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Should I take my business online?



Being a Digital Transformation Advisor recently I get a lot of similar queries. This blog should address your generic query to some extent. You can always comment to get specific answers.

You will agree that there are shops and offices and then there are online shops or web portals. In the real world, you could choose to be an isolated shop close to a community, or you could be part of a shopping mall. Similarly, in the online world, you could have your own presence as an independent shop (an independent website), or you could choose to partner with established online retailers (popularly known as e-retailers) to sell your goods and services thru their online presence.

Both the approaches have their own pros and cons. Since the physical world and the online world are quite different, unfortunately, the learning of one cannot be mapped to another. You will however find some similarities.

Let us look at both these scenarios.

When and why, you should choose to have an independent online presence? Having an independent online presence is purely a business decision. Creating an online presence for your business could be a costly affair than using a third-party e-retailer platform. There may be a gestation period before you actually start making sales.

If you are thinking of something unconventional, different or disruptive and want to quickly create a dependable brand to establish your business (for example, if your business is a specialty chain, like a Vintage collection, Art and Craft, Custom made solutions, Designer apparel, Value-added food or herbs, Goods manufacturer, Transportation services, and so on. It may make much more sense to venture into an independent online presence if your budget permits.

How much to spend on creating your independent online presence depends on how do you plan to serve your customers when they visit your website. The amount of services that you can offer to your customer in an online business is limitless.

Besides glossy website and app, at the first, you will need to establish trust with your customers. Next, analyze what services would matter the most, to your customer, if they choose to transact a business with you and then plan to offer at a minimum set. Adding more and more services would help your business cut down on some recurring costs.

When and why you should choose to go with e-retailors. Once again, partnering with online retailers to sell goods and services on the e-retailors platforms is also a business decision. If you are dealing with commodity goods such as FMCG products, household utility goods, regular wear clothes, Groceries, and so on, where typically your business growth comes from volume sales instead of margins. In such cases, it makes great sense to partner with online retailers.

There may be an onboarding hurdle, but typically there are no (or little) onboarding charges. Besides basic selling, your e-retailors may offer various services to boost your business. This usually comes with either a higher cut or subscription fees.

When compared to an independent online presence, the solution is instant and very appealing. If the online retailer platform has gained the trust of the customers, this trust is extended to your business as a seller on that platform, removing the trust barrier to make your initial sales. Services provided by these platforms are proven and are templatized and they come ready to use right out of the box. If you have an online presence on your roadmap and do not have enough resources to establish your self-independent online store, this could be a great beginning. You could check the viability of your products by instantly testing demand and customer feedback before investing in an independent brand.

While all of this seems very lucrative, your business is at the mercy of the online retailer’s platform. Your identity has very little or no relevance in that marketplace. You are one of the several sellers on the platform. If your volumes grow beyond a certain limit, you would be losing hefty payouts offsetting the cost of creating your online presence. You may be constantly competing against your peers on price and quality points. Most importantly, one policy change by the specific online retailer may disrupt your established business with that online retailer.

If you want to decide what is the right strategy for your business, you should start asking yourself questions like so. 1. Am I an existing business with a physical presence or I am creating a new venture. 2. Am I a manufacturer or am I a retailer? 3. What is the motivation behind going online? You need to ask yourself endless questions like so, to access and create your business plans.

I will be happy to answer your specific queries if you may have any.

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