Not long ago, after a new business was well established it required an online presence to sustain its success. Now, the trend is reversed. Many new corporations are created to start first as online only businesses.
In uncertain economic times, it’s smart to exercise caution. One of the ways to accomplish this is to minimize risk by testing a concept online. Too much capital is required for a physical location with plenty of inventory and staff.
Many retail concepts are ripe for online only marketing. A new corporation can sell clothing, accessories, toys, and gift items online. A lot more than books and music are sold everyday on websites. In addition, many educational and business services are ideal for selling online.
With an online presence, you can find out what people want to buy and at what price. You also learn what products are likely for add-on purchases. That is, you learn the combination of products to cross-sell to your type of customer.
The costs for an online store are lower than a physical location. However, a web business incurs different types of costs to attract customers. Website design for easy navigation is obviously critical. After that comes the marketing process. This involves decisions about search engine optimization, paid search strategies, and marketing partnerships.
The other essential aspects of operating an online business involve logistics. This encompasses the delivery of purchases, including packing and shipping. Other fulfillment issues involve billing and customer service matters.
These concerns can make a basic retail location appear simple by comparison. The key to success with an online business is knowing the costs to reach and serve customers. The cost per sale requires knowing how many website visitors are converted into buyers and the ratio that return as repeat buyers. Matching this to the revenue per sale will tell you if an online only presence is the best avenue to capture the target market of your new business.