Initiating an online business model requires elaborate planning. An entrepreneur needs to know about the needs and demand of that particular sector, understand well how SEO and marketing works and how to win over the customer base efficiently. As stated in the "Enabling Digital Entrepreneur" report formulated by the World Bank, many digital entrepreneurs are born to be global and can adapt, grow and scale across frontiers very rapidly.
Online expenditure has skyrocketed in the last few years, and the growth won't be witnessing any disruption soon as people continue to stay within the confines of their home during these trying times. This has opened up a flurry of opportunities in the internet world. Experts believe that it is critical that an entrepreneur has a proper mindset and removes any notion of limitations to make the most of the opportunities.
“The world doesn’t happen to successful entrepreneurs, successful entrepreneurs happen to the world.”
In the US, 16 per cent of all retail sales are being represented by the eCommerce sector, according to their Commerce Department, with Amazon.com accounting for more than one-third of all eCommerce sales. It goes to show how a small digital business can grow and potentially be exposed to a wide customer base. However, with perks comes a fair share of pitfalls one must avoid to make the business model sustainable and successful
1. Not completely understanding the target customer base
One can burn through huge amounts of cash by implementing ineffective advertisements. Poor marketing campaigns increase the cost of acquiring a part of the customer base without any fruitful outcome, which is a very crucial metric for a digital commerce venture. There is much noise on social media and the web, which is enough to confuse the novices approaching such campaigns. One needs to have a complete understanding of the targeted customer to customise advertisements. That translates to being effective with the region targeted, interests, culture, design, tailor-made design and action and other factors which help in increasing conversions and bring down the cost of customer acquisition.
The volume of sales for merchandise is gargantuan. To cite an example of how booming the sector is right now, the online market for apparel, accessories and footwear is pegged to hit a whopping $4 trillion in sales this year. Shopping with the help of an online platform has also led to an increase in the demand for online services like website building, SEO, marketing and online advertising. A high level of understanding the customer base is done by identifying a niche pattern, and the marketing and other supporting web content can be developed and optimised based on that. When one publishes better content, one will be able to improve inbound marketing statistics as well as an increase in user engagement with the platform.
Owners of retail storefronts had it easy because the target consumer base was mostly someone belonging in that particular region/zone. Online realm, however, has no geographical bounds. This helps in rendering a digital persona of the customer base the business is targeting- purchase patterns, behaviour, preferences etc. and derives insights on evident patterns. An entrepreneur will never be able to have a firm grip on the sector if he/she doesn’t understand the customer base, their needs and demands.
2. Functioning as a lone wolf
It is of great help to acquire and possess knowledge of online practices like advertisement formulation, SEO, email campaigns and social media promotions which comprise a crucial factor in marketing, but there can be some dead ends. One can be good at running Facebook sponsored advertisements but be miserable when it comes to formulating landing pages. Email campaigns might have a high rate of views but they might not turn in higher purchase conversion rates. One has to figure out the shortcomings all by themselves, and that might lead to higher expenditures in promotion and marketing.
These hurdles can be overcome by getting a hold of mentors or solution consultants who will be able to provide the required roadmap as well as added motivation. A seasoned veteran in this field can show a better path to the entrepreneurs and teach them on the do’s and don'ts of marketing- saving of headache, time and money. Such small tweaks go a long way in making a business model successful. Leveraging other people's efficiency and implementing it on one's business model pays rich dividends in the long run.
3. Not outsourcing or avoiding automation tools
Outsourcing enables entrepreneurs to tap into the skills of freelance contractors cost-effectively, which helps in streamlining the business because they might be better at some specific tasks than the entrepreneur him/herself. Virtual assistants can help businesses acquire customers and provide them with after-purchase support without spending any extra time.
Business owners must spend their available time on activities which are necessary for the benefit of the business model. Tasks of lesser priority should be delegated to others. An online business can reach a wider audience and scale up its operation rapidly if proper steps are undertaken.