Some businesses take perennial time as well as taxing tasks to succeed well in the future, and one such business is the wine business. Just like farming, the wine business also takes time, say, for 3-5 years to get the implacable extraction of the grape. However, the return on investment that we get from a wine business is twice or thrice the amount we initially invested in it.
Besides, owning a wine business brings prosperity as it is an elite business, where royal or rich people rely more on it. Generally, wine making business or winery was quite a renowned business in the 18th and 19th centuries, as it is cited that those who own any wineries or a wine business must be highborn.
As we know in history, people prefer wine to any other drink as it is considered to be a royal drink that literally took more than 100 years to mature or reap. Additionally, commencing capital in a wine business or winery is legal but requires plenty of documents to be approved as it is illegal to sell wine in some countries.
As is the case, investing or starting a wine business requires a copious amount and the result will be manifest in the future, only if the wine augments the brand. Because prepping wine is a laborious activity as it takes more than years to get ready. If your ancestors owned any wineries, then it would be good as you don’t have to invest any beans in them.
There are two ways, in which a businessman or an entrepreneur can look into starting a wine business- either lending land to harvest wine or buying a thriving winery business.
In case, you have superfluous funds in the idea of running a wine business, then acquire wineries- where the building or a place produces fine wine for years. So, plan according to the capital you want to invest in the wine business.
Size of Wine Market in India
In FY 2021, India’s wine market was around two million cases. By FY 2025, it is expected to grow to 3.4 million cases.
Find a Suitable Land for the Wine Business
Select a place that should be soil-friendly and large square feet where the grape should grow fine as well as enriched. The place should be suitable for a warehouse along with a tasting room, where matured grapes can be tested & stored for the procedure of wine. Make sure you have at least 20 acres of land. Furthermore, Examine the winery or wine production place that should be in suitable vegetation as it will generate seasoned grapes.
Get Approval
As I said before, planning to start a wine business demands a lot of approval, documents, and permission from the government. Besides, the wine business should apply for a permit and register to pay the tax. Until the license is procured, the wine business or wineries have no right to proceed with its market of wine in the country.
In order to trade your wine in the market, you just need transport to transfer or carry out the wine, wine crates to store the wine, tanks in case to preserve it for years, and wine pallets to arrange the wine according to their categories like- number of years, flavored wine or enriched wine, etc.
Apart from that, a wine business requires an office to maintain its record of transactions like a computer, and staff to supervise the office as well as wine production. The investment required for the wine business is approximately 4 crores to 7 crores.
Connect with Clients via Retailers
Before marketing your wine to anyone, decide whether you want to trade your business through retailers or wholesalers or directly to the consumer. If you are looking for a retailer, there are plenty of opportunities knocking at your door, where those potential retailers connect your business with expecting events such as weddings, ceremonies, or jubilant celebrations. Because these events demand drink and that too fine-flavoured wine. In this way, you can also earn reputable & credible clients for your future business transactions.
Select a Brand Name
Selling wine itself is an elite business in some countries, but that ilk of wine should come from a brand name. For instance, E & J Gallo stands as the top-notch wine production company in the whole world. And people would definitely go for E & J Gallo wine, as it tastes heavenly plus branded for sure.
Owning a wine business connects you widely particularly among high society because in history producing & selling wine was considered a reputable business. Besides, starting a wine business casts you as an aristocracy in the eyes of highborn society.
Just investing money in the wine business and waiting to burgeon is tantamount to waiting for the grape to reap or mature. Think of an ingenious way to sell your wine like making special offers for your potential & first-ever customer to bring trust in your business.
Furthermore, advertise your business reliably and creatively like selling a romantic-flavoured wine to a couple by coming up with a romantic tale behind the wine taste.
How Wine is Made
Investing in Wine Business
Draw a budget for your wine business and according to that, plan and work. Investing a plethora of money in the wine business really reflects prosperity earnings or returns in the future. The price of the land you are looking for in a wine business is determined by the square feet and whether there is the availability of necessary amenities for the production of wine.
Generally, investment in the wine business starts from approximately 4 crores to 7 crores. as ferreting a suitable land to set up the prepared wine to the market requires tons of money. On the other hand, you can just buy thriving wineries to expect profit soon, and demand a lot more money than starting up your own wine business; But, you can get up to 50% of the loan.
A wine business is tolerated only if the wine label must be approved by the government of the Food Safety Standards Act. Besides, the wine business will function, only if they have registered in Alcoholic Beverage Control by concurring all terms and conditions of the state and local of India. The license is given to the merchant only if the payment of sales charges, excise tax, and other related taxes are paid.
If your wine business is trading goods and services overseas, you should get the license. Pay off the state and excise sales tax with the help of prescribed rates.
The license for the wine business is valid only for 1 year, and the license should be renewed each year to function wine business in the nation.
According to GST, all alcoholic products subsuming- Wine are levied tax at an 18% rate, and state & local excise tax differs in each state of India but doesn’t exceed 25%.
The Indian government has introduced several initiatives to promote the wine industry:
National Wine Board: Supports grape, apple, plum, and apricot farmers, along with raisin, juice, and wine producers. It encourages contract farming and promotes fruit processing and the wine industry.
APEDA (Agricultural and Processed Food Products Export Development Authority): Promotes “Wines of India” globally, focusing on markets like France, Italy, Germany, the USA, the UK, and Singapore. Several wine clubs, tourism initiatives, and magazines have also emerged across India.
Maharashtra’s Grape Policy: Offers incentives such as reduced excise duty on wines, quality control regulations, certification, and export promotion. A Wine Institute has been established to ensure international quality and provide trained professionals. Additionally, an Agri Export Zone for grapes has been set up in Nashik, Pune, Sangli, and Solapur.
Karnataka’s Wine Regions: The state has identified suitable areas for high-quality wine grape cultivation. Bengaluru, Kolar, Ramanagar, Chikkaballapur, and Tumkur are designated as “Nandi Valley,” while Bijapur, Bagalkot, Belgaum, Gulbarga, Koppal, Raichur, Gadag, Bellary, and Bidar form “Krishna Valley.” Mysore, Mandya, and Chamarajanagar are recognized as “Cauvery Valley.”
