How does an online business venture succeed when others are offering similar?(29 Posts)
Ultimately I want to open a bricks and mortar shop. However there is nothing available in the way of retail startup funding, so I'm planning to start online without the huge overhead of a retail outlet.
My concern is that the products I want to sell are already available online, both direct from brand websites and from similar websites (I would be reselling rather than launching my own product).
I will be restricted on price by RRP, and there are a limited number of brands that fit the bill, so the way I see it I need to take the following into account:
Searchability (ffs, is that even a word?)
Visual appeal of website
Range of product types and brands
Promotions (including use of social media)
I'm considering the possibility of trade stands at large local and nationwide family events both for retail and to promote the website.
Eventually I do plan to have a shop, if only as a front for the online business.
What am I not considering here? How can I make my website succeed among competitors?
As far as giving a reason for customers to choose us over competitors is concerned, I would be aiming for price to be the incentive. As Xenia has pointed out, it's illegal to fix the price or insist on a product being sold at RRP, but there is the issue of supply drying up. I thought we could get round this by offering a discount on first orders, then follow this up with discount codes and free D&R to keep the price low. I'm also considering the possibility of attracting customers via a cashback site.
WRT building a local presence, yes I've considered selling via parties, markets, reps and at large family shows and festivals. Definitely a strategy I plan to follow.
No I don't know much at all about marketing either on or offline I'm afraid, but if I were to allow that to prevent me from having a go I'd be stick on my current job forever. What I do have is a number of friends with various business specialisms to sound out. Though at this very early stage, the food for thought I'm getting here is invaluable.
I do also appreciate where you're coming from on the cupcakes and children's clothing cliche. The 'idea' presented itself to me simply because there isn't a similar business in this relatively affluent area. You can buy cheap supermarket stuff, high street brands and higher end designer childrenswear, but nothing of the ilk that I'm looking to sell. However this applies to the original idea of a physical shop, of course I realise the sorts of brands I'm interested in are widely available online. And I do realise that the likely reason that there isn't such a shop in the area is probably because noone else sees a market for it.
It's not very imaginative really is it? It has occurred to me that what I really ought to be doing is looking at technology retail or something like that, but I have precious little knowledge if anything outside my own specialism (teaching).
All of the input here is much, much appreciated.
We've had an online business selling childrens products for the last 3 years. We're doing quite well now but it has been really hard. Customers are very price sensitive currently which is quite a challenge. We use trustpilot for our customer reviews and now have a few hundred very positive reviews which has helped our conversion rate. Also, we are using social media more now and sending regular newsletters. We didn't know anything about selling online when we started out but read a few books and did lots of research on the internet. What also really helped is that we weren't dependent on the income from our business as we had jobs too, however, it did mean working all week in our day job and then all evenings and weekends on our business which was exhausting! Re the legal side, this is a really good resource - http://dshub.tradingstandards.gov.uk/
Just wanted to respond to your point re price being the incentive - you'll find that incredibly difficult. When we started out we looked at the wholesale price and the RRP and thought we'd have no trouble making a profit as our overheads would be low. Once we got going we found that lots of people offered the products we were selling at way below RRP (e.g. on ebay and amazon) and once we took postage into account, payment gateway fees and VAT, our margins were much tighter than we expected. Added to that are the losses that you inevitably make on returns (even if you can resell the item, you lose the originally postage costs as you have to refund outward postage to the customer). Then getting people to your website is much harder than you imagine so you almost certainly need to spend on marketing. Conversion rates online are generally low - 3% is good - which means that you need 100 people to visit your site to get 3 sales. Your price does need to be reasonably competitive but you need to give people other reasons to shop with you - fast delivery, gift wrapping, whatever. Then once they've shopped with you, you need to find ways to keep them coming back, email marketing, sending catalogues, social media.
Thank you so much davidjrmum, really helpful to have input from someone doing similar.
Would you mind me asking the approximate markup on wholesale price please? I'm having doubts about this
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