5 Questions to Ask Yourself Before Investing in E-Commerce
You have probably heard of cases about companies around you that have had 30%, 100% or 300% increase in online sales since the start of the Covid-19 crisis. The current situation has led many entrepreneurs to review their priorities in consideration of two main objectives: to simply survive their business or to seize a new business opportunity. What about you? Have you analyzed the possibility of selling your products online? If yes, excellent! Your site should have been ready yesterday.
Before investing in the implementation of an e-commerce solution for your business, you should ask yourself the following 5 questions:
- When should I start my online business?
- Do I need B2B, B2C or both?
- Are marketplaces the right choice for me?
- Which platform should I choose for my e-commerce?
- Is my inventory and warehouse software ready?
1- When should I start my online business?
The answer to this question depends on several factors. If your customers are already shopping online, the answer is NOW. Indeed, if your customers shop and buy online, and you are not there, then they are probably buying from your competitors.
To get online quickly, several strategies are available to you:
- Only put your featured products online;
- Select a few product lines that lend themselves well to electronic commerce;
- Select an e-commerce software that offers standard pro-formats;
- Select an e-commerce software that is already integrated with an ERP software;
- Choose a partner who has availability and expertise for you;
- Choose between B2B or B2C.
2- Do I need B2B or B2C or both?
To get started, you need to know who your customers are.
Are they consumers who buy for their personal needs? Yes. Excellent, you are going to need B2C.
Are they small and medium businesses that will shop and buy on your website? Yes. Perfect, you are going to want B2B.
Are they big companies? If so, be careful. Do not assume that these customers will systematically order from your website. Large companies have integrated ERP management software, and buyers make their purchases through this software. Therefore, there is little chance that they will place orders on your website because they will then have to enter the transaction manually in their system (double entry = waste of time). If your customers are large companies, you should focus on integrating and automating orders with them. Integration with the Ariba platform would be a great way to achieve this. We expect 3.2 trillion USD in transactions through Ariba this year.
Also, keep in mind that B2B companies often have complex price lists to manage by customer, by product, by volume, and by date. Not all e-commerce software can manage complex price lists.
3- Are marketplaces the right choice for me?
Marketplaces can allow you to gain access to a new type of customer and possibly exit your business niche. This can allow your brand to stand out and gain popularity. You can also use marketplaces to launch and test new products, liquidate surplus stocks, test your prices, etc.
Here are some factors that can help you determine whether or not you should get into this type of online sale:
- Be ready to sell your products internationally, considering the logistics involved;
- Study the costs that the platform charges you and calculate the return costs;
- Make sure you have an attractive profit margin after paying the following fees: monthly fees and each sale, return fees, replacement fees, restocking fees, etc.;
- Optimize the logistics in your company: efficient warehouse management, fast delivery times, return management (RMA), refunds, product replacement shipments, etc.;
- Hire internal resources or an experienced firm that can support you.
4- Which platform should I choose for my e-commerce?
If there was a perfect solution, there would not so many software options available on the market. Here are some things to consider:
B2B or B2C
Some software can do both, but many cannot. Others specialize in B2C but are not at all suitable for B2B.
The level of personalization sought with your transactional site
Some solutions are much more flexible and complex than others. If your products and services are standard and simple, opt for a lighter platform. Otherwise, choose a custom solution.
Make a business plan for online sales and establish a budget that makes sense in relation to anticipated income. Your first site should be beautiful and functional, but remember, it will not be your last. You may change it completely or improve it once you have some experience and supporting figures.
Your transactional site
It must be 100% integrated into your financial or ERP software. Information (price, quantity in inventory, etc.) and transactions (invoices, payments, deliveries, etc.) must be transferred between the two software programs with little or no human intervention. If you buy a connector to make the link between the two, make sure that it has several customers to reference who use the same software (ERP and eCommerce) as you do.
5- Is my inventory and warehouse software ready?
Recently, several companies have seen their online sales explode. Good news! They were ready, and they took advantage of the current situation to do good business. The downside of this increase is meeting “on-time” delivery. People are used to buying from Amazon and having it delivered in 2 days, or the next day if they are Prime subscribers. Are you able to deliver your products in such a short time? Here are some solutions on how to be ready to meet your delivery deadlines:
- Optimize the management of your warehouse with WMS software: movement, filling, and packaging. Everything must be done faster.
- Use barcode readers. These reduce errors and increase productivity, especially if your products are managed by serial numbers or barcodes.
- Improve the structure of your warehouse: type and arrangement of racks, shelves, row width, etc.
- Choose the right type of lift.
- Negotiate in advance with your carriers depending on the volume and delivery times. Frequently, carriers are much more efficient and affordable for specific territories and routes.
In conclusion, the current crisis has exposed many consumers to online commerce while others are shopping online more than ever. One thing is certain, new shopping habits are here to stay. If your customers are online, then you should be online too.
E-commerce can generate significant income for your business. It is time to get started. Make sure you are surrounded by qualified people who have the necessary expertise to support you.
The N’ware Technologies team and our partners are available for you!