Conclusion
Investing in a wine business will cherish your life in the future, remember that grapes take time to mature. But in case you want to meet profit soon, then go for wine vineyards or wineries as they have connectivity in the market for years because of the business existence period. Once, you are well developed in the wine business there’s no turning back because you will have already reached one of the top-richest businesses in the world.
FAQs
How much does it cost to start a wine business?
An investment of approximately 4 crores to 7 crores is required to set up a wine business in India.
Is wine making profitable in India?
Yes, winemaking is a profitable business in India but requires high investment.
How much does a wine shop owner make in India?
A liquor store owner in India earns an average profit of 4 to 5 lakhs per month.
What is the wine factory cost in India?
The estimated cost to open a wine factory in India is INR 6-7 crore.
Is the wine business profitable in India?
Yes, the wine business in India is becoming more profitable. The market is growing fast, and demand for both Indian and imported wines is increasing. This makes it a good business opportunity with room to grow. However, success depends on things like location, product quality, marketing, and following local rules.
What are the small winery startup costs in India?
Setting up a small winery in India usually costs between INR 4 crore and INR 7.5 crore.
How to start wine factory in India?
Follow the below steps to start wine factory in India:
Research & Plan – Study the wine industry, choose a location, and create a business plan.
Legal Requirements – Obtain licenses, and permits, and follow local regulations.
Land & Infrastructure – Find land for grape cultivation and build the factory.
Grape Sourcing – Grow your own grapes or partner with farmers.
Equipment & Technology – Buy necessary machinery for wine production.
Hiring – Hire skilled workers for production, quality control, and sales.
Marketing – Promote your brand through online platforms, wine clubs, and events.
How to start wine making business in India?
To start a wine business in India, get licenses, choose a good location, and set up a winery with proper equipment. Source quality grapes, ensure good production, and hire skilled staff. Build a strong brand, market well, and sell through retailers and online platforms.
How much investment is required to open a wine shop?
The estimated amount for a wine shop investment is ₹50 lakh to ₹1.5 crore, depending on location and size. Major costs include licenses (₹10-50 lakh), store setup (₹10-30 lakh), stock purchase (₹10-50 lakh), and operational expenses like staff and marketing. Profit margins range from 20-40%, and success depends on location, product variety, and effective marketing.
How much does a wine shop owner make in India?
A wine shop owner in India can earn ₹1 lakh to ₹10 lakh per month, depending on location, sales volume, and profit margins.
As companies strive to increase revenue and gain a competitive edge, effective channel management has become a crucial component of their strategy. Channel management involves identifying, cultivating, and maintaining relationships or communication with partners and customers who help sell a company’s products or services to others.
By utilizing this approach, businesses can improve customer satisfaction, boost sales and increase brand visibility in the market. In this article, we delve into the concept of channel management and its significance for companies aiming for growth and success in the current business environment.
Channel management is the process of coordinating and optimizing the distribution of a company’s products or services through various sales channels, such as online marketplaces, brick-and-mortar retail stores, direct-to-consumer sales, and more.
The goal of channel management is to maximize revenue, minimize costs, and ensure a consistent brand experience across all channels. This involves activities such as setting pricing strategies, managing inventory levels, monitoring channel performance, and maintaining relationships with channel partners.
Why Is Channel Management Important for Your Company?
By carefully selecting and managing the various channels through which a company distributes its products or services, it can maximize its reach and optimize its distribution.
This can involve identifying the most effective channels for your company’s products or services, and maximizing their potential. Additionally, it can involve creating a clear strategy for each channel, and regularly reviewing and adjusting the approach as needed. By doing so, your company can improve its reach and accessibility to customers, and can increase its sales and profitability.
With channel management tools and software, you can create the right decisions with real-time data, it gives you an advantage over your competitors and helps you to save your time, etc.
10 Channel Management Strategies You Can Use for Your Company
Channel management requires an understanding of customer preferences, an analysis of current and potential sales opportunities, and an understanding of competitors’ strategies and capabilities. Here are 10 channel management strategies that businesses can use to create long-term relationships and drive sales growth:
1. Differentiate Your Channels
Make sure each channel has unique offerings to differentiate them from each other. This will avoid confusion and create loyalty among customers. Differentiating channels also allows the expansion of the reach of the audience.
2. Strategize for Market Expansion
Have specific strategies for expanding your presence in each channel. Analyze current market share and opportunities for expansion. One can also have a closer inspection of the strategies used by competitor platforms while creating one for the self.
3. Analyze Performance
Track the performance of your channels and analyze any changes or trends. If a particular channel is performing poorly, look into ways to adjust or optimize it. However, while looking for a poorly performing one, giving an equal amount of attention to the better-performing channels is also important.
4. Evaluate Channel Partners
Identify the right distributors, resellers, and partners to ensure their upselling efforts are having a positive impact on sales numbers. For a better selection, one can prepare a list and then sort from them as per the requirements.
5. Understand Competitors’ Strengths and Weaknesses
Become familiar with the strategies of your competitors and strive to understand how they manage their channels. Also, taking the knowledge of tools and services used by them can be a good point to consider while learning about their strategies.
6. Optimize Visibility and Accessibility
Make sure customers can find your products or services and have easy access to them. Keep this in mind when designing a website, creating content, executing promotions, and engaging customers.
7. Integrate Channels
Ensure the channels you use are in sync with each other and customers can have consistent experiences across all of them. Having perfectly synced channels can provide great help in executing a better business plan.
8. Leverage Technology
Take advantage of available technology to monitor channels and make it easier to move data between them. The web has a number of applications and software that can help in easy channel management. One should not forget to use them for better management.
9. Focus on Personalization
Create an experience tailored to each customer by personalizing how you communicate with them and addressing their unique needs. Each business has its own need, hence using personalized methods is way better than directly following the path set by others.
10. Provide Good Customer Support
Make sure every channel has good customer support, so customers can easily get their questions answered and access help. One can also take the help of an online chatbot that can help with easy customer management.
By using these channel management strategies, businesses can create successful long-term relationships with their customers and ensure they get the most out of each channel. It takes time and effort, but the results are worth the effort.
Most Commonly Used Channel Management Tools
Top channel management tools
Distribution Software
This type of software is used to manage the distribution of products or services through various channels.
