How Does Connective eCommerce Work? Is it the Safest & Easiest Way to Start an Online Business?
Over 50% of retail startups fail. It’s a sad fact, but a fact nonetheless.
The forecast is even more dire for online stores than for brick-and-mortar retailers. One report shows that 90% of all new eCommerce businesses fail within the first 120 days of launch.
Failure can have substantial financial fallout. Would-be entrepreneurs who signed long-term leases, hired employees, and purchased inventory are now faced with no way to pay the bills. Not to mention go-to-market costs like having a website built, advertising, and buying the initial inventory.
That may be changing, though. A fast-growing concept known as “connective eCommerce” offers a less risky way to get an online store up and operating. It’s a legitimate strategy, but as we’ll see, you can’t necessarily trust all of the hype.
Recommended reading
- What Happens When You Dispute a Transaction?
- Provisional Credits: Here’s Everything You Need to Know.
- Here are the 5 Valid Reasons to Dispute a Charge
- 14 Chargeback Facts Exposing the Threat of Fraud in 2024
- How are Partial Chargeback Different From Other Disputes?
- Late Presentment: Why You MUST Submit Transactions on Time
What is Connective eCommerce?
- Connective eCommerce
Connective eCommerce refers to a risk-reduction strategy for opening an online store without investing in web developers, advertising, or inventory.
[noun]/kə • nek • tiv • ē • käm • ərs/Launching an online retail business was relatively simple a decade or two ago. There’s much more competition in the marketplace now, though. Competing at a high level is too cost-prohibitive for many newcomers, especially when the odds are high that the operation could go under within a matter of weeks.
Connective (or “connected”) eCommerce refers to a business model that allows newcomers to put up an online store without the need to handle many points typically considered necessary to do business. Merchants can go to market with no upfront investment in website development, inventory management, merchandise storage, shipping and fulfillment, or promotion. This removes many barriers to entry.
There are considerable risks (and costs) attached to opening a new store. There’s also a harsh learning curve; in traditional commerce, you either sink or swim. In contrast, relying on established practices, software systems, and templates seems to make a lot of sense.
How Does Connective eCommerce Work?
Different facets of this strategy have all been around for a while. It is effectively built on the dropshipping model, but expands on that concept.
With a connective eCommerce strategy, you create your own website using a templated eCommerce platform like Magento, Wix, or Weebly. This is done in place of investing in a traditional web developer. You then promote the business and acquire customers through free channels, including Facebook, Instagram, Twitter, or Tiktok.
When a customer makes a purchase, you transfer the order to a supplier, who then ships the products directly to the customer. This part of the process works much in the same way as a conventional dropshipping business.
You could argue that connective eCommerce is not really a distinct strategy. Instead, it’s more of a paradigm regarding online sales, by which you’re aiming to keep your operation as lean as possible:
| Traditional eCommerce | Connective eCommerce |
| Invest in inventory and storage facility | No inventory or storage needed |
| Hire developer to build your store | Create a store using premade sales platform |
| Handle sales, as well as stocking & shipping | Handle sales, but outsource fulfillment |
| Invest heavily in marketing | Promote your site organically |
| Extensive startup costs | Minimal startup costs |
| High risk of loss | Low risk of loss |
Is Connective eCommerce Too Good to Be True?
Connective eCommerce is not a scam. It’s a solid concept, and can open doors for those looking to launch a new business while having limited resources.
Is it everything it’s hyped up to be, though? Well, that depends.
Connective eCommerce is sometimes sold as a type of “get rich quick” scheme. Overly simplistic