Forum Moderators: buckworks
>> can small stores compete with big one in long run
Yes and no. Short answer is that small stores need to grow into big stores - large enough to take advantage of some of the economies of scale like bulk purchases, tax breaks, and an infrastructure designed to replace key people (like the CEO) should they die or become incapacitated. If they don't. Then they won't be here as long as the big stores.
Is there room for small stores in the marketplace even if they don't choose to grow into big stores? Absolutely! The number of online shoppers is increasing each year, they are becoming increasingly savvy, and they want choices! It really comes down to your target market and the sales hook you use - price, quality, convenience, service, etc.
As for the technology - there are three basic flavors of ecommerce. The hosted online store service, the off-the-shelf software, and then a custom built service. Which one you choose typically depends upon
1) the skill set available
2) comfort level with each option
3) cash available for development
4) cash & ability for ongoing upkeep
5) timeline to launch
Each of the options overflows the others in some fashion. Ex: they typically all have the ability to allow a customer to make purchases and checkout.
Personally, I think of these options in a linear progression.
In the most basic sense, the online service is the easiest and most robust for the money. But I wouldn't recommend staying with this setup indefinately. It's great for small stores with maybe a few hundred products or less. It allows the shop owner to test the waters of their market place without a large capital investment.
The OTS carts are next in line. Ready made and customizable to take the owner to the next level. Followed by a fully customized cart. There are folks who may start with and OTS cart and customize the heck out of it and end up with a fully customized solution. The only problem with this is they aren't willing to let go of the upgrades offered by the OTS authors which means the more customized the cart - the more difficult the upgrades.
There are many folks out there in each of the 3 different categories and doing quite well. I think all 3 will be around in many different flavors for a long time to come. We'll likely see a 4th option come along sometime in the next 3-5 years. What will it be? I don't know for sure but I can think of a few options that haven't been tried yet.
That competition is tough for several reasons, some already mentioned. Bulk purchasing power can mean lower prices for the big guy. That alone hurts people like myself in some product areas. I spent the last year trying my hand at bulk buying (at a level that's bulk for me) and it's not easy. Sure, I saved a little in the upfront costs, but my wallet cries every night. So I've resolved to go back to what I know, for now. I'm just not there.. yet.
On the other hand, I let one of the big guys do some heavy lifting for me. OK, they let me in :-) But because of the visibility of the big guy, I'm getting exposure to customers I may have never seen otherwise. My point there is that it isn't always US vs THEM. There are ways to take advantage of e-commerce supersites, in fact some of them encourage and actually need your (our) participation.
I foresee a strong future for online stores. Every year a new report indicates more people are on the web. That growth can only be good news. Look for a report in the next few weeks about how many BILLIONS of dollars were spent with online Christmas shopping this year.
You could look at some failed ventures - online grocery shopping comes to mind. The simple fact is, people still want to squeeze an orange before taking it home. But eventually, IMO, the time WILL be right for that sort of idea. I don't think that time is too far off, either.
If a small store wants to sell mass market commodity products to all comers, they are going to have a difficult go at it.
If they want to sell more specialized products to a more narrowly defined market segment, they may never have to worry about becoming "big."
Everybody is crazy today off community sites and video sharing… There are thousands of articles about new WEB 2.0 services but nothing or too little on ecommerce trends.
I tried to start a thread on cutting edge ecommerce a few months ago and it went nowhere. Surely some of you have discovered commerce sites that are utilizing futuristic ways to PROFITABLY sell online... ways that smaller guys can learn from.
(agree too about video sharing. Cute fad in my elderly opinion)
...my store is more than a decade old and very profitable...
Being "all but forgotten" by the press but remaining profitable just sounds to me as if it's made a sucessful place for itself and isn't the new thing anymore - but that's not necessarily bad.
[edited by: Beagle at 5:51 pm (utc) on Dec. 24, 2006]
whats the future of ecommerce? Choosing your market and consequently products carefully.
For me they have to be considered luxury or one special purchases (Margins are high) and I would like to as ive done in teh past be able to have the items made. This reduces teh overall cost, in my market arena this can be done easily.
Soooo the future is stil bright for the small e-retailer whose prepared to hunt out the products.
---I Like this thread...keep it coming...
I am more interested in the fact that web 2.0 is all the rage and ecommerce is all but forgotten
How do you think the web 2 guys are planning on making money? By selling ad space to the ecommerce guys.
Good observation. Ecommerce has hit a plateau. Phase I novelty wore off in the late 90s - it's not new anymore. Phase II - demand for diversity and has been met - there are now many options available for many different markets. The books were a simple measure of the first two phases - simple, easy, and empty. Now we're at Phase III.
Consumer views are now being shaped by what other consumers think of the product. (not a surprise to us here). The WSJ felt that major brands weren't adapting to this new phenomenon.
When was the last time you could click on an image and see a video of it being rotated so you can see around it?
Thats ecommerce 2.0, the products wont just be some lame picture or a duff review by the authors mum, sites are going to become more like those awful satelite shopping channels in terms of product viewing.
I have the impression that in my region (germany) last year google has begun to substitute the yellow pages. We received an interesting amount of orders from customers about 50-100 km away. Google's adwords keyword suggstion tool shows quite a number of "mybranch + anytown" searches as related to the mere "mybranch"-keyword where we are #1. Seems as if quite a number of people are looking for an alternative for their traditional local supplier, who gave up recently. I guess, this is what has been observed in the US about four years ago.
> ...hosted solution or hosted at developers server solution?
A rose is a rose is a rose, but a shop is unlike a shop is unlike a shop.
In the long run, for any niche broad enough to make a living there is only room for a dozen if not less competitors. Currently there is an immense number of specialized areas where you can observe that the traditional B&M scene is heavily suffering and many are giving up, because more and more deals are made online. This development might prevail for another ten years or so.
But in the end you will only be able to be among the remaining if you manage to develop your ecomerce-shop into one of THE major hubs of the social network around your products.
Given this, I dare say that the era of standard-shop-systems - be them customized or not - will come to an end sooner or later. Specialization and (web 2.0-)community-building will require very individual applications.
> small stores need to grow into big stores
that's what I mean. And a big store is one beyond a single dedicated server. Maintanence, database-management and programming for such big stores will require more work, than a single individual can do. And the most important issue is:
shorten communication between the computer-experts and the product-experts.
Maybe as a good SEO-consultant, photographer, programmer or graphics-designer you can work for more than one customer running an ecommerce-shop, but you won't be able to do everything for more than one shop-owner. At least you will need one contact-person in that company, who has fully understood the chances of ecommerce and has the fulltime-job to coordinate and delegate the various tasks.
we obviously overlapped: That is a very serious argument in favour of proprietary solutions other than standard-shopping-carts. You'll never spyder my site, lol.
It's just as easy for your waiter at a restaurant to steal your information. I wish they'd stop making it sound like an online only problem.
there is an interesting discussion about "what to do with returns" under
[webmasterworld.com ]
I still pursue the "send back anything you want, we take the costs, just send us a note"-policy. I regard it a very important trust-building-factor, because I still view my online-store in its beginner's phase. Although we are #1 for all the major kws I monitor. We still sell on commission, even abroad.
If I manage to work cost-effective this way (and I did so far), I might probably get really rich in a few years, handling this issue a bit more strict.
you heard it here first :-)