It typically includes features such as inventory management, order processing, and shipping and tracking. Some of the best examples are NetSuite ERP, ShipStation, QuickBooks Commerce, etc.
Sales Force Automation (SFA) Software
SFA software is used to manage and optimize the sales process, from lead generation to closing deals.
It often includes features such as customer relationship management (CRM), lead tracking, and sales forecasting. Some of the best examples of SFA software are Teamwork, Salesflare, PipelineDeals, etc.
Marketing Automation Software
Marketing automation software is used to automate and streamline marketing tasks, such as email campaigns, social media marketing, and lead generation.
It can help companies save time and resources by automating repetitive tasks and providing insights into marketing performance. Some of the marketing automation software examples are Tidio, HubSpot, Sendinblue, etc.
Channel Partner Management Software
This type of software is specifically designed to help companies manage their relationships with channel partners, such as resellers and distributors.
It can include features such as partner portal management, lead sharing, and commission tracking. Some of the channel partner management software are PartnerStack, Allbound, ImpartnerPRM, etc.
Overall, these tools can help companies manage their channels more effectively and efficiently, enabling them to better serve their customers and grow their business.
How Can You Effectively Manage Your Channels?
Effective channel management is essential in ensuring the successful delivery of products and services from the company to its customers. It ensures that the organizations can ensure that their marketing and sales efforts are effective and successful.
It is key that organizations have effective channel management strategies in place to maximize their sales potential and maintain efficient business partnerships.
Identify The Most Effective Channels for Your Business
This will depend on your target audience and the type of products or services you offer. For example, if you are a B2B company, LinkedIn may be a more effective channel than Instagram.
Develop a Clear Strategy for Each Channel
Once you have identified the channels that will be most effective for your business, you should create a clear strategy for each one. This should include goals, a content strategy, and metrics for measuring success.
Regularly Review and Adjust Your Approach
As with any marketing strategy, it’s critical to regularly review and adjust your channel management approach. This will help you stay on track and ensure that you are using the channels that are most effective for your business.
Use Tools and Technology to Manage Your Channels
There are many tools and technologies available that can help you manage your channels more effectively. These include social media management tools, email marketing platforms, and analytics tools.
Engage With Your Audience on Each Channel
To be effective, your channel management strategy should include a plan for engaging with your audience on each channel. This could include responding to comments and messages, posting regular updates, and running promotions or contests.
Important attributes helpful in customer experience can be made better with effective channel management
By following these tips, you can create an effective channel management strategy that will help you reach your target audience and achieve your business goals.
Effective channel management can also help a company to optimize its distribution and reach more customers and can improve its overall efficiency and profitability. Additionally, channel management can help a company to maintain healthy relationships with its channels, and address any challenges or opportunities that may arise.
The Future of Channel Management in Businesses
The future of channel management is likely to be shaped by several emerging trends, including the following:
1. Increased use of digital channels: As more and more consumers turn to the internet to shop, companies will need to focus on developing and managing digital channels, such as e-commerce websites and social media platforms, to reach and engage with customers.
2. Continued globalization: As the global economy continues to integrate, companies will need to adapt their channel management strategies to account for differences in consumer preferences, cultural norms, and regulatory environments across different regions and markets.
3. A stronger emphasis on customer experience: With increased competition and changing consumer expectations, companies will need to focus on providing a seamless and personalized customer experience across all channels to retain and attract customers.
4. Rise of omnichannel marketing: Omnichannel marketing refers to the use of multiple channels, such as brick-and-mortar stores, online platforms, and mobile apps, to provide a consistent and integrated customer experience. This approach will likely become more relevant as customers increasingly expect a seamless and consistent experience across different channels.
5. Increased use of data and analytics: As the amount of data generated by customers and channels continues to grow, companies will need to use data and analytics to gain insights into customer behavior and preferences, and to optimize their channel management strategies.
Altogether, the future of channel management will likely be characterized by a continued shift towards digital channels, the need to adapt to a global and increasingly competitive marketplace, and the growing importance of customer experience and data-driven decision-making.
Businesses are looking for ways to establish and maintain successful relationships with their customers, and a key way to do this is through effective channel management strategies.
To ensure successful channel management, there are several key steps to consider. These include researching the target market and the characteristics of the products or services, identifying the most effective channels, creating a clear strategy for each channel, and regularly reviewing and adjusting the approach as needed.
Additionally, it is important to stay up-to-date with the latest trends and developments in the industry, as this can help to ensure that the company is taking advantage of the most effective channels. By following these steps, a company can ensure that its products or services are widely available and accessible to customers, and can improve its overall efficiency and profitability.
FAQs
What is channel management also known as?
Channel management is sometimes also referred to as marketing management.
What is the importance of channel management in marketing?
Channel management allows the creation of a direct pathway for the marketing and selling of products or services offered through them.
What is the need for channel management?
Chanel management is essential for forming a connection between customers, supporting third parties, different vendors, etc. They establish direct communication with customers in each channel.
If you are looking to start your own e-commerce business in India like Amazon or Flipkart, then this is the way to go. To start with, eCommerce is an online process of buying or selling goods and services. There is no paperwork involved in making any transaction here.
One of the best things that most of us like about an e-commerce startup is that we can update and modify it the way we want and make it attractive and appealing to the eyes of the audience. Your customer will have access to your services 24×7 and you don’t need to come out of your door for marketing and other stuff if you are doing it at a small level.
According to a report, in 2019, eCommerce sales accounted for 14.1% of all retail sales worldwide. However, there are some things that you need to care about in your eCommerce business plan.
How to Start an eCommerce Business in India? (A 10-Step Business Plan)
Starting an eCommerce website might sound challenging, but with this easy 10-step business plan, it would hardly be tough. So, let’s dive into the steps:
Step 1: Define your business name
Business names are always important as they give you an identity after identifying what you want to sell. A business name will be the legal identity of your business. This opens a room for marketing your product with ease. The name that you choose should be simple and unique. It is always better to research extensively before you decide upon a particular name for your business. This will let you be safe and secure, and thus, is really important for everyone who would be starting an eCommerce website.
Step 2: Set a domain name
Ideally, there is always diversity in business. The business name acts as the domain name. A domain name system (DNS) stipulates the website address that your business wants to keep.
