Forum Moderators: buckworks
Now that prices of things have come down, domain registration, hosting, not to mention development cost (ah~ my wages) of shopping cart etc, one day there's gonna be e-commerce site everywhere you go. I mean likes of osCommerce, it's not hard to create Amazon look alike website providing that you can do few tweaks with graphics & bit of programming.
My question to you is..
What is the future of the e-commerce market?
How is it going to grow?
Is there going to be any space left for every Joe Blogg in the world!?
:D
Pixels
Your question is a very good one!
Personally, I think the future for e-commerce as an industry is pretty good. I am in Canada, and, as a whole, I can tell you that e-commerce here is very late in terms of its development when compared to that of the US.
And, I also beleive it to be similar in other continents such as parts of Europe, Asia and even South-America too.
I guess what will happen between now and 2 years from now is a small acceleration (a pickup) in terms of its growth.
I strongly beleive that ecommerce, and B2B as a whole have very strong futures ahead of them. Development costs have probably stabilized for now. But, even if costs are down, companies still want (need) to rely on secure and dependable ecomm applications to run their businesses on, so price is not always an issue, if you can "build a better mouse trap".
My 2 cents
1. Overture started at 0.01 minimum per click, and is now 0.1. Likewise espotting is now 10p
2. Looksmart went from a directoty to a ppc engine
3. Yahoo started charging a recurrent $299 annual fee, and they don't even use their own directory results now and so most people get very few clicks
4. Commission junction charges a non-refundable set-up fee of $2250 and a minimum spend of $500. Befree and linkexchange charges a set-up fee of $5000
5. It is extremely difficult to optimize for Google unless you have a domain with a high PR which is very difficult to build up. In any case, many of the cart systems use dynamic pages that are not indexed readily by Google.
Faced with this situation, I simply cannot recommend any of my friends investing heavily in a start-up knowing that the marketing would be prohibitively expensive.
The way it is going, e-commerce is going to be left to the big guys only.
Wow. We have two very different views so far and they are both interesting.
PR-advertising has always been pricey, be it small ads in a newspaper/magazines or on the internet. So I can see where derekwong28 is coming from. However, that is not the only way to advertise your site, don't you think? And somehow I feel uneasy hearing that the e-commerce is going to be for big boys only...just my opinion.
I think SE optimisation for google etc plays a big role still. There must be other way of catching a niche market out there for smaller marketers though. I suppose getting your name across to people is the key whatever it takes.
Pixels
1. E-Commerce = Internet Strategy. The former is unconditionally depandant on the latter.
2. Although EC apps have infact become more prevalant and cheaper, packaged EC has inherent problems relavant to SEM, while failing to address unique selling conditions of most businesses.
3. SEM now drives EC strategy engagements, wherein IA (info arch.) is now dictated by keyword and SE factors, not simply usability.
4. EC continues to grow in importance for traditional business. This trend is far from over and infact is just beginning. Even in the States.
5. EC leadership will result from a multi-disceplanary approach involving the entire spectrum of Internet tactics on top of a strong traditional business base.
6. EC projects continue to grow in size from a scope and cost standpoint, notwithstanding the fragmented market.
7. EC projects for leaders are always preceeded by strategic engagments that represent approx. 20-25% of the total project size, wherein market and situation analysis is conducted and execution artifacts are created.
8. Over the midterm, we need to think of the EC market as we think of the traditional business world wherein sound investment, comparitive advantages, competitive margins, strong management and surrounding competitencies will ultimately dictate the winners and losers.
9. Traditional business rules and factors are hip again, and EC fits in very well. What is out, is pure-plays thinking they can buck trends over the long term, business thinking they can make a million from a 15k investment, business thinking they can simply break long established supply chains, and the like.
EC is a natural extension of many traditional business. The key to understanding EC in the future is to have APPROPRIATE EXPECTATIONS relative to traditional business factors, investment, and market conditions.
Lastly, remember 95% of the total business universe is made up of small business. It would be a mistake to say that small business can not compete for EC marketshare (a big mistake). Small business will end up dominating EC activity from a volume standpoint. It would, however, be a mistake to think that mom and pop book store can compete with Amazon.
Irrational Exuberance is out. Rational Strategy is in.
I'd like to add/reinforce that ecommerce businesses face the same challenges and opportunities as their offline equivalents.
In some ways it is harder to have a sucessful ecommerce business compared to an offline operation. In addition to being a good "business person" you also need a deep understanding of the Internet. There are plenty of good business people out there, ditto for people with a deep understanding of the Internet - what is rare is a combination of the two, imho.
>business thinking they can make a million from a 15k investment, business thinking they can simply break long established supply chains,
I do disagree with that however, its still possible at least in the UK.
Pixels :-) Hi!
I agree with you NFFC... if your project or business model doesn't make sense in the "brick and mortar" world, it won't make any more sense just 'cuz its on an e-commece site. Either it makes sense or it doesn't.
That said, I strongly beleive that yes, e-commerce should be on an upswing any time soon, perhaps even in the US. The "dot-com bombs" in 2000 was a good shake up. I don't know if any of you here follow the ups and downs of Wall Street but, as an outside observer, I think the next couple of quarters should be good to business, as a whole.
E-comm will pick up some of that too, it's only a question of time. Personally, I am planning right now a fairly large ecommerce project I want to put online in the fall. It will be a B2C site and most of my planning is 80% done.
You wouldn't build a house without a good plan, right?
Same thing in e-commerce: carefully plan ahead, think a lot, ask people what THEY think of your idea and go ahead and do exactly as you planned it.
In terms of being a beleiver, on a scale of 1 to 10 (10 being the highest) I am at about 7 right now, and I will probaly be at the 8 level once I see my new sales come in the fall.
