E-commerce stores and online marketplaces were developed a long time ago and could not be considered a new shopping method. However, ever since the COVID-19 pandemic erupted, it accelerated the digitalization process. Many people had to learn to do everything remotely, from working to shopping.
Through those experiences, people started to realize the benefits of online platforms and some decided to adopt them as a new normal. Good examples are big companies like Airbnb, Twitter, and Spotify, which allow their employees to work from home permanently.
The growing number of people familiar with doing things online also leads to a larger customer base for online stores and marketplaces. According to Insider Intelligence (1), worldwide e-commerce sales will reach $5.5 trillion by the end of 2022 and has the possibility to reach $7 trillion by 2025.
Seeing this as an opportunity, e-commerce business has become a trend that everyone wants to dig into. Even the big brands started to invest more in their digital platforms instead of physical retail stores.
It is also a good opportunity for new entrepreneurs with limited capital that want to start their brands without having a brick-and-mortar shopfront. Here is a list of why it is a good idea to sell online and also why e-commerce is better than traditional retail:
An online store means the shop is accessible to everyone who can connect to the internet. The customers can be anywhere in the world and not limited to geographical restraints, as long as you can ship your products there. There is no limited space or even limited opening time.
Your customers can come to take a look at your products 24 hours and order whenever they feel likely. This can be implied that there are more chances for your products to be seen by the target customers and increase your chance of selling.
With online marketplaces and platforms, there is no need for building a company or going through all the complicated procedures to have a physical office.
Nowadays there are several methods that can help e-commerce store owners run their businesses easier by outsourcing their logistics and order fulfilment to other parties. Famous examples are dropshipping and Amazon’s FBA. With the dropshipping method, you (the store owner) can rely on the manufacturers to stock and ship your products to the end customers. While Amazon’s FBA stands for “fulfilment by Amazon” which means you ship your products from the manufacturers to Amazon warehouse, and let them handle the packing and shipping to the end customers.
Or, if you think selling general items is too boring and you want to create something a little bit more unique, some manufacturers offer a “private labelling” option for you to customize your products according to you and your brand. This option is also available for dropshipping and Amazon’s FBA, so you can just focus on selling and marketing your branded product.
Since online stores do not need a physical location, you can save a huge amount of cost compared to having traditional retail. Furthermore, with the choice of dropshipping and Amazon’s FBA, there is no need for stock and inventory. Even though there are some fees for these services, it is still a lot less compared to the building and maintenance costs of a physical store.
You can collect data to gain customer insights and improve the match between your products and your target customers, to increase sales and grow your business. With data, online stores can show customers the products they want and make them more likely to purchase. You can also track your customers’ interaction and develop a smoother customer experience to boost your sales, which is harder to acquire in traditional retail shopping experiences. However, it is important to comply with GDPR to ensure the customers’ privacy and trust.
Online stores and marketplaces are even more suitable for niche market products. Due to the difficulty of finding target customers for niche market products, being limited by the physical location of the shopfront only makes the products harder to sell.
On the other hand, online access can increase the chance for your products to be seen by the right customers, wherever they are. The harder your products can be found in physical stores, the more chances the buyers will look for them online.
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