One of the important factors for an eCommerce business plan is awebsite. A website can be useful in developing different marketing strategies. It acts as a point of contact between you and your customers.
A website is accessible to many people at any given time and creates a climate of trust (credibility). Churning out a website is really convenient as it tells the customers that you exist. Furthermore, the website and the domain name are some of the core steps to proceed with before one can go about launching an eCommerce business.
Step 3: Identify the type of business and register
People engage with businesses as sole proprietorships, partnerships, or cooperation. Each of these has an advantage and disadvantage attached to it. For example, operating as a sole proprietor always subjects you to numerous risks.
You need to weigh before deciding upon a particular type of business that suits you. The income removal system (IRS) allows you to file the structure of your business on your own or get a different filing company to help you.
Step 4: Employer Identification Number (EIN)
You can not operate an e-commerce business without a bank account. To get a bank account you need for your business you need EIN. This number you are given acts as identification. You use it to file taxes for the business. It is always a requirement whether you will operate alone or employ people.
Step 5: Obtain legal documents
Every country has its own policies and procedures that every citizen must adhere to. This is also one of the things you must keep as a priority while creating an eCommerce business plan. If you fail to do that, the government has the mandate to declare your business illegal, after which numerous penalties might be imposed.
Licenses for the business and work permit should be obtained. Confirm with your state what type of taxes you are required to pay in order to operate. Also, you need to Apply for Goods and Service Tax (GST) certification and a Shops and Establishment Licence.
Step 6: Source for vendors
It is not possible to operate without vendors. Everyone needs to identify and keep in contact with different vendors. This way you can derive the best quality and prices for the materials you need to make your products. Conduct a thorough and serious search of the vendors to help you identify who you want to work with.
Step 7: Early marketing
Media platforms are paramount in e-commerce. However, it is also necessary that you have an eCommerce business plan prior to that. Alert customers that there is something good coming up so they can create interest to know. You can even decide to introduce blogging as a tool.
Step 8: Get effective software
E-commerce cannot work without making use of technology. Put every system in place before launching the product. Effective software is what you simply cannot compromise when it comes to building e-commerce websites in India.
Step 9: Keep a smart inventory
Inventory will help you track the information that you need. Ensure the warehouse (store) has enough products so that the customers don’t miss out on what they want. You may not be in a position to tell what will be needed and when but is always safe to keep a decent stock. This will help keep track of the orders you make in the future.
Step 10: Be compliant
Always be smart with deadlines in terms of taxes, licenses and permits needed. Always ensure you abide by the law of the land. Staying compliant is the key to starting an eCommerce store or an online business and making it successful.
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How to Build an eCommerce Startup?
The Ecommerce industry is on the boom for the past few years, and why not? It is ultimately a sector with big opportunities and low barriers to entry. The total valuation of the e-commerce industry in India was last recorded at $46.2 million and is expected to rise to $188 billion by 2025. Such a sector that is ever so growing, certainly consists of a lot of opportunities.
Currently, there are hundreds of e-commerce sites selling products and services and thousands are on the way. Probably you also want to have one. Well, the e-commerce industry is so dynamic now, that you need to be agile and alert. So, keep monitoring the activities, events, discussions, and changes going on in your niche.
Now e-commerce is not about selling a product but a solution. Your potential customer must see the clear benefit of buying from you. Here are some tips to follow if you are starting up or already have an existing startup in the e-commerce domain.
Find a niche
If you get an idea for e-commerce, there is a fair chance that many startups are operating in that niche and many are coming up. That is why it is important to break the initial idea, segment them a little further or get a niche that is not explored yet and work on that with full focus.
If you think you can compete against Flipkart or Snapdeal that’s not going to happen if you plan to start with the same business model.
Take sandal. When the company launched, it was an online portal for deals and coupons. This was a very focused play. They didn’t immediately start selling physical goods. Make your unique selling proposition, find your target “janta” or customers, and sell your product to them.
Experiment
As you have started out, the world seems very new to you. Nobody except you can tell what works best for you. So, experiment with different Pitches, Distribution channels, and more. Do this until you find out a solid sales strategy.
Listen to your customer
As it is always said worship customers like gods. Always remember that if there is any service you want to provide, then that should always be a customer satisfaction service. Your behaviour towards the customer after the sale would make all the difference.
This will help you in customer retention and thus make more sales. Once a sale is made. Talk to them, get feedback and see what changes they want. Even if it doesn’t comply with want you want just change it.
Learn from the mistakes of competitors
Do you have lots of competitors? Having too many competitors is not so good news for businesses but every bad thing has got something good in it. So, if you have quite some competitors already in the same space where you would be starting your own eCommerce business, you can try to analyze their website design, pricing, and marketing strategies on a regular basis to get useful insights for future action. Go through their social media profile to see what activities have helped them gain traction a lot and what has failed for them. In this way, pick up all that they have done good, and try to avoid all the mistakes that they have done.
Use digital marketing
74% of adults who are online, use social networking sites, and among them, it has been found that 71% of online adults use Facebook. Being a startup you don’t have much marketing budget. Here, starting with social media platforms for marketing purposes will indeed be of great help. Optimising the content and regularly sharing them on social platforms certainly is rewarding for brands and businesses. This will not only let you reach to large audience economically but also help you to get analytics to learn about the users. It is also a great way to listen to what customers are saying about your brand.
Number of social network users in India from 2015 to 2020
Operation
Make sure you always have enough inventory of the highest-selling product. Make sure that you keep a track of all the products that belong to the highest-selling and lowest-selling categories. Figure out what is making the highest product sell the highest and what makes the others the lowest-selling products. This will help you a great deal!
Looking at what similar companies are using. Add a mascot on the site that guides the users about the site and the products, is an interesting way to get the attention of customers (like Zendesk). Use only those plugins that are necessary.
Hire trained customer care executives to resolve customer queries over calls and emails. A toll-free number and support email is crucial too. Solve the problems that the customer is facing, to ensure the efficiency of the website.
Content marketing
The content is important for an e-commerce website and is good for marketing the brand. Putting up a blog or posts will surely bring up more traffic than ever. Content marketing will stand as one of the primary requisites as soon as you start an eCommerce store or an eCommerce website in India.
