Introducing a new business model, eCommerce opens a whole new world of opportunities to scale a business successfully. From the wholesale industry to smaller sectors such as arts and crafts, health and wellbeing or pet care, eCommerce has incredibly changed the traditional way of business, creating a chance for even small entrepreneurs to open their stores virtually and act globally. Just like the traditional business model has got benefits and disfavors, the same goes for eCommerce. This ultimate guide will give you an overview of all relevant eCommerce advantages and disadvantages, showing you what you could possibly expect in your new online business venture.
#1: Lower set-up, overhead and operating costs
Investing in an eCommerce store and starting an online business is not as cost demanding as it is for starting an offline store. Compared to physical stores, eCommerce stores generate much lower overhead and operating costs. When starting a physical store, an entrepreneur should be ready to cover at least three to six months of rents, maintenance costs, employee salaries, etc. An eCommerce store doesn't need an expensive retail space, many employees, costly and specialized equipment or a place for production. All an online entrepreneur has to provide is a good eCommerce website, hosting and marketing budget which can be quite affordable.
As an eCommerce store develops and gets user adoption, it will be most necessary to invest in the storage place and quality customer support willing to resolve the actual customers' problems. This business expansion will undoubtedly increase the costs but the revenue, too.
#2: Sell globally: No geographical limitations
The best feature of an eCommerce business is the possibility to start it from your garage, avoiding unnecessary costs and directing your money into marketing and websites. An eCommerce store has got the advantage that the business does not strictly rely on the local area where the business or the local customers are situated. The products can be sold globally without limitations. Since an eCommerce business model is mainly founded on marketing endeavors, reaching the broader group of target customers and expanding the customer base is quite certain if marketing is done right.
#3: Online shops are always open
Your online shop will always be available for potential customers. Whether it is a Sunday, a holiday, a different time-zone or 03:00 AM, a customer can always browse the web store and go virtually shopping. This also reduces the operating costs because those processes can be highly automated and there is no need for extra employees.
#4: Acceleration of the buying process
The majority of shoppers search on the internet for a particular product before buying it. Whether they can not find the wished product in a physical store or they just want to compare prices, they search for it online. This statement is confirmed by Think with Google statistics, showing that 51% of survey respondents stated they conduct research before making a final purchase. The shoppers research on search engines, Amazon, websites of a specific brand they want, social media and other marketplaces. Furthermore, mobile performed searches for "best place to buy" have grown by 70% in the past two years, as Think with Google states.
The eCommerce shopping experience enables customers to reduce the time required for the buying process and to cut time they would need for physical shopping and get the product directly delivered to their home address.
#5: Personalized shopping experience
Personalization means nothing more than dedicated and automated data collection and analysis followed by specific content presented to the respective users on the web store. There are innumerable data segments that can be traced and personalized, creating a dynamic experience on your eCommerce website for your users.
Personalization means showing different types of content for different users by tracing the data based on: demographic, personal data, subscriptions to your newsletter, browsing behavior, purchase history, offers based on previous purchases, onsite searches for specific products, cart abandonment, etc. All this data can then generate the appearance of the website's content for each user differently based on personal preferences, showing them specific pop-ups, recommended product lists or reviews.
A personalized shopping experience will help you to increase repeat purchases, drive sales, increase conversion rates and easily conduct your retargeting campaigns. Furthermore, when knowing your customer needs there is no more need for guessing. This analysis will help you to choose the right products for future sales and will shorten the sales process overall.
#6: Tracking the customers' journey
Following the path of how your customer buys the product is essential for scaling an eCommerce store fast.
Answering the following questions will help you to advance the customers' journey and boost your prospects for sales.
- How did they find your brand?
- How do they browse an eCommerce website when they are ready to purchase?
- What influences them to make a final choice?
- How are they converted to a buyer?
- What do they expect regarding order delivery?
- How can you reactivate inactive buyers?
- Who are your returning customers that advocate your brand?
#7: Managing a high number of orders
An eCommerce website enables you to increase both the number of products for sale and the number of purchases being processed compared to a physical store.
Physical stores are constrained in so many ways regarding stock status, operating time, number of employees, outdated working system, etc. In contrast, an eCommerce store that is run with automated processes is overcoming all the limitations physical stores have. Automation processes will equip you with quicker procedures, allowing you to operate the whole confirmation and shipping procedure much quicker, enabling you to grow your business much faster and on a much larger scale. This will give you precedence when negotiating on key factors that can impact your final prices, such as extra costs of shipping, taxes or fees.
#1: Some products are difficult to sell online due to the customers' lack of physical contact with the product and in-person communication.
From a buyer's point of view, being unable to touch, feel, taste or smell the product can sometimes be a key factor when making the final decision against a purchase. Even though your product descriptions may include every single detail of them, the physical store is still a better place to be sold on for certain kinds of products.
Another doubt customers might have when shopping online is not being sure about the products' quality, particularly for specialized or luxury ones. Occasionally, customers need support, mild stimulus or consultation with an expert while shopping. This is something that a customer support can not provide well, and where in-person communication with a seller at a brick-and-mortar shop is still leading in sales.
