Just as there is no perfect formula for living the good life, there is no perfect formula for building a successful business. Nowhere is this more true than in online retail.
Setting up a New Business Can Be Frustrating
One of the most frustrating aspects of setting up a new business is sorting through all of the advice. Search for business advice online and you will find millions of articles—including this one. They all seem to have something to contribute to your vision. Ask your friends for advice, and they will give you, even more to think about. How do you make sense of it all?
Just Try Looking for a Perfect Formula for Business Success
The first thing you do is come to terms with the fact that there is no perfect formula for building a successful business. Take online retail, for example.
You may find people who offer a formula they guarantee will lead to success. What they really offer is an opinion. When you step back and analyze the most successful businesses in the world, you discover they all have one thing in common: Those who built them did not follow a formula.
Online retail is as good an example as anything else to illustrate this principle. Let it be known from the outset that there is more than one way to succeed in online retail. You are limited only by your imagination and creativity.
Online Retail Is More Complicated Than It Appears at First Glance
Online retail is pretty basic at its core. You choose an area to participate in, secure products you can sell, and then set up an online store front through which you can sell them. Simple enough. Yet what seems simple in principle can be very complicated in practice.
For example, how do you proceed? Where do you secure your inventory from? How do you handle shipping? These are all things you have to deal with in online retail.
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Should You Follow the Traditional Retail Model?
You can set up a retail operation in any number of ways. The traditional model starts with establishing some sort of sales venue, whether that be a brick-and-mortar store or an e-commerce website. Then you obtain your inventory by ordering from wholesalers who sell to you in bulk and at reduced prices. You sell the product yourself with a mark-up added to cover your costs. This allows you to generate revenue.
This model has worked well for generations. It is the model on which Western retail was built. Its primary benefit is that you do not have to make products yourself. You rely on others for that. For example, you might sell products similar to the UK’s Seton workplace safety suppliers. Workplace safety is big business, so there are lots of suppliers to choose from.
Or Is the Dropship Model Better for Online Retail?
A more recent model for online retail is the dropship model. This model works a lot like the traditional model with one significant difference: You do not actually hold inventory on-site. Instead, rather than buying in bulk, you place individual orders with your suppliers as your customers place orders with you. Then your suppliers ship products directly to your customers in packaging bearing your name.
The big advantage of the dropship model is that you don’t have to invest large sums of money in inventory. You also do not have to maintain warehouse storage. You sell on your website the same way you would in the traditional model. However, you let your suppliers handle inventory and shipping.
Maybe You Want to Make Your Own Products for Online Retail
You may not like either the traditional or dropship models for online retail. That’s fine. You can choose to make your own products from scratch. Doing so completely eliminates wholesale suppliers except where raw materials are concerned. You get to maintain complete control over your inventory, its quality, and so on.
This sort of business can work well for some types of retail products. It doesn’t work well for others. Going back to the workplace safety example for a minute, many of the items sold in this category must meet strict government safety controls in most countries. You probably wouldn’t have the resources to keep up with changing regulations. As such, you would want to pick another area to get involved in.
Or You Can Mix Things Up
One last idea you might want to explore is that of mixed commerce. Far too many online retailers get caught in the trap of thinking that selling online is the only way to go. Nothing could be further from the truth. Even if e-commerce is the major thrust, that doesn’t stop you from selling in person.
For example, some e-commerce sellers also take their businesses to local festivals, trade shows, flea markets, and pop-up shops. This allows them to expand their reach locally without having to commit to a full-time brick-and-mortar establishment. At the same time, it brings in a little more income.
There Is No Such Thing as a “Guaranteed Formula”
This post only scratches the surface of the many ways to succeed in online retail. The main thing to understand here is that there is no single formula for success. If anyone tries to sell you on a so called “guaranteed formula,” run away. There is no such thing.
Also, bear in mind that the principles described here apply to more than just retail. Virtually any business venture you could think of relies on more than a single black-and-white formula for success. The way to succeed in business is to work hard and be willing to take risks. So keep trying great ideas until you find one that works for you.