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Are Traditional Business Models Going the Way of the Dinosaur

Companies / SME Apr 08, 2019 - 06:59 PM GMT

By: Submissions

Companies

The term "business as usual" has always represented a slight misnomer, as the concept itself is dictated by economic, social and political conditions. So, success within this community will often depend upon one's ability to see what might be waiting around the corner. While all eyes are focused upon the Brexit and its potential long-term ramifications, not all freelancers and entrepreneurs have taken a dim view on the eventual outcome. Why is this the case? Should they not be more concerned about the fiscal ramifications of such an unprecedented move? One of the main reasons why astute professionals will likely be able to weather the storm involves the growing presence of the online business community. What changes might this phenomenon have in store? Are traditional models no longer viable? How can freelancers take full advantage of the opportunities at their disposal? 





The Inexorable Rise of the Online Entrepreneur

Anyone who has chosen to follow the progress of the Internet over the past two decades is already aware that the notion of online retail sales is nothing new. It can be argued that the two most well-known examples of this area of expertise are eBay and Amazon. However, this very same realm was dominated by larger corporations in the past. This left little room for small- to medium-sized businesses to carve out a niche. Two factors heavily influenced this situation. First and foremost, the majority of business owners were not familiar with the mechanics associated with e-commerce solutions. Secondly, there were very few e-commerce providers which were willing to cater to the freelance community. 

Competition is now rife and many entrepreneurs are beginning to appreciate the potential for digital success. This has led to a meteoric rise in the number of online startup organisations during the past few years. Of course, such a paradigm shift is not without its fair share of challenges. Increased levels of competition dictate that prices need to be amenable to the end user. Marketing and sales campaigns must likewise attract a niche sector as opposed to a general audience. Above all, freelancers must be willing to devote their time and talent towards a project if they hope to establish a sustainable source of income. In other words, there are no shortcuts within the world of online retail sales. 

Modern Utilities for Modern Times

The second main reason why traditional business models are being forced to adapt involves the presence of powerful digital tools which can now be leveraged by those with only a moderate level of technical experience. E-commerce solutions have been re-engineered in order to suit the needs of the end user as opposed to the multinational corporation. This is why we are witnessing a growing number of websites which appear highly professional even though they may have just become live. This is also the reason behind the trend towards mobile-responsive designs. The price of such utilities continues to drop; leading to a massive influx of freelancers and similar dreamers into the online marketplace. 

Logistics have also dramatically changed. Traditional business models would normally be forced to outsource certain solutions to rather expensive third-party providers. These could have included:
  • Product procurement
  • Stock and inventory
  • Shipping and returns

The main problem with this scenario is that such expenses could quickly erode a decidedly limited budget. Brick-and-mortar businesses were therefore understandably wary about taking such steps and their growth inevitably suffered as a result. Once again, we are seeing the overall landscape change dramatically. 

Companies such as Oberlo now provide proprietary drop shipping services to customers throughout the United Kingdom and other regions of the world. What is perhaps most interesting to note is that these platforms are completely free to download. They can be integrated with in-house software systems and the ongoing operations of a business will not be adversely affected. So, it only makes sense that entrepreneurs are taking advantage of such options in order to enjoy both short- and long-term profits. 

Do all of these digital advancements signal that traditional business models are no longer valid? This is hardly the case. Basic concepts such as supply and demand, return on investment and profit/loss ratios are still perfectly valid. The main difference is that these principles will now need to be incorporated into digital business models. There may also be instances when they could be slightly adapted in order to address the discrete needs of the business in question. 

While economic purists might be slightly alarmed at how fast the business community is evolving, this momentum should come as no great surprise. The only remaining question involves which individuals will possess the acumen and the foresight to take advantage of such a trend within the real-world environment. The digital future looks bright indeed.

By Larisa Wong

© 2019 Copyright Larisa Wong - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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