Lockdown was imposed after the onset of the Coronavirus outbreak. Soon after its arrival, it was declared a pandemic by WHO. As a result, people were asked to stay indoors and not go out unless it is indispensable. It gave rise to the e-commerce businesses as people were now buying everything online, and this trend is likely to stay relevant as we are witnessing the second wave of Covid in Europe.
Thus, if you are planning to start an e-commerce business, then this is an ideal time to do so. This blog will explain some of the key considerations you should carefully contemplate as an entrepreneur who has invested heavily in his business.
To start your e-commerce business, you can use your savings, take a loan or approach a direct lender to get quick loans for unemployed. These are unsecured loans offered without demanding any collateral and without any guarantor. The loan amount is credited to the borrower’s account on the same day it is applied for, once it is approved.
Let’s see what all factors you as the e-commerce business owner should consider before going all guns blazing by investing millions of pounds. Here it goes:
Financial projections should be made upfront; it is one of the critical actions to be done. It gives you a birds-eye view of the cost-benefit analysis, which is essential considering the investment amount.
Your finance department will assess the market and allocate the budget accordingly for every activity and department. This team will forecast the fixed and variable costs that are involved in this business, what will be the expected revenue, what are the profitability margins etc.
This step should be taken a right after you decide to venture into the e-commerce business and much before you invest the first pound in the business.
Comprehensive market research should be conducted to comprehend the market you are targeting. You can also go for additional market research that will be conducted by an independent third party. This market research should answer your questions on the current needs of the market.
- How you can serve it efficiently
- Who are your competitors and what they are doing currently
- Is there a demand for your product in this market
- How loyal are your target customers towards your existing competitors
You need to conduct in-depth interviews and group interviews of your potential customers to understand most of the things here.
Centralized Distribution Hub
The location of your main distribution centre directly impacts your costs and time to delivery. Ideally, you should follow the hub and spoke model,which allows your distribution centre to be at the centre of your operations and customer location. It will save you a lot of pounds spent on transportation and also time is saved.
You should look for an ideal location for your distribution facility and warehousing. Also, the distribution centre location should not be at a place where real estate prices are sky-high. It will increase your operational expenses which will hurt your profits in the long run.
You will get loans but try to find a middle ground in this situation.
If you are into an online business of perishable items, then inventory management becomes quite important. Even if you are a general e-commerce business, then also inventory management becomes pertinent.
Inventory should ideally not be too low so that you end up losing a sales opportunity and subsequently a customer. Inventory should not also be too high so that it does not lock your capital in unsold goods. Just-in-time (JIT) inventory management could be inculcated for some of the products based on your business relations with your vendors and suppliers.
The bottom line is you don’t want to say ‘No’ to your customer about a product he is looking for and nor you would want unsold goods being stocked-up in your warehouse. Thus, strike the right balance.
Regulations are something which you are meant to follow to avoid hefty penalties and fines.
- You should be well-versed with all the regulations that govern your business and your industry in the UK.
- You should also know the taxation policies in that region and what are the different taxation laws and how you can get tax incentives and benefits for your business.
- You should also know what all are the regulatory clearances and Government permits you need to start an e-commerce business and successfully operate it.
- You should ideally hire a local accounting agency and a legal counsel for your business for them to take care of all the accounting, taxation, legal, and auditing aspects of the business.
Your website or app are the only places through which customers place an order and communicate with you. Make sure to have an appealing website or app with smooth UI/UX designs, and easy to navigate.
If you have a complex website/app, then customers or website visitors will switch to your competitors. It should be compatible with multiple operating systems like Android, iOS, Windows etc.
An important aspect is to make your website or app mobile-friendly as more than half of the customers place their orders using their smartphones or tablets. Educate your customer with your website/app and have everything to keep him engaged until he places an order.
Customer Support Team
Firstly, you don’t want an angry or frustrated customer, even if he is for some reason then make sure to have a professional team of customer support to pacify him. It is the only verbal communication mode between the customer and your business, and it should be flawless.
The customer support team should resolve every query of customers efficiently and on priority. This team should speak the local language to resonate better with the customers. Quite often, it is the customer support which leads to a happy and loyal customer in the e-commerce business.