If you just build it -- meaning a website for eCommerce -- no one is going to come. You won’t get traffic until you put as much effort into promoting your online business as you would opening a corner pizzeria in pizza-crazy Chicago.
And don’t be surprised if a successful online retail business leads you to a brick-and-mortar presence. If you sell wholesale/retail and want to scale up inventory to bring down per-unit cost, those goods have to go somewhere other than your basement as you grow.
Those are the assessments of Ryan Preisner, co-founder and CEO of boldSOCKS in Grand Rapids who has managed with his partners to build a thriving small business on designing and selling fanciful and colorful hosiery for men, women and children on a retail and wholesale basis.
“We started our online business about 5 years ago, and the internet is a lot more crowded now,” said Ryan, who cautions would-be eCommerce entrepreneurs about underestimating the need for online advertising and marketing. “It was more like a hobby business then, started with about $1,500 between three guys.
“But things really took off, and now we have to spend money and time to gain web traffic. We’ve had to invest a lot more in inventory and online advertising. We use Google AdWords primarily.”
There’s no doubt that online retailing is getting more crowded. Internet security firm NetCraft Ltd. in Bath, U.K. estimated there are more than 1 billion websites on the World Wide Web as of July, compared with about 206 million websites as of July 2010. Even with an estimated three-quarters of the sites being inactive or parked domains, this month’s figure that still leaves 250 million websites that are vying for the attention of visitors, compared with an estimated 80 million five years ago.
Forrester Research inc., a leading business intelligence firm based in Cambridge, Mass., reported that the digital marketing spend -- social media, email, online display ads, search and mobile -- rose a compounded annual growth rate of 17 percent from 2011 to this year. So while it is inexpensive to build an online retail business that can reach customers worldwide, the cost of getting your voice heard on the internet is rising.
That kind of digital marketing spend is critical for a company like boldSOCKS, which expects to have about 200 of its own sock designs manufactured and up for sale by fall. But it also made sense to rent a storefront at 17 South Division Ave. to double as warehousing for all that new inventory -- with retail sales essentially covering the cost of what would have been leased warehouse space. “In the early years, our inventory took up every room in my basement,” Ryan said. “But as we grew, it just doesn’t work to have people driving to your home everyday to fulfill orders. And this is so much nicer than working in a space with no windows.”
Research firm Forrester said businesses like BoldSOCKS are at forefront with omnichannel retailing, a combination of retail store, online store, and other methods of transacting business with a customer. The concept is still in its infancy, and no one knows exactly what works yet, the firm said.
But Ryan and his partners know what works for them, and they’ve limited retail store hours for a reason. “If you are frustrated with the hours of operation, we apologize” the boldSOCKS website states. “We put a priority on spending time with friends and family as well as maintaining good life balance. We hope you understand.”
Customers today should understand, given today’s technology makes it a simple push of a button to know when boldSOCKS is open, rather than waste a trip downtown to see a Closed For Business sign.