Is The eCommerce Business Model Right For You?

eCommerce Business Model

Let me help you find out and give you several pointers. These pointers will help you make an informed decision to decide if you should pursue it or not.

Technically speaking, every business that uses the internet is eCommerce. But for the purposes of this discussion, I’d like to limit our definition to active selling.

In my view, the eCommerce business model definition is selling online. It does not matter where or how, but as long as you are selling a service or a physical product, you are doing eCommerce. The most common of these are Amazon, Etsy, dropshipping, and others.

But is the eCommerce business model right for you?

Passion Product or Service 

The first challenge you have to face is product or service selection. Do you have a product in mind that you are really passionate about?

The internet is saturated with online stores. There really isn’t anything in the world that you cannot find on the internet. As such, you need to brace yourself against the competition.

Competition is tough, and the only thing that will help you stay in the game is passion. Unless you really believe in your product or niche, you will not really make it through.

Here are two tips for choosing your passion:

  • Something you love – some people love basketball shoes. This is a passion. And because they love these shoes, they know everything about them. If you start selling a product that you understand, you will be able to establish a solid foundation for your business.
  • Something you want to change – there are many products out there that need innovation. If you are the kind of person who wants to change things to make them better, then you are likely to have found your passion.

Passion in business is defined as an unwavering commitment to your product. If you think long and hard, you will realize that many people succeed in the retail business because they really love doing it.

Customer Satisfaction

One of the keys to success in eCommerce is customer satisfaction. Of course, the same principle applies to all businesses.

But what many people think is that customer happiness only boils down to having a good product. This is incorrect. Customer satisfaction is more than that.

Here are some of the things you have to do to make customers happy:

  • Product quality – make sure that your product or service is superb. People paid you money, and they deserve to receive products that are not defective.
  • Customer service – if people have a question, you have to be there to answer them. Make sure that you put yourself in the position of the customer and have empathy.
  • Customer complaints – not all products will be perfect. Not all customers will be happy. There will be times when a customer is unhappy and wants a refund. Can you really deal with this? Do you feel a sense of accomplishment after fixing a problem?

You also need to deal with financial losses. Whether you are serving a product or a service, you should be prepared to issue a refund or replace the broken or defective item. This will cause a lot of headaches, but you need to be accountable for what you sell.

Product Handling and Shipping

As an online entrepreneur, you need to ship your items to your consumer. If you think this is easy, think again.

Here are some things that go on behind the scenes:

  • Stocking and inventory – you need space to keep your inventory, and you need to manage the inventory. Some principles include first-in and first-out, and you also have to make sure that the items in your inventory are functional.
  • Packaging – you must prepare packing materials for your items. This includes plastic wrappers, bubble wraps, and boxes. You also need duct tape, other stuff. Plus, you also need to spend some time actually packing the goods.
  • Shipping labels – you need to choose a shipping courier. You have to drive to the facility to ship the item. In some situations, you will be lucky if the courier has a pick-up service.

If you ship items, you also need to know how much the shipping will cost, how long it will take, and if there is going to be insurance. As a seller, you cannot pass the buck to the courier all the time.

You need to be able to answer your customer if he is asking about the shipment status, which means that you also need to choose a courier that provides tracking numbers.

Website Building and Management

There are many e-commerce business models and strategies.

If you sell online, you are likely to create an online store. I know that you also have the option to build your store inside platforms like Amazon, eBay, and Etsy. Even if you do so, you still need to manage your site.

The most popular method if you do not want to sell on marketplaces is to build your store via Shopify. Although Shopify for eCommerce makes it easy to build a store, there are some components that you need to take care of.

Whether you choose a marketplace or your own store, here are some of the things you need to worry about:

  • Photography – you need to take images of your products and make sure that they are of high quality.
  • Uploads – you need to upload the images and their product description. There is no going around this—it has to be manually done.
  • Inventory – you need to update the product count in your store all the time. Make sure the count is the same with the actual inventory that you have.

Apart from these, you need a payment processor so you can receive a payment. If you build your own retail business, you also need to install other apps that you can use to make your store more professional—all of these entail cost and effort.

Marketing and Advertising

The last thing you need to think about is marketing. As a solopreneur, you will likely do your own marketing.

What does this mean?

It means that you have to create your own graphic arts, that you have to learn how to advertise on Facebook, YouTube, or even Google. You need to spend money on ads, even if most of them do not yield a sale.

Essentially, you are a one-person team. If you do not have the time to learn different techniques about marketing, you have to seriously consider if eCommerce is the right business model for you.

Summary: Is the eCommerce Business Model Right for You

One sad thing about eCommerce is that many people open their stores with dollar signs on their eyes. They do not think about the potential storm of problems that may arise from the business model.

Read through each of the pointers I made, and then think carefully if you can live through with them. If there are some possible situations where you may not be comfortable, then you have to rethink if eCommerce is the right business model for you.

If eCommerce is not the right choice, you may be better off blogging or doing affiliate marketing. Both of these business models are simple. They do require an effort, but they do not pose so many problems as eCommerce does.

John Kilmerstone

I'm an Aussie living in Japan who enjoys traveling, photography, and blogging. Please visit this website and explore the wonderful world of blogging. Discover how to turn your passions and pastimes into an online business.

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