Digital transactions have passed from being a trend to becoming the norm. Individuals, entrepreneurs, and businesses are going digital, reaching more people and expanding their sales exponentially.
The Rise of Digital Transactions
Online transactions have spiked in number during the past years. In 2019, digital sales overtook retail during specific instances like Christmas and Black Friday sales. From 10 per cent of all sales, digital transactions reached 14.5 per cent in 2020, largely due to the lockdowns and the decline of gas revenue and travel purchases. Experts estimate online sales accounted for more than $700 billion in sales in 2020, with Amazon taking in a large share of $55 billion.
Online sales are likely to increase in the following years, as more than 80 per cent of all Americans have made online purchases, with the numbers expected to only rise in the following years. Online purchases are particularly popular among the younger generation, who prefer buying in front of their laptops or phones instead of queuing in physical stores.
Using Social Media
The lockdowns of 2020 have given rise to many bakers, hobbyists, and artists who sell their wares over the internet. Transactions over social media platforms boomed over the past year as people spent more time at home. Social media allows individuals and businesses to reach people outside of their community. Transactions are usually done through private messages, where the buyer asks for a product and then sends proof of payment (via bank transaction) to seal the deal.
Social media platforms are generally free, but users can opt to pay premiums for promotion or to unlock additional features. Social media also gave rise to so-called influencers who market their popularity, endorsing sponsored brands, or making money through Patreon, SubscribeStar, or other membership platforms where supporters can offer financial backing.
Selling on Amazon
With over $55 billion in sales in the past year, Amazon is the top destination for most sellers, whether individuals or large companies. Selling on Amazon can cost as little as a dollar per transaction ($0.99 to be exact), and the site allows users a maximum of 40 items. Opting for the Professional plan can bring the price up to $40 a month, but that covers all transactions for the month and allows listings of over 40 items.
Opting for the monthly Professional plan is best for individuals and businesses who handle more than 40 transactions a month as prices per transaction can drop significantly less than the usual $0.99 per transaction. The seller or Amazon can handle shipping through its fulfilment networks. All you need to start selling is a bank account, a chargeable credit card, valid identification, a phone number, any tax information.
E-Commerce Platforms
Large businesses with their own websites typically use e-commerce platforms for their digital transactions. An online store on a dedicated website allows for more freedom and customization. A business will also be in charge of what’s listed, with none of the competitors one gets when using Amazon or similar sites. E-commerce platforms like Shopify provide a simple yet effective system to connect with potential buyers. These platforms function with a subscription model, costing around $20 a month for the most basic packages.
A dedicated website creates a sense of professionalism and stability. Buyers know that the business invested significant money on their website instead of merely hitching a ride on big online selling platforms. Buying a domain name can cost $20 a year, but developing and customizing a site’s content can cost around $2,000 to $5,000. Maintaining a website and an online store can cost around $500 a month, but the cost is significantly lower than the overheads associated with opening a physical store.
Getting on the Top of the List
Promotions are essential if you want your business to be highlighted on social media platforms. A good brand/company name also counts, as well as making use of hashtags when posting your products. Rising to the top of Amazon listings can be tricky, as multiple sellers vie for the top spot by dropping prices. Featured products get highlighted, but only users under its Professional plan are considered. Dedicated websites can opt for SEO services for e-commerce sites to appear on the top of every related search (or at least the first page), increasing page visits and potential transactions.
Selling online has never been more manageable, as more and more people opt to transact digitally. Entrepreneurs and businesses can opt for multiple avenues of transactions, choosing one that better fits their products. This way, they can experience business growth and success.
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