Get Into E-tail


Gerry Harvey famously said that online success was 50 years in the future and that: “Online people do not make any money. The whole world was conned with online retailing… it’s a con, a complete con.” That was in 2008, just 3 short years ago.

Since then a lot has changed. It could be said that the global financial crises was perfectly timed for ecommerce, as sales in bricks and mortar plummeted and credit companies crunched, e-tail has experienced great growth. Ebay saw 24% growth in the 12 months between the end of 2008 and 2009, that’s US$14.2 billion. Amazon had a 42% growth in the same period, AussieBum similarly grew its net profit by 40% in 2009.

The GFC created what Ed Butler, senior analyst at IBISWorld, calls “the perfect storm” for e-tailers – particularly in Australia. There was no real drop in earning power during the financial crisis, he points out. What fell was consumer confidence. Negative media coverage made people extremely concerned about their future earning power and, in turn, far more careful about where and how they spent their money.

2011 will be remembered as the year ecommerce went mainstream in Australia. Myer, David Jones and Harvey Norman have all gone online in the last 12 months and research from Swinburne University released in September has found that Australians are the world’s most frequent online shoppers, with 78% of Australians regularly shopping online.

In fact, a quarter of our population buys something online at least once a week and more than half buy something once a month. Facebook isn’t the biggest thing on the internet in this country – shopping is.

Welcome then, to the ecommerce revolution. If you’ve only recently joined, don’t worry you’re not far behind and you can take advantage of all the hard learning and expensive mistakes that others have gone through.

So how do you avoid the pitfalls of online selling and get the best head start possible? Paul Downs, co-founder and director of ecommerce consultancy Hitworks said it’s all down to the three most basic Ps in the marketing mix: product, price and promotion. The biggest mistake people can make is expecting to plug in an off-the-shelf shopping cart and turning over a million dollars in their first month.

Is it possible to build a brilliant online store on a budget?
Downs says yes in fact, the biggest and best online stores in the country probably cost an awful lot less than you might think and some of the best shopping cart solutions are actually the cheapest. BigCommerce, for example, starts at only $24.95 a month and there are dozens, if not hundreds of free solutions like osCommerce and Magento, which leave much more expensive systems for dead.
So put e-tail on your to do list for 2012.

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