With the introduction of the internet and e-commerce aggregators such as eBay and Amazon, there has been an increase in SMEs and entrepreneurs setting up online and multi-channel retail businesses at home. However, despite tales of young entrepreneurs who have made their millions by selling from their bedroom, is this process really as easy as it seems?
Keith Bird, CEO at eSellerPro, provides Retail Times’ readers with some valuable advice on starting out in multi-channel retail and discusses why multi-channel is the key to maximising profits
eBay recently announced a 25% rise in the number of million pound businesses on its site, signifying the fourth year of consecutive growth in the number of eBay SME millionaires. Many of these eBay powersellers, such as Gridstop, an online equestrian specialist, started out selling from home and have gone on to develop successful and lucrative businesses; demonstrating the importance of these online channels in today’s retail environment.
It is not surprising many of these smaller entrepreneurs are turning to the likes of eBay and Amazon, as they provide the perfect platform for launching and then developing an online retail business without large sums of capital. The low entry costs and broad support mechanisms offered by these channels leave budding entrepreneurs with minimal risks and a host of opportunities to reach millions of potential customers. In fact, for all SME retailers – a strong ecommerce presence is vital. If retailers are to succeed selling via the internet they need to have a footprint across all major channels and platforms, such as eBay. If not, they run the risk of potentially missing out on the tens of billions being spent in the e-commerce market each year.
Currently, the fastest growth area in retail is online, with many SMEs such as online discount retailer XS-Stock, turning over more money online than offline. Many retailers are currently asking themselves – what does all this change in the market mean to my business? In short, it creates an opportunity. Consumers are increasingly using multiple platforms to shop – therefore no retailer, not matter what size, can afford not to have a multi-channel presence.
While implementing an online or multi-channel strategy may appear a daunting task to smaller retailers, it is a natural extension of retailers’ existing operations and is far easier to set up and manage than it might first seem. Essentially multi-channel retailing is about focusing on the customer. What the modern day customer wants is the right balance of selection, value, service and accessibility – which for retailers means ensuring their products are available when, where and how the customer wants them.
However in reality, achieving this balance is not easy. One of the biggest challenges SMEs and entrepreneurs face is the struggle of maintaining high quality service, while managing their selling operations across a range of channels. With a range of tasks including stock and inventory management, invoicing and delivery, smaller retailers often do not have the resources to manage these themselves.
Adrian Hodge, managing director of XS-Stock, said one of the biggest challenges his business faced when moving to a multi-channel strategy was the increase in demand and inventory management. “While moving to multiple platforms no doubt opened up more sales opportunities, the more we branched out into multiple channels, the harder it became to manage and we ended overselling stock, subsequently delivering a bad customer experience,” he said.
As well as challenges with inventory management, managing multiple platforms can also be an extremely time-consuming task for smaller retailers. Andrew Redstone, company manager at Gridstop, has first-hand experience of managing multi-channel platforms with limited resources.
“When we first moved to multi-channel, managing routine tasks took over an immense amount of time so it became impossible to focus on areas such as marketing or sales to grow the business. The only way to combat this was by taking on more staff, which would have cost a huge amount of money; therefore an e-commerce system was vital to remain successful.”
By putting in place smart technology that simplifies the entire online sales process, businesses can automate tasks such as: inventory management, product listing, scheduling, sales order processing, payments and dispatch. While implementing an ecommerce system may initially be time-consuming to set up, these new smart technologies improve the running of the business and help online retailers seamlessly scale up operations by introducing and managing inventory across multiple retail channels such as eBay and Amazon.
Without a doubt, there are huge profits to be made from online retail. Last month the British Retail Consortium highlighted the potential of e-commerce in the current difficult retail environment. Unlike many sectors, the SME or single entrepreneur with the right tools really can compete with the leading players. The future of a successful retail business lies with those who can create an integrated and holistic approach to reaching the customer. The retailers that embrace a multi-channel approach will reap the benefits and will secure the loyalty of customers throughout the world. All online retailers need to take a long look at how multi-channel selling can help benefit their customer base and then start taking advantage of these new ways to compete with rivals and the big market players. Who knows? The next business to join the eBay millionaire club could be you.
eSellerPro is the first complete ecommerce ERP solution that integrates retailer’s online sales process, simplifying and automating tasks such as inventory management, product listing and scheduling, sales order processing, payment and dispatch, customer communications and accounts posting. eSellerPro saves retailers time and money – leaving them free to concentrate on their businesses and customers. With eSellerPro retailers can seamlessly scale up their operation, maximising sales opportunities across multiple channels such as eBay and Amazon.
Gridstop is a powerseller trading on eBay and Amazon as well as on two niche websites www.cybercheckout.co.uk and www.wheyprotein247.co.uk . Gridstop specialiss in both equestrian and sports nutrition, but also sell many other items such as home and garden products and jewellery boxes.
XS-Stock started out on trading on eBay and 2005 and today is a powerseller managing numerous different ID’s on eBay, as well as selling on six different websites, including Amazon and Play.com. XS-Stock is an online discount retailer selling a variety of products including toys, fancy dress, garden furniture and more.