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By KATE ISLER, CEO and CoFounder, WMarketplace | Author, Breaking Borders | Speaker | Global Sales and Marketing Leader | C200 Member
Starting a new year with a clean slate and lots of excitement about the opportunity ahead is appealing — but we shouldn't ignore the business conditions as 2024 begins. The conclusion of 2023 unveiled several troubling realities for women business owners. Speaking from my own experiences as a co-founder of an ecommerce enterprise dedicated to women-owned businesses, the closure of numerous businesses we'd collaborated with for years weighed heavily on us. While every year witnesses a certain level of natural attrition in business, the economic climate of 2023 felt like a poignant setback for many women-owned, small businesses.
Ecommerce is a challenge and an opportunity for women entrepreneurs
This seems significant for multiple reasons, most notably the impact of small businesses on the nation's economy. Small businesses are the backbone of America's economic vitality; women own nearly half of the country's businesses, reliably leading the charge in initiating new ventures. For years, data has substantiated the positive effects of women-owned businesses on their families' education, overall health and their communities. A flourishing community includes thriving, women-owned small businesses, fostering a ripple effect of prosperity.
This became even more clear during the pandemic. Women displayed remarkable resilience by initiating businesses out of necessity, coupled with a need for flexibility. Many converted their interests or hobbies into income sources, seizing the opportunities created by the surge in online shopping during the pandemic. But what seemed like a straightforward shift to online sales brought unexpected complexities and expenses.
Establishing a direct-to-consumer website appeared promising for building a brand and showcasing your products. But there can be dozens of costs associated with creating and managing a flourishing online ecommerce site. It is a given that having your own website is a great way to build your brand and show off your products the way you want them to be seen. Your dedicated website lets you tell your story and provide all your product details, controlling every piece of your brand promise. Several companies will charge a low monthly fee to host your ecommerce website.
These sites provide templates that make it very easy to create and design a beautiful ecommerce shop where you can sell your products within days. And then there are all the apps, standing ready to optimize every pixel and process in your store. Some apps give you access to a payment gateway to process credit card payments; apps that optimize your product listing for search engines; apps that render your product images quickly to speed up your site; apps to optimize the customer checkout; apps that improve search capabilities within your site; some apps automatically capture customer email and send notices and reminders; apps that allow customers to buy subscriptions and have products automatically shipped; and the list goes on. The problem is that all these apps come with additional costs, varying support levels, and technical compatibility.
Along with creating a direct-to-consumer site, joining a major online retail channel comes with its own set of complexities, including high commission rates and lots and lots of fees for everything from listing products to managing inventory — significant costs that preceded any actual sales.
Regardless of the online channel chosen, many of these small businesses incurred significant expenses in building consumer awareness and marketing, often with vague returns on investment. The complexity of online selling took a toll, especially on women who ventured into businesses during the pandemic.
Although there are significant hurdles to growing a successful online business, a recent study by the Visa Economic Empowerment Institute shed light on the digital strategies that successful women-owned businesses have in common, including:
They are more likely to use digital payments.
They are more likely to sell on global marketplaces that enable them to scale their sales and diversify their markets.
They are more likely to export beyond their home country.
In 2024 ecommerce will continue to lead as the fastest-growing sales channel in the world. It is necessary for all businesses, especially women-owned, to embrace technology and selling opportunities like marketplaces to extend their reach and become sustainable. In online sales, venturing solo can be far more challenging than originally perceived.
While the allure of placing one's brand and products online with a dedicated website where there are millions of potential customers is compelling, data shows that there is safety to be found in collective strength. Over time, the ability to collaborate with other businesses and pool marketing efforts, streamlining a message to attract customers, will yield better results. Choosing the right online channel that aligns with given resources, brand, and time investment can be pivotal in the success of a small business.
The path to online success lies in seizing opportunities and strategically navigating them with research and perseverance. As we saw in 2023, the long-term cost of building an ecommerce business, in terms of time and money, had a devastating impact on many fantastic small businesses. The promise of quickly executing an online sales strategy with low cost simply doesn't pan out in practice. But proven strategies work, including small businesses coming together to pool resources and collaborate in online marketplaces rather than competing as stand-alone sites.
As shown in the Visa Economic Empowerment Institute results, carefully researching marketplace options that align with a company's brand and resources is worth researching. As we move into this new year, I am confident that women entrepreneurs will be doing this research, gaining market insights, and sustainably growing their businesses, positively impacting their local economies and moving us towards the larger goal of closing the economic gender gap.
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