If you’re looking for a quick way to make some extra money, you’ve probably considered looking into the booming world of online marketplaces. After all, the opportunity to make money online seems too good to be true.
Online marketplaces, or eCommerce platforms as they’re commonly known, allow businesses to sell their products to consumers across the globe. Essentially, all a business needs to do is create an online store, fill it with the products they want to sell, and then use various tools to drive traffic to their store.
While there’s certainly a place in this world for eCommerce store owners who want to make extra money, it’s not quite that simple. Not all businesses will make money online, and even those that do might not make as much as they could be earning. Let’s look at the factors that could be contributing to your business’ lack of success.
The Evolving Nature Of Online Marketplaces
Back in the early days of online marketplaces, all a business needed to do to make money was to have a product and a storefront. The amount of traffic they got was essentially a mathematical calculation based on how many people came to their website and if those people made a purchase after they got there. Naturally, the more people that come to your website, the more purchases you make, and vice versa.
These days, having a product is still needed to get started, but the nature of that product has completely changed. As the internet evolved, so did online marketplaces. Instead of only selling one product, businesses are able to diversify their products and make money off multiple streams of revenue.
For example, let’s say you’re running an online store for ladies’ clothing. You could sell swimsuits, but you could also sell jewelry, scarves, and sunglasses, all of which have the potential to bring in sales. This makes it much more difficult to put a dollar amount on how much money you’re going to make from your online store. It’s simply not practical to try and figure out how much money you’re going to make from each product sold since your products could (and probably will) have multiple selling points.
In our example above, we saw how much money a business could make off of one product, but what about if we looked at how much money a business could make off of multiple products?
Say our hypothetical business went on to become very successful, generating $500,000 in annual revenue from its online store. Further, say this business decided to diversify its product line and started selling furniture, boat docks, and outdoor furniture, all items that could potentially be purchased online. In this scenario, how much money could our business make overall?
Well, the good news is that our business, depending on how many items we’ve decided to sell in our eCommerce store, could potentially make multiple streams of revenue. The bad news is that, because we’ve started to generate so much revenue from one source, our other sources of revenue are now going to have to generate more money to make up for the lack of revenue brought in by our initial product. In other words, the more we do, the more we’re going to need to do to make sure we’re staying afloat.
Falling Revenue From Advertisements
In the process of building a successful business, you’re naturally going to attract some attention from various advertising sources, commonly known as ad networks. When users visit your site, they could see ads from various advertisers that appear along with your content.
As your business grows in size and notoriety, so does the amount of money you’re spending on advertisements. Naturally, this could lead you to cut back on the amount of content you provide or cut back on the number of people who visit your site. If this happens, it’s critical you find a way to generate more revenue from content so you don’t end up in a money-saving battle with arms tied behind your back.
The Increasing Cost Of Doing Business Online
While many businesses look at the opportunity to make money online as a way to save, actually, the opposite is often true. The opportunity to make money online comes with considerable costs. If you’re not prepared to shoulder those costs, then you’re better off looking elsewhere.
The first and most significant cost of doing business online is simply getting started. Naturally, you’ll want to have a website that’s both attractive and functional, but building a website and getting it found on the web can be quite costly. Additionally, as your business grows, you’ll need to keep upgrading your website to remain relevant and up-to-date. The prices for web hosting, domain registration, and website content can add up quickly.
If you’re looking for an all-in-one business platform that can help you save money without compromising your revenue, you might want to consider exploring the world of online marketplaces. They’re certainly not for everyone, but if you’ve got the capital, they’re a perfect way to make money online.