Articles from EricWelke.com How Online Businesses Overcome Traditional Barriers by Eric Welke
<<<=== Start & Share Over Here =)
If youâ&#x20AC;&#x2122;re just starting out with your first online business, it is good to know what challenges you may encounter along the way. Traditional businesses have been around for a long time and experts have pinpointed several barriers to the growth of a new business. With the coming of the Internet, online businesses were born. They have their own specific challenges to growth, but they do have the capability to overcome traditional barriers. What are the traditional barriers for new businesses? Lack of Capital Inadequate product distribution system Inconsistent supply of raw materials The need for highly skilled workforce Difficulty Scaling up Regulatory issues Intellectual Property issues Well established brand loyalty Extremely competitive pricing. Traditional businesses generally encounter most of these problems. An online business, however, has a few advantages that help it easily overcome these challenges. An online business relies heavily on technology. This same technology also provides the means with which it can overcome traditional barriers for new businesses.
Lack of Capital - The minimum required amount to start a business online is quite small compared to brick and mortar businesses. You can even start with as little as the price of a web domain and a year’s web hosting. A good example of a business that only needs a small investment is Affiliate Marketing. You don’t even need to maintain inventory, all you need to do is drive traffic to the webpage where potential customers can buy the product. Inadequate product distribution system - Drop Shipping is one of the most popular ways to distribute products online. This involves the manufacturer sending out the product from their plant or warehouse. You don’t need to maintain and inventory. A business can also specialize in selling virtual products like e-books, music, and prepaid subscriptions. There are no physical products involved and the buyer can receive their order anywhere that has an internet connection. Inconsistent supply of raw materials - This is one barrier that is still not completely controlled by online business, at least for physical products. Virtual products again are not affected by this. The need for highly skilled workforce - This is another barrier that cannot be completely eliminated by technology. You will always need good people on your team who have the right skills and attitude. Technology does allow you to hire remote workers from different parts of the globe. This makes it easier and cheaper to find a worker with the skills you need. Difficulty Scaling up - It is easier to scale up an online business due to the fact that almost everything is virtual and generally stored in the cloud. Usually scaling up requires the addition of more remote staff, increase in products being sold on the website, and the addition of phone numbers for accepting orders. Regulatory issues - This will depend on where you’re doing business and who your target markets are. Regulations exist for online businesses in most parts of the world. It’s up to you to make sure your enterprise follows all the rules. Intellectual Property issues - This is one barrier that has actually gotten steeper once you go online. Since the threat of intellectual property theft is very real online and the cost to safeguard your products can eat up a huge chunk of your capital.
Well established brand loyalty - This depends on the product you’re selling or the service that you offer. Even if there are huge, well established companies online, customers will always want the best deals. If you can offer innovation at a competitive price, you can even beat the older companies in their game. Extremely competitive pricing - As mentioned previously, online customers will choose the best value for their money. Loyalty to a brand is less important than getting a good deal. This gives any new player with the best value proposition an edge. If you’ve already established your business online, then you should never stop in your search for the best deals from your own suppliers. Staying on top of pricing is a matter of survival for your online business.
Technology drives innovation in the way people do business. Online entrepreneurs wouldn’t exist with out the advances made in telecommunication and computers. The Internet has allowed new types of businesses to flourish.
As long as innovation isn’t stifled, even more new types of businesses will spring up. And these new businesses will be started by the latest crop of online entrepreneurs.
Subscribe by Email Get Updates & Marketing Tips For FREE! Enter Your Email... Subscribe
Be Sure To Comment, Like & Share!
How Online Businesses Overcome Traditional Barriers 5.00 / 5 5 1/5
2/5 3/5 4/5 5/5 1 vote, 5.00 avg. rating (94% score)
Originally posted at: http://ericwelke.com/how-online-businesses-overcometraditional-barriers/
Get the latest posts & join the Free Newsletter by Clicking Here!