Some products/services simply do not sell online. For example, if customers cannot get enough information or experience (extending beyond reading text) of the product/service, it is unlikely that they will part with their money.
Examples of products that have proven to sell well on the Internet include books, CD’s, software, household appliances, and electrical items.
Examples of products that have proven to not sell well on the Internet include clothes and furniture where customers cannot properly feel/view the size, texture, fit, etc of the product.
Will my target audience (customers) be online?
If your target audience is not online – what’s the point! However, today, customers go online to purchase almost anything but you should still research to find out if your product/service may be excluded.
Consider which age groups you are targeting as the ‘older’ generation may not be as knowledgeable when it comes down to using the Internet, as opposed to the ‘younger’ generation.
Some customers still have the issue of security and trust when purchasing online and therefore prefer to shop offline. Nevertheless, the rising figures for online purchasing may give new start-ups more confidence that this is becoming less of an issue.
How much competition is there online?
Having a lot of competition online is not a bad thing – in fact it is a good sign! Lots of competition is a sign that your product/service does work online, but the only problem you are faced with now is differentiating your product/service.
If you will be faced with little or no competition and you are still convinced your product/service will be a huge success online, you should research further. It may be that a similar product/service has already been sold online but ended in failure (hence the lack of competitors).
Do I have the skills, commitment and resources to run an online business?
If you already have strong IT skills (you or/and your employees), you may find that you have an advantage. If not, it is a decision to either get the necessary training (software, IT, and general management) or employ skilled staff.
Commitment is also important as your business will now be accessible to the public 24 hours a day, 7 days a week. You therefore have to be prepared to jump quickly to solve any problems (as you would in any business), for example server failures, around the clock.
If your business is already offline and you are now taking the step of putting the business online – can you afford to portion part of your business to managing the website and online sales.
Do I need to be online?
Does your business need to be online or are you just reacting to the growth of e-commerce in fear of missing out on the action? Referring back to the ‘What am I selling’ section, many people put their business online without thought, where offline sales would have been the much better option.
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