The Fallacy of eCommerce

CraneseCommerce is often portrayed as a glamorous and hands-free (digital) occupation while the backroom (plumbing) is often overlooked at the envisioning (startup) stage by the entrepreneur.

A great deal of emphasis (and rightly so) is often on the website and digital marketing, which needs to be integrated into backroom. However consideration needs to be given to the over-arching structure to find the right balance to ensure business growth. So you how do you find a business model that suits?

Business Model

Real attention needs to be paid to your business model and the core value proposition you offer customers. A crucial element, in my perception, is the question of how you get paid?  There are case studies where this aspect has been overlooked by experienced exporters, some of whom have failed to take export insurance and paid the price. Essential also is how you then maintain the cash-flow in the business.  Best way forward would then be to have a strategy alongside the business model.

Channels

This would be my first stop because this will focus you on building customer relationships and engagement. So understand which of the following sectors you should start with. This guidepost blog will serve to use Channels to explain the niche that should be explored.

Retail (Marketplace)

This is the predominant focus of most eCommerce business and is best served by the (third-party) Marketplace channel which is dominated (in Europe/USA) by Amazon and EBay.

The core advantage here is that they give the business the ability to outsource operational and logistics elements. Equally they have a well-established digital platform with eCommerce platforms that are robust and scalable (say Cloud!).  There is also the option of the single Market – trading using your site only  as platform but this is inefficient and costly for a new entrant, since it will involve establishing a brand , advertising costs and pipelines’.  For great expert help  on this, visit http://www.tamebay.com

Manufacturing

Companies with a manufacturing or production base would be well served by the Alibaba platform which is a China conglomerate that is actually bigger than Amazon. They are very good with provision of outsourcing to China.

Professional Services

Actually served better by Export Clubs since International Trade dwells on trust and reputation and visits on trade missions would be necessary at the growth stages through better collaboration.

Key elements alongside are the following;

Payment Issues:  VAT & Delivery issues, Pricing mechanisms, Foreign exchange fluctuation, Overseas Government regulations 

Build Partnerships:  Support from UKTI, Open To Export, Ensure you get on the right Trade Shows

Market Research:  Get local media on-ground, Use local(overseas) channels, Use multilingual staff in residence country

Intellectual PropertyIssues of Trademark, Domain Name, in foreign countries can be difficult to protect.

Backbone is Logistics:  Use reliable procurement and courier companies. Be wary of issue of returns. Understand your contractual obligations, Ensure fulfilment works and how to use (free) Delivery terms

Moving forward does not need to be a Big Bang approach so don’t feel overwhelmed with this ‘short list’ but do take the small steps to build and grow your eCommerce business. Hasta la Vista!

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