Taking the 1st Step in Online Business: How to set up an Online
Business
Any business requires a lot of planning before venturing into a
particular industry. You need to understand the dynamics and
unique characteristics of the business to enable you to have a
holistic picture of the business you are about to launch. You
may be passionate about starting an online business, but before
delving into the business, there are some aspects of business
that you must consider.
These include the following:
The Target Customer
In any business venture, the managers always focus on the
target customer or consumer of the product. This may be broadly
categorized into either Business-to-Business or
Business-to-Consumer.
Business-to-Business (B2B)
Your business in this case will focus on selling products to
other businesses. The major advantage of this business model is
the size of the order and probability of getting repeat orders
from loyal clients. This business model is suitable for those
with large capital investment and can withstand the long sale
cycles.
Business to Consumer (B2C)
This business model involves you selling your products directly
to the consumer. Most people often think of B2C model when they
want to venture in most online business. It is important to
note that there are other business models that are gradually
becoming attractive, though, are less common, such as Business
to Government (B2G), where your business sells products or
services to federal or state government.
Types of Products to Sell
It is vital to know the type of products you want to sell in
your business. They may include physical products, digital
products or Services.
Physical Products
This entails the actual sale of items online that are then
shipped to the consumers’ address. There are several advantages
and challenges in selling physical products. The main advantage
is that if the consumers love your products, they rate it
highly and even recommend for others to buy. Major challenge
includes shipping, insurance cover for the products, breakage
and storage of inventory.
Digital Products
This involves the sale of intangible goods that exist in an
electronic format. The major advantage is that you do not have
to worry about inventory storage and physical delivery of the
item, compared to physical products. A major challenge is the
fact that digital products can be pirated. Books, Videos,
Images and music can be copied, shared and downloaded within
seconds upon launching the product in the market. This
challenge poses a great challenge, especially when it comes to
the sales margins.
Services
Selling services online is slightly less common compared to,
digital and physical goods. You can offer consulting services,
web design and development, content writing/editing, data
entry, accounting and bookkeeping services. A major advantage
to selling services is that you can build your credibility and
gain more exposure and experience, though it comes with the
challenge of scalability as the service is often delivered by
an individual, hence limited to the availability of the person
to offer the service.