Online Business: Having a Website or Selling Through Social Media?


Some business owners choose to use only social media like Twitter, Instagram or Facebook to leverage their sales, while some simply use instant messenger platforms like BBM (Blackberry Messenger) and Line, and many other choose to build websites.

Which platform is more effective?

Each of these platform have its own characteristics– along with its own advantages and disadvantages. Here are a few parameters to help you navigate the options:

1. Scalability

Scalability is about the maximum capacity of certain tools and technology to handle sales.

When you choose to use an Instant Messenger platform like BBM to start up your ecommerce business, then you chose speed over volume. It is because with BBM, your maximum number of contacts is 1,000.

When you choose to use Twitter and Facebook to reach your audience, the number of contacts is no longer an issue. However, tracking orders and updating inventory becomes very inconvenient when you reach double digit orders per day.

When you have a website, you can scale according to the number of orders you have by upgrading the system and server based on your needs. However, websites have its own disadvantages –it takes longer to implement, and it will cost more than selling via BBM, Twitter or Facebook.

2. Speed

Setting up an online store using Instant Messenger and social media will give you speed mainly because the tools, i.e. for uploading pictures of products, have already been set up.

What you need to think about is how to generate sales, create good pictures, and select goods that are “hot" or demanded by the market.

In building your own website, all those small features and tools have to be built or set up from scratch – just like building a new store. Although it is timely and more costly, once it is all set up, you can quickly grow and automate.

You can also use some online marketplaces like Tokopedia and Bukalapak.com to tackle speed and cost issues, but it will be at the expense of your brand equity. If you really want to build a brand, then having a website is a must.

3. List-Building

List building is about how many contacts or prospects you have and how relevant it is for your product.

When you use BBM as a platform, you immediately have your friends and family as your first list. Naturally, selling to The inner circle is a lot easier than cold calling or driving traffic through SEO (Search Engine Optimization) in a website, because we have some basic knowledge what our friends want and do not want to have, making our marketing campaigns more effective.

Meanwhile, if you are going to use social media tools like Twitter, Instagram and Facebook, you are going to build that list from scratch.

List building becomes even more challenging if you build your own website, as you will have to do SEO, invest in SEM (Search Engine Marketing), ensure good content that is updated regularly, have a good web design, among other things.

4. Inventory management

The main disadvantage of using social media and instant messenger tools for your online selling activities is inventory management. Once you upload a picture of a product to the platform, customers naturally assume that it is available on stock. To avoid disappointing potential buyers, you will have to update availability of each and every product manually.

Imagine trying to do this when you have 100 products in a timeline view and with products randomly out of stock, while orders are high!

By having a website, you can automate all those process, so you can be more focused on increasing sales or restocking, without additional work load in administration.

5. Promotion and marketing costs

Online promotion using instant messenger and social media almost cost you nothing – other than the internet connection, time spent, and social media staff that you employ. What you really need is a good customer experience with your service and a few tricks to increase WOM (Word of Mouth) marketing with your already satisfied customers.

With a website, you will inevitably have to employ a large budget for marketing efforts, because you need to constantly drive traffic to your website. It will be harder when your products' keywords compete head to head with big players like Lazada and Zalora, who have enormous marketing budgets at their disposal.

When you are just starting out and do not have large a marketing budget, the best option may be to use a combination of social media and instant messenger platforms. Then once you have some brand recognition, gradually migrate your customer list to a website and establish your own brand.

It will be difficult to build a website if you have limited budget, unless you have the capacity to build it yourself.

The table below summarizes the advantages and disadvantages of each channel. “Low” means it is a disadvantage, “high” means it is an advantage.

Instant Messenger Social Media Website
Scalability Low

Medium

High

Speed High

High

Low

List Building Medium

Medium

Low

Inventory Management Low

Low

High

Marketing & Promotion High

High

Low

    

 

Read also: Cost of Setting up an Online Business

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