Businesses were already looking at going on line, before the COVID-19 shutdown. The
shutdown only sped up the inevitable, it accelerated the ongoing trend. In this blog
we discuss 2 main strategies of going on line. It is perfectly possible to use both
strategies and this blog still stands should you wish to consider a hybrid approach.
It used to be, 10-15 years ago, the only real way of getting online is to have your own
website, but that has changed. With the emergence of SaaS and marketplaces, you
now have different options, yet some businesses do not fully understand or appreciate
what’s involved.
Some businesses think it is too difficult and do not attempt it, and others will invest a lot
of money on a poorly advised or executed strategy, and then give up leaving them very
hesitant to attempt it again.
Every business will need to go online in order to survive, there is not doubt about this.
The only question is when they will go online, some will go online before others and
reap the benefits of moving first, others will follow the crowd and retain their neutral
market position and some will leave it too late and will lose market share, some may
become extinct.
The benefits of online business are :
- You are open 24 hours a day : With an online store your website is open
24 hours a day. As more and more and more people start to shop outside of the
conventional hours, your website can offer services to your customers around the
clock. The consumer can browse your products and services at their leisure and
at their pace. There is no rush. If they get distracted they can leave and come
back, its convenient without any pressure. - You can show your products to everyone anywhere anytime :
You can have your product catalogue online, making it convenient for customers
to browse your catalogue from the comfort of their home. A well designed
website will allow users to create accounts and mark favourites or have cookies
installed so that when the customer returns you know what they were looking at
before and can assist in picking up from where the customer last left off. - You can provide quotes and information: Shoppers will often either go
to a number of shops to get quotes/prices or even call around. You make it easy
and efficient to handle those queries. The easier it is to get information from you
the more likely you are to generate traffic. - You can take online payments : For those customers that want to
purchase from home, you can offer online payments, allowing the transaction to
be completed from the comfort of the customer’s home. - You can drive traffic to your website more competitively then
bringing footfall into a physical store: Similar to traditional advertising
of TV, radio and print, you can use online marketing and advertising to drive
traffic to your website, it is much cheaper and you can specifically target your
required customers. - You can grow your online store quickly with little expense: You
can increase your catalogue or product range by x10 without having to increase
your store front. Store fronts are normally expensive and prime property, but
online you do not have that restriction.
The benefits of online business are - You don’t need to pay a premium to be on the high street to get
the traffic: We will discuss this below, but the cost of being at Trinicity mall or
West Mall is much higher than being on a high street, which itself is much higher
than being on a side or local street. The online real estate works differently. - You need less staff : As you have less customers coming to your directly
needing in person assistance, you can reduce your staff account. Many of your
processes and reporting can be automated, giving you a realtime picture of what
is happening. Reducing inefficiencies. - You can work remotely/globally: You can work from home or from
around the world. It gives you the flexibility to have a better balance between
your personal and work life. Empowering you to do more.
How to get online
Having covered some of the benefits briefly, let’s discuss how to get online. There are two ways
to do it. We will use the parallels from the physical/traditional way of doing things so to better
explain the options.
You can either build your own shop or you can rent a shop on the high street or a shopping mall.
Both of these options have their advantages and disadvantages and which one makes sense
will depend on your business and strategy.
In the same way in the online world you can either build your own website or you can rent space
in a marketplace (shopping mall).
The first option is to build your own website, this way you are in full control of what you will get
but it is a much higher risk.
Build your own website
- Purchase a domain name
- Purchase a web hosting package
- Configure your name servers
- Configure your email
- Develop your website
- SEO
- CMS
- Social Media and traffic drive
- Updates and changes
Benefits
- It is your website, you have full control to build exactly what you want.
- Build the features and functionality that you require
- It’s the same as purchasing land and then constructing whatever you need.
Disadvantages
- Huge amount of capital investment is needed
- You need to builders/developers, who will ask for down payments and then may not
deliver - Budget increases as deadlines pass
- You may need to change the developer
- If you make a mistake and get something wrong, or forget something important, changes
will be expensive - Also once developed the website will require ongoing maintenance
- You require technical IT staff to manage your business website and that can become
single point of failure or reliance
Market Place
- Signup and register
- Pay monthly for the service
- No maintenance or technical skill or investment
- No contract
Benefits - Quicker, you have your store up within 10-30mins
- No capital investment needed. Some market places will give you free trials
- No contracts. Many do month to month contracts, although annual contracts are given
discounts - Quik ROI. With minimal capital investment your ROI is much quicker.
- No maintenance or technical expertise required. It’s like using Facebook. Infact
facebook is also a marketplace (a social marketplace) - No investment needed to generate traffic. Although you can advertise to increase traffic,
it’s like a shopping mall, buyers go to shopping malls and market places because they
will find variety and hence you need to do little marketing to drive extra traffic
Disadvantages
- You are limited to the features and functionality of the marketplace
- All your competitors are in the same place
Which way you decide to go will depend on your business. As a general rule, if you are a small
business then I recommend you go to the marketplace. The cost of developing and maintaining
an effective website will be too much. You may be offered a website for $20k-$30k or even
$100k but it will NOT be a full ecommerce site, it will lack functionality and will cost much more
when you look at the TCO (Total Cost of Ownership). Many small businesses find themselves in
this situation and in the end give up, cut their losses.
If you are a large business, with sufficient internal IT then you could consider this, but we are
even seeing larger businesses going to marketplaces. There are very few if any businesses in
Trinidad and wider caribbean that are large enough and IT advanced enough to be able to
compete with a marketplace. There may be some short term gains, but in the long term I
believe the caribbean is a marketplace led economy.
One of the advantages an online marketplace has that a traditional shopping mall doesn’t is the
cost of replication. If a retail unit costs $100k to build in a shopping mall then 10 units will cost
close to $1million, there are some economies of scale saving, even if you say 20%-30%, it is
nothing compared to the savings in the digital world. If the cost of developing a single store is
$100k in the digital world then the cost for 10, 100 or 1000 is also $100k or maybe an extra
$10k. Hence the rental/monthly subscription cost for the marketplace will be much lower. You
can get access to a huge amount of rich technology for extremely cheap price.
Also the marketplaces are constantly investing in improvements, and when they are rolled out
everyone on their platform benefits, sometimes it may require additional costs, but that is small.
E.g a portal with 1000 businesses introduces a new feature that costs $100,000 to develop, they
only need to charge $10 a month extra and within 1 year they will have recovered their costs
and start to make extra profit. An independent portal will not have that power or scale.
Other options are to do both, the cost of running your own website is very high, and if you decide
to go that way, then you could also consider having a dual strategy and have presence on the
market place. Another strategy could be to quickly start on the marketplace and over time you
can develop your own website.
Many businesses use Facebook for their businesses and do not have their own websites, and
some do both.
This is a very simplified analysis, should you wish to speak to us please contact us at
info@taurus.one.
bizibi is a full turnkey solution for an ecommerce platform purely focused to the Trinidad and Tobago market. A feature rich multivendor platform that includes delivery and payments as well as a fully powerful marketing engine that not only generates a whole portfolio of marketing material for you, but also with its integration with social media we can also deliver it to your audience.
If you would like to have an online store go to bizibi and signup here.