Social Media Marketing
Social media is the key to climbing the ladder and getting the exposure one wants in the public eye, so creating social media accounts is the key to helping the brand reach the eyes of the world. Keep the followers updated with new products and give ways to get more followers. Meme marketing is also a great way to engage your customers (Millennials).
Influencer’s utilization
The influencers are the best people in the game especially, in terms of product branding and making the future of a product. Hence, hire some influencers who are the best in the marketing game, which your brand focuses on, and pay them to put the ad on their social media. This will help increase your brand reach, thereby helping it to reach thousands and millions, who would then be able to see what your brand and its products are all about and people will pop up on the website for sure, giving you more website traffic and multiplying your revenues for sure.
How to Compete in the eCommerce Market?
Every day is new and brings changes in people’s needs and desires. Luckily, this is where small and upcoming startups can still win in the midst of other eCommerce giants. Here, is how to compete in the E-commerce market.
We are aware of how Amazon and eBay have driven many small and medium companies to extinction. But the other side of the reality is also that new interventions are always abundant and there’s always a new idea, product concept, or methodology that can topple the market leaders as we know them, or at least create a comfortably sweet spot in the market for themselves-which is just where your startup needs to reach.
If your startup is introducing a new product or service altogether, there is a very different approach you might need to take as compared to a start-up that is re-offering the existing product or service to bridge the demand-supply gap.
Be very clear as to who you are, what your offer is, and what your target is. Make sure that your core team and your entire organization have this understanding to ensure that the combined effort of the entire workforce maximizes the results.
It is a hopeful time to be as Amazon and the likes do cater everything to everyone. But the digital age has made it possible for everyone to co-exist as people’s tastes are ever-evolving and start-ups targeting the niche will be able to carve out their own space.
Read on for sage advice on how you can stand out in a crowded marketplace and reap the maximum benefit of being a newcomer to the industry.
Create Your Own Service
Your chance to be victorious in the game is to be an innovator and make your own market rather than depending on the existing marketplace. It is a harder approach to what you are already doing but will take you miles ahead of others.
See a Need, Fill a Need
We have seen time and again that certain brands launch big after years of testing and planning, however, once the brand is not received well they start to fizzle out. The ones who make it successfully are often seen using the feedback from the customers and dedicating some resources to perfecting common complaints and difficulties consumers are experiencing. They don’t quit, rather, they use real-time data as the major source of what the next step is inspired.
In fact, building on what the customer conveyed as your shortcoming can also forge a trustworthy and loyal bond with them, which is a great way to market yourself. Instead of resisting the feedback, be open to them and make your way to their hearts by listening and acting on it. Create your own trend rather than following the norm.
Champion the Mobile App
Make sure that your customer is having a seamless mobile experience on your app and is likely to check out under 60 seconds after preparing the cart or choosing the service without any in-built interruptions. Fast times require faster solutions! In addition, make sure your startup belongs on platforms like Snapchat and Instagram that have made the visual world fun and directly accessible.
Design Thinking promotes that design is an elementary part of any system. Design your product, service, or systems within the organization always prioritizing the user needs and user practices.
Get inside not just the mind of the end-user, but also their daily lifestyle, their influences, their dreams and aspirations, their environment, and their culture, depending on the nature of your services.
Customer is more likely to trust your brand if they think you thought of them specifically while making the product or service. This gives them confidence that you will understand them and will stand as a good choice for them.
Better Incentive Programs
Your incentives can come in the form of discounts, rebates, points earned toward a discount, points earned toward prizes, or any of many other plans. The worst-designed incentive plans have ambiguity in the stated rules.
An incentive is likely to shape your customer’s behaviour and drive them to your desired action. These incentives are thus, really valuable for an eCommerce company, especially if you are wanting to start an online store in India. If they are rewarded for their purchase, they feel like they ‘earned’ it. Keep a close eye on what other e-commerce companies in India are offering and if you are to compete with them, you must outdo their offer every time.
Better Customer Service
A common Amazon trait that has made it wildly popular in the e-commerce service is how they value each customer. Similarly, if you also want to start an eCommerce business, then you must first start to value each and every customer the same. While you can’t crush e-commerce giants given that they have bigger marketing budgets and bigger control of their product lines, operations and sales, it is certainly a trait you can imbibe in your company. Each satisfied customer means five people who will hear about you from him, which is great marketing for you at no actual cost.
Customer Data Is The Key to Ultimate Business Growth
A former Amazon company worker stated that Amazon has the ability to track both what people are buying as well as what they search for and can’t find.
This is a part of their success story. Companies that use customer data to better their practices are more likely to increase their sales and their gross margins than those who ignore the data.
Even if you don’t have big budgets to acquire data like e-com giants, do make absolute use of the behavioural data you already have in their database to improve customer satisfaction and customer retention.
How do eCommerce Sites Make Money?
Everyone wants an extra income to meet their needs and upkeep their standard of living. Furthermore, buying and selling goods and services via the Internet is the new trend to earn money, and the websites that make them possible are none other than Ecommerce websites. The Ecommerce websites are offering a free platform for the sellers and the buyers to get in touch with each other.
One can easily list their products on e-commerce websites and potential buyers can buy the products hassle-free sitting in any part of the world. The whole online buying and selling chain appears to be a very easy and economical process.
Although, you must have wondered as they offer free services to sellers and buyers thenhow these e-commerce websites like OLX, Quikr, Craigslist, and Gumtree make money online.
E-commerce websites, such as OLX, Quikr, and other leading sites provide an online portal to advertise your product or service offerings and find the buyer for them.
Almost all emerging e-commerce websites offer free services to users. However, they still make high-tech TV commercials and disburse lucrative salaries to their employees. How? So, let’s get the answer by analyzing the revenue-generating strategies of a few leading e-commerce websites and comparing their revenue plan with others.
Olx
OLX is one of the most popular and well-structured e-commerce websites. It offers a variety of features to its users, such as sellers can directly chat with a buyer, can easily bargain, etc. eBay is one of its competitors of OLX. OLX opts for the following methods to earn money:
Google AdSense Banner Ads
Google offers to all bloggers and website owners a very easy platform to get advertisements on their sites. Google AdSense is a platform where you can register your website and after verification, Google will show related advertisements. Hence, OLX effectively runs Google ads to reach its target audience. The earnings through ads depend, upon the number of clicks they get which is called CPC (cost per click model).
