The way people buy products and services has changed dramatically in the last couple of years, thanks to technology. Most people today use the internet to research brands and decide whether they should trust them or not, and more and more switch partially or entirely to online shopping.

And with the pandemic everything that could, including shopping, has moved into the digital world, creating incredible opportunities for entrepreneurs who want to start an eCommerce business.

Build a Superb Online Store

Whether you are just starting a business, moving an existing one online, or trying to grow your eCommerce business, nothing is more important than the condition of your online store. Even though it’s virtual, your store should look beautiful, the buying experience should be impeccable, everything should be easy to find, payment should be secure, all the necessary information available, and putting things in the cart should go smoothly.

First, you should find an eCommerce platform to build an online store for your business. It’s important that you choose one that will make your job as easy as possible. For one, the store builder should be user-friendly, and the platform should enable ordering, paying, and hosting. Furthermore, it should allow you to automate day-to-day tasks. Aesthetics is also crucial and it should be easy to customize the website design so that your online store represents your brand perfectly and matches your business vision.

The fact of the matter is that the better your online store works, the fewer potential buyers will leave your website immediately or abandon the cart. Finally, choose a platform that will be able to accommodate your business as it grows, without compromising the performance, speed, and efficiency of the store, and the overall customer experience.

Choose the Right Shipping Method

Timely delivery is one of the keys to running a successful eCommerce business. Long and frequent delays prompt order cancellations, bad reviews, and unsatisfactory customer experience. All of this can harm your reputation, and consequently, your profit. Good buying experience on the other hand plays a huge role in customer retention.

There are several ways you can go about shipping your products to your customers. Simply put, you can either ship your products by yourself, or you can use a third party. Owning your own stock, however, can be very expensive, especially for small or new businesses. This is why it’s a great idea to use another way of shipping products. When considering third-party shipping options, platforms like Shiply can offer efficient solutions tailored to your eCommerce needs, ensuring timely deliveries and satisfied customers.

One option is to become an Amazon FBA business. This means that you sell your products, while Amazon will ship them. Using Fulfillment by Amazon gives you access to more customers and inspires trust. And not only will it make your work easier but it will also help you run a successful business, and eventually grow and scale it.

Dropshipping is another fulfillment method in which you don’t keep products in stock, but rather purchase it as needed from a wholesaler or manufacturer. You can use one or several dropshipping suppliers and tools. Some businesses also combine FBA and FBM methods.

Focus on Customer Retention

Acquiring new customers is important but successful eCommerce businesses also focus on retaining customers. Powerful tactics to increase customer retention are key for business growth, because returning buyers are loyal customers, and they translate to a good reputation, increased visibility, and, most importantly, increased profit.

There are many tactics you can use to build a strong, lasting, and meaningful relationship with your customers, including creating loyalty programs, offering gifts and discounts, providing quality content on your website and your social media, interacting with customers, asking for feedback on their experience, and staying in touch after they’re done with the purchase.

Take Advantage of Social Media

Most companies nowadays recognize the importance of social media for their success, whether they are eCommerce businesses or not. Major social networks, including Facebook, Instagram, TikTok, and Twitter, offer many features for businesses to boost sales and even enable shopping through their platforms.

However, this is not the most important benefit of social media for businesses. With more than half of the world’s population using one or more of these platforms constantly, they can provide you with a vast pool of potential buyers. Some of the tactics you can use to reach your ideal customers using social media, include:

• Providing high-quality content to increase engagement rate;
• Inspiring user-generated content;
• Interacting with followers;
• Using paid ads to target the right social media users;
• Collaborating with other brands and/or influencers;
• Cross-promote.

In a Nutshell

There are many successful eCommerce businesses out there, which can be intimidating if you are just starting your online store. However, with the right tools and tactics, you can increase your chances to run a profitable and scalable eCommerce business.

Market Place

MKTPlace is a leading digital and social media platform for traders and investors. MKTPlace offers premiere resources for trading and investing education, digital resources for personal finance, news about IoT, AI, Blockchain, Business, market analysis and education resources and guides.

