What you need to start in E-Commerce

[netting87]

“You have to work out your model on several levels. Find something truly innovative to place online, make sure that the marketplace is big enough to slot your company in and sustain three or four companies of the same type. Then, make sure you have a solid and fully qualified and experienced management team, as their expertise will be crucial in the long run and finally, time your entrance to the market.”

This is a quote I took from a startups.co.uk article about starting up in E-Commerce.

Most of it I think is relevant, but the bit about having a "solid and fully qualified and experienced management team" is a bit off surely. What she is saying is unless you already have an infrastructure set up you can't do it.

I'm looking to start my first business online, but this has really raised doubt.

Does anyone else actually agree with this?

 

[innovengine]

Hi Dan,

I don't agree with the "solid and fully qualified and experienced management team".

Mostly as it doesn't provide details of what "solid" means or the qualifications should be. Maybe on the site is does -but from your titbit, it doesn't help.

It kind of gives the impression, that you need five or six people managing everything; and that's complete rubbish.

E-commerce can start off like a small corner shop, albeit somewhat more technologically advanced.

You need:

a) A very good website
b) Someone on the backend completing orders from it
c) A strategy for getting people to visit it
d) A value add to get people to buy from it
e) A feedback system to develop it

Done...

As you build and get more customers, you'll need to expand on each of these areas. As each area gets bigger, you stop being able to manage it all yourself, and then need a team - not before.

Some businesses make the mistake of overbuilding infrastructure. Whereby they hire a massive team, a big warehouse and spend aggressively on adverting. This, ultimately leads to spending far more than you need - and having an infrastructure that is underutilised for quite some time.

As an entrepreneur, you need confidence in yourself; something that you seem to have on the whole. Keep with it; put the energy where it is needed. Use articles to give you the heads up, but don't let them discourage you.

If you have the right skills, the right business and enough energy to keep going through all the crap you have to face, it'll work.

Darren

 

[netting87]

Thanks Darren,

Unfortunately this is all she says. Its an article written by the site itself, but at the end "Sonia Lo, co-founder of Ezoka.com, gives her expert advice"

The word 'expert' is questionnable from what you're saying.

 

[innovengine]

Thanks Darren,

Unfortunately this is all she says. Its an article written by the site itself, but at the end "Sonia Lo, co-founder of Ezoka.com, gives her expert advice"

The word 'expert' is questionnable from what you're saying.

Indeed, the word "expert" should be taken with a pinch of salt in most instances.

Let me know if I can be of any further assistance.

Darren

 

[CableGuy]

I echo Darren's comments.

The CEOs of the larger e-commerce companies run very different companies to the smaller SMEs (small/medium sized enterprises) that dominate the online marketplace. We don't have layers of management, millions to spend on marketing or acres of warehousing. Most are run by small companies, or even just individuals, who have determination and passion.

• You do need a good web site because search engines are a big factor in online sales.
• You need something to differentiate you - ideally something other than price.
• You need to offer your customers fantastic service so they come back for more and tell their friends.
• You need good supplier links to get stock fast (if you're selling a physical good).
• Finally, you need a good delivery firm to maintain the excellent service you offer right until the end.

Running an online business can be really rewarding and really frustrating - but ultimately it's like any business - it's hard work but worth it (most of the time!).

PS: The domain name 'Ezoka.com' goes to a holding page! Maybe Sonia's business was part of the Boo.com 'spend, spend, spend' era! However fancy the business plan, logo and marketing, a business needs profit so survive and prosper. Simple as that.

 

[MartCactus]

I agree with other posters here.

Success of a business (any business) isn't dependent on "a solid and fully qualified and experienced management team, as their expertise will be crucial in the long run"

I know of many successful businesses started by inexperienced people (mine included, and we've been going 10 years now!). We've seen lots of inexperienced customers of ours set up successful businesses with our software, and also seen many fail, so we've had some experience of the mistakes that those starting up businesses make.

The common mistakes we see are:
1) not understanding their market properly...eg trying to sell a product that people don't really want, trying to sell a product against established players when the product isn't significantly better or cheaper, trying to sell a product to company car drivers when they should be targetting the buyers instead, etc.

You'd be surprised how many people have a great idea for an online business they think is unique and don't even bother to do a few searches to find out whether it is or not.

2) not realising how much it can cost to market a product. People have to know about it. In most cases its not enough to just rely on search engine traffic.
3) insufficient reserves of cash - very few business are profitable from day one - how long can you survive until you turn a profit?

