How to tackle the logistics of starting an e-commerce venture
With the
increase in e-commerce, many companies have started offering services
such as payment collection and logistics to online retailers.
The Internet is going to be the marketplace for your future purchases, or at least a large portion of it. Online retail in India is forecast to grow hundred-fold from the current Rs 3,400 crore ($600 million) to Rs 4,30,000 crore ($76 billion) by 2021, according Technopak Advisors, a global advisory company.
The share of online retail in total organised retail in India has been forecast to grow from 0.1% now to 5.3% by 2021. Online stores ship a good proportion of their products to small cities where consumers don't have brick-and-mortar stores selling those products (such as high-end brands).
Though online retail is growing, Indian entrepreneurs in the space don't have it easy. Many e-commerce companies are facing challenges in attracting investors to expand their infrastructure to serve a bigger customer base and more cities.
Setting up the system for online retailing-supply chain, logistics and payments, electronic as well as cash-isn't an easy task if all of it has to be done by the e-commerce company itself.
Setting up an elaborate infrastructure and system for e-commerce requires huge investment and effort, but you can skip it. With the increase in e-commerce, many companies have started offering services such as payment collection and logistics to online retailers.
This means you can also use online marketplaces to sell your products without even having to create an online store website. Such intermediaries can help you start selling products (or services) while focusing on your core product.
STORE PLATFORMS
Setting up an e-commerce store is neither very hard nor very expensive. If you are not ready to take up the task of setting up an independent e-store, there are many online services that you can use to create your own branded store. Of course, you would have to pay a fee for these services, but most of them offer free trials.
With online store providers, you get access to great templates and designs, payment processing systems and technical support. All of this means you can start your store almost immediately, without having to worry about the technicalities or hiring a coder or a designer. You can use your own website address (domain) to build a brand and establish yourself as a reputed retailer.
Shopify.com is a popular US-based website that supports a large number of payment gateways. Their e-commerce website services start from $14 (about Rs 600) per month.
In India, Zepo.in offers hosted online store solutions starting from Rs 750 a month. BuildABazaar.com offers similar services starting from Rs 1,000 per month. Ahmedabad-based start-up-39Shops.com-is also offering a hosted e-commerce platform starting from $10 per month.
ONLINE MARKETS
Several online marketplaces enable individuals and companies to sell products using their platforms. You have popular sites such as eBay.in and Amazon.in, which became operational in India in the beginning of June. Amazon allows sellers to use its warehouse and shipping facilities.
If you want to sell handmade products globally, Etsy.com allows you to reach a large number of prospective buyers across the world. You can find many Indian merchants selling products such as handbags, linen, garments, jewellery and artwork. You can also create your own store on the marketplace.
Etsy.com charges a listing fee (currently $0.20 for listing an item for four months) and a commission on each sale (3.5% of price). ItsHandMade.in is an Indian version of this popular US-based site.
CraftsVilla.com is a Mumbai-based online marketplace for selling fashion and lifestyle products, including handicraft, vintage items and organic products. According to the website, it has more than 3,000 sellers across India. Another Indian online marketplace that you can tap is Shopclues.com.
Even websites that started as independent retailers have transformed to allow third-party vendors sell through their online stores. A notable example of this trend would be Flipkart.com, which now allows thirdparty vendors to sell their products on its website. If you would like to capitalise on Flipkart.com's existing traffic and customer base, check out the details at https://sellers.flipkart.com.
Another place to sell your stuff is SnapDeal.com, which recently secured $50 million of funds, a large portion coming from global e-commerce giant eBay.com. After gaining popularity as a deals and coupons website, SnapDeal.com has evolved into a marketplace for vendors. The e-commerce site allows sellers to list their products without any upfront charge. One needs to pay a commission on sales through the website. Details can be found at http://sellers.snapdeal.com/.
Though online marketplaces allow you to build your business on their traffic and popularity, it also means that you are highly dependent on these platforms. You would also not have much of a brand recognition for your business.
DIGITAL STORES
If you have digital products such as e-books, songs and videos to sell, there are online services that allow you to sell directly to your existing customers or followers using your existing platforms-websites, blogs and even social media websites.
GumRoad.com is a relatively new service that allows you to sell physical and digital products. You have to just put your product on the service's platform. You can then integrate it in your website, email newsletters, Twitter, Facebook and YouTube. A customer can then purchase it by filling up a simple payment form.
A popular service for selling digital products is USbased ClickBank.com, which also exposes your product to a large number of affiliates looking to earn commissions by referring customers. It does cost some money to start selling through this platform.
E-junkie.com is another platform for selling digital products, though it can also be used for selling physical goods. It provides you with a shopping cart and 'Buy Now' buttons to let you sell through your website, CraigsList.com and other websites. You do have to pay a monthly fee (starting from $5) for the service.
LOGISTICS
Delivering the product to your customer on time is a big challenge for virtual stores. Though online stores can use courier companies for delivering their product to customers, there are specialist companies that handle logistics and product delivery for e-commerce.
Using such specialist logistics providers means you can also use their services to offer cash on delivery, which is a preferred payment mode in India, as well as collect the product from customers in case of returns.
Delhivery.com and Chhotu.in are two providers of logistics services to e-commerce stores in India. DTDC Courier & Cargo has also launched DotZot.in, a service exclusively for e-retail.
However, using private courier and logistics companies has one major limitation-reach. Most of these would be unable to deliver products to small cities and villages. The country's postal service is also being used by some online stores.
