An ecommerce enterprise is can be tough business for a novice, especially because of all the potential bottlenecks and leaks that it can have, many of which are unique to this kind of business. One of the characteristics of ecommerce is that it is conducted both offline and online. Offline, one has to be on top of shipping, logistics and delivery – the backbone of any retail business. Managing inventory and warehouse concerns fall under the same category. Online, one has to keep an eye on two things – one is the face value of the business – what developers call ‘front-end’. This is where the customer interaction takes place.

Everything from your website design, payment integration, product listing, UX/UI concerns, social media marketing, etc. is to do with that interaction with the consumer. The second thing one has to be aware of online is how the data gathered in this interaction process is funnelled into the inventory. This is the back-end. Each of these parts of the business are susceptible to breakdown or leaks, and each can have massive repercussions on your business.

The important thing to understand about ecommerce is that it is extremely scalable. One does not have to necessarily manage any of the above things to have an ecommerce business. If you don’t have the capability or the expertise to manage inventory, you can go for the drop shipping model, which allows you to be an online middleman for wholesale businesses. Instead, if you are transitioning from a warehouse based offline business model to the online world, you can start slow and enter via the marketplace model – by signing up on online retail marketplaces like Flipkart and Amazon, which provide assistance both in shipping and in terms of virtual space.

While scaling your business according to your needs, you can then think about expanding into an independent online brand for the future. The bottom line is that it is necessary to understand how the entire business works and what are the potholes where you can lose money, and avoid them. Let’s take a look at some pointers that you must keep in mind.

Where are You Losing Money in Ecommerce?

1. On the Website

An ecommerce website is a model for a shopping space on the virtual world. The screen is the display space, and instead of walking through aisles, the customer navigates various webpages. Using various data analytics tools, you can find out how many people actually land up on your website, how many of them add items to their shopping cart and how many of them actually make a successful transaction. This is valuable data, because it tells you where exactly the bottlenecks in the system are hidden.

Abandoned carts, for example, are a major headaches for online sellers. While there can be many reasons to cart abandonment, the site-specific ones can be easily tracked down and dealt with. Issues like slow loading webpages, website and server crashes and inadequate security for online transactions are major turnoffs for the online shopper. Forcing the customer to register on your website before proceeding to checkout can also lead to cart abandonment. The bottomline is that just as a physical store tries to make the customer feel comfortable while shopping, the job of a good ecommerce website is to create an experience that would lead to meaningful interactions with the customer.

2. During the Transaction

There are a few things that today’s online consumer has come to expect from the retailer. Issues like Cash on Delivery, management of product returns and free shipping have become industry standards by now. Failure to comply with these basic norms may cause many transactions to go unfinished. It is during the transaction that customer reviews for the product and the seller’s rating also come to the fore. A typical customer expects multiple payment options, accurate delivery dates and better transactional security in today’s ecommerce scenario. Also, it is important that the same thought goes into building mobile interfaces for transactions. Many apps like Paytm and Freecharge are pushing the boundaries of the things that can be done to facilitate effortless transactions – automatically verifying the OTP during a netbanking transaction, for example, is a feature yet to be incorporated by many prominent ecommerce ventures.

3. During the Delivery

Logistics and delivery are major hassles for an ecommerce newbie, and this is also where much of your hard earned investment might be leaking out. The first question here becomes whether to outsource logistics or handle it yourself. This is a subjective question, because what might work for someone might not for someone else. But rather than making a haphazard choice, it is better to dip one’s toes in both waters for a time, and develop a hybrid approach depending upon the situation. In this manner, you can prioritize delivery and avoid wastage of resources and time, which might directly reflect in your overall margins.

It is important to have a geographical understanding of your target market and its accessibility. Depending upon whether a particular delivery falls in the tier I, II or III, its accessibility and cost of operations will differ. Therefore, it is ideal to keep the structure of the logistics operation flexible and scalable. This way you can keep stepping up your operations at your own pace while making sure that they are being managed efficiently. This also reflects on the online world – you can be more confident about tracking packages, you will be able to give more accurate delivery timings and all this will be seen in your seller’s ratings.

This is what we have on managing leaks in your ecommerce enterprise. For more information, get in touch with us at Browntape. We are India’s leading ecommerce experts, and we are always happy to help!

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