Top tips for an online-selling business plan
A good, realistic business plan that also looks at how the new channel will fit with the rest of the business is fundamental to the success of a transactional web site. This is not as easy as it may at first seem, but fulfilment and distance shopping expert, Zendor, provides some valuable tips.
A realistic and comprehensive business plan is vital for the success of an online venture. Many retailers do not think through the implications of setting up an online channel properly and this may lead to failure. The plan needs to consider the entire distance selling process from overall objectives to research, infrastructure, marketing and ongoing measurement of success.
Key points to consider
- Understand the importance of the business plan An online business plan is needed as stakeholders need to be assured of a return on their investments, and if done thoroughly and effectively, risk will be reduced. Ultimately, this business plan should be something that can be condensed into a profit and loss forecast over a defined period of time.
- Do your research It is essential to review the online market, the opportunities available to the retailer and the impact of the new channel on the retail business as a whole.
- Ask "why am I doing this?" It is important to understand the strategic fit of online selling with the rest of the business and to be clear about overall objectives for one retailer the objective may be to simply generate online revenue, for another improved customer service, for another maintaining market share.
- Define success In order to define the success of the business and achievement of the objectives set, it must be decided what will constitute success and how it will be measured, especially when bearing in mind the halo effect (when customers dip in and out of different retail channels).
- Address infrastructure requirements Those considering distance selling need to look closely at infrastructure requirements, as a completely different set-up may be required to that of the existing retail business. For example: Will product be warehoused separately? What IT systems will be needed? Who will deliver to customers and how will returns be handled?
- Include marketing The online market will add a whole new dimension to the marketing strategy. Key details to be looked at include: how to market to online and multi-channel customers; what response rates should be expected; and how a customer database can be used to segment and target for a better return on investment.
- Understand all the costs Absolutely all costs involved on online selling must be fully understood by the retailer so that forecasts and profit estimates are realistic (for example, costs of returns).
- Decide whether or not to outsource Depending on whether the retailer has any experience in distance shopping, the relevant expertise or infrastructure may not be available in-house. If this is the case, the retailer may wish to outsource the business plan to a third party supplier with industry knowledge, who can demonstrate success and credibility with other retailers, and who is in the position to work alongside the retailer from developing the business plan through to implementation and beyond.