The Immense Opportunities of an Online Business
It is estimated that retail eCommerce sales, which includes products and services ordered via the internet over any device will reach $4 trillion by 2020. Not sure about you, but I am hard pressed to find other business sectors currently in the Trillions that are projected to double in such a short time. This type of growth certainly brings a wealth of opportunities for the online entrepreneur.
* Methodology: Estimates are based on the analysis of data from other research firms and government agencies, historical trends, reported and estimated revenues from major online retailers, consumer online buying trends.
Online Data highlights
The online market base is growing. There is a trend of greater comfort and ease with shopping online.
- 2016, almost $2 Trillion online sales, from 1.61 billion people who purchased goods online (8.7% of all retail sales)
- 2018 Global online sales growth projected to almost hit $3 Trillion
- 2020 Global online sales estimated to hit $4 Trillion
Early this year, the Pew Research Center in their US (highly likely Globally it is similar) online shopping trends study found that:
- For 18 to 30-year-olds –
- 90% bought online
- 77% of them used their cell phone to shop
- 24% purchased through a social media line
2. 31-49-year-olds –
- 87% bought online
- 64% used their cell phone to shop
- 19% purchased through a social media link
3. For 50-64-year-olds
- 72% of bought online
- 35% used their cell phone to shop
- 11% bought through a social media link
4. For 65+
- 59% bought online
- 17% used their cell phone to shop
- 5% bought through a social media link.
From 22% of Americans buying online in 2002, the percentage has ballooned to 79% buying online in 2016.
So with so much opportunity, we need to a serious take a look at the online business opportunity. We are at the right place in history. There is no questions that potential online customers are there, spending more and the numbers are growing. The key is reaching them.
Advantage / Disadvantages of the online Business model
It is hard to recall the early days, when you consider today, almost everyone has a “smart phone” and/or a tablet (recent estimates are over three billion people). Interestingly, these devices now account for half of all online sales and it is increasing, it is an amazing thing, essentially Consumers holds the stores in their hands.
- A Niche website can be built around personal passions, interests, hobbies
- Significantly lower start, upfront and operating costs than a brick-and-mortar business
- Flexibility in work schedule
- Supplementary income and can fit around child care or other commitments
- Access to a market of 3.7 billion potential Customers
- Online businesses are open 24/7 while you away, sleeping, on holiday, playing
- Technology is improving rapidly, online tools make it easy to automate workflows
With minimal barriers to entry, it is no wonder there is an increasing number of people chasing a slice of the booming online business (eCommerce market). Low start up costs, no brick and mortar, rent, for most online entities, there is no need for a physical store or a large staff. When a customer purchases an item the stock typically comes from a third party and is “drop shipped” The merchant, doesn’t even have to acquire, let alone handle or deliver the end products. There are also offshoot opportunities, like the business model for content-driven websites. – Blogs or online newspapers in underserved niches with website monetization platforms such as AdSense, Chitika etc.
Conversely, for the very same aforementioned advantages, there are a number of disadvantages. These are enabling plenty of competition to inexpensively and quickly get started online. Like any other business, there is always a risk. This is a sector that is really a fairly new business model, not even 25 yet – it didn’t even exist prior to 1994. It came to be and was certainly made viable by the wide availability of broadband and the inception of secure online payments. It certainly is an industry that is changing rapidly.
Ok, so I do want to get my very own website and start an online business.
A website can be easily created. You can quickly and inexpensively purchase a site domain with domain registrar companies like GoDaddy, InMotion Hosting, and DreamHost.etc. It is about as easy as registering a phone number.
There are many Quality open-source platforms available that allow you to easily add visual designs, images and text content using their web sites platforms such as WordPress, Weebly or Wix. Many offer ready-made website templates and support. The sites can be cost effectively hosted by any number of web hosting companies and become globally visible web sites rapidly.
Do not forget or underestimate the value of support from knowledgeable people – If you want to build a house, you seek advice from someone who is effectively building houses or has already done it successfully. Like any other business, there are Industry Associations and Government programs for starting up businesses, hiring, performing research etc. Check your local, provincial, state, federal governments for what is available in your area. It wouldn’t hurt to search out and meet successful marketers, or other online business development consultants – in many cases they will provide some free preliminary advice on eCommerce to help entice you to use them and pay for their expertise in the future.
Finding a niche
Picking a less competitive niche is one of the easiest ways to gain a piece of a market. The regional or Global market provides rapid “scalability”, but it really ends up making a lot of retail categories very competitive. Companies like Amazon and other giants suck up a massive proportion of traffic in mainstream product areas – yet, surprisingly, if you become a trusted blogger, source or reviewer, you can still grab a chunk of this space as an affiliate.
What it takes to develop a successful online business
- Be content with spending a lot of time on your computer, tablet or smart phone
- Have some basic proficiency in computer skills
- Have some knowledge or willingness to acquire knowledge of Social media
- Have knowledge or willingness to acquire online marketing skills and tools
- Have a willingness to research, read, write and improve to stay on top of a rapidly changing sector
- Be able to multitask – you will be wearing many different hats
Considering the low cost of entry into this market, the good news is that unlike many other businesses, capital is not a big requirement. You do have to do some hard work, although you have the opportunity to work an online business from home and not have to commute and have work flexible hours to fit around other commitments. With the aforementioned off-the-shelf website builders, access to their great tools and fairly inexpensive as well, you don’t require to hire or have coding skills.
It is imperative to acquire some knowledge of SEO, social media and certainly some basic digital skills.
You can be successful if you make a commitment to work hard at it and participate in ongoing self-education and improvement. Skills like mobile optimization, marketing, and the ability to absorb emerging new trends and innovations that occur rapidly in this space will be valuable. Ranking in the big search engines like Google is likely one of the most important elements and likely will be the differentiation of being successful or not. Professional help at a price is available.
What to strive for over time from your website
- A site that looks good, is easy to navigate and gives users what they want to sustain longevity
- High volume of traffic mix, source, targeted website’s traffic, ability to add value to increase traffic and revenue
- High SEO rankings
- A good, positive reputation, derived from social media monitoring and sentiment analysis
- A positive cash flow, trending to grow
I hope this information is helpful. Please drop me a line or feel free to ask any questions.