Featured Listing
OLX offers a featured listing option to the sellers. Featured links are those links that you see on the top, whereas, in a normal listing Ads are placed in OLX depending on how recently the Ad has been placed.
Featured Ads will always appear on top of the list irrespective of any factors. Ideally all such should be mentioned as featured/sponsored/ads so that users don’t get an illusion. In a featured listing, your ad will show up at the top of the search list and your ad will be shown first to the buyers whenever they search for anything on OLX. The sponsored links appear depending on the keywords targeted by the advertisers. Being at the top of the list gives advertisers a way to get more leads.
Quikr
Quikr is yet another e-commerce, which is very popular in India and somehow looks and works similarly to OLX. While the featured listing is one way to make money Quikr also follows a different route here.
They also generate revenue by generating leads for businesses. It makes a gainful amount of money for Quikr. Recently Quikr has acquired a few startups to diversify in different fields like Jobs, spas, and salons where they provide leads to these service providers.
Craigslist
Craigslist is also a popular rental listing website. It is mainly popular in the USA. But the company doesn’t earn as much revenue when compared to other websites. The company only makes revenue equal to its operation charges.
It charges $10 for a rental listing in New York and $25 for a job listing to occur in any of the major U.S. cities. If in the San Francisco area, you need to pay a $75 fee for a job to be listed.
The company is trying to consider Google AdSense and paid advertisements to generate more revenue, but it is still worried about the quality and clutter on the website due to ads, which is the main priority of the company.
There are other similar eCommerce websites present, like Gumtree and BookSellBuy. They also earn through a basic business model, that is, by providing premium membership Ads wherein the features depend on their own model, by featured ads and paid listings. So, almost every website uses paid ads to generate money.
Conclusion
Now, building an eCommerce website is the trend. It definitely takes a lot of effort and hard work, but once created and branded properly, it will surely open a whole lot of doors for growth. It is not an easy task to run an e-commerce business in India in the current age of competition. Starting an eCommerce company or an eCommerce business in India is certainly achievable if one has the focus and grit to understand the customer and the people who are in the organization.
Use your data efficiently and always make the customers happy at the end of each transaction. Comment on your favourite e-commerce site or your story of launching your own e-commerce site in the comment down below.
FAQs
What are the 3 types of e-commerce?
The three types of Ecommerce are Business-to-Business (B2B), Business-to-Consumer (B2C), and Mobile Commerce (M-Commerce).
What is the future of e-commerce?
The eCommerce industry was last valued at $46.2 bn in 2020 and is expected to rise to $188 billion by 2025, and would soar to become $350 billion by 2030.
Which is the largest e-commerce company in the world?
Amazon is the largest e-commerce company in the world.
How much does it cost to start an e-commerce business in India?
To start an e-commerce business in India you need approximately at least 5 – 10 lacs of investment.
How to start an eCommerce website, store, or eCommerce business?
Whether you want to start an eCommerce store/site or an eCommerce business, it is evident that you first need to research the industry and the market potential before starting up. Starting an eCommerce company in India would need you to:
Build a fast, comprehensive, and informative website
Create a viable business and revenue model
Decide a relevant domain name
Host the website properly
Market your website, its products, and services
Monitor the performance
What are some of the eCommerce business ideas?
Some of the best ideas if you want to create an eCommerce website or an eCommerce business in India would include grocery delivery, cosmetic and beauty products eCommerce business, refurbished or second-hand products business, fashion, jewellery, food tech and more.
What are some things that you should never forget while trying to set up an eCommerce business in India?
Setting up an eCommerce business in India is the dream of many, but only some eCommerce businesses in India actually see the light of day. Here are some of the easiest steps that you need to remember while setting up an eCommerce company in India:
Chalking out a workable business and revenue model
Branding your brand well
Registering the business
Opening a bank account and linking the business to the same
Creating and launching a simple but secure eCommerce website
The psychology of a human being is complicated as well as interesting. When a friend or acquaintance refers you to a product to use, you definitely get a little curious about the said product or service, they make an appearance in your head. Imagine getting rewards by just referring a product or service to your friends or family. Isn’t it amazing?
There are various types of marketing, one of them being referral marketing. Referral marketing doesn’t get much attention, but the industry knows its value. You might not share about any product you bought, but when you get some discount for sharing, your inner “you” automatically press the share button. Referral marketing is the best way to increase sales. Not only do people bring you more customers, but they become loyal to you too.
Generations Trusting Referral Advertising
Every app, shopping website, and literally every business uses referral programs these days. In this article, we will talk about Referral Marketing so let’s get right into it.
Whenever we get a suggestion from our friend or family referring to a particular product, we are more likely to believe them. However, word-of-mouth is still the best referral channel out there, but it is nearly impossible for a company to track that referral. To solve this problem and encourage and reward their customers for referring their products, companies use referral marketing programs.
As a company, you provide a unique referral code to every customer and ask them to share that code and earn some profit. When people share that code with someone and bring you a new customer, they get reward points or money and you get a lead. As already said, this is not as powerful as word-of-mouth, but it is still a good option as people will share your content to earn points that will be a reward and there is hardly anyone who doesn’t like rewards.
Rewarding Options for Referral Marketing Strategies
There are four ways to provide the reward:
Rewardingboth parties: You can reward both the referrer and your new customer. This way, both the people get the benefit and it is a great way to motivate them to bring in more customers.
Rewardingthereferred: Reward the person who is referred by someone. People who feel guilty to make a profit by referring will love this feature. However, you should analyze the audience first, as not the majority of people feel that way.
Rewardingthereferrer: By rewarding the person who referred someone, you motivate the next person to refer someone else. By this method, you don’t have to spend on both parties and the process will still continue.
NoRewards: You can provide the referring code and reward none of them to share it. Although this is an option, people will not appreciate it much, unless you have great content.
Some Amazing Stats of Referral Marketing
In a survey, people were 4 times more likely to buy when referred by a friend
Over 90% of respondents trust referrals from people they knew.
According to Capterra, 88% of B2B decision-makers rely on word-of-mouth for information and advice.
A survey shows every referring customer makes an average of 2.68 invites.
Companies with formalized referral programs experience more revenue growth.
