:

  • are there any competitors?

  • if so, what makes my business model different from theirs?

  • what is my added value?

  • how can I be positioned within the concurrential market?

  • how can I take advantage of the competitors' presence in the market?

  • what do customers think after their purchase?

Here are some trails to find the answers:

- create a basic keyword search to find if your product is sold by another online shop or if a similar product already exists. Check as well your rivals' use of Google Adwords;

- if you have any competitors, make use of their platform to improve yours. Take a look at the customers' evaluation across the products comments or the website judgment (via Google Trusted Stores) so that you can maximize your offer and get a better view of clients' expectation.

If no one sells your product, there is a different approach, but it is as important for your strategy:

  • what is the market requirement? Why does no one sell this product?

  • am I the first one to get into that market? Are there people who failedtrying this way?

  • why did these potential fails occur?

  • can I create demand if it does not already exist?

  • what do I risk if some competitors get into that market quickly?

Here are some trails to find the answers:

Google Trends allows us to see the amount of Google searches made by Internet users. You can study the trends (increases, decreases) and compare them to the different expression linked to a specific need;

Try to find the users' feedback so that you can determine the reasons of that fail. It is worth taking all the tools you have access to (Google search, marketplace, social networks and so on).

The tendency of focusing on a niche market is increasing, but this model is not always synonym of success. Even though you offer an innovative quality product, your eCommerce project may miss the boat if all thefactors are nothere.

How to estimate the scope of your project?

An innovative product is a good basis for an eCommerce business, but it is only one of many aspects.

To reach your goal, you need to work on all of them. Who provides you with the product? Do you have a strong collaboration with the supplier? How do you plan to manage the stock, the delivery process, and the hole eCommerce logistic?

A lot of eCommerce merchants underestimate the daily work that has to be done on the eShop.

Improving on the management process is a long-term work, but it also requires an upstream thought. Your model can collapse if your supplier gives up on you, if the raw material prices rise, or even if you mismanage your stock.

At the very beginning, it is hard to define the stiff scope of an activity. However, you should have a management model before building the website.

It is only common sense that all the process above can be improved throughout the development steps in order to get the ideal method for you.

Starting up on Amazon Marketplace as well: a good or bad idea?

Generating web traffic on a new eCommerce website is quite a challenge. Uniting with Amazon to launch your project and to promote your brand can be a solution to consider. In fact, if you start your website alone, you will spend your early months counting the visitors one by one.

In parallel, during the first quarter of 2015, Amazonattracted more than 16.8 million unique visitors per month! Such gigantic potential benefits should be able to highlight your product.

Obviously, you are not alone on Amazon, but with such a traffic, you necessarily get a part of it. This is perfect to introduce your product with lower risks and investments.

Concerning logistics, Amazon offers services such as "Fulfilment By Amazon" which allows eCommerce merchants to get rid of some tedious tasks. The biggest one is the orders preparation and shipment, but there is a lot more to work with:

  • Amazon is the only entity which manages the stocks, the shipment and the customer service (in addition, in the client's native language);

  • your products coverage is much higher;

  • the mention "Fulfilment By Amazon" allows you to generate more sales because it is an additional insurance for the customer;

  • Amazon takes on a worldwide shipment without extra fees;

  • you can even get Amazon to ship a product which was sold on your own website. You only need to tell Amazon where to deliver it and they send the product, which is stored within their warehouses.

All these advantages are not free of charge for the merchant, but it is worth the risk.

For example, Amazon takes less than $0.75 to store a "t-shirt" format and charges between $1 and $4 the shipment for standard products. It is common sense that selling bigger or heavier objects is more expensive.

But the prices remain very affordable because even if you negotiate with conventional delivery services (such as UPS, DHL and so on), you hardly get a better deal.

At your project initiation, you can get rid of many daily tasks. The precious time you save can be dedicated to the promotion of your offer. In addition, Amazon offers you a 3-month technical assistance in order to help you to get accustomed to the back office, to help you with the product data sheets, or even to optimize your prices or promotions.

More about Amazon’s prices:

Amazon - FBA charges Inventory Storage Fees

Amazon - Fulfillment Fees for Orders

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