How young entrepreneurs can leverage on e-commerce

Jakarasi

The developments in the digital space has brought in benefits and challenges for upcoming entrepreneurs. The digital divide between those who have ready access to computers and the internet, and those who do not, has almost been closed with the explosive increase in the penetration of smartphones as a result of cheaper phones and easier access to broadband connectivity.  This development has brought about an impressive growth in internet users.

This surge in internet usage has completely transformed the world of marketing, the way business is conducted and has opened up great doors for young entrepreneurs to leverage their businesses using e-commerce solutions. Research has shown that E-commerce, the marketing, promotion, buying and selling of goods and services over the internet, is experiencing unprecedented growth and is expected to continue to grow into the future. Hamadoun Toure Secretary General of ITU said “Broadband gives small businesses the opportunity to broaden their customer base and reduce their overheads through e-commerce platforms.”

E-commerce comes in a number of forms: business-to-consumer (B2C), business-to-business (B2B), consumer-to-consumer (C2C) and e-procurement. An entrepreneur can adopt any of these forms.

Despite the limited resources available to start-ups, the young entrepreneurs have the advantage that they are endowed with IT knowledge, expertise and know how to experiment with technology and therefore should benefit from e-commerce. Being techno savvy gives the young entrepreneur an advantage when doing business on the internet.

Online business is now easy to start because the reduction in prices of software and hosting services has reduced the barriers to entry in the online business. You don’t need necessarily have to buy the software. You can lease the software from companies offering these services. Businesses have three options either to host their own web site; host their site with a web hosting service provider or host their site with a portal such as Yahoo or other service providers for a small monthly fee.

Online business offers many advantages for the start-up. Traditional business requires the brick-and-mortar set-up which is very restrictive on growth because of the prohibitive costs in setting up such facilities. The most efficient, quick and cost effective alternative for entrepreneurs to start operations is by opting for the online route to run a business.

Young entrepreneurs can leverage on the internet to expand their markets, improve efficiencies, attract and retain customers, and exploit other e-commerce opportunities which include customer service, technical support, data retrieval, public and investor relations, security and payment issues, cutting costs, and obtaining advice or information.

Trading goods or services online gives the entrepreneur ability to reach out to a wider global audience without investing heavily in the physical infrastructure, the brick-and-mortar required under traditional businesses. You don’t need to invest in huge facilities to start a business. Your major cost will be that of setting up a website that will give your company a foothold in the market by using this to stimulate public interest through social media, e-mails, videos and online advertisements, You can therefore run your business remotely from any location. Companies carrying their business online will benefit through the reduction of costs associated with finding new customers.

E-commerce provides a variety of options to communicate with potential customers. You can tailor-make communication to a particular group of customers depending on their needs. This can be done at least cost.  You can customise the way the organisation exhibits it products.

Payments can be done online. However security is one of the challenges and so should be addressed to avoid hacking into the site for credit card. Entrepreneurs need to assure their customers that they take adequate security precautions. There have been substantial improvements in security on payments. Most of the payment systems are fairly secure and therefore should not pose any problems to customers. Shipment of products can be done using the experienced international couriers.

Business can be carried out round the clock. The company is therefore able to provide 24/7 online support all over the globe. Customer service is enhanced as a result. There is no longer much difference in exposure to customers between a small company and a big one. Both are exposed the same way because of internet coverage.

E-commerce offers efficiencies that give a business the ability to reduce the costs of billing, payment, customer service and distribution costs. It also helps reduce supply chain management, procurement, and other management costs. This is because the internet, once set up, can operate at minimal costs.

The internet enables small businesses to access information about goods especially prices and availability of goods from different suppliers which gives the entrepreneur ability to source from cheaper sources and to effectively and efficiently manage stock levels. Customer service can be improved by letting customers use frequently asked questions(FAQs). This will free up valuable time for the selling staff to do other activities for customers.

By using the internet companies are able to improve their value chain by cutting out the middleman. Normally in the traditional value chain the transaction flows from the manufacturer, then to the wholesaler/distributor, retailer, and finally to the consumer. With the advent of the internet, entrepreneurs can develop relationships with the manufacturers and sell directly to the consumer without having to deal with the middlemen.

About the author

Stewart Jakarasi is a business & financial strategist and a lecturer in business strategy and performance management. He provides advisory and guidance on leadership, strategy and execution, preparation of business plans and on how to build and sustain high-performing organisations. For assistance in implementing some of the concepts discussed in these articles please contact him on the following contacts: sjakarasi@gmail.com or +266 58881062 or on WhatsApp +266 62110062