Starting a new e-commerce business is not easy. You read it right. At an age where booking a domain and creating a commerce website is a matter of few clicks, it may come as a surprise if someone says that its tough to start an e-commerce. Here’s why its difficult to start an e-commerce business.
Better access to competition – Customers who buy online are more aware about options they have. The users are in a position to research more about the product before they make a purchase decision.In traditional business when a customer walks in to the store the probability of them making a purchase is very high.Hence it is critical that you ensure your products are of good quality and are priced correctly.
Option to Return – Customers tend to purchase from platforms that offer goods returns with no or less questions asked.It is estimated market places process approximately 25-27% as return orders as compared to about 5% in traditional businesses. Hence it is important to consider high amounts of replacements as part of your success strategy.
Deep Discounts – Big marketplaces offer deep discounts to acquire and retain customers. The cost of customer acquisition takes away huge profit margins from the products sold online as compared to traditional business. It is important to understand that like any traditional business, starting e-commerce is also an investment and will take time to turn into a profitable business.