According to data from Statista, online sales within the US are expected to exceed $4 billion by the year 2020. The growth trajectory of online shopping has steadily increased since 2014, and it doesn't look like it will be slowing down anytime soon. That's why many entrepreneurs and business owners feel that 2017 is the best time there's ever been to start an online business.
But what specifically makes today's online environment so lucrative for modern retailers? I spoke with a few different online business owners and asked them why they feel it's such a good idea to launch an online business today.
Chris Gerbig, owner of Pink Lily, an online women's fashion brand, has built an online business that now brings in more than $1 million in revenue per month, with more than 600 orders per day. He explains that there are two main reasons someone should start an online businesses today:
"Number one: Everything is being sold online today. It's a massive market and its only getting bigger. There's no reason not to take advantage of that. Number two: There's very little startup cost. I started a $30 million business out of my living room for a couple hundred dollars. A home office is free, an e-commerce website can be obtained for less than $50 a month, a Facebook page is free, and most people already have a computer. The only initial expense is a small amount of inventory. Once that sells, you can use incoming revenue to fund your future inventory purchases."
Jason Boyce, co-founder and CEO ofDazadi, a web-only retailer of sporting goods, has also seen his online business do extremely well in the modern online shopping environment. In 2016, the brand's sales grew by more than 80 percent over the previous year. He feels today is one of the best times to get started as well, thanks in part to the power of social media.
"Today, retailers can use their social media following to drive traffic to their mobile e-commerce sites and capture a new audience of super-connected buyers," he explained.
By tapping into a demographic of shoppers who are attached to their smartphones, e-commerce retailers can become more readily available to their audience than ever before, with many new opportunities for referrals and sales.
Miranda Burnet, founder of online art accessories store Flash Tattoos, said that for her business, online was the only feasible route. And it seems to be working: The business has achieved 90 percent year over year revenue growth and more than a 165 percent year over year increase in traffic.
"There was not enough time or capital in those early days to manage a brick-and-mortar, and that was never a part of our strategy since there is such a limited audience," Burnet said. "Affordable, DIY-friendly e-commerce platforms (BigCommerce is what we use) allow entrepreneurs to get their products to market quickly and easily. Impulse purchases driven by social media influencers are a big asset for today's online retailers, and having a shoppable, mobile-optimized website gives our customers instant gratification both in the convenience of their home and on-the-go."
While this is only a small sample of entrepreneurs seeing success in the world of online retail, their points make a strong case.
With low startup costs, the power of social media, and mobile-friendly storefronts, brands have a huge opportunity today to capture an audience of shoppers who are ready to buy online.