Growing a business

How E-commerce is Democratizing Business Building

Jared Bertrand

Jared Bertrand

Feb 5, 2020

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Think about the word “e-commerce.” Like me, you probably imagine successful names like Amazon and eBay when you see the word. It makes sense considering these were some of the early pioneers in mass online sales platforms. But the reality is that e-commerce is not a space reserved for multi-billion dollar companies. In fact, it’s likely the future home of most business as we know it. The roadblocks that once stood in the way of new businesses adopting e-commerce models have now been largely cleared away. One-person operations can now begin an online empire without even owning a warehouse. Small companies can supplement their local brick and mortar activities with international sales online. A world of possibility in e-commerce awaits virtually anyone who aspires to build their online presence. This blog will explore all the ways e-commerce has democratized the business world.

No physical store? Not a problem anymore
One of the hardest aspects of starting a business is buying the building to house your operation. A considerable sum of small business loans go towards paying for land, buildings, warehouses, and other essential structures to support the business. According to Fundera, “56% of small businesses apply for funding to expand their business, pursue a new opportunity, or acquire business assets.” So more than half of small business loans are pursued with physical assets in mind. A number of those loans will never even be approved due to credit reasons. Other businesses use critical investment funding to pay for their physical locations and therefore have less to spend on marketing and product development.
Thankfully, e-commerce has made it possible to have an even greater scale than a brick and mortar store by merely having the point of sale entirely online. Loans and critical funding can be saved and allocated where they are most needed. People who would have spent years saving for the purchase of land in the past can now realize their business dreams in a fraction of the time.
You can trade your rent for a much cheaper site hosting fee

With a standard business, paying rent will be a significant drain on your monthly fees. With an online model, things are quite different. According to Website Builder Expert, the cheapest site hosting options fall somewhere in the neighborhood of $2.49 per month, and more expensive dedicated options can cost as much as $730 a month, although most are in a much cheaper range. I don’t know what you might pay for rent in your preferred business location, but I can almost guarantee it’s more expensive than the web hosting fees. So rather than drain your funds on monthly rent, pay a fraction of the rent and invest that money where you need it (I wish my rent were $10 a month).

Your work force can be located ANYWHERE

It can seem pretty self-defeating when you want to open a business where you live, but most of the talent lives in a select few areas. Good thing that’s irrelevant now. Forget about packing your stuffed animals into your Corolla to move into a cramped California apartment. Sit back in your jammies and hire that talent from the comfort of your home (I’m more of a boxers guy myself). It’s so easy to use internet offerings to find and secure talent for all your business needs now. You can even use freelance sites to find temporary talent to fill your needs through contract work. So much of the jobs that people erroneously thought needed to be done in person can be just as effective over remote work. In addition, online meeting software is sophisticated enough that you can still talk face-to-face and discuss business in meetings without having a shared office.

Website coding? You don’t even need to know how

Many businesses who were early to the e-commerce game paid coders to develop and launch their websites. They used coding staff or contract workers to build their desired business functionality and paid a high price for it. In an earlier blog, we learned that, according to thumbtack.com, the average national hourly pay for developers lies between $75 and $400 an hour. Wow. That’s lame. Super lame. Thankfully, there are now many options for building out websites and applications that are significantly cheaper than in-house development. A lot of well-known companies and even smaller organizations are offering services to cheaply build new e-commerce apps without ever having to stress over sky-high developer costs. If that sounds like something you’re interested in, this company might be just what you need to develop your business.

Marketing opportunities explode with a web-based business model

How do most businesses advertise? Well, many use flyers, mail, billboards, word of mouth, and occasionally web ads. There’s nothing wrong with this sort of advertisement, but the power of internet search engines completely blows these marketing efforts out of the water. With an e-commerce site, you benefit from search engine optimization and linked sites. So essentially, if your site is useful for solving problems or filling a need that people have, it will rank higher on search results due to search engine algorithms. You can also use links on other sites and articles to drive interested traffic to your site. Not to mention, direct links through blogs and paid advertisements on relevant websites can be another massive way to put your product or service in front of an interested audience.

Scale isn’t limited to geographic reach
Opening new store locations allows businesses to increase their reach and capture more market share in a geographic area. It involves the massive cost of buying land and erecting new buildings to expand their reach. Not many small businesses can afford such a high cost to reach that new market scale. E-commerce has democratized the business landscape in such a way that market scale is possible throughout the entire world now. So don’t worry about buying up land. Your margin will be exponentially better with an online business arm, and your scale will be unhindered by geographic constraints.
All around, e-commerce is making business dreams a reality for more people than ever before. The constraints that once kept business building relegated to a small group of privileged people are now irrelevant. Those who adopt this model will recognize how significant the switch can be. Brick and mortar stores and those who choose to stay with a purely physical store model are suffering already, and staying in their old ways will only lead to lost revenue and wasted market share. So don’t stay in the old ways that will limit your success. If you’re interested in building a business, read more about the modern landscape. Or take that leap today. The earlier you make the change, the more market share you can capture.

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Jared Bertrand
Bloks Staff

Jared Bertrand is a freelance writer from Covington, Louisiana. He has worked with several startups during his time attending Tulane University as well as post-graduation. He holds a Bachelor of Science in Management in Finance with a specialization in entrepreneurship. He writes on a wide range of subject matter from insightful startup content to his personal gardening blog.

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