Of course, it is the rise of the internet that has made ecommerce possible. Amazon understood that and are now the largest ecommerce retailer in the world, trailing only Walmart as the second largest retailer – of any kind – that has ever existed. It’s no secret that ecommerce is big business and a large part of that is down to the great democratization of buying and selling that e-commerce has facilitated.
Ecommerce has made it easier than ever to start a business. It has also made it remarkably easier for customers to engage intimately with said businesses – from the ability to leave product reviews on ecommerce sites to being able to sell (as well as buy) through companies like Amazon, eBay, Alibaba, and so on. In short, the virtual market place admits everybody.
More Start-Ups – More Failures
So, getting started in business is not a complicated or prohibitively expensive task. However, business is still business, and that is something which certainly has not changed as companies transitioned online. Consider that a quarter of start-ups and ecommerce ventures fail after the first two years. After five years, half of them have failed and extending that to a decade, all but a successful few have fallen by the wayside.
To succeed, you still need a great product, a robust marketing strategy, and the need to build a loyal customer base. Shipping and Handling of Texas, an ecommerce fulfillment company, advise that the main reason for the failure of new start-up and ecommerce ventures is a failure to properly scale the business. In other words, knowing when the time is right to expand.
The Top Mistakes to Try to Avoid
To work out when that time is, you need to have a clear idea of just how your business is doing. For that, there are some common mistakes to avoid:
Failing to Get a Firm Hand on Accounting
When your business is small, you are fulfilling orders yourself and only selling one or two products to a small customer base. The costs are low and the finances typically uncomplicated. As you grow, however, all of this changes. And if you don’t get a robust accounting system in order from the off, you simply won’t know when the time to expand is coming up!
Jumping the Gun
Expanding means increased costs and knowing whether you can afford it or not is easier said than done. Remember, if you invest in the increased work force and inventory that is necessary to grow, you could be in for a nasty surprise if your profits (or, more often, your cash flow) is not up to the job.
Not Knowing the Customer
If you try to expand too quickly and make your products available to as many people as possible, you run the risk of knowing nothing about your customer base. Building up loyal customers who come back is far more important in the early days. This is what you build on to grow.
Getting Overwhelmed by Order Fulfillment
As your company grows, you should ideally progress through order fulfilment strategies – generally from doing it yourself to enlisting a third-party company to handle it for you. There are many intermediate stages along the way, and not taking that step-up in order fulfillment when it is necessary to take it is a sure way to fail.
Ultimately, ecommerce growth requires intimate knowledge of both your business and your customers. That takes time to build, and you should account for it. But, by the same token, you need to make the leap when it comes time to jump.