If you are familiar with mail-order businesses that operated before e-commerce picked up, you might know about Value Payable Post (VPP), the cash-on-delivery equivalent service offered by India Post.
According to media reports published in April 2013, India Post is exploring the option of providing specialised logistics solutions for e-commerce. If the postal department can start such a service successfully, online stores would be able to service a large number of customers living in remote areas of the country.
Another important service that an online entrepreneur needs is a payment gateway. Read our story Virtual Money Channels (pg 68) for more information.
Given the services available for e-commerce, you can get started without having to set up capital-intensive infrastructure. With a bit of knowledge and the right selection of platforms, you can succeed as well.
The share of online retail in total organised retail in India has been forecast to grow from 0.1% now to 5.3% by 2021. Online stores ship a good proportion of their products to small cities where consumers don't have brick-and-mortar stores selling those products (such as high-end brands).
Though online retail is growing, Indian entrepreneurs in the space don't have it easy. Many e-commerce companies are facing challenges in attracting investors to expand their infrastructure to serve a bigger customer base and more cities.
Setting up the system for online retailing-supply chain, logistics and payments, electronic as well as cash-isn't an easy task if all of it has to be done by the e-commerce company itself.
Setting up an elaborate infrastructure and system for e-commerce requires huge investment and effort, but you can skip it. With the increase in e-commerce, many companies have started offering services such as payment collection and logistics to online retailers.
This means you can also use online marketplaces to sell your products without even having to create an online store website. Such intermediaries can help you start selling products (or services) while focusing on your core product.
STORE PLATFORMS
Setting up an e-commerce store is neither very hard nor very expensive. If you are not ready to take up the task of setting up an independent e-store, there are many online services that you can use to create your own branded store. Of course, you would have to pay a fee for these services, but most of them offer free trials.
Shopify.com is a popular US-based website that supports a large number of payment gateways. Their e-commerce website services start from $14 (about Rs 600) per month.
In India, Zepo.in offers hosted online store solutions starting from Rs 750 a month. BuildABazaar.com offers similar services starting from Rs 1,000 per month. Ahmedabad-based start-up-39Shops.com-is also offering a hosted e-commerce platform starting from $10 per month.
ONLINE MARKETS
Several online marketplaces enable individuals and companies to sell products using their platforms. You have popular sites such as eBay.in and Amazon.in, which became operational in India in the beginning of June. Amazon allows sellers to use its warehouse and shipping facilities.
If you want to sell handmade products globally, Etsy.com allows you to reach a large number of prospective buyers across the world. You can find many Indian merchants selling products such as handbags, linen, garments, jewellery and artwork. You can also create your own store on the marketplace.
Etsy.com charges a listing fee (currently $0.20 for listing an item for four months) and a commission on each sale (3.5% of price). ItsHandMade.in is an Indian version of this popular US-based site.
Even websites that started as independent retailers have transformed to allow third-party vendors sell through their online stores. A notable example of this trend would be Flipkart.com, which now allows thirdparty vendors to sell their products on its website. If you would like to capitalise on Flipkart.com's existing traffic and customer base, check out the details at https://sellers.flipkart.com.
Another place to sell your stuff is SnapDeal.com, which recently secured $50 million of funds, a large portion coming from global e-commerce giant eBay.com. After gaining popularity as a deals and coupons website, SnapDeal.com has evolved into a marketplace for vendors. The e-commerce site allows sellers to list their products without any upfront charge. One needs to pay a commission on sales through the website. Details can be found at http://sellers.snapdeal.com/.
Though online marketplaces allow you to build your business on their traffic and popularity, it also means that you are highly dependent on these platforms. You would also not have much of a brand recognition for your business.
DIGITAL STORES
If you have digital products such as e-books, songs and videos to sell, there are online services that allow you to sell directly to your existing customers or followers using your existing platforms-websites, blogs and even social media websites.
A popular service for selling digital products is USbased ClickBank.com, which also exposes your product to a large number of affiliates looking to earn commissions by referring customers. It does cost some money to start selling through this platform.
E-junkie.com is another platform for selling digital products, though it can also be used for selling physical goods. It provides you with a shopping cart and 'Buy Now' buttons to let you sell through your website, CraigsList.com and other websites. You do have to pay a monthly fee (starting from $5) for the service.
LOGISTICS
Delivering the product to your customer on time is a big challenge for virtual stores. Though online stores can use courier companies for delivering their product to customers, there are specialist companies that handle logistics and product delivery for e-commerce.
Using such specialist logistics providers means you can also use their services to offer cash on delivery, which is a preferred payment mode in India, as well as collect the product from customers in case of returns.
Delhivery.com and Chhotu.in are two providers of logistics services to e-commerce stores in India. DTDC Courier & Cargo has also launched DotZot.in, a service exclusively for e-retail.
If you are familiar with mail-order businesses that operated before e-commerce picked up, you might know about Value Payable Post (VPP), the cash-on-delivery equivalent service offered by India Post.
According to media reports published in April 2013, India Post is exploring the option of providing specialised logistics solutions for e-commerce. If the postal department can start such a service successfully, online stores would be able to service a large number of customers living in remote areas of the country.
Another important service that an online entrepreneur needs is a payment gateway. Read our story Virtual Money Channels (pg 68) for more information.
Given the services available for e-commerce, you can get started without having to set up capital-intensive infrastructure. With a bit of knowledge and the right selection of platforms, you can succeed as well.
