There are many e-commerce stores popping up right, left and center. The online market is like “Perfect Competition” described in economic studies; in perfect competition, there are no barriers toand exit and no single player can influence price. It is very easy to set-up an e-commerce store but with thin margins and cut-throat margins it is very difficult to survive and prosper in this segment. Many e-commerce stores are closing down, and yet at the same time, new big players like Walmart are entering into the market by purchasing websites like Jet.com in multi-dollar deals! Amazon is continuously expanding and is now currently pushing to capture a greater market share in India. The market has potential but only for the most determined. For the small players right now, it is especially a daunting challenge, as the market is in consolidation stage and most of the big players are combing and pushing slower businesses out or buying them out.
So the point comes what can you do for success in the e-commerce world?
- Digital advertising is the key to success
You need to stay up-to-date with the latest trends in online advertising, for it may look easy but it is actually quite challenging. Thanks to the advent of traditional Google ads will no longer cut it. Also charging your credit card on Facebook is also quite the expensive option and you cannot just rely on Facebook alone. So what do you do? You keep abreast of latest trends, for example right now Video ads are one way of getting around ad blockers.
Besides ad-blockers, video ads make more sense. Video consumption across devices has increased thanks to falling data charges in most countries and increasing smartphone and internet penetration.
- Look inwards
Right now the e-commerce market is cut-throat. You can only maximize margins to a certain level. To stay competitive against giants you need to cut every possible cost. You need to look inwards and see where you can save money. Find a cheaper toll-free number, a cheaper shipping service or find ways to save on packaging. Negotiate better credit periods and see your bank charges and negotiate for each and every cent you can. It is difficult but every cent saved helps to add towards the bottom line.
This is especially a must for start-ups, often being helmed by fresh graduates who also have to worry about paying off their student loans. Every strive and profit you make out of your business not only helps you scale but also helps to get your personal finances in order avoid problems like delayed student loans.
- Keep track of customer satisfaction rates
Customer satisfaction rates are often treated like a fire putting exercise. They often come into the limelight once sales start to fall. By then, restoring customer satisfaction and restoring goodwill lost becomes an uphill task. All businesses heavily rely on customer satisfaction thus one should keep a constant track it. Monitor your total sales and then draw up a meaningful sample that represents the whole population. Follow up with this sample and understand the customer satisfaction levels. Also keep a good track on customer reviews. Pacify disgruntled customers fast because they are the ones who are more active at commenting on public pages.
About the Author
Rachael Everly is an undergraduate student who loves to write on the topics related business, finance, technology and education. Follow @RachaelEverly for further updates