From Start Up to Global Brand - Going Big with E-Commerce

How do we go from start up to global sales? The answer is surprisingly simple. This article goes over the stages of business development and how to start scaling your business, with a few app recommendations.

Dustin Chikeev

E-Commerce businesses can come in a variety of different models with each having their own set of unique characteristics. There is an ordered set of objectives that can help you scale your business efficiently and effectively. The objective of this article is to give you some important insight and break down the key elements for any growing business.

There are 4 stages for e-commerce businesses and we will be defining the steps necessary to expand your business to the final stage, which is on a global scale. This article uses concepts like hybrid business models as a combination of both physical stores with an e-commerce function, and implies how the most effective method to scaling your business is through the implementation of e-commerce.

We focus on how online stores can economically and effectively scale your base of operations as an addition to a core physical business. This article will hopefully clarify what are the main objectives in e-commerce and demonstrate how it is a vital in the growth of any business small or large.

The Four Stages of E-commerce:

1. The No Inventory Model

2. The Physical Only Model

3. The Local Delivery Model

4. And the International or Multi-Market Model

The No Inventory Model:

1. Digital Content or Service Providers

2. Print on Demand

3. Dropshipping

Some of the most profitable companies in the world are online service or content providers. Their products are purely scalable and less capital intensive than other business models. These business models encapsulate the meaning of e-commerce in a very pure way by relying primarily on the internet. They can range from apps, streaming or even advertisement companies. These business include companies like Netflix, Facebook and even Growave.

Amongst the zero inventory business models we also have the relatively new, Print on Demand and Dropshipping models. Dropshipping is a zero inventory model that relies on independent manufacturers to produce, warehouse and distribute products. By marketing a product on the behalf of a warehouse the Dropshipper receives a small margin on the sales proceeds. The warehouse fulfills the order by directly shipping the items to the customer. These sort of business models have risen to fame for their low startup cost and heavy endorsement by social media icons, primarily on Youtube. Dropshipping is widely considered to be a risky in nature and has received a row of criticism for their practices.

Print on Demand is very similar to Dropshipping as it requires no inventory management. In this business model white label manufacturers print custom items upon request and ship them on your behalf. They are considered low risk, due to their low capital requirement.

Physical Only Model

These are traditional business models are the basis of our argument. These types of businesses are just like any small merchant that sells items out of a physical store front. They generally use the internet for basic brand exposure and communication. They are almost always in their developmental stages and are limited in their capacity.

These sort of businesses are important for our argument because they represent the most standard type of trade. This article uses these models to demonstrate how you can starting expanding your business from this level with e-commerce platforms.

At these stages, business do not offer any purchase function nor any delivery services. It’s important to understand how a major portion of the market is ignored and how these conditions severally hinder growth. This is the stage were business face the most difficulty. Since the rise of major e-commerce platforms the process has become far more affordable and accessible.

Local Delivery Model

Implementing some sort of delivery service to your local business should be a primary objective. These companies are just like any traditional business, but have elevated their internet presence to be able to receive and fulfill product orders. These businesses use e-commerce as one of the primary functions of their core business model. At this stage, digital marketing increases in importance and can be highly impactful on business prospects. These sort of businesses often have disruptive characteristics because they can interject into market dynamics and capture market share. Your web presence can become a differentiating competitive factor because of this disruptive potential. E-commerce is considered a powerful launching pad for new business ideas, but only when you begin processing and delivering orders.

For businesses that have a hybrid business models, roughly 30% of their sales are generated through e-commerce. Figures suggest that businesses are actively diverting more resources towards their web presence and that they're becoming increasingly reliant on internet sales.

International E-Commerce Companies

The next stage for any business that has demonstrated a history of strong consumer demand is geographical expansion. This would create an instant multiplier effect and fortunately you've already made the necessary investments into your digital presence to be able to expand easily. Otherwise, this would require some sort of investment into fixed assets in order to begin operations in another market, but this isn't the case for businesses that operate through the internet. The Internet is considered the premier vehicle for brand exposure because it can be scaled easily to a global level. Additionally, e-commerce is a great way of reducing the costs associated with expansion and it is sophisticated enough to target your audience with specifically.