Thank you for your contribution. Very interesting read and I agree with you on the sound business strategy in "brick and mortar" world.
SEO_practioner,
Do let us know how your web projects gets on. Best of luck!
Pixels
EC continues to grow in importance for traditional business. This trend is far from over and infact is just beginning. Even in the States.
I completely agree.
Ecom is still in it's early stages. When broadband is as common as cable/satellite we'll see the growth start to slow.
There are some advantages of Ecom that offline chanels can't compete with.
1. Selection - Widget World down the street can't afford the floor space to stock every model of Acme widgets. But WidgetWorld.com can in their warehouse.
2. Product Information - It's easier to provide consumers with product information online than offline. Look at what amazon gives you for product details. Reviews, ratings, etc.. What does Barnes and Noble give you in the store? A book jacket?
3. Ease of Reorder - If you know what you want, reordering online is a blessing.
4. Gift Giving - I think this gets overlooked a lot, but I am surprised at the percent of orders I see shipped to a third party. Who wants to deal with driving to a store buying a present, then having to deal with shipping it via FedEx or UPS?
Right on the money. E-comm is the wave of the future. I think that, as more and more people get connected, high-speed or not, in the next 1 to 3 years, we will all see a sizeable increase in e-commerce sales.
I love the Amazon business model too: Amazon wrote the book on e-commerce and is now starting to make profit$ on it too...
E-commerce is the next big wave, phase 2:
The shakeout was done in 2000. The serious companies, like Amazon and e-Bay (I love that one too) will all thrive.
Now, I need to get back to my on-line e-comm project if I want to launch it in the fall!
Bye all
:-) SEO
Online its very easy to accurately measure ROI if you use PPC and Pay for Performance programmes ( Affiliate) ... So whatever the online promotion cost you will continue to use it only if it produce profit otherwise simply trash it ... Now try doing it offline? :)
I am a few pounds away from beating last years figures already this year.
I predict that we will have at least a 300% increase in sales over last year.
Investment so far
1 x PC : £1000.00
1 x High Speed Connection : £594.00 per year
1 x EPDQ terminal : £180.00 per year
1 x Hosting package : £203.88 per year
Everything else is in place as we have been established 30 years.
I just wish I had the opportunity to get involved in the e-commerce vibe a few years ago
Karl :)
1. Being top ranked in Google for almost all search terms of our products
2. More than 2,000 unique visitors per day
3. Shipped to over 80 countries
4. Excellent feedbacks and testamonials from our customers
Sure there are other factors involved here. Firstly because we are based in Hong Kong, we have to get over the trust gap with our prospective customers. Secondly, our prices are not that low, especially compared to the US. The fact that we operate a no or little stock inventory policy meant that we could not get large discounts.
Certainly in Hong Kong, there is very little room for e-commerce in the local market. Most items are readily available on the street at a lower cost than online, unlike Western countries.
I'm a web developer and have worked with winery websites and it's been a royal PAIN dealing with all the various state laws about "can ship, but only two bottles at a time" and "can't ship from Oregon to here but can ship from California to here"...it's why many wineries don't have real ecommerce systems just a form or a printable order form. I can see similar issues with the sales tax since (for example) some states tax snack food and others don't. So it'll be a headache for us web developers who have the fun of setting up the ecommerce websites. Sure, there'll be programs developed to take care of all of the collection and etc., but I'm sure the good ones will cost $$s and most small businesses won't be able to justify the price and will have to do the work by hand.
The forms you have to fill out to submit your sales taxes collected are confusing (I used to live/work in California and made the mistake of selling a product once, instead of sticking to selling services), and I doubt that the unified tax thingy that's being worked on will fix the state form problem, or the issue that once you've paid in *any* sales taxes the states want you to fill out quarterly forms every quarter even if you don't have any sales to that state. What a hassle!
Small businesses don't need the burden of all that extra paperwork and details to keep track of...and my gut feeling is that once all online businesses are expected to collect sales taxes for all states/cities with sales taxes many smaller online businesses will stop doing ecommerce and go back to just selling locally, just because it's too much of a hassle and causes too much paperwork.
Oh, and don't think SEO's are off the hook just because we're selling our talents/skills rather than selling those blue widgets -- some states tax all advertising (media buying, copywriting, & design) and you bet they're looking at SEO as just a form of advertising. So, we might end up having to pay sales tax on any services we sell to folks in those states if we sell them via a "store" but not if we sell via the phone -- won't it be fun to develop the paperwork/system to track that, eh?
If there is ONE thing worrying me about right now, that is it: e-commerce sales tax! :-(
Even since President Bush came up with that idea, I said: Oh No...!
I don't want to do any politics here, but citizens in the US must talk to their Congressmen to avoid and repel that new tax.... it will kill the egg even before the hen delivers it...
My 2 cents
If you are in a niche specific to a subject or offering a unique good or service then there will always be room to carve out a space.
I have seen this both ways as an analyst for a major subject specific site that has had large US retailers partner with us because we have aggregated a large group of people online, and as someone looking to start their own website. Because the world is always changing, there will always be a new or underserved market waiting to be discovered.
UK traders, correct me if I'm wrong but I think UK already ship goods including sales tax (VAT) regardless of where it goes. Come to think of it, I seem to have been charged sales tax from Amazon.com, B&N and other smaller websites too in the past.
Pixels
hehehe, NO!
>regardless of where it goes
That's a no too.
But 17.5%! Its a crime in its self.
In Quebec, we have the GST at 7% Plus the quebec sales tax of 7.5%... your looking at over 15% :-(
Not too good, no
