10 Important Essentials of Ecommerce
Assuming that such a sonic e-commerce boom in India is going to last for a while. Many would wish to start an e-commerce business and would wonder how to really start one. Well here are some key points that I found to be crucial in starting an eCommerce site. The business model may seem to be very tech-savvy but in actuality when it comes down to basics it’s like any other regular business but without brick and mortar. Here are the ten most important essentials in starting up and e-commerce business.
Whether its electronic items, gadgets, food items, recharge vouchers, travel related or apparels, there is a site for everything. So it’s very important that your business tries to distinguish itself from other counterparts in the form of its business plan or strategy. You can’t start selling everything or anything on the site (Flipkart started with books and then it expanded) at least not at its inception as it’s crucial for any business to develop its brand needs to have a theme around the business. Developing the budget plan or strategy also helps in finding out the estimate of the budget which can later help in understanding the need of funding. For e.g. there are thousands of sites selling graphic t-shirts, but there are the couple of sites which have found a way to differentiate themselves by either selling hand painted t-shirts or getting into organically grown and produced cotton t-shirts which are environmentally safer.
If you are the manufacturer of the product then, of course, product procurement comes out easily but in the case of those who tend to source their products, it’s essential that the amount of money incurred in procuring the product doesn’t exceed the estimated budget. One should also understand the need of product in the market; it’s crucial that one produces or procures those products which have a demand in the market. At the earliest its is important that there is a good line of quality check maintained in order to send up only the best quality product as any defect in the quality of the product would hamper the growth of the company at the earliest. There are many places online and offline where people can give you good or bad review, thus, can't be taken casually.
3. Warehousing/Vendor Management:
Traditionally warehousing is the way for conducting business, but if one calculates the expense incurred in warehousing and logistics of the business, the budget may have to be inflated a lot from collecting stock from vendors to logistically moving it to the warehouse base. Ideally, it’s crucial that one tries to cut cost as much as possible especially initially as a start-up and rely more on vendor management which is a far more effective mechanism in better product procurement. Yet the vendor management process should be efficient enough to have a good quality check on the product, product stock updates and orders should be completed at the earliest well coordinated with the vendors.
Whether local, national or even global, an e-commerce has the capacity to conduct all kinds of business, but it’s important that the logistics support the same. This is the key to e-commerce, after all, it’s the primary service that e-commerce stands upon, it's what any customer is willing to pay for. Whether it’s Flipkart, Amazon or even Snapdeal every one of the three has the best logistics in some way or the other. There are two ways of handling logistics either by developing one’s own logistic or shipping venture or outsourcing to the third party at the cheaper rate; ideally, it’s what every startup does cause it is more cost effective. Every online buyer wishes to get the product at the earliest it's fine if the product is delivered within five days, but anything ahead can raise customer complaints.
To run any business funds its crucial weather its expenses on infrastructure, manpower, marketing, production, expansion etc. Funding is essential and most required for any business, thus a budget is required to come up with an ideal amount of funds that’s enough to run a business. Initially, the funds would go through one's pocket but in later stages of the business, the funding can be developed by getting either loan, finance from financiers or investors on equity. Once the company goes big one can even go for IPO, but that could take time. Companies like Flipkart or Snapdeal are running currently on the huge amount of investment that they have received from fellow investors.
6. Legal Issues:
There are many legal issues to comply with when starting up a business or even e-commerce, here are some of the few we have come across, Partnership Deed (If the business is started with partners), Shop Act (Its required for conducting any form of business), Firm Pan Card (different from individual Pan Card), Sales Tax No. (One can run without sales tax no. for a year), Export Import Code (if in case one is trying to go global you may try getting an export-import code).
It's one thing to be an all-rounder, but it’s another to have a team of experts in their own field. If you wish to build a good sustainable, surviving and a growing company one cannot do everything thus a company or e-commerce would require a team from someone handling the marketing, finance, manage vendors/productions, technology etc. Thus, it’s crucial that one tries to develop the best team of the best people available at the right price. Weather as a freelancer, employee, partner or even an intern it’s up to you to get the right kind of people at the right cost.
Now you have the products in your hand, the funds to invest, the team that’s working with all their will and vigour, but nothing is going to get you any sale or profit or turnover until you get your business to market. Marketing consists of everything right from products being produces to a larger scale to it being delivered to the end customer, and the journey between the two is nothing else but marketing. How one promotes and popularise the e-commerce and then convinces probable customers to buy the products is nothing else but marketing. Which in a case of e-commerce could take a huge amount of time, effort and investment? There are various forms of marketing channels available right from online activities like social media, PPC, SEO etc. to offline activities like exhibitions, events, pamphlet distribution etc.
While marketing activities tend to be product and sales driven, it's crucial to conduct other forms of branding related activities in order to build up the trust of the people on the company as a whole. This is where one should try to make their company logo and other brand related creative content relevant and prominent in the eyes of the general public. To the extent that people, in general, should be able to distinguish you from others and can recognize you as an entity. Companies like Apple, Pepsi, McDonald etc. spends billions on branding and their brand value, but, of course, being a startup we don't have the luxury of splurging money here. The ideal way to go about it is to either collaborate with other relevant but non-competitor brands while emphasizing on online related branding activity which is cheaper, faster and has a huge probability of being viral.
10. Multiple Channel Sales:
Any business relies on two primary and basic rule that is to survive or to expand, otherwise, it's impossible for it to even exist. Thus, one must find other channels of sales either in the form of Customs services or bulk selling or even B2B which can help to get a continuous roll in.