You might have read or heard someone envisage or forecast that a particular retail organization or a chain of stores is going shut down due to being on the verge of bankruptcy. Can you remember how many times it did not happen the way you heard about it? Well, it might have happened a few times. Maybe you have also predicted that a store will shut down in the near future because of so and so reasons. Most people think like that.

If you take a look over recent years, you will notice there have been plenty of stores that closed down because of the super ecommerce retailer, Amazon. After the juggernaut was formed, the first ones to be crushed under it because of the financial crisis were Borders, Circuit City and Linen’ n Things. And now economic analysts have identified there could be a next wave of victims that could be destroyed by Amazon, namely Barnes & Nobel, Best Buy and RadioShack. Even Wal-Mart is showing signs of decreased store sales in the domestic division.

So, being an investor, what is the first question that pops into your mind? Of course, you will be asking yourself is it a good to differentiate an actual crisis at a brick and mortar retailer from that of a threatening one, but one that can be survivable? If you can distinguish the threat, you can avert a potentially dangerous investment but also make a profit on the consistent drop or a rebound in the company’s primary stocks.

Why Is It So Complicated To Forecast Failure?

The main reason why predicting failure can be overly complicated or calculating when a company will sink under is because bankruptcy is not just an issue of solvency (having more assets than liabilities), and if things were that simple, even a rookie investor would be able to foresee the downfall of a publicly traded company. Because all that would take is to review and evaluate the company’s shareholder equity portion in the balance sheet.

However, this doesn’t mean that solvency is of no importance, because it does matter. The thing to understand here is that solvency is not the leading cause of failure among companies. Let’s look at a textbook example. Consider the downfall of Circuit City which was a former electronics giant. When Circuit City filed for bankruptcy less than 6 years, it was deemed America’s second biggest electronics retailer and vendor. It had 700 superstores in different shopping malls and centres across the US. And on top of that, before it filed for bankruptcy, the ending balance sheet indicated that the company had $3.4 billion in assets in comparison to their liabilities which amounted to $2.3 billion.

This tells you that the company was not just solvency but it had a book value of over $1 billion. So, if solvency is not the problem here then what is? Quite simply, the answer to the question is liquidity. When an organization or company is in its final struggle, the first and most immediate problem it faces is the failure of converting assets into liquid cash, cash that can be used to pay off expenses such as rent and wages, etc.

This problem occurs when creditors begin to give up hope in the company and stop taking the company’s assets as collateral in order to be paid off. So, basically it is the inability to pay creditors what causes the entire problem, leading to the demise of a particular company and this is what exactly happened with Circuit City.

The Framework for Evaluating Liquidity

When liquidity becomes a problem, the traditional move should be towards the analysis of a company’s current assets, like cash, inventory and accounts receivable, and comparing it with its current liabilities, which could be debts and further obligations to be carried out. However, this method, referred to as  the current ratio analysis, can be both effective and misleading because of the fact that it includes assets which cannot be turned into cash, namely accounts receivable and the inventory, at short notice.

Current ratio also ignores cash flow which is the core of liquidity. Moreover there is also a one-sided aspect to liquidity that cannot be recorded in the financial statements. In essence, everything points towards the creditors of a company. Liquidity depends on the company’s creditors. Because of the fact that creditors are not interested in shorthand measures pertaining to the fiscal prosperity of company, like the current ratio, they are more worried about how they can topple competing creditors, thereby getting their repayments before time runs out.

Predicting Failure: The Bottom-Line

The point of what is explained here is to help you realize it is hard to pinpoint the failure of the companies which are on the brink of shutting down. There are immense complications because the analysis entails more elements than just solvency.

Market Place

MKTPlace is a leading digital and social media platform for traders and investors. MKTPlace offers premiere resources for trading and investing education, digital resources for personal finance, news about IoT, AI, Blockchain, Business, market analysis and education resources and guides.