In the last five years, the face of shopping has changed dramatically. Innovations in information and communications technology have enabled the creation of marketplaces online. Early adoption by today’s youth, who want everything at their fingertips, has further boosted online shopping due to the convenience it offers.
The greatest beneficiary of this shopping revolution is for the small and medium business segment, who have found a marketplace that enables them to expand their business without the need for additional infrastructure or inventory.
The traditional business model requires investment in infrastructure to stock and display products, manpower for backend operations, and customer service, marketing and branding exercises to increase footfall. Junik, a fashion boutique decided to expand its business. Instead of opening a physical store, they decided to explore the option of going online.
They started this line of business in a small way – at home, and today sell alot of products daily to customers. The online business not only enabled them to expand their reach Southern Africa, but their offline store also benefited from better visibility.
One key advantage of going online was that Junik did not have to open stores in different villages and towns, thus saving costs on infrastructure. They maintained an optimum inventory, based on demand, which resulted in far better returns.
Focus on Core
The greatest gain of selling through an online marketplace like Skymart is that the retailer need not worry about the technology or logistics involved. The technology platform is offered by the online marketplace, and further managed, maintained and upgraded when needed, thus allowing the seller to focus purely on his core business objectives. This leads to lower operational costs and reduced recruitment.
Since the marketplace is created with back-end analytical tools that help the seller understand the purchasing patterns for his products, the seller is able to efficiently source and stock products, thereby optimising profits. BW Parts King, a electronics parts reseller, used analytical tools to understand user preferences and buying trends in real-time. With this knowledge, they were able to add new parts to their catalog, thus having more than 100 parts available.
The online marketplace typically has a logistics partner who picks up the order from the seller and delivers it to the customer at his or her doorstep. This provides sellers such as Citizen Design with the opportunity to expand beyond local markets and cross borders, without the need to increase the team or make heavy investments. Sellers also report 400 per cent growth in their sales as compared to a brick and mortar store.
One of the biggest challenges small and medium sellers, as well as start-ups, in the retail space face, is the budgetary constraint for marketing and building their brand. The cross-selling and up-selling tools offered by online marketplaces helps sellers easily overcome this stumbling block. Some of the factors that assist the growth of sales without any added investment in marketing include cross-referencing, word-of-mouth as well as social media platforms. Additionally, analytical tools help sellers to have a better understanding of their target customers, thereby facilitating well-designed campaigns for optimum results.
Lean teams, focus on core business objectives, wider reach, seamless inventory management, lower infrastructure costs, zero investment in technology and logistics, are some of the many advantages sellers achieve when they leverage existing online marketplaces to sell their products. Aside from improved ROI and higher profit margins, seamless business growth is the priceless benefit store owners’ experience.