Surprisingly, only 30% of B2B companies have formal referral programs.
Advantages of Referral Marketing
Budget: The first and best advantage of referral marketing is that you don’t have to spend too much money. The money needed for referral marketing is too little than any other traditional advertisements. However, it depends on you how much reward you wish to give to your customers for sharing your content with others.
Comfort: People are more comfortable buying any product when it is referred to them by their friends or family. Referral marketing is much more effective than traditional advertising.
FastResults: The impact of referral marketing can be seen very quickly. It doesn’t take much time for people to share any content. If you are using referral marketing for an app or e-commerce website, then you don’t have to wait too long to see the results.
ContinuousProcess: People don’t stop referring until you want them to. A will refer to B and B will refer to C and so on. It is a never-ending process. So, you don’t have to worry about the process. However, you should update the process and the system to better them.
LoyalCustomer: The best thing referral marketing do is to target loyal customers. Even if they are not loyal customers, they are still loyal marketers for you. When people get rewards from you, they will prefer your product over others. These were some of the advantages of referral programs.
Boost Your Referral Campaign
Disadvantages of Referral Marketing
Budget: Although you are saved from spending tons of money on advertisement with referral marketing, you still have to spend some money. You will have to give up some profit to the customer in the form of rewards.
The senseofGuilt: Some people don’t share their referral code as they think they will be sellouts. Some people don’t like making a profit out of someone without doing anything but a click. They will have a problem with their inner “sense of guilt”.
NotEfficientEnough: Compared to word-of-mouth referring, referral marketing is just a kid. People are more likely to buy when people heard about the product from somebody. Moreover, people are aware that word-of-mouth referrals are mostly free, so everyone would give their honest opinion. Whereas, in referral marketing, most people prefer to earn rewards only.
Some Top Referral Marketing Software
Now, that you know what are the advantages and disadvantages of referral marketing, you might want to know how you can have this program on your own website or app. This is 2022, therefore, there are services available for everything. You can use any of the below tools to integrate the referral program into your website.·
Referral Factory
ReferralCandy
Friendbuy
InviteReferrals
Mention Me
Ambassador
Genius Referrals
Referral SaaSquatch
Referral Rock
Revetize
ReferralMagic
TapMango
Talkable
Conclusion
Referral programs increase your sales. However, you might feel annoyed when someone WhatsApp you a download link again and again, which will make them some bucks. But by seeing something time and again, an idea to check that service out develops in our mind. And that’s what the ultimate goal of marketing is.
FAQs
What is referral marketing?
Referral marketing is a word-of-mouth strategy created by a business to tempt current customers to recommend the brand to their friends, family, and contacts. It is a tool to expand and increase the customer base. It heavily relies on the internet and social media.
Do Referral programs work?
Referral programs are incredibly successful as people love earning rewards, so they refer the products and services to their acquaintances, and the cycle continues.
Why Referral Marketing is the best?
Referral marketing is cost-effective marketing and its success rate is immense.
Can you make money on referrals?
Of course, you can. You get rewarded for successful referrals.
31st March has just passed. Was the last month of the gone financial year full of a hassle for you? Do your last-minute tax-saving plans always lead you to invest in the wrong instruments? Well, if your answer is yes, you are at the right place. In this blog, we have brought you tips on how to organize your personal finance in the new financial year.
A book named “Personal Finance” written by E. Thomas Garman and Raymond Forgue defines Personal Finance as the study of resources, both personal and family, that can be considered important from a financial perspective. It involves spending, saving, protection, and investment of these financial resources.
Financial freedom is available for those who learn about it and work for it. – Robert Kiyosaki
Key Aspects of Personal Finance
The reason most people fail in making a successful financial plan is a lack of awareness. Although people make a lot of effort while managing their finances, they often overlook important areas. In this section, we will discuss the 5 key aspects of Personal Finance.
Saving
Warren Buffet has said “Do not save what is left after spending, but spend what is left after saving. This is indeed a great piece of advice. You cannot predict when the financial crisis will hit you. Therefore, it is better to remain prepared.
Savings help you to keep calm in such situations and look for a solution. As per experts, your optimum savings should be equal to your six months expenses.
Earlier, the most preferred option for savings was a “Saving account”. However, recently a lot of people are moving towards debt instruments such as liquid funds for saving.
There are a number of reasons for this shift. Foremost, Liquid funds have minimal credit and interest risks attached. Further, you can easily withdraw money in small time. Also, though there is no guarantee, these funds provide you with better returns than your savings account.
Investing
Investing
As Benjamin Graham said, “Successful investing is about managing risk, not avoiding it”. Many people confuse saving and investing to be the same. Well, they are not.
While investing, you are actually using your money to make more money. There are plenty of investment options available in the market such as mutual funds, real estate, stock market, etc.
To choose the correct investment options organize them into short, long, and mid-term goals. The option best suited for your requirement, horizon, and time frame should be chosen.
Financial Protection
As per WHO, financial protection is the heart of Universal Health Coverage (UHC). If chosen well, it gives a safety net to you and your loved ones. The key is to ascertain prepayment and pooling of resources to save you from financial hardship.
Financial protection ensures that these impromptu situations do not hamper your savings and investment plans. Insurance is classic financial protection. Basically, four types of insurance plans are considered mandatory for an individual. They are Term insurance, Health insurance, Mortgage Protection, and Personal accident insurance.
Tax Plan
Tax Planning
You can save your tax by identifying the right kinds of investments and purchases. In India, there are almost 70 exemptions and deductions that can be used to lower your taxable income.
Section 80C and 80D of the Income Tax act may help you save a lot on your income. Under Section 80C, you can reduce your taxable income by investing in certain tax-saving instruments such as EPF, PPF, NPS, NSC, etc.
On the other hand, Section 80D allows you to save tax on the money you pay as a premium for the health insurance of you and your family.
Retirement Plan
“Planning for retirement is not something we can put off until a later date. The time to plan is now.” Here Bob Reid has correctly described the need for a retirement plan.
Unless you are planning to become a liability to your kids, you should start planning for your retirement now. This is actually because you never know when you will stop working.
The greater life expectancy and frequent inflations have further enhanced the need for a retirement plan. Investing in sources of steady income can be the best option. Life insurance annuity, rental income, and mutual funds are good options to consider for your retirement plan.
