E-commerce generates billions of dollars across a variety of industries: consumer packaged goods, clothing, health, etc. It connects consumers with specific needs to product or service providers. Creating a business around an e-commerce is a big opportunity to generate greater income, but at the same time, it presents greater challenges. No business is easy, less so one that involves products or services, technology, pricing strategies and dynamic markets. Even so, the steps to achieve a successful e-commerce are clear today more than ever. In this article, we’ll talk about an essential step: finding out what products to sell and why.
The different phases of e-commerce
If we analyze the more advanced markets, like the American one, we can detect repeating patterns that are reproduced in other countries who have adopted e-commerce as a growing economic model.
Phase 1: Emerging e-commerce. Users aren’t aware or have certain rejection of online payment methods and only shop in safe and known stores. Starting is difficult because the related systems (logistics, payments and general regulations) aren’t in tune with what e-commerce needs for its development. Colombia and Peru are in a transition between this phase and the next.
Phase 2: E-commerce has been in the market for some years. Online payment methods are accepted partially, although there’s still some reluctance. Local regulations have started to change to promote e-commerce and users are reacting positively to online shopping discounts. Discount websites are very popular. Some logistics systems, that allow the shipping of products in a relatively secure way, are established. Chile, Brazil and Argentina are currently in this phase, moving quickly into the third one.
Phase 3: E-commerce is widely accepted and it’s part of daily life. Payment methods are massively accepted and regulations have permitted a growing competition and the appearance of new actors. Logistics systems and regulations in general are working. This allows people to massively buy online with a greater variety of different products at their disposal. With these phases in mind, you must first define the one your country belongs to in regards to e-commerce. If it’s just starting out and users aren’t comfortable using online payment methods and prefer safer transactions, the product or service must take these variables into account. Products with a discount or in categories that can offer a big price difference due to its smaller costs structure, are a valid alternative. On the other hand, if your local market is more advanced and there isn’t much reluctance to use virtual payment methods and the shipping systems work at a decent cost, the array of products broadens. You could sell clothes, accessories, cosmetics, etc with a lower risk. The question now is, what phase does your country belong to?
E-commerce is local
Many companies starting out with e-commerce have tried to make their business grow by opening their websites to other countries in the continent. This is an interesting challenge, but it fails most of the time for a very simple reason: every market is different in a cultural way, in its regulations and the e-commerce phase they’re currently on. It’s expected that in 2018 electronic commerce will surpass the US$100.000 million mark in Latin America, a 177% increase in regards to 2014. While this is a very tempting number for online stores throughout the continent, the challenge resides in being strongly established in a local setting and only then analyze what market shows the most similarities.
Think of Logistics
Logistics is the main obstacle for many new stores and companies wanting to grow. The first thing to consider is the cost associated with logistics. In Latin America, there are markets with high cost logistics systems that are not well suited for e-commerce. This doesn’t allow for a rapid increase in area coverage. This is why when starting an online store, you should choose small sized products. This will allow you to get more stock at better prices which can lead to the addition of products of greater volume. The second thing to consider the reliability of these services. Some logistics systems can offer a good price for shipping, but in some areas their delivery rate can only be around 60%. You must also take into account the refunds and products that get lost in delivery. If 40% of deliveries are not successful, you can’t risk selling high value products. You must choose items with greater margin and maybe lower cost. *The question is: What are the features of the logistics systems present in my country?
The best approach is to try them out quickly and compare results
While there are many tips flying around about deciding what to sell, the best thing to do is to launch products into the market and see how people will respond. Today is easier and cheaper to experiment and see what products have a higher acceptance. You will be surprised with what people actually want. You already have an understanding about what factors to evaluate when selecting products for selling. You’re one step away to do it. Open your online store with shopping cart in just one click with Jumpseller, and the best: try it for free!