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Published On: Mon, May 21st, 2018

How Millennials Entrepreneurs Are Disrupting The ECommerce Industry

Amazon has been the undisputed leader in online commerce for well over a decade now. According to a report published by One Click Retail, the company was responsible for about 44% of all eCommerce sales in the United States last year. The rest of the market has traditionally been split among retail behemoths (like Walmart and Target) as well as small and medium sized retail owners.

In recent times however, independent entrepreneurs have been slowly nibbling market share away from traditional retailers.

In a recent Forbes report, contributor Kate Talbot points out that nearly 40% of new entrepreneurs in the United States are women and being digitally savvy, these entrepreneurs have been steadily turning the eCommerce tables in their favor.

A key contributor to this disruption has been social media. Platforms like Instagram and Facebook have been instrumental in democratizing the eCommerce ecosystem. Unlike traditional marketing channels, social media networks tend to grow virally and this rewards interesting content creators regardless of their marketing budget. Savvy millennial entrepreneurs have been able to take advantage of such platforms to grow their business.

But eCommerce is much more than just marketing. Nearly 80 percent of all eCommerce businesses fail.

There are many reasons for this, but they can all be consolidated into a few key points: eCommerce relies on consumer trust. Unless sellers can establish credibility, eCommerce can be a tough nut to crack.

Also, most eCommerce businesses run on low margins. Financial mismanagement (including a lack of planning with respect to handling cash flow) is extremely common and is often the reason why eCommerce businesses shut shop.

photo/Gerd Altmann

Millennial entrepreneurs have been helped by the presence of third party tools that have helped them establish worthy alternatives to eCommerce behemoths. Tools like Shopify and Etsy have helped these eCommerce entrepreneurs set their own shop that are integrated with their own secure payment gateways and supply chain management systems.

In addition to this, they have been helped by other third party tools that have made product creation and procurement easy. Services like AliExpress make it easy to find a manufacturer who can manufacture a prototype of your product for cheap. Entrepreneurs may also minimize shipping and holding costs through wholesale dropshippers who receive orders from the seller and ship it directly to the buyers. Such tools have made it possible for entrepreneurs to launch eCommerce businesses with very low capital.

Despite all the gains that eCommerce has seen over the past two decades, the industry is still nascent. Globally, eCommerce makes up less than 12 percent of all retail sales. The good thing however is that the market has been steadily growing. In just the next three years, the share of eCommerce is expected to rise by five percentage points to over 17.5%.

This presents a terrific opportunity for millennial entrepreneurs to stake a claim in the growing pie over the next decade. With the infrastructure in place, and the tools that exist today, chances are that this long-tail list of hustling entrepreneurs may define the next wave of online commerce growth.

ECommerce is a challenging business to be in. But it is also highly validated and an attractive opportunity for new entrants. It will be interesting to see how the industry landscape evolves as the market grows over the next decade.

Author: Colin Steinway

 

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