Since it was invented, the internet has become an increasingly popular place to conduct business over the years.
More and more people each year obtain access to the internet and feel comfortable conducting transactions online.
As a result, the popularity of the internet has fueled a boom for internet retailers which have led to an overall significant market size and revenues.
Having said that, particularly in 2012 and the future, internet retail will remain a difficult market for internet retailers to conduct business, as will be the focus of this article.
Although the overall retail market has exploded, profits have not always coincided with this increase.
There are immense price pressures on internet retailers that have led to a compression of profits.
Since there are little to know significant barriers to entry, companies can easily enter into the marketplace.
This flood of competition has maintained a difficult competitive environment for the internet retailer.
Many shoppers concentrate solely on price and ignore all other factors when making a purchase.
Shoppers often see little variation between websites and simply go for the cheapest product.
Since large online retailers know this, it makes it difficult to compete with them.
In recent years, the competition of online retail has become significantly diversified.
There are both large competitors that cater to every facet of the market and many specialized retailers that provide products to very niche markets.
Internet advertising may not be all that effective as internet users often ignore or tune out these ads.
This has led to a very difficult market for a retailer to break into in 2012.
Unless you have a secure website, hackers and security threats have added a layer of difficulty for an internet retailer.
Implementing security measures on your site may not add much assurance to a potential customer.
Even if there is little risk for your site to be hacked, there may be a perception that smaller internet retail sites are more susceptible to fraud or dishonesty.
As a result, unless there is a significant price variation, people choose to shop on these larger established sites with pristine reputations.
The online retail market is a difficult market to break into, particularly in 2012 and in the future.
Having a distinct product and competitive advantage may be the best way to secure a market for your products.
Make sure you have a viable business plan in place and identify with customers in order to be successful as an online retailer.