How to Organize Your Personal Finance in the New Financial Year?
Now that we know the key aspects, we are ready to organize our personal finance. We have listed tips to help you organize your personal finance in the new financial year.
1. Start Early
“Haste makes Waste”. If you have tried to plan your finances and investment in the last month of the financial year, you can certainly relate to this statement. During the last-minute rush, not just you but investors are also impatient. Thus, there are maximum chances of making a wrong decision. Therefore, it is better not to wait for March to plan your finances. Starting early helps you to make calculated decisions. Put your financial plan in place in the month of April itself.
If you wish to invest in PPF or SIPs in your equity-linked saving schemes (ELSS funds), better start at the beginning of the new financial year.
2. Plan your Budget
Living within your means is important. Plan your expenditure and savings for the next year in the beginning. Go through your previous year’s income and expenses to make the right decision.
Set your financial goals and decide your cash flow accordingly. If you have received a good bonus, try to prepay your loans, at least partially. Our income and aspirations play a major role in deciding our financial plan.
This would help you to identify your spending. So, you can strike the right balance between spending and savings. If cutting down your expenditure is not an option, try using smart spending means such as loyalty programs, credit cards, or some apps.
Try competing with your previous month’s budget. It would help you grow as a smart spender. Try setting goals and make efforts to reach them.
3. Create an Emergency fund
This is the fund that will help you take care of the unexpected expenses in “just-in-case” situations. Usually, financial experts advise keeping 20% of your every paycheck in this fund.
As per Forbes, you can create an emergency fund by simply following a few steps. They are:
Setting up a target date to start your fund.
Reallocating some amount from existing assets.
Drawing a monthly commitment.
Creating a separate account for gathering.
Channelize extra income towards this fund.
4. Determine your insurance needs
Determine Your Insurance Needs
Insurance is not only meant to save tax, rather it is a means to serve critical needs. The beginning of the new financial year is a good time to determine if you have adequate insurance coverage.
The finance experts believe that your insurance cover must be 10 times your annual income. Also, reviewing your insurance needs as per your changing life goals is important for example, if you are planning to get married, have a child, or buy a house.
As per a Swiss report, people in India are awfully uninsured. The protection gap is almost 83% wide. This means that if the Rs 100 insurance cover is needed only Rs 17 are spent by the policyholders.
To evaluate the adequacy of your insurance cover you can also use Human Life Value (HLV) tools. These tools are available online and help you assess your financial requirements based on your liabilities, increments, earning capabilities, and your age.
5. Review your investment portfolio
It is always a great idea to review your investment portfolio at the beginning of the new financial year. Track the market performance of your existing assets to understand how it has changed since last year.
Readjusting your investment strategy is especially important if you have experienced any major life changes in the last year. For example, if you are nearing retirement, you may want to invest in a good retirement plan. Evaluate your needs and invest accordingly.
6. Plan to spend your annual bonus
If you have received an annual bonus do not let the money get fritter away. Plan your spending well. For example, if you have a loan you can partially or completely prepay it. Or if you have a child try spending the bonus on good Children’s plan.
Even if you have no such liability, this does not mean you can just cross your budget and waste that money. Try channelizing it towards your savings or emergency fund. This will help you meet your financial goals.
7. Plan your taxes
Planning your taxes at the beginning is a great way to start your new financial year. It is actually a part of the financial discipline. To initiate tax planning, you first need to identify your tax slab. The tax rates are different for different levels of income. If you know your tax slab, you can easily calculate your tax outgo. This will help you to figure out your tax-saving requirement.
To analyze the scope for reduction, first, evaluate your existing tax-saving investments. This is crucial as there is a maximum limit for reducing the tax outflow.
A number of tax-saving instruments are available to choose from such as PPF, NPS, tax-saving mutual funds, etc. It is also important to distribute your tax investment across the year instead of doing it in the last month. However, it is equally important to understand that investment goals must be derived from your financial goals and not for the purpose of tax savings.
8. Limit your debts
It sounds easier said than done. Anyways who wants to remain in debt? It just happens. However, as per Central Bank, there are certain strategies to keep your debts in check. They are:
Do not buy anything which you cannot afford without a credit card.
Completely pay off your credit card balance, every month.
Focus on your needs not wants.
Plan your budget as per your financial goals and requirements.
Limit the number of cards you own.
Maintain a master sheet to track your expenses.
9. Monitor your credit score
It is almost impossible to not own a credit card in today’s world. However, it is crucial to managing your credits correctly. A solid credit report is required if you are planning to obtain a loan or mortgage a property. For this, you better pay off your balance every month or at least try to keep a minimal credit utilization ratio.
The most popular credit score these days is FICO (Fair Isaac Corporation) score. The factors that determine your FICO score include payment history (35%), length of credit history (15%), amounts owed (30%), credit mix (10%), and new credit (10%).
It is also a good idea to subscribe to credit agencies that provide you with regular updates on your credit score. This would not just help you in identifying mistakes but, also to detect any fraudulent activity.
10. Maintain financial records
It is always important to keep your financial records organized. This will help you track any discrepancies at later stages. Traditionally, a folder or drawer is used to keep all your bill and payment receipts. However, this increases the risk of missing or forgetting one or more of them.
Currently, a number of apps are available to keep track of your finances. These online services help you separate the old bills and receipts from the new ones. Also, you can set reminders for upcoming payments. This saves you from the hassle of looking through every document in your folder while trying to find one.
Conclusion
Therefore, it is important to understand the five key aspects of personal finance i.e. savings, investment, financial protection, tax plan, and retirement plan before you start to plan. Moreover, organizing your personal finance in the new financial year using the tips mentioned above would certainly help you get more out of your available assets.
Hope you enjoyed reading this article and learned something. Keep visiting for more fun and knowledge.
FAQs
How do I write a financial plan for the new year?
Start early, create an emergency fund, plan your taxes, and monitor your credit score.
Which financial plan should be set first?
Creating an emergency fund should be your priority because you never know when a crisis will hit you and you’ll be buried under debts.
What is the 50 30 20 budget rule?
According to the 50 30 20 budget rule, you should allocate 50% of your income to needs, 30% to spending, and 20% to savings.
Ashwini
