E-Commerce Concept & Questions

[Knugs]

Last week my Dad called me to help him out with taking an old IKEA-shelf down and fixing the back panel that has loosened over the last 25 years in his store. Whilst we were fixing the pretty heavy shelf I couldn’t stop noticing this “item” on the table. I took it home, researched the market, products and industry and over a few days incidentally came up with an innovative approach that could solve the customers in the market major pain points.

My next steps in the execution is the validation of all assumptions that I have made so far. For example, I interviewed business owners and customers about the current situation and pitched them my idea. So far so good I haven’t identified a major red-flag. Yet. The reason I work through concepts in such a way is because of the mistakes we made in my current startup. We had a lot of assumptions that theoretically made sense but we haven’t had black-on-white data backing up our claims. Luckily we are still in business but I realized that in these chains of assumptions one wrongly assumed theory could result in the failure of the complete startup.

I will share a progress thread about my start up and the experiences I have made with a VC investor and incubator on the INSIDERS soon. However I found this approach really useful to workout & kill concepts/ideas quicky.

That has lead me to the following questions that I was wondering about and luckily TFL is incredibly e-commerce heavy. I will need to open up the legendary @biophase files too, because a large component of the business is the e-commerce side of it. Anyway! Here are some questions I would to hear your perspectives on.

Q1: how does an e-commerce site deliver products in 1-2 working days but simultaneously offers thousands of SKUs (one competitor =50,000) from different manufacturers in their online-store?

Q2: if an e-commerce store has a logistic center, it probably means they buy the stock at wholesale price, right? So the business model requires high volume purchase orders for better pricing and in turn leads to higher margins on products sold?

Q2b: how do they finance thousands of SKUs that way?

Q2c: eventually the e-commerce business brands their own products for higher profitability?

Q3: or does the e-commerce store hold the products of their partners in their logistics center, not owning them at this point and really just sell their partner-products and earn a fee per item sold?

 

Dislike ads? Become a Fastlane member: Subscribe today and surround yourself with winners and millionaire mentors, not those broke friends who only want to drink beer and play video games. :-)