Scalability is the ability to reach a comparatively larger demographic with limited capital requirement, while remaining uncompromising on quality of services you provide. This would suggest that you could 10x your sales and potentially require no additional investment to do so. With a complete e-commerce solutions like Shopify you have everything you need to actually exercise these objectives. It has never been easier or quicker than in the modern state of the internet to scale your business to a global level. In fact, many blogs regarding e-commerce will commonly use overnight mega brands to justify the merits of e-commerce.

Shopify - The First Step for Expansion

We need to have an ordered set of goals that will take us from the base level business to the e-commerce based brand. Setting up your first fully functional online store means that your business is capable of accepting and dispatching orders, tracking your financials and correctly marketing your business for exposure. Shopify is revolutionary in that respect, because they provide a comprehensive solution to all your e-commerce needs. Its public status and large capitalization ensure the highest standard in e-commerce solution. Shopify's market dominance is continuously growing based on their infrastructure and reputation. Integrating Shopify into your business model is a great first step to truly scaling your business in an efficient and timely manner.

The Importance of Digital Marketing

Once your e-commerce capable website set up a marketing strategy is necessary to drive traffic to your website. The marketing funnel is great for conceptualizing your objectives, which is divided into three stages that represent the customer journey. They can be summarized as lead generation, conversion of traffic, and retainment of customers. Digital marketing is a complete discipline on its own and requires thorough understanding in order to create substantial change.

Digital marketing is the means by which we begin to expand our operations and how we use the scalability of the internet to its maximum effect. What all starts with a simple social media presence to brand your business at start up, can evolve into millions of followers and order processing on a global scale.

In many respects, your website is a focal point for your business, and digital marketing is the means by which we optimize your digital presence.

In order to realize any significant change we need to set our focus on the accumulation of long term users. The only sustainable way to increase market share in any market is through customer loyalty. It’s important to remember that each customer is a unique individual that is constantly comparing their options. Knowing your customer means understanding what affects their purchasing decision. It is within the customer journey that we can identify the best practices for growth.

As we all know, market share is underpinned by brand recognition and the accumulation of repeat customers. The accumulation of long term customers is contingent on your product but also your relationship with the customer. There is only a finite amount of demand in any segment and to accumulate any market share means that your business is actively re-engaging with previous shoppers, while improving the overall shopping experience.

Characteristics of the Market Leader

The market leader is a perfect example of how to excel in a competitive environment. Not all the businesses that divide the market are the same, but we can presume that their success is attributed to certain qualities. These qualities are observable first-hand and are always orientated towards the consumer, suggesting that there exist at least some insight. We can see that these companies consider their digital presence as a way of capturing customers due to the contrast between the "top and bottom". Which further suggests that businesses with an advanced online presence excel in these competitive environments. Remember to think about your domestic market in context as well, and how the inclusion of e-commerce compares to businesses with out such a function.

Disruptive Properties of E-Commerce:

1. They have greater exposure and ranking.

2. They are considered more authoritative.

3. And they engage a larger demographic.

4. And perform better in terms of sales performance.

In early stages, most businesses only have a simple social media presence and are often being outperformed by the more capital intensive market leader. We argue that with the integration of an e-commerce function, your digital presence is a way of narrowing the difference amongst these power players while slightly dulling their market dominance. At this stage, your business has the potential to elevate above any geographical locks; having a presence beyond what is possible with a physical only business. There is also the benefit of having larger target segment without requirement for any additional capital, which increases the efficiency of your production facilities. It is also important to understand that your digital platform is a quasi-permanent asset that progressively grows as you build connections and has a continuously growing impact on your businesses prospects. The hope is that you treat your website as a valuable asset, particularly as your first point of contact and premier conversion tool.

Apps and Integrations

The e-commerce industry has shown its potential both through financials and consumer sentiment. These two indications suggest that the projected growth rates bear some sort of semblance of truth. One thing is certain, that there is an endless pursuit for competitive advantage. This pursuit has manifested sub-sectors in the form of apps and extensions for e-commerce businesses. These software companies develop specialized apps that are intended to increase productivity. There is an order of importance amongst these apps.