Clearly experience is a plus point, but its not essential by any means.

 

[deniser]

I echo Darren's comments.

Maybe Sonia's business was part of the Boo.com 'spend, spend, spend' era!

I was just thinking that before I reached your post!

Having read the book about Boo I can't help wondering whether they would have made it if they had started small and grown organically. They would have benefitted hugely from broadband if they hadn't gone bust so quickly.

 

[quikshop]

If you are hoping to win over venture capitalists or business angels, the very first thing they look at is your team. Having someone there with recognised skills or achievements in your market (a so-called expert) is a huge plus.

 

[fairestcape]

Looks like that quote is aimed at "established" bricks 'n mortar companies who are now looking to make inroads into e-commerce.

If you're a one-man (one-woman) start-up, then there are a variety of inexpensive options available. E-cart software comes in many shapes and sizes, from the simple "paypal" button on a website selling tea-cosies made by aunt Agatha, to sophisticated monsters that manage everything from stock control, visitor analysis, seo, fulfilment tracking to CRM, marketing and competitive analysis.

You can pay for e-cart software - or you can get it for free (opensource packages such as OsCommerce and Zencart).

There are literally hundreds of people out there capable of offering help advice, and commercial services - some are hopeless, others are very good. Simple rule of thumb - you get what you pay for.

Best way to determine if there's a "gap in the market" is to see what's happening - use Google, MSN and Yahoo to search for webshops that are already selling items you'd like to sell. Spend a few hours each evening trawing the web, doing basic research.

If the sector in which you'd like to trade seems heavily subscribed already, it could mean one of two things - either the sector is extremely lucrative and theres space for lots of players, or, the sector's too crowded and margins are cut-throat.

A popular trend today is for people to set up webshops, then use drop-shippers to do fulfilment. This has advantages in that you don't need to carry stock, but you are reliant on the efficiency of another company. If they are slack, you get tarred with the brush.

The web is a great leveller - a small one-man band can have a website that is functionally as sophisticated as a major national retailer - but this is just one facet on a very complex prism...

The big retailers use traditional advertising and marketing driving huge traffic to their sites (on average, tesco concludes a sale every 1.5 seconds on its website).

But back to my first point, you can get up and running on quite a low budget, and if you have some technical expertise, then there may be no need to heavily engage consultants.

... but if you are serious about making a success - or at least giving it your best shot, treat the venture as you would any business start up:-

Research
Level of investment needed (human as well as cash)
Business Plan
Forecasts (cash flow)
Competitifve analysis
Marketing Strategy
Business management

 

[netting87]

fairestcape thats fantastic, thanks!

 

[TotallySport]

Hi

I disagree with some of the above.

Although I agree with the part where you don't need and experienced qualitied team inplace, and I do agree with the research.

But IMO the only thing you need to setup and e-commerce business is time!!!

To start in ecommerce you need time to look into your idea and prepare to put a plan into action, and then go for it.

You don't need a web site to sell online and in theory it could be hard going especially at the begining, there are othe options, ebay, ebd, tazbar, amazon and more, classified adds, forums, and other places will provide you with a market place for both tangable and none tagable goods, but will also give you a place to focus and learn.

You can have a business plan but thats not necessary, a good idea maybe but as long as you have done your research and have time and don't waist money you haven't got, learning is part fo the fun.

Goals are also a good idea but not essential, that way you can take check of your progress, especially if you going for the more organic approach.

Good luck.

 

[Page]

“ Then, make sure you have a solid and fully qualified and experienced management team, as their expertise will be crucial in the long run and finally, time your entrance to the market.”

Does anyone else actually agree with this?

Absolutely I agree with it.

But that can be simply you - you are that management team - when you start up and if you are good you may well go further but if you are poor you will probably fail.

But then if your online store grows the nature of that team may have to expand beyond yourself. And a good team ... and a bad team ...

 

[ibizara]

I have had a lot of customers contact me with regards to setting up an eCommerce website. I thought I would share this information of an OpenSource project called Total Shop UK eCommerce. It can be freely downloaded from SourceForge - sourceforge.net/projects/totalshopuk/files/

It has been made with simplicity in mind. If you have a PayPal account then great, all you would need to do is add your email address under the configuration page. Simple!

Hope this helps some people looking to start their own online shop.

Regards,
ibizara

 

[leonyu]

to some extent, e-commerce is the same as traditional trading, knowledge of the products you are dealing with is a MUST.

 

[yourmajesty]

I have always used Actinic with customers accounts and would not trust anything else when I web design.