Building a business from scratch is a long term process and it needs a lot of patience to see the success. Its a common rule for both online and offline businesses in the world. Yet, during the process, you will find ups and downs and lots of learning along the way.
I was once a dropshipper for years and now I am handling a few customers. But I see the same pattern being followed for even a small dropshipping store or a branded eCommerce store. That’s learning and improving.
Ecommerce is a trillion-dollar business that anyone can begin. Unfortunately, many people are unaware of do’s and don’ts, before they enter into this large ocean. Also, it is important to realize the nature of ecommerce. I believe you are a smart person who needs to dig down and understand the pros and cons of e commerce.
When I started my e commerce journey by selling online as a dropshipper I was inspired by youtube stars who claimed profits $500 to $1000 per day in their videos. But reality is not the same. Let me share my experience about the ecommerce pros and cons without dragging much
Pros and Cons Of ecommerce : Advantages of e-commerce
Table of Contents
1.Easy to Plan
This is my favorite feature of e-commerce. It gives very easy access to plan the business through simple online research.
Before starting an ecommerce business, I would encourage you to begin your market research about your audience.
Market research can give you a clear idea about your audience and what they expect from you.
Simple part of online research can be like this
What websites do your customers regularly visit?
What do they follow online?
What relevant media do they follow?
What are 5/10 Influential or interested in them
2.Build a Market Before the products
This is another advantage of the e commerce business and I learned this strategy from Neil Patel.
Here is how you can build a market before you start your ecommerce business. I have applied this method through blogs.
As an example, let’s think you are a horse lover and you have horses. What you have to do is to start a social media account related to horses. In this case let’s think you start a Youtube channel about horses. Consistent uploads of high quality videos can increase your subscribers. As you reach 10,000 subscribers, you can start your own horse niche ecommerce website that sells horse related products and promote it through your youtube channel.
With this method, you can start getting sales which will help to grow your business as well as your Youtube channel. You must have seen most of the popular youtube stars have their own ecommerce business aside.
The startup cost of a commerce business can vary. If you are trying to sell your own products, that can be costly due to ton inventory cost. But if dropshipping is your business model, it is definitely cost-effective. Dropshipping is a business model, where you can run your own online store without owning an inventory. Also, you don’t need to spend money on staff salaries, storage facilities and retail spaces , etc…
Dropshipping is one of the very popular ecommerce models that any person can start with a fair amount of budget. But after analyzing many dropshipping stores, I have noticed most of the beginners have no idea about the sales optimization and the marketing strategy. I will address this in the cons/disadvantages of ecommerce section of this post.
4.Be the side hustle Hero
In order to come to the e-commerce industry, you don’t need to leave your full-time job and put your family in a massive risk. (I never recommend it at all) While you are doing your full-time job you can start an ecommerce store and spend time improving it.
Most of the dropshippers started as a side hustle and later they moved to their own brand as a full-time ecommerce owner.
Have a look at the Gymshark story below, how that 19 years old boy built the business while he was still studying at the university.
When I’m talking about Pros and Cons Of e commerce I have to mention this, ecommerce has a learning curve that every beginner has to go through. But the best thing about it is, there are tons of blogs and videos on e-commerce where you can learn without spending a dime. It is really important to learn from someone who has experience in running an online business or online selling.
However, you need to be aware that there are plenty of e-commerce gurus who are trying to sell expensive online training courses. In the beginning, I also purchased a few courses. Then I realized that those are the same free youtube contents in an organized manner.
Hats off to the internet, your business is no more a business which is stuck in a postal code. It is a universal business where I will sell the products to a customer in Bologna, Italy, when I run the business from Dubai, United Arab Emirates.
The Internet has become so powerful that you can sell the products to anyone who is using Facebook or Google.
7.Identifying the customer behaviors
As a growth hacking part of e-commerce, it’s very important to analyze the customer data carefully. By motoring visitors activities, bounce rate, exit rate, etc we are able to get a good idea about the customer behavior patterns.
There are some free as well as paid tools to analyze those data. Google Analytics, Google tag manager are free tools and Hotjar is a paid tool where you can get heat maps and session recordings.
Advertising platforms like Google and Facebook provide retargeting options to ecommerce business owners. Retargeting is a super powerful option where the ads will follow the customers every time they are online.
Comparatively, retargeting ads are bit cheap and it has a high conversion rate. So, Retargeting has become very popular among ecommerce business owners.
9.Communication with customers
Customer relationship is the number one priority in ecommerce business. With the latest technologies available, the business owner can talk to them and solve their issues instantly.
Eg: If you have a Facebook page, you have an amazing opportunity to talk to your audience and influence them.
Not only that you can set up a massage service in your e-commerce store for the visitors to communicate with you in a second, but also it is an excellent tool to win the visitor’s heart and make them your customers.
Don’t forget that communication with customers can increase Customer Lifetime Value.
10.Easy and affordable employees
With the growth of your ecommerce store, you must focus only on one area of your business. Either marketing or operation. In this situation, you can hire a Virtual assistant for a very affordable salary scheme.
