E-commerce White River or E-River is a blog opportunity to contribute to the We Are White River community and will be a short summary of lessons learnt in my journey on developing www.abebaflowers.co.za and hopefully notes to other start ups keen on starting their own online store.
I am a matriculant from Uplands class of 2008, I travelled and studied in Switzerland and England for 5 years, then worked in Cape Town for 3 years for a leading marketing and branding company focused on the agricultural, power & utilities as well as finance and investment industries for Southern Africa and East Africa.
Why Amazon.com started with books only
In the digital age it is easy to justify starting an online business that provides more than one core service or product, as ecommerce provides opportunity to scale easily and the ability to cross sale complementary products. In my opinion this is a fundamental mistake to make in starting an online company because you as the entrepreneur do not understand the hidden costs, supply chain requirements, operational costs and have yet to dominate that market.
I believe Jeff Bezos (Founder & CEO of Amazon.com) understood this, which provided Amazon the platform to dominate the book market, vertically integrate and then diversify into other sectors such as baby-care, home goods and most recently foods. I had the pleasure of meeting a prominent CEO in Cape Town in the fresh food sector in December 2017and his words to me were “Demand is a funny thing, I’ve seen good companies fail chasing demand and they end up running out of cash to supply their original service.”
In conclusion to all budding ecommerce entrepreneurs, “Do things that don’t scale” (Reid Hoffman, co-founder LinkedIn) and focus on one service or product and allow the market to determine your complementary and substitute products.
This blog is the opinion of the writer and does not necessarily share the views of the host provider.
By Thabo Khoza
Founder & CEO