Published on May 22, 2014 Online business startup opportunities for Aussie businesses
Australians have spent $15.2 billion online in the past 12-months and Australian businesses are getting more of a share of it, according to the findings of the latest National Australia Bank Retail Sales Index. With fewer Australian online sales going offshore this gives an even greater opportunity for Australian businesses looking to get started.
Media agencies have today been reporting that the rate of growth of the online retail market has slowed, but this should not be taken as bad news for those looking to start an online business. In fact, the findings from the NAB Retail Sales Index report to 31 March 2014 signal opportunities for Australian online business startups or those looking to take an existing retail or wholesale business online.
Source: NAB Retail Sales Index – March 2014 (PDF)
Positive signs for business startups include:
- Growth in online sales continues to grow – while the rate of growth has slowed from 30+% to 12.5% compared to the same time last year, fewer of these sales are going offshore because of a weaker Australian dollar, lower prices and more competitors – not from lack of consumer interest in online products.
- In fact, the size of the online sales market is now over 6% of the dollar volume of physical retail sales.
- Sales growth in traditional physical stores also continues to grow (making it a good time for businesses to consider expanding their sales channels and spreading risk).
- The strongest growth was found in Groceries and Liquor, Department & Variety Stores, and Fashion.
Does a slowing in the rate of online growth matter? No – it’s still growing strong
If you look to the reasons behind a slowing of the rate of sales growth increase, these are factors that very weigh favorably for local retailers and should not discourage local retailers at all. These include factors like:
- A weaker Australian dollar against the major currencies makes it more expensive for consumers to purchase products from overseas instead of in Australia – it also makes Australian prices more competitive against their international competitors
- Australians have more choice as traditional retailers are recognising the importance of having an online channel to sell their products (and not just a website with their phone number and location)
- More Australian wholesalers are starting to sell online, making it easier and more convenient for Australian retailers to start selling online
Have you been thinking of starting an online business, or taking your existing business online?
If you want to grow a successful online business in Australia, look to where your customers are. And if online spending is growing and these customers are looking to Australian retailers for purchasers in the first instance then you need to be there. If only your competitors are there for them to buy from, who will they choose?
So if you are thinking that you need a shopping cart website to sell your products online, with the end of the financial year coming up, now is the time. If your competitors get online before you, that gives them the edge and more and more Australian offline businesses are starting online shops to act as a 24-hour sales channel. Remember that your online shop is like an employee who you don’t have to pay overtime or superannuation for who can advertise your products and take orders even while you sleep. For example, you can market your website 24 hours a day if you like through scheduled Google or Facebook advertising.
Where are the best places to start an online business?
Online shops are well suited to businesses:
- Who have customers in remote locations – those who can’t get to online shops who live in remote parts of WA, for example.
- Who are themselves in remote locations and rural townships – making the expected amount of foot traffic or demand for their products otherwise too low to be sustainable.
- Who want to lower their overall costs or reach geographic markets that they could otherwise not reach.
- Who have an innovative take on products in their industry and are looking to build a sustainable growth business – you can target niches that other retailers may not be interested in.
- Those looking to start a business for an additional source of income or new income source altogether.
- Those wanting to open a business quickly – it typically takes much less time to get an online store open than a retail store, and the business overheads are lower.
- Those wanting more flexibility to market their store in a wide variety of ways – online stores generally allow you to experiment, test and change marketing strategies quickly and effectively compared to offline stores.
- You can take advantage of Facebook and Twitter quickly and effectively.
- You can track statistics like the customers browsing particular products in your store and track how often they buy as well as repeat purchasers.
What type of business should I start?
Any online business can succeed if you have done your initial planning, scoped your competition, set your prices competitively (but not necessarily the cheapest – customers look for value, have a good quality product and supply of it and a strong selling platform through your shopping cart.
The keys to getting started are:
- Choose your products with a strong understanding of your target customers and audience.
- Choose a niche for your particular products rather than going head to head with a larger established competitors.
- Understand who your competitors are, what their strengths and strategies are relative to yours, and who might potentially enter the market to compete with you if you succeed.
- Make the right impression with a strong, memorable brand – from logo, to service, to product strategy, to stocking strategy, to colours to product photos to shipping policies. All of these things need to be well thought out carefully.
- Plan your marketing approach. There are fewer online barriers to competition, but it also makes it easier for competitors to respond. Plan how you will spend your marketing budget to get the most effective results. You need to understand how much effort you will put in to ranking naturally in the search engines versus online marketing.
- How to turn your hobby into an online shop
- Getting your online business started – registering your domain and business
- How to choose the right product to sell online
- Getting B2B Wholesale websites started
- What are the costs of starting a shopping cart website store?
- Starting a shopping cart store – introduction