You can easily find VA’s from freelancing websites like Legiit and assign the task how you want. But it’s important to train the VA’s the way you want and also maybe you can take them through tests to find the best out of them.
11.Product research without buying the inventory.
Every business requires having products on hand to start marketing. But ecommerce platforms have passed that hurdle. If you are running a dropshipping business you can start your marketing campaigns when the products are still in the Chinese supplier’s warehouse.
Through the marketing campaigns, you will be able to find out the winning products and scale the marketing on the winners.
12.Improving the business without a huge cost
To Improve the brick and mortar business requires a large sum of money. To change the outlook of the shop, increase the storage capacity, and hiring employees can add to the cost in the brick and mortar store. And also those improvements may need a long time to achieve.
However, the advantage of ecommerce is, it will not cost a fortune for the improvement of the business. Changing the store theme , improving user experience, and changing the landing pages can be easily done with a minimal cost if you have an in-house developer or you can hire a freelancer for the same.
13.Scaling is easy
Indeed, there is a point where every ecommerce business has to scale it up to the moon. Although, it is not a difficult task if you know how to do it. If you want to sell the products in another country or if you want to sell the products worldwide can easily achieve that solely with your marketing campaigns.
14.Fastlane to build a brand.
Who does not want to build a brand like NIke, Apple, Cocacola, etc.? With online marketing, it’s no more a difficult task as it was 10 years back. Ecommerce allows you to easily build a brand with the help of a good online store.
If you have a strategy to dominate social media with your ecommerce business, it’s not a challenging task to build a brand anymore. And I have seen beginners build their brands within their niches in a short period of time.
Pros and Cons Of e commerce: Disadvantage of ecommerce
I must mention this as the first con of our topic Pros and Cons Of e-commerce the reason being, many beginners are going out of the business after realizing when they don’t make any sales after spending thousands on Facebook ads.
Ecommecre has a learning curve that everyone should go through.
80% of the ecommerce depends on online marketing on different platforms. It may take time and plenty of testings to master any online platform. Therefore, I never recommend anyone to start with all the platforms together.
If most of your audience is using Facebook, it is a wise idea to learn and start advertising and improve your Facebook marketing skills.
Yes! It is one of the major disadvantages of ecommerce that keeps most of them away from this online business.
2. Patience to listen to customer complaints.
When your business grows into a global online retailer, you will have customers from different countries and cultural backgrounds. I experienced some of my customers sending mails in Italian and had to use a translator to understand them.
You have to be cool and calm to answer them. Especially if you are running a dropshipping store you have to be prepared for customer complaints. The disadvantage of dropshipping is that most of the operation is out of our hands. There will be many loopholes where customers can complain of. Eg: Delayed shipping, damaged items, etc,
To minimize customer complaints, I stopped selling fragile items and oversized products.
3.Shipping can kill your business
Yes! It’s true! Shipping is an important factor in the selling online. Also, shipping can break customers expectations as well. If you are running your own inventory, it is important to arrange a trustworthy shipping service even if it’s quite expensive. And that will definitely improve your customer satisfaction.
But if you are a dropshipper you have to take it as a challenge and face it. Always mention how many days it can take for the delivery in your shipping policy. Also in case of any inquiry comes from customers, never ask them to go and check the shipping policy. Provide the tracking code and tell them where the shipment is right now and inform the customer that you will follow up to make the delivery fast.
I had some experience with very delayed shipments and I have refunded the customer without any doubts. And later when they received the shipment the customers informed me and I allowed them to keep the products free of cost for my service failure. It was a loss for me, but later I had the chance to sell more products to the same customers.
According to data, there are 800,000+ Shopify stores operating around the world. Not only that there are other platforms such as woo commerce, big commerce etc…That clearly shows how competitive the ecommerce platform is. High competition makes advertising costs very high. Because many people bid on the same keywords can increase the cost of ads.
To face the high competition you have to over-deliver your services to the audience. And build a good retention customer base. Retention customers are gold to your business.
There is no way a customer can experience the product before they receive it. But when you deliver the product, it might not match with the customer expectations. This is a common issue in the ecommerce business. This issue arises, especially in fashion and clothing niches.
If you want to start a dropshipping business it is wise to avoid those two niches and look for some other niches. Specifically, it’s difficult to dropship women clothing and also meet with customer satisfaction.
As a solution to avoid these kinds of issues, you can optimize your product pages with a good description, product images from different angles, and additionally, how to use product video can boost the description. By providing sufficient information about the product can clear customer doubts and avoid high expectations about the products.
If you are someone hoping to enter the ecommerce business, I believe the above-mentioned advantages and disadvantages of ecommerce and online selling can help you to attain a clear picture of the industry and how to run an ecommerce business. Also never be demotivated by reading the cons of ecommerce because there are solutions available for any challenging situation.
You have the opportunity to talk to me and get any help you may requirein order to build your brand. Make sure to comment and give your feedback about the above points.
Thank you for reading Pros and Cons of E commerce and see you again.