E-commerce: 10 myths dismantled
Whoever tried to launch an e-commerce site, knows it doesn’t go exactly as one originally thought it would. Web designers, e-commerce solution vendors, and web hosting companies have made a fortune telling people how “easy” it is to launch an e-commerce site.
However, the potential entrepreneur needs to look at the task ahead with an objective and informed mindset, not in a superficial way which could lead him to fall into the traps that have caused many similar projects to fail.
Here are some common, dismantled urban myths about e-commerce.
MYTH NO. 1 E-COMMERCE IS CHEAP
MYTH NO. 2 E-COMMERCE CAN MAKE YOU RICH
E-commerce has been seen for a long time as the El Dorado of modern times. It is supposed to be cheap and an easy way to become a millionaire overnight.
While entry barriers are lower compared to a traditional business, e-commerce still entails costs (estimated around 10 000 euro). It is true that you do not have many of the constraints of setting up a physical store, but what you would pay for renting a good commercial space, in the digital world you have to invest ( time, knowledge or money-wise) into making your store visible, usually through SEO or SEM.
On the other hand, as any business, selling online has risks, so profit is not a sure thing, and potential gains are usually proportional with the investment made (unless you are a true innovator).
MYTH NO. 3 ALL YOU NEED IS A WEBSITE AND OFF YOU GO
E-commerce is not about technology in the first place.
Setting up the online store, although a complex task in itself, is the easy part of the business.
In order to make it successful you need to figure out the business aspects, which are as complex as for the brick and mortar counterpart.
MYTH NO. 4 NOT ALL PRODUCTS CAN BE SOLD ONLINE
It starts with having the right product that caters to a real need. While there is in fact no limit to what can be sold on the internet, the challenge is aiming it at the right market segment and making it visible, which can be tricky on the internet. You have the whole world as your potential customer, but also as your competitor.
MYTH NO. 5 SETTING UP AN ONLINE SHOP IS A TASK FOR THE IT DEPARTMENT
MYTH NO. 6 AN ONLINE SHOP CAN BE RUN BY ONE PERSON
Given the complexity of doing business in the digital world, setting up an online store does not involve only the IT department, but the whole organization and multiple competencies. For the same reasons, running an e-commerce is an equally complex task that cannot be handled by a single person either.
MYTH NO. 7 THE KEY OF E-COMMERCE IS GOOGLE
As far as the marketing effort is concerned, though it is important not to limit it to Google SEO.
Google page rank can only bring you visitors, but you still need to convert them into customers, and more important, into loyal customers. In addition, since Google algorithms change often, your page rank can easily drop. If Google is your only source of customers, this could “shut” your business down until you rework your SEO strategy.
This said, the other key element is the customer. We need to be aware of the things that might keep him away from buying online.
MYTH NO. 8 ONLINE PAYMENT IS NOT SAFE
Statistically, online payment is safer than ATM withdrawals and most fraud attempts on the internet are from buyers, not sellers.
On the other hand, the need for online security is widely recognized, and a lot of effort and investment is being put into its improvement.
MYTH NO. 9 CUSTOMERS SHOP ONLINE AROUND THE CLOCK
We must not thing that the online customer is a lot different (or easier to attract) that the customer offline. For example, he will not ensure “around the clock” orders on your site. There is a statistical predilection for shopping in certain time intervals: 10:00 – 12:00, 16:00 – 18:00, 20:00 – 22:00 which are not completely different from those of traditional commerce.
MYTH NO. 10 A SUCCESSFUL COMPANY OFFLINE WILL ALSO BE SUCCESSFUL ONLINE
For those trying to expand an existing business into the online environment, it is important to keep in mind that pure- players are in fact favoured on the internet, so the success is not guaranteed even if the business model has worked offline.
The conclusion…. Education is key for of both entrepreneurs and customers.
- Know your customers. Meet their needs.
- Educate and convince your clients that ordering online is convenient!
- Don’t try to please everybody. Aim at one specific market segment.
- An online shop is not an add-on to your business. It is a business in itself and has its own rules.