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Free VC Directory

With any B-Plan Purchase
425 Page Capital Directory
Through Apr. 30


Custom Business Plan
$425 Flat Rate
No Templates Used
7 Day Turnaround

All Purchased Plans
Are Updated for 2017

E-Commerce Website SWOT Analysis

 

Strengths

 

One of the strengths of operating an e-commerce website is that it is relatively easy to set up. There are now a number of off the shelf solutions that allows internet entrepreneurs to easily establish a presence on the internet in order to generate sales. Depending on the products sold by the business, these companies can generate moderate to high gross margins. For a general merchandise e-commerce platform, the gross margins are approximately 20% to 40%. For specialized companies, these gross margin figures may be substantially higher. The barriers to entry for a new e-commerce site are very low. They can be established in as little as a day. This is both a positive and a negative. Outside of inventory, the cost of establishing a new e-commerce platform may be as little as $500. For an entrepreneur that is seeking to develop a large presence immediately after launching operations - the costs can be as high as $100,000 (if not more). Additionally, e-commerce entrepreneurs have the ability to expand rapidly if they are able to properly market the products and services they are offering.

 

Weaknesses

 

The extremely low barriers to entry are the primary weakness for these types of businesses. For general merchandise e-commerce websites, the competition faced by these companies is enormous. This is especially true when you are competing with internationally based online sales companies. The best way to remedy this issue to make sure that you can develop viral marketing messages that will drive thousands of people to your website on a daily basis. A well developed e-commerce platform should have a conversion rate of 1% to 3% depending on the types of products sold.

 

Opportunities

 

The greatest opportunity for expanding an online e-commerce platform is to develop an expansive affiliate marketing network that will allow third party entrepreneurs to share in your success. These individuals (or companies) receive a commission each time a sale is made. As such, if your e-commerce website has a high conversion rate then you will be able to effectively draw partners that will market the website on your behalf.

 

Threats

 

The internet is constantly changing, as are the business methods that are used to promote e-commerce websites. It is extremely important for an e-commerce entrepreneur to remain at the edge of how to drive traffic to a website in order to continually deal with the competitive issues faced by these businesses. This is going to be a trend that is going to need to be dealt with in perpetuity.


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