History of Ecommerce and Small Business Retailers

One of the greatest things that the internet has done is level the playing field for the little guy. This is especially true in the retail industry.

History of Retail

There was once a time where a small business owner could take out a loan, borrow from friends and family, and dip into their savings to start a little retail brick and mortar store on Main Street. Even then, it took some capital to lease a location, buy inventory, do marketing and advertising and hire employees.

Then the big box retailers like Walmart and Sears came to town and obliterated the small mom and pop shops all around the country.

Well now, the little guy is striking back, but now online. The irony is, this came about because Amazon is starting to obliterate the big box retail stores like they did to the small mom and pops.

Amazon and The Little Guy

Amazon started by selling books directly to the consumer. That caused the demise of Borders Books and thousands of other book retailers in this country.

Then they did something that changed everything for small retailers. They decided to open up their platform to third-party merchants.

Now there are millions of small sellers making thousands of dollars, and some millions of dollars a month, selling on Amazon. Not only that, there’s never been a lower barrier to entry to someone to get into the retailing business. It’s come full circle.

Day in the Life of a Small Retailer

What does the day to day of a small retailer look like? It depends on how big their operation is, how they’ve set it up and what they’re selling. But let’s look at what a typical life of an ecommerce merchant looks like.

Most likely, they’ll source their products overseas, probably from China, Vietnam or another Asian country. They’ll have cases of those products shipped to a warehouse that they own and operate, or they’ll have it shipped to a fulfillment service like Fulfillment by Amazon (FBA). We’ll get more into FBA later.

They’ll probably start their day by opening up an ecommerce platform like Magento Enterprise. It may also be a Magento Enterprise alternative like Shopify or Big Commerce.

These ecommerce platforms allow the seller to list their products, not just on Amazon, but also on other channels like eBay, NewEgg, Etsy among others. They simply have to enter the product data in once, including descriptions, pricing and other information. Then these platforms will convert it into the format that the marketplaces need it in and upload it.

It also allows them to manage orders, marketing, reporting, analytics and much more from just one hub. The platforms are pretty powerful and almost a need to have in today’s ecommerce world.

Do these ecommerce platforms cost money? Of course they do! But the good news is, they aren’t even close to how much it would cost to setup a brick and mortar store.

In fact, most of these platforms have an entry-level package created for small ecommerce retailers. Then as they grow, they are able to buy more premium packages with more advanced features to help them scale their business.

Once orders start coming in, the system will automatically execute the fulfillment functions. This will vary depending on how the fulfillment of the orders are done.

Many ecommerce merchants buy or lease a warehouse. They’ll set up an operation including warehouse software, an inventory management system, hire employees and so on.

For these merchants, once the order comes in, their employees will pick the product, package it and ship it off.

Another option that many ecommerce merchants take advantage of is using a fulfillment service. The most popular one is called Fulfillment by Amazon or FBA.

As the name indicates, this is a service offered by Amazon. But don’t be fooled. They will fulfill your orders irrespective of where the customer ordered that product.

For example, if a customer orders a product on eBay, and the merchant is using FBA, the order will go to FBA and Amazon’s employee will pick and pack that product from one of their distribution centers and ship it to the customer for you.

Ecommerce Growth

All indicators are pointing to the fact that ecommerce is growing and that it will continue to offer opportunities for small retailers and new entrepreneurs to enter the space for some time to come.

The retail industry has come full circle, from small mom and pop shops, to big box retails, to the rise of Amazon and ecommerce, to now the small retailers who are entering this space in droves and thriving in this current economic environment.

There has never been a better time to become a retailer. It is no longer for the rich, power or even those with access to lots of capital.

Adam Torkildson