#2: Product presentations take too much time and can not always fulfil the customers' expectations
Product presentations require a lot of effort and previously planned actions in order to get done properly and in time.
Professional product photo shootings and high-quality photos are the primary focus of any eCommerce store. The products' presentation can be taken to the next level by creating videos that will show the product in a realistic, physical space or presenting the stories of satisfied customers willing to recommend your product. A growing trend in product showcasing is using augmented reality in order to create a more realistic presentation of the product. Using augmented reality opens the possibility for a customer to preview how a product will look like in a physical space - for example a couch in the living room or a new spectacle model - before making the decision for a purchase.
Although all of the mentioned types of product presentations are very useful, there is always a chance for not matching the customers' expectations. For example, there might be a small difference in colors of a product in reality and an online display. Certainly, it takes more time to produce a proper product presentation in such cases which also requires a slightly larger budget.
#3: Customers request instant service and reliable, fast deliveries
The customers demand impeccable customer support that will reply to their emails, calls or messages immediately. The same goes for the delivery of their products. However, shipping is the most complicated task of every eCommerce business. Especially, when it uses a third-party logistics provider and when it comes to delivery delay, product damage or loss and refund requests.
#4: Security related issues
A secure storage of customers' personal and financial data is crucial for every eCommerce business. The average eCommerce website collects much vulnerable personal data such as name, address, phone number, credit card and CVV number, which can be a subject of fraud and hacker attacks. This is why eCommerce stores often put a lot of money into security systems for their websites. However, there is no guarantee that those efforts will always bear fruit.
#5: High competition and endless comparisons
As the eCommerce market is rapidly growing, so is competition and power of the established giants in this market sector. Small retailers are still most affected by huge corporations such as Amazon, for example, whose precedence and power is almost impossible to overcome. The competition is high even in the smaller niches. A further problem connected to the characteristics of this competitive field is an open space for customers to perform endless comparisons of similar products on different eCommerce websites while deciding on which platform they should make a purchase.
An effective solution for those problems is setting up an efficient marketing strategy that will put your product at the top of the SERP, creating a par excellence user experience across your eCommerce store, endeavoring to influence the customer's final purchase decision in favor of your online store.
How can a blockchain-based eCommerce platform advance your eCommerce business?
Blockchain-based eCommerce technology can successfully resolve some of the greatest disadvantages of the contemporary eCommerce business model and launch your business right into the future of trade.
The World Marketplace - an eCommerce platform developed by Safex - is the perfect solution for all business owners determined to stay up to date with the evolution of eCommerce and provide their customers with the possibility of doing online shopping with cryptocurrency. Using the benefits of this still less known and adopted business model will help you overcome the high competition, giving you the opportunity to become a leader in this new industry.
Here is how exactly this blockchain-based eCommerce platform can help you scale your business and make it highly lucrative. Safex - the blockchain engine for eCommerce - allows a simple integration process to an already existing website. Furthermore, being a merchant in this ecosystem will make your offers display in The World Marketplace application for every user. This integration will bring you several benefits, such as:
- Better payment gateway processes that shorten the transaction way, providing direct contact between merchant and customer. On The World Marketplace, the only participants of trade are merchants, buyers and software that enables the platform to function.
- No intermediaries that add high fees for their service and affect the final product's price and the merchants revenue. In the existing online payment systems with credit cards, there are seven different intermediaries in a single transaction.
- By providing direct trade between shoppers and merchants without intermediaries, all eCommerce businesses placed on The World Marketplace are guaranteed lower fees, which will increase the revenue as a result. On The World Marketplace, the seller fee is only 5%, which is low compared to other eCommerce platforms that take up to 15-45% for each sale.
- Faster transactions are another benefit of blockchain technology that enables the transactions to be made immediately. An existing credit card payment system requires three to five days to authorize the payment and transfer the money into your bank account. The blockchain-based technology of The World Marketplace enables its customers to use their assets in a moment.
- Security and data privacy are the best advantages of blockchain technology that guarantees its users full privacy by not providing their personal or financial information to a third-party, which is a common practice of existing payment processors and established eCommerce platforms. Due to the features of this blockchain-based platform transactions and balances are obfuscated which means that no one can see the balance of your cryptocurrency addresses and their transaction history. Relevant data for a purchase like name and delivery address are only shared in an encrypted manner between the merchant and the customer and stored locally on each of their devices.
- Lower competition on this new blockchain-based eCommerce platform is the wave you should try to catch as an early adopter. Not only will you face lower competition compared to regular eCommerce platforms but you will also expand your customer base by targeting specific users' needs or preference to pay with cryptocurrency, have their personal data not compromised and make anonymous transactions.
At The World Marketplace, online shopping with cryptocurrency is already possible. A digital guide on what you can buy with cryptocurrency around the world shows that cryptocurrencies are shaping the future of eCommerce and are on the verge of creating a new era of Crypto-Commerce.