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    1. wholesaleinsight's Avatar
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      Basic Guide to E-Commerce - Succeed in eCommerce: Running an Online Business

      The daily expenses of an ecommerce business are usually lower as the odds for opportunities increase.

      If you’re operating a regular retail store, you could dodge a couple of expenses and use your ecommerce infrastructure instead. As you grow, you’ll realize expanding through the Internet costs less but it also demands extra spending in other areas.

      eProperty

      Real estate for eTailing (Internet retailing) is pretty easy on the wallet when it’s compared to high-traffic websites. Even domain name registration and hosting is very reasonable at less than $100 per year, while regular retail space costs thousands and thousands of dollars.

      But design and upkeep, equal to in-store merchandising, adds to your operating costs. And, the ability to operate a high ranked site with a dedicated server and technical support usually means more expenses.

      Ultimately, you’ll most likely need a warehouse to stock inventory as well as staging, packaging, and shipping orders. Industrial space usually solves this problem at a quarter of the cost of rent for retail space of a similar size. In the first phases of your ecommerce business, you can pull merchandise form the sales floor and ready them for shipment in your stockroom.

      Market

      The amount of cash you save by not leasing a traditional store can be used on social media marketing. Bringing in web traffic usually means hours on search engine optimization (SEO), pay-per-click programs, email campaigns, and many more online marketing initiatives.

      One thing that works for both online and offline retail is social media marketing. By interacting with local consumers, with whom you have a personal contact with, should take less energy than persuading worldwide customers. The money you save on regular advertising should be relayed to social media efforts.

      Merchandise

      Your eBusiness can handle lower levels of merchandise than your regular retail store. On the other hand, old school retail shops need to be stocked to the roof if they want to send a message of meeting customer demands for X amount of time. On top of that, every department requires store displays stocked with products, along with matching SKUs, to create a professional look.

      Products held for ecommerce sites do not have to be showcased physically, but they can be held in a distribution center. And, you can easily sell products that aren’t stocked in your catalogue by drop-shipping them straight from the vendors. Instead of mixing aesthetically pleasing products that are changed often, you can center on high volume, high margin products.

      Ante up

      An ecommerce business usually requires a small team to manage orders and to maintain customer service standards, usually during normal business hours (9am-5pm, M-F). An old school shop employs sales associates who also tackle customer service, as well as being a cashier, stockroom personnel, and store manager.

      In a regular retail shop, customers will perform the order-fulfillment. They browse displays, look at items, put them in real shopping carts, bring them to the register, pay, and take them home. Out-of-stock products are a real pain but they don’t really mess up the flow of order fulfillment.


      The usual process for order fulfillment of an ecommerce business usually includes:
      • Receiving orders
      • Requesting products from the distribution center
      • Sending order information of non-inventoried products to vendors
      • Handling orders for out-of-stock merch (telling customers you’re out of X item and when the next shipment arrives)
      • Grouping various customer orders into one big order
      • Packaging orders
      • Shipping orders
      To some degree, sales is a part of the site design for ecommerce shops. Search boxes, categories, prominent promotional messages, customization, and filtering applications give your customers the relevant tools to find what they’re looking for. Detailed descriptions and customer reviews help to ease the dilemma of buying from a website that is similarly handled by a sales associate in a regular store. A customer service representative can also uphold the quality of the website through live chat software, email messaging, and technical support calls.


      Shipping

      This is one expense that exists for ecommerce sites that doesn’t occur for regular stores. If you add small shipping charges to your customer’s total order, you’ll pass on this cost to the consumer. But nowadays online shoppers are used to the idea of “free shipping” deals and they’re usually irritated at paying these charges. You can try to raise the product price to hide shipping costs but competition will keep it almost impossible to do so. So, you have to take some of the shipping cost if you want to be successful.

      If you decide to go all out on ecommerce with the hope of expanding your business, you’ll spend less on real estate and inventory, about the same on marketing and staff, and more on shipping.
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    2. Thank you for this post:

      JennH (11 Jun 2012)

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