Author Archives: Felipe Botero

What are the benefits and disadvantages of the dropshipping business model.

Since the inception of e-commerce as a new way for entrepreneurs and customers to participate in online marketplaces, drop shipping became one of the most popular methods used by consumers to make their purchases.

Drop shipping is defined as a retail fulfillment method in which a merchant sells products without having a physical store or keeping a large inventory but still getting a wholesale price from a supplier. Moreover, when the merchant sells a product, it purchases the item from a third party and ship it directly to the customer.

Although this online business model has been expanding exponentially in the last few years, there are some benefits and disadvantages entrepreneurs need to consider before starting a drop shipping business.

Benefits:

Low financial risks: Usually the drop shipping business model offers an inexpensive manner to procure inventory which is not possible otherwise. This makes it less risky than investing large amounts of money on acquiring inventory.
Fast Profitability: If the drop shipping business model is executed following an insightful online marketing strategy, it will convert well, yielding at the same time immediate profits.
Location flexibility: A drop shipping business can be operated from any location that has internet connection. Moreover, it can be run from anywhere as long as merchants can communicate with suppliers and customers.
Wider Product Selection: In the drop shipping model, merchants do not need to pre-purchase items for sell. As a result, they can offer a wide variety of products, increasing the availability of items when suppliers stock a new item at no additional cost.
Time and money saving: As merchants do not need to manage a warehouse, plan the shipping of products or manage stock levels, they can increase their profit margins and save management time.

Disadvantages:

Low Entry Barriers: As merchants don’t need large amounts of capital to start the business, more people want to enter to the drop shipping business which increases competition.
Low Margins: In the drop shipping business, most market niches are highly competitive. As a result, merchants try to drop prices in order to draw customers decreasing at the same time their revenue.
Inventory Issues: As merchants source their products from different warehouses, inventories might change daily, making it hard to synchronize merchants store inventory with the supplier inventory.
Supplier mistakes: Due to the large quantity of business suppliers handle, very often they make mistakes when sourcing to merchants such as missing items, wrong shipments and low-quality packing.

The drop shipping business model comes with several built-in complexities. However, a well-thought digital marketing strategy and a comprehensive business plan, can help merchants to develop a thriving, profitable drop shipping business.

drop shipping business model

How to design a usable navigation system for a website?

The navigation system of a website is like the road map that directs users to all the different areas and information contained in it. When the navigation system is clear and well-structured it helps to create trust and credibility, allowing visitors to easily find the information and content they are looking for. However, when that navigation system is confusing and hard to follow it will result in frustrated visitors.

When users navigate in a website, they usually have three main questions to ask:

‘Where am I?’,
‘Where have I been?’ and
‘Where else can I go in this site?’

As a result, and to create easy and enjoyable navigation systems, designers need to follow these suggestions:

What are the attributes of a usable navigation system?

Have persistent navigation– a set of navigation icons displayed on each page. Persistent navigation should include these five elements:

The Site ID (logo) – must be placed on the top left
A search box placed on the top right
A home button or tab
Utilities(shopping cart, site map, help page etc.)
Sections

There is an exception with the homepage (often it doesn’t need the persistent navigation because it is not like other pages). Also, some forms pages like the checkout page in an e-commerce website don’t need persistent navigation.

Display a “You are here” indicator. Designers need to highlight, where the user’s current location is in navigation bars, menus or lists in the page.
Each page must have a page name. The tab that identifies the page name needs to display the content that is unique to this specific page. Also, it needs to be outstanding (it should say, “this is the heading for the entire page”). Moreover, the name needs to match what the user clicked.
Display Breadcrumbs. They are like a secondary navigation scheme that helps users to determine where they are; and an alternative way to navigate around a website They need to place them at the top of the site, organized in a hierarchical manner.
Use tabs. Tabs allow users to easily access different areas of a site or different parts of an individual page. They help to group content, connect related information, and as a tool to save space in a website.

Finally, the importance of a well structured usable navigation system is critical when it comes to differentiate a brand as it plays an essential role in encouraging visitors to stay, view the web content or buy a product.

How do we browse in websites.

Big data 4 v’s applied to digital marketing strategies.

Big data analysis is a valuable business tool that helps companies and managers to improve their operational capacities through a faster and more intelligent decision making process.

However, the main question for marketers is how big data can be used to gain unique advantages over competitors in the world of digital marketing?

Whether it is structured or unstructured, the analysis of large data sets of information can be appalling, slowing simultaneously companies’ decision-making processes. But, when big data is evaluated under the sphere of The Four V’s (volume, variety velocity and veracity), it can help marketers to make smarter decisions.

Four V’s of big data applied to decision-making processes in digital marketing:

Volume: massive amounts of data are created every moment between brands and their followers in social media. When such information is gathered, curated, visualized and shared, it helps to understand important facts about the brand reputation, social media influencers and trending keywords.
Variety: structured and unstructured data comes from multiple sources and is created by machines as well as consumers. For example, structured data represents existing information in databases and unstructured data can be information obtained from hashtags analysis in social media.
Velocity: companies must track web analytics variables such as visits, hits, views and relational marketing information like sales calls and social media interactions in order keep up with the speed of information creation.
Veracity: big data is obtained from diverse sources and multiple devices. cleaning, normalizing and collating those large volumes of data, helps to make truthful and comprehensive decisions.

The way marketers face different challenges associated with how to manage the vast amount of information generated every second in digital media, will determine if big data is useful in improving the decision-making processes.

Structuring a comprehensive analysis of big data sets under the sphere of The Four V’s, will help to create actionable, useful insights that can support marketers’ efforts and business strategies.

https://youtu.be/xJfP_o_fANA

How is consumer behavior in ecommerce websites determined?

The business to consumer (B2C) e-commerce model is described as the most used business approach by companies and entrepreneurs when undertaking different digital marketing strategies. Therefore, some economists have tried to demonstrate the positive effects this business model have on consumers’ purchase decisions, arguing that consumers can process in a rational manner, large volumes of commercial information in order to choose the most logical option.

On the other hand, some consumer behavior experts dispute such theory explaining that in e-commerce platforms developed under web 2.0 interfaces, buying experience is determined by tactics of behavioral stimuli which trigger emotional reactions.

For instance, several e-commerce websites employ psychological motivators that exploit users’ feelings of fear or perceived risk with the idea of creating multiple interpretations of the situational reality at the moment of buying something online. Thus, these psychological motivators give a single subjective connotation to every purchase experience and therefore influence websites’ conversion rates.

Rationality or psychological stimuli when buying online?

A particular case, in which the paradigm of “rational purchase decision” might be challenged, happens in airlines websites. In these e-commerce platforms, the time factor (urgency) determines tickets’ price fluctuation, which most likely will be increased if the user performs a second search in the same website using the same device.

The aforementioned marketing strategy is based on a psychological stimulator called: “time-limited scarcity” and is supported by the installation of cookies in the users’ device by the airline website.

The implementation of different business to consumer (B2C) e-commerce models by some companies, have allowed users to access large volumes of relevant commercial information before buying a product in a website. However, users’ behavior follows a dynamic of psychological stimuli rather than the rational choice, “analysis – comparison” on the available information.

Psychology and conversion in e-commerce

Why is the concept of culture important when creating usable e-commerce websites?

The correlation between web usability and ecommerce is of greater significance as more companies from the developed world, seek to expand their operations into emerging markets.

According to internet usage data published by Nielsen//NetRatings, during the year 2015, 37.4% of the world’s e-commerce activity took place in the Asian market, followed by North America with a 31.7.9%, Europe with a 25.9% and Latin America with 6.3 %. Nevertheless, in the year 1996 most of the ecommerce activity took place in North America with 83% of the world total.

It is clear then, that the largest growth in e-commerce transactions occurred in emerging economies that are also more diverse in terms of cultural identity.

Similarly, with the overall growth of ecommerce business transactions in emerging markets, many companies are adapting their web sites to “local” versions. Such adaptation means a specific web design for each market niche that takes into account language and cultural context, preserving at the same the brand integrity.

For example, some studies explain that culturally adapted web sites crafted for each specific market reduce users’ cognitive efforts to process web information, making navigation easier and improving consumers’ attitudes toward the goods and services offered in such ecommerce site.

Why most companies are not adapting their ecommerce websites to each specific market?

The high costs of testing cultural-tailored websites, the obstacles to find key ethnographic elements that effectively contribute to the site’s visual layout and the propensity to cultural ambiguity are some of the reasons why most companies are reluctant to implement culturally adapted ecommerce websites. For instance, in nations such as China and India, the large number of languages and the different connotations images have in each region, may induce designers and web developers to make mistakes in the interpretation of cultural elements.

Even though the above mentioned issues can deter some companies to adapt their websites design to the cultural identity of each specific market, when companies undertake a comprehensive cultural analysis strategy, their ecommerce websites will become more profitable increasing at the same time, users’ satisfaction levels.

The local web

Why our societies are technologically deterministic?

Technological determinism is a reductionist theory that explains how society’s structure and cultural values are driven by technology. This concept, has gained relevance in the last two decades since most of the basic human social skills such as meeting new people or fostering existing bonds of friendship, have become activities highly mediated by technology.

According to some technology analysts and the companies that develop social network platforms, these technologies are effective tools that help to resolve the subjective necessity of promoting friendship or to seek new relationships. Their main argument states that people’s lack of time, society’s cultural changes, people’s new life styles and the growth of the migratory flows, have triggered the use of these social networks.

However, other authors claim that factors such as the lack of a real communicative interaction beyond virtual platforms, the low levels of trust created in online relationships and the e-commerce interface of the “matchmaking apps” for example, have created a technology with multiple flaws that can hardly address such social needs.

We are consumed by a technological deterministic rhetoric.

Considering the above mentioned arguments, some relevant questions might help us to put the concept of technological determinism into context:

Should we assume a neutral point of view on the social, economic and cultural changes, social networking technologies are creating in our societies?

Should we be more critical about the implications social networking technologies might have in our daily lives and in the way we construct our relationships with other people using such technologies?

Are societies aware that the development of these technologies happens because societies organize themselves to give support and expand these technologies once they have been introduced?

Are companies such as Facebook, Apple and Google delivering a technological deterministic discourse that leads us to believe that their technological developments have positive effects on society inherent to themselves?