Hard facts on software – Its time to sell online!
Some of you will have missed my column over the last two weeks. I do apologise for not posting anything. The main reason for that is that we have been super busy setting up a new business venture. We have been at it for some time now, but recently this has picked up well.
What is all this about? Well, we have started a new subsidiary that delivers e-commerce solutions. The company is called Vaimo and you can check it out online at www.vaimo.co.za. Why move into e-commerce you might ask? Well, again there are a lot of reasons. And these hold for you just as they hold for us. Let me share some of them here:
Over the last few years, the number of internet users in Africa, and South Africa in particular, has boomed. While there were fewer than 3 million internet users a year or two ago, there are going to be more than 10 million by next year.
Also, more and more people start to shop online. It is estimated that there were some 600,000 online shoppers in SA three years ago, and there are going to be 6 million in two years time. That is a huge increase.
Part of the reason, of course, is the increase in the number of people with internet access but there is also a marked increase in the percentage of internet users that shop online. Its up from 48% in 2009 to nearly 60% now.
As a consequence of all this, the turnover in online shops is growing at a steady pace of 30% year on year for the last few years, and its set to continue for the foreseeable future.
Now the good news is (if above is not good enough) that there are still very few online shops in SA. This is a HUGE opportunity for any retailer, wholesaler or anyone with an interest in selling online.
We are working with quite a few companies now that (1) are thinking of e-commerce; (2) are putting strategies in place; (3) are busy setting up an online shop or (4) are in version two or three of their online shopping business.
Obviously those in position four have huge advantages since they are already sitting on large databases of shoppers and they already have engraved themselves into the mind of the shopper. But its not too late. Now is the time to setup a new, fresh, online store. Technology makes it so easy these days. If you have a website already on some relatively modern platform like WordPress or Drupal, you can easily plug-in a shopping cart and be up and running in a few days.
If you really take e-commerce seriously, then you start from scratch with a state of the art shopping cart system based on an opensource shopping cart software. The ones to look at are Opencart or Magento. There are many, so do your research carefully.
We have decided to work with Magento only – it’s the fastest growing e-commerce shopping cart worldwide today.
Why opensource? Well, if you use a community supported cart there are many advantages over commercial solutions. For one, you can download them for free and start using them, so they are much cheaper to deploy. There also is a community of developers not only able to help you with your setup, but those developers also contribute to the solution so it continues to grow and evolve.
So you could be up and running setting up your own shop for free, or you can start with an entry level solution from companies that setup and host the open-source cart for you.
Of course if you have complex requirements like ERP integration, setting up multiple stores, custom design, B2B functionality etc, your project can run into the hundreds of thousands. Typically companies that are already trading online successfully are going this route, where they enhance their shops to do even more.
If you are just starting out, it makes sense to start with an entry level solution to first test the waters. Once you see that your concept works, you can invest more.
So what’s the risk? Stats show that only 1% of online stores in SA are not making a profit, while around 30% are breaking even, 30% are making good profit, and the rest are highly profitable.
Until next time then – Keep it (A)fresh.