If you have an idea that seems really, really good to you – how do you start making money from it? Those who answer such a question begin to be called entrepreneurs, but it is said that easy beginnings do not exist. And if there is no experience, no team, no premises either – can an idea alone ever be enough?
One trend is appearing more and more often
New e-businesses are increasingly being started without any “infrastructure” – no office, no warehouse, not even a team. It may sound strange or smell like a quick collapse, but on the contrary, according to “Venipak” marketing manager Asta Raudonienė, this way of operating is a very natural direction of e-commerce development.
“Today you can start practically without any physical footprint – no office, no warehouse, not even a team. Fulfillment services allow businesses to concentrate on what creates value – the product, suppliers, marketing, customer experience. Everything else becomes an on-demand service. This fundamentally changes business: the most important thing is no longer having infrastructure, but being able to create flow – customers and sales.
That these days you can start a business having only a computer and an individual activity certificate or small partnership documents is also acknowledged by “GloberTop” founder and official “eBay” platform ambassador in the Baltics, Aivaras Milašauskas. By hiring competent external help, according to him, you can not only save time costs but also avoid some risks. There are quite a few agencies that cover a certain niche, take over some necessary work from a person starting a business, and in terms of costs this is often much more beneficial than hiring a separate person.
According to A. Raudonienė, the advantages of such a choice are flexibility, smaller initial investments, and speed. You can start and test an idea very quickly, since you don’t need to commit to premises or staff. However, there are also disadvantages – less control, greater dependence on partners, limited possibilities for differentiation in logistics. A. Milašauskas agrees – although outsourcing part of the work saves costs, the main disadvantages are lack of flexibility and the need to have not only clear and precise processes but also to calculate everything as much as possible, to reduce the likelihood of mistakes:
“If we outsource everything, then solving problems when something was overlooked will be much harder and slower when we have nothing in-house. Then the mentioned advantages will really disappear. In addition, other challenges arise – how to choose properly, understand the work and the value received for the money we pay. It is harder to trust when you don’t physically see the person and aren’t with them every working day,” – says A. Milašauskas, listing the challenges of entrusting part of business processes to other hands.
“Will this become the standard? For a large part of small and medium e-businesses – definitely yes. Just as working from home became the norm, so an outsourced infrastructure becomes the new standard,” – A. Raudonienė is convinced.
You must understand your value: what separates a good idea from one doomed to fail
If you can start without premises, even without a team – what is it that an e-commerce business really cannot start without? According to “Venipak” marketing manager, you cannot start without a clear value proposition:
“You need to have a product that stands out, or at least clearly know what will make it attractive to the customer. It is also necessary to have at least a minimal budget for marketing, because in today’s abundance of goods and advertising noise it is very hard to stand out. Without customer attention everything else has no meaning.”
Let’s admit that not everyone succeeds equally – some ideas become successful businesses, while other ideas are almost immediately doomed to collapse. Where is the essential dividing line between these two models? “The essential difference, I think, is whether the idea solves a real problem or satisfies a strong need. If the idea matches market trends, has a clear audience, and the entrepreneur can quickly test and adapt – the chance of success is high. Ideas based only on ‘I think it will be interesting’ or some other personal assumptions usually get stuck,” – says A. Raudonienė.
The founder of “GloberTop” and official “eBay” platform ambassador in the Baltics says that global electronic marketplaces are highly automated, a lot is done by robots, including checking various documents, so even the smallest inaccuracy in submitting documents, etc. can cause very big problems, so it is especially important not only to have an idea but also to accumulate the necessary knowledge, educate yourself, and consult a lot. Later, when there is really enough knowledge or professional support behind you, and the electronic marketplace hygiene is truly proper, then attention turns to what is most important in any retail – what we sell, for how much, where the product is, and how quickly we can deliver it. “Also very important are long-known details – good customer service, presentation – quality photos, descriptions, precisely defined product specifications, and so on.”
According to him, it is important not only to educate yourself and thus avoid sometimes very costly mistakes, but also to get to know the electronic marketplace, to know what is really in demand and what might not get the desired popularity. Also, to understand audiences and their different needs. “Consulting with specialists before starting, I think, is necessary so that first of all they dispel myths circulating on the internet and help you evaluate your potential faster and more accurately, direct your energy more purposefully, choose the right e-marketplaces. Later comes the understanding where more attention is needed, automated solutions, how not to mess up, and so on. A real example – an ‘out of stock’ situation, when someone buys a product from us but we cannot send it, because we don’t have it, maybe we didn’t notice that the last one in stock was already sold. Then the marketplace gives us the option to cancel the order, choosing the reason ‘out of stock,’ but in many cases a few such cancellations with this reason can have a big negative impact and end our sales,” – shares A. Milašauskas with an example of how, seemingly without making very big mistakes, you can strongly harm your newly started business.
The most common mistakes and golden tips for beginners
Perhaps the biggest mistake, according to him, is to start without a knowledge base and clear understanding where we are going and what is most important to us, relying only on comments read on social media or tutorial videos seen on YouTube.
“An unsuitable market choice is also one of the more frequent mistakes, when focus is put on e.g. the American market, because it has the greatest purchasing power, but it is not considered that the brand or product is not meant for that market at all, and it might be much more appropriate to go into the German market, which is smaller but more targeted. Finally, lack of understanding of the e-marketplace audience – what investments are needed, what the market is, what is in demand, and what is not,” – lists A. Milašauskas the most common mistakes of new e-businesses.
A. Raudonienė also shares the main tips for those who so far only have an idea but want to move forward on a successful path:
“First of all, you should start from a clear value proposition. Very clearly define: why should the customer buy specifically from you, and not from a competitor? It can be price, quality, delivery speed, service, unique design, or an emotional connection with the brand. Without a clear USP (unique selling proposition) even the best marketing won’t work. Later test the idea on a small scale. You don’t need to order 10,000 units of goods right away. You can order a small batch, launch ads to see whether people actually buy.
Another tip – invest in marketing, not in walls. Premises, offices, nice furniture – all that means nothing if there are no sales. First ensure that your product reaches the target audience. Social networks, influencers, performance ads – these are channels that generate sales. The e-shop must be simple, clear, with a convenient payment and delivery system. If the customer cannot conveniently pay or choose a delivery method – they will go to a competitor. Logistics, fulfillment centers, couriers – these are the links on which an e-shop’s reputation depends. It is better to pay a little more but have peace of mind and reliable service. Also, plan finances. It is important not to forget that even an “easy” start requires working capital: for advertising, for purchasing goods, for platform fees. Finally, learn from customers. Ask their opinion, observe behavior in the store, collect feedback. Often it is customers who say what needs improvement, whether it be packaging, communication, or a product detail.”