Online Shop Massive Invasion, Should An Offline Store Die?

Note: Tulisan ini adalah terjemahan Basa Enggres bebas dari artikel ini

Hello friends.

Meet again to discuss the various actual things together with me (Author).

Especially for this meeting, I want to continue the discussion of the article before, entitled: OPPORTUNITIES and ADVANTAGES of ONLINE BUSINESS

As I explained earlier in the article above, about that online business phenomenon so fast shot like snowball rolling! Massive and can't be dammed!
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The online business attack was 'so awful,' that it made quite offline shops (physical stores) is 'shocked.' It is undeniable that the continuous 'invasion' of the online store is enough to shake the existence of physical shops. Including, is my store. Later, I will write an exclusive article, about why I finally opened an online to store (besides a physical store).
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The blue text above is a quote one of the paragraphs of the previous article. In the last section, I promised to write a continued article. Well,  this the particular article. I will discuss it in more detail in the form of advanced sub-topics.

Next, below are the sub-topics that I will discuss:

#1. Some 'shocks' and changes that occur in physical stores due to the phenomenon of the online store 'invasion.'

#2. Finally, I decided to start opening an online store, with the brand 'Bangizaltoys.'

#3. The advantage of having an online store is that we become quite expert in internet tech savvy.

All right, I try to discuss it one by one starting with:

#1. Some 'shocks' and changes that occur in physical stores due to the phenomenon of online store invasion.

I started to open a toy store business (offline) in the East Jakarta Kalisari area at the beginning of 2010. I still remember at that time 'everything still went well.' In Kalisari (as far I observed), physical stores were not too mushrooming like now. At that time there were only three toy stores in that area (including my shop). The other two stores already existed before my toy store opened. In other sub-districts which are still close to Kalisari (that is Ciracas market), there were only two toy stores.

What does it mean?

So, the price competition at that time was not too tight.

So that toy store businesspeople can take quite a large margin. For example, for toys that are 'not marketable' (the price is 'blind'), on average per item, we get the margin reaches 100%.

At the lowest for toys that are widely known for their market prices (such as hot wheels, die-cast, etc.), we toy store traders can still take an average margin of 50% (at that time).

What do you think? The margin a large right? Yes, that is true!☺☺☺

BUT it's in the past! ☺

I began to feel everything changed dramatically since the beginning of 2012. At first, I was shocked - my buyers and customers who before had never protested about prices, why now began to question? 

Questions like:

- "Mr. Rizal, how come the price is high? The price in the online store is only blah ... blah ... blah ...,,,,,,,,"

- "Sir, can the price be reduced again? Because in Bukalapak can be cheaper." (Bukalapak is one of the largest e-commerce in Indonesia).

- "How come the price in Bukalapak is lower, bro? (If this buyer talks about it more subtly, i.e., by the way asking questions. But still sounds uncomfortable by me hehe ☺).

The above are some examples of comments from my shop customers at that time. Almost all of his comments are similar and in tune. I have begun to feel the symptoms of my customers going one by one. And my store started to be quiet from the buyers.

Turnover even decreased to 50% when compared from previous times.

But at first, I was still trying to survive and don't worry too much. I feel I don't have to reduce or adjust the selling price of products in my store.

But what surprised me was, in mid-2012, when I idly checked the price to one of the fiercest competitors in my area.

Apparently,,,, the competitor's shop has reduced the selling price of the products! Yeah! The competitor's shop has started to adjust price!

From there, I began to wake up and want to adapt. I began to could face any changes in business dynamics. I also started to replace all the price tag in my shop. Yes! All of old price tags strikethrough (crossed) using a pen, and replaced with a new cheaper price tag! (see photo below).

The model: My Wife. ☺

This price reduction process has its own unique story. I told the story, in this article: MY COMPETITORS IS MY INSPIRATION!

Thus above the main changes and 'shocks' that occur in physical stores due to the phenomenon of online store invasion.

#2. Finally, I decided to start opening an online store, with the brand 'Bangizaltoys.' 

Okay, now we focus on adaptation to open an online store.

Are there choices for us besides adapting?

Nothing!

The choice is only 2:

Can adapt or 'sink' swallowed by changing times.

Why can it 'sink' ...?

Do you know what percentage of the average margin taken by an online store in the e-commerce market?

On average at this time all are competing to take the lowest margin!

What is the percentage?? Yeah! Just taking a net margin of around 10% off!

Whereas (as far as I know), offline stores / physical stores only dare to take the lowest margin in the range of 30% - 25%.

Offline stores will never be able to grab margins for only 10% because offline stores will loss if they set such a small margin.

An offline store needs fees to pay for store rental, employee salaries, and many other operational costs.

While the business capital online store? Just the cost of the internet, pay for electricity and buys a laptop. Cheap and simple.

Online store reach is almost unlimited, while offline store reach? Never mind ☺

The offline store is defeated !! Onlineshop has invaded! Creepy! (Intermezzo ☺)

But with all those facts, is the owner of the offline shop must lose his mind ...? !! Immediately give up?

Owww ... oww,, oww shouldn't be like that ...☺
We must be outsmarted... there must be a smart solution.

Other exciting Articles: WHAT ARE THE TYPES OF ONLINE BUSINESSES? AND HOW TO GET INCOME?

What is the solution? 

The solution is: follow the flow! That is by way of ==> Also open an online store! As a simple that!☺☺☺

Well, why you should be confused?

Try to think about some things:

- As an offline shop owner, of course, you have a complete product inventory in your store. Well, why don't you sell your product to an online store?

What about the market price problems in online stores that have fallen?

Yeah, it's not trouble! No problemo!

Just simple. You have to follow 'the plot' (read: system) in the online store. Try to adapt. Try you measure your capital capabilities and competitiveness.

Maybe you will ask me: "What do you mean, Mr. Izal?

So, here it is,,,,

If you have a strong business capital capability, you can play a Quantity strategy. This means playing in a fast cashflow rotation. You take a thin margin, only about 5%. The important thing is that goods can sell quickly.

So what if you have minimal capital? So that it's not possible to play in the manner as above?

Well, if you have not been able to play in hight quantity sell (low price),,,.It is okay ..., you only have to play with standard trading methods. This means that the price of the product you are selling is not too low. But don't get too expensive. Set a reasonable selling price (not too much different in price from other online stores).

Not everyone who shops at the online store is 'cautious' with the price. A lot also happens, even though the price of the product is a little higher ( e.g., different $1) from other online stores, but if your service is friendly, packing is neat, fast and precise - usually, the buyer comes again to you.

The point is if other online stores rely on low selling prices, you can count on maximum service!

There are types of buyers who if they are satisfied with your service, a slight price difference is usually not a problem for them.

The proof is the price of products in my online store including standard rates. Not too cheap, also not too expensive, yet still, sell well. And there are loyal customers in my shop.

Remember, each people has a provision of his fortune.

So the key; we have to be able to follow the flow and adapt!

Because of that consideration, finally, in early 2013 I decided to start opening an online store. The first online store, I named it;  'The Cheap Toy Store.'

I started to photograph product use blackberry Gemini camera; then I shared them in a personal Facebook account post.

At first, my buyer was my junior and high school alumni friends.

After finishing packing the goods, that product I photographed. Then I share that packing product to Facebook post. With the intention for 'telling' my friend that the product order is ready, and will send directly.

Well, because posting on the Facebook homepage, of course, all the schoolmate on my timeline also can see it. Because of the frequency, I display packings of ordered items, eventually over time other Facebook friends (who are not alumni of the school)  participate in ordering toys to me.

After ten months of running, then I created a Facebook page with the name: A Very Cheap Toy Store. On this facebook page, I started pioneering my career as an online businessman.

Then, after I thought about it, the name of 'A Very Cheap Toy Store' uncomfortable to hear. Finally, the name of the official fan page changed to 'BangIzalToys' at the beginning of the year 2014

Then in mid-2015 I also opened an online store in two of the biggest e-commerce in Indonesia, namely Bukalapak and Tokopedia. At the two online stores, I have successfully sold hundreds of toy products until now.

Other exciting Articles: THE OF 10 PERCENT MARGIN, A POWERFUL STRATEGY TO SEIZE ONLINE BUSINESS MARKET SHARE

3. The advantage of having an online store is that we become quite expert in internet tech savvy.

Especially for physical shopkeepers, maybe it is difficult for you can to master both fields at once by truly (including me). The person formerly from an offline store is relatively difficult to will be an expert (truly an expert) in the field of online stores.

Likewise, vice versa, for people who are initially (basic) from an online store, it's usually also difficult to become an expert in the offline store. Typically, only be able to focus on just one field. Very rarely the people can master both at once except for giant companies that already have strong business foundations and networks everywhere.

I, at certain moments like Eid, my online store usually closes until a month.

But, at least by pioneering an online store, I'm ready and not surprised by the more and more changing shopping trends. Which undoubtedly certainly will be more sophisticated using internet technology in the next 5 or 10 years.

The point is that if I have pioneered from now on, I have not stuttered technology again in the future.

In conclusion: The offline store will never die, as long as you (offline shop owners) are good at adapting to the times and technological advancements.

Hopefully, it can be useful. See you again in the next article.


Regards.