In the Netherlands there are more and more small companies emerging, while the number of big companies is decreasing. (CBS, 2015) When we look at these numbers, we can see that there is a huge increase in the number of businesses in the sector business services, health and welfare, and education. In this blog I am going to focus on the increase in the business services sector, because the other increases are mainly caused by changes in policy in the Netherlands.
According to the CBS, which is the Central Bureau for Statistics in the Netherlands, the increase in webshops is caused by the fact that there are low entry and exit fees. These low fees have caused the number of webshops to rise with 17 thousand from 2010 to 2014 to a total of 30 thousand webshops in 2014.
These low entry and exit fees are mainly caused by all sorts of new technologies in the information sector. You can think of providers who accommodate making a webpage without using any code, you simply drag some textboxes and pictures. Furthermore you can think of providers like Dropbox, Google Drive, which provide you with online storage which is relatively safe. Also there are a lot of companies that provide administration services that are partially automated, you can think of Exact Online, Twinfield, e-boekhouden et cetera. All these services have one thing in common, namely scalability, and I think this is one of the main drivers behind today’s enormous increase in online shops.
These companies provide their services for almost no money or even for free. When your company grows, you are going to need more functions or you require more of the products that are offered by the same company. Since you are familiar with their services, it is not likely that you will switch to another provider, since the switching costs are high. These new kinds of business models are becoming more and more popular and are facilitating small companies to start with almost no resources.
This was my blog about scalability and I hope you enjoyed reading the blog.
Bibliography:
https://www.cbs.nl/nl-nl/nieuws/2015/16/steeds-meer-ondernemers-in-nederland \
Hi Thijs, nice article! I partly agree on your article,it is indeed easy to get a webshop online. There is a wide offer of webshop software providers and in many cases you do not have to touch a line of code. From that point of view the entry barriers are very low. But in order to grow I think you need more than a good looking webshop and automatic accounting system.
Nowadays you have to meet more requirements to succeed. For example fast delivery times and a fair returning policy which costs a lot of money (it is also very costly if you do not have a <a href="http://www.emerce.nl/nieuws/zware-boete-acm-bewust-misleidende-webwinkels-tom" returning policy). Therefore, I think that the growth rate of new webshops will slow down. Because people will realize that they need more than a nice looking webshop in order to succeed.
Hi Thijs, thanks for you post, good read! It is true that the entry barriers of starting a webshop have become much lower through services like Dropbox. Another factor that could’ve been mentioned, is the ease of information these days. Services like Alibaba.com makes it very easy to connect suppliers with retailers. There are literally no costs involved other than internet expenses to make contact and arrange a deal with a supplier from another country and relationships are easily maintained through services like Skype. All in all, thanks for your submission.
Hi Thijs, thanks for the interesting post about this trending topic! I definitely agree with you that online shopping is almost a must-have for companies in order to satisfy your customers. You mainly focussed in your blog on the entry and exit fees, which are important causes for the increasing number of webshops worldwide.
However, I would like to take the customer perspective in consideration regarding your blog. Ten years ago, even when online shopping was available, people felt uncomfortable using their credit cards and giving their personal information to cyber-shops. That has all changed now. Consumers may still be concerned about the security of online shopping, but more and more of them are prepared to buy on the web.
A major benefit of webshops is that online stores are usually available 24 hours a day, which enables the customer to shop not only during daytime. Also offering one-day delivery service, easier return policies and free shipping are important causes for the desirability of online buying. Furthermore, customers are given the option of shopping products for the lowest price possible due to search engines like Beslist.nl. Webshops should respond to this by keeping in mind the trading down concept, in which consumers exhibit stronger preferences for choosing the products that provide the best price.
For webshop companies it’s a challenge to collect relevant customer information and customizing their products and services based on that information. Thanks for sharing!
Interesting article Thijs. The barriers for creating a webshop have indeed decreased a lot. Although I think we’re just dealing with a short trend, or even a fad in this situation. I think there’s much more behind running a webshop than just building the webshop itself. To get yourself into the market would nowadays already cost you a fortune. And when you really want to compete with other webshops and make some nice revenues, you’ll soon need to establish a good business model and obtain a storage location (for physical goods of course). I think the reason for success is about the product you offer in the webshop. It should be unique and help you gain a competitive advantage. Building a webshop is necessary, but is just a small part of a large process. And although these ‘self-build’ webshops are scalable, I think you will still need optimize it and rebuild it to your needs and wants after your products have proven to be a success. But that’s just my view on this, thanks for sharing your interesting post!