Pre-requisites for virtual business                                     Comments

Kishore C.S. (April 2000)

Can anybody start selling online?' was a question in my mind last week. The following are few thoughts that crossed my mind.

With e-business you have advantages:

• You can reach more people
• You can gain over competition
• You can sell faster.

But what is necessary before one can start selling online:

Enough Stock: You should have enough stock to sell. You advertise new arrival which you have stocked 1000 items and within one hour you get orders for 10000 items. Can you meet the demand and satisfy everyone?

Quality Products: Products you offer online should be of known quality/brand and does not involve lot of inspection and decision-making. In buying a book or CD customer does not think too much. He will randomly select an item. But you should be willing to replace if the customer is not satisfied. This is a risk.

Infrastructure for delivery: You need to build adequate resources to be able to deliver items to the customer's door. Either you staff yourself or tie up with another who can do this.

Provide adequate information: Advertise appropriately with the discounts or special offers available so that customer can place orders and avail the benefits. Customer should not feel cheated because he avails web shopping facilities.

Payment Options: Provide various options of payment: payment on delivery, pay by credit card etc.

Web-presence: It needs investment and effort to setup Web-site and keep it alive. You need to get online by offering e-mail reminders, e-mail confirmation of orders etc. This is not something that you can do very easily. Need a very good system to maintain your inventory both online and offline. Imagine a scenario where a customer placed an order online and you confirmed the order. At the same time customer in your shop wants the same item. What will you do? How do you satisfy both?

Disadvantages of having Virtual Customers:

• You can't entice customers purchase more than what they want. This is the job of sales persons who manage to convince customers buy more than what they had in mind.
• You can't guarantee customer loyalty. With personal service at shop you can satisfy customers and ensure customer loyalty which is difficult to do with virtual customers

Summary

There are advantages and disadvantages of e-business. You will not have a pure Virtual shopping. This will only be additional business which has its own risks. Imagine what went to Tele Shopping. You really have to demonstrate the products on TV to make the customers convinced of quality of the product before he orders the same.

Comments

From Srinivasa Rao N

Coming to enticing the customer to buy some thing they have not planned, there are lot of software packages for cross-sell and up-sell. If you go  to   Amazon.com and select a book, you will see books that may be of interest  to   you if you like this book. Also its possible to suggest customers to buy a   different PC which is equally powerful or more powerful than he is  planning   to buy, and can make more profit on it etc.

Also customers tend to be loyal if you give good price and good quality  products. I bought at least 8 or 9 books online and every time I bought   through amazon and I think I will first turn to amazon when I need  something   important and not getting it in local stores. Also most of the times, I  get   discounts at amazon and not at local store.

Of course one has to take care of inventory management and cost effective  delivery of goods to customer. I believe online business is no different   than a traditional brick and mortar business in terms of execution. Only   advantage I see is the extended customer reach for online business.