Nobody said having a business would be easy. The failure rate of businesses around the world is very high, surpassing 90%. The numbers are even less encouraging in Latin America. There are a variety of reasons for this: poorly dynamic markets, products or services not designed with the customer in mind, entrepreneurs lacking the necessary tools and knowledge, etc. One of the most important reasons for this failure is that people starting a business don’t have the needed mentality to overcome the day-to-day obstacles. There’s a cloud of uncertainty not everyone can deal with. We don’t know if what we’re doing is good, bad or even worse, we can’t identify what’s actually working and what’s not. Here’s where e-commerce comes into play: it’s a quick and cheap way of creating a business, allowing anyone to try out products at low cost until finding a match in tune with what people want. And better yet, with data that will allow for decision making and the creation of a business with value.
Having a business is a learning process
When most business owners start with an e-commerce store, they believe the first thing to do is to create a company, a structure, and to implement systems. The issue with this approach is that when starting an online store, in pretty much the 99% of the cases, we won’t really know which products will sell. Think of Amazon: When they started in 1994 they didn’t know what to sell. The only thing they knew was that the internet was taking off and the obvious result would be that this new technology would bring the digitalization of all the things people do, even buying. But they needed to know what it was that people wanted. They couldn’t just start with a “store for everything” from the beginning. It would be expensive, inefficient and probably not smart. For this reason they started selling only books. It was something people were buying on a regular basis and the offer was segmented in many different places. It wasn’t easy to find a specific book because the bookstores at the time weren’t connected between them and there wasn’t a centralized database that could help find the book you wanted. Thus, Amazon found its starting point. But with the following months and growing book sales they realized people also wanted another product: music. CDs represented an opportunity similar to books. Amazon was able to receive that feedback on a daily basis from the data provided by their customers. This way, the empire grew. To start an online store is a constant learning process. To be successful, you must be open to try and fail and keep trying.
Try out products without fear
Having an online store is cheaper than ever. The challenge is not having a store but to turn it into a real business. Jumpseller, for example, allows you to create your store with a shopping cart for free with a single click. This is no longer a barrier to start. The next step is to test your initial hypothesis on what products to sell and find out what’s the initial response. If the response is good, you’re already on your way. If, on the contrary, people are not buying your products, ask them why, and what, they would buy online. The answers will surprise you. Trying out an e-commerce is free, use it!
Having a large inventory is not a necessity
Many believe that having a large stock of products is necessary to be able to sell on the internet. There are, in fact, many ways to avoid large initial costs. Let’s look at Amazon again. Before having stock, they would go and get the books in person at the bookstores as soon as an order would arrive. They would carry them back to their offices, pack them and ship them to the final recipient. Most times they wouldn’t gain any money and would even lose some. The important thing at the beginning wasn’t getting a lot of margin but to verify that people would buy products online. Once the model was no longer sustainable, Amazon started doing business directly with publishers and having its own stock. Simple, isn’t it? It isn’t always necessary to have an inventory of your own to starting out. Think about how you can start with someone else’s stock.