free online shop
Exploring a new business model
for an online shop
Is low risk and low cost consistent with
a successful eCommerce strategy?
In this edition, we have been looking at the SME as the powerhouse of the economy;
4.7 million separate entities whose collective turnover accounts for 50% of the UK’s
GDP while employing some 58% of the private sector workforce. Overcoming the
worst effects of a downturn means being flexible and adaptable and leveraging the
greatest commercial benefit from those SMEs’ inherent skills and resources.
Remember that changes can be made rapidly from security software to office supplies that
and often at minimal cost, without the bureau- had paid between £8,000 and £15,000 in the
cratic infrastructure that hallmarks the larger past two years to have a site developed by
business, specialist shop-builders.
Turning a business which is essentially The sites were well designed but there was
‘bricks and mortar’ into one which attracts a no certainty that any of those organisations
significant proportion of its revenue online is would recover their total costs after taking the
certainly one change worth considering. It annual operating and maintenance costs into
might mean conceiving a brand new business account – in under thirty-six months. In the
from first principles. Either way, there is a new present economic climate, that is too much of
culture to absorb; new practices to take on a risk for most businesses considering the
board, and new approaches to time-honoured merits of selling online.
areas of business such as marketing, customer
retention and financial accounting.
Lower risk ways into ecommerce
Traditional reasons ‘why not’
If small businesses really are to benefit from
the lower overheads and greater market op-
What holds many SMEs back from taking such portunities that online trading can offer them,
a vital step is the cost of acquiring an online they have to find lower-cost and lower-risk
shop front that could take weeks to build, routes into the online world.
months to attract customers and years to make We took that process to its logical conclu-
a return on its set-up and operating costs. sion and asked whether it was possible to set
In our research for this edition, we encoun- up an online site at zero cost, or very close to
tered quite small businesses selling anything it. Was it possible, for example, to open a shop
SMEs have been held back from selling on the web by cost of acquiring a suitable online
shop that could take weeks to build, months to attract customers and years to earn a profit.
The Informed Executive
93
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