How online marketplaces can help your business grow
Tuesday 11 February 2020
The ecommerce industry has grown rapidly in the past decade, and it’s little wonder why. The ability to find any item you want with just a few clicks and have it conveniently delivered to your door has been a godsend for shoppers around the world.
The flipside to this is that online retailers are also experiencing a boom. According to recent findings by eBay’s Global Marketplace Index (GMI), sentiment among Australian ecommerce operators is at a high, with 69% reporting that their income has increased since they started selling through marketplaces.
There’s no shortage of challenges when it comes to launching your business, let alone keeping it up and running. But adding an online element to your brick-and-mortar store - or transitioning to an internet-only business - can have a huge impact on revenue. Below, we look at just a few reasons why taking the ecommerce route can be a good idea.
1. Lower start up and operating costs
A lack of necessary capital is often the biggest barrier for budding entrepreneurs, which is why turning to an online marketplace is often so appealing. Among respondents to the eBay survey, 47% said they went down the ecommerce path because it doesn’t require such a large financial investment.
Online businesses are usually much leaner than your traditional shopfront. Not only are they substantially cheaper to set up, but you also won’t have to worry about many of the overhead costs that brick-and-mortar stores need to cover in order to keep the lights on.
There are also plenty of resources available to anyone looking to set up shop online. For example, if you’re unable to start your own website from scratch, you can rely on already existing platforms like eBay, Amazon and Etsy to do all the heavy lifting.
Having a drop shipping arrangement can also make things a lot easier, especially if you run your business from home or don’t have much space in your store. This is when retailers purchase items from a third party and ship them directly to their customers, eliminating the need to keep items in stock at all times.
2. Greater flexibility
It’s no secret that many entrepreneurs prefer the flexibility offered by the online business model. Among sellers aged 18 to 34, 61% said it was extremely important to be able to set their own schedule. This was even more pronounced in the 35 to 54 age bracket, with 72% valuing the flexibility that comes with running an ecommerce business.
Of course, running your own business is no walk in the park, whether it’s online or not. It requires tons of commitment, particularly in the early stages when the goal is getting your business off the ground. But for those who like the idea of being their own boss (and scrapping the daily commute to work), it makes for a very attractive option.
3. Expanded reach
One disadvantage brick-and-mortar stores have is their customer base tends to be quite limited, usually to people in the area or those passing by. Online stores, on the other hand, have potentially unlimited reach.
For many Australian store owners, this has translated to increased sales and revenue. In fact, 51% of respondents said that online marketplaces have expanded their reach, so much so that a majority of their sales now come from outside their local community. A further 18% admitted they would need financial assistance from the government were it not for the ability to sell online.
If you’re thinking of entering the ecommerce scene, one thing you'll need to have in order is a business bank account. For an idea of where to start, be sure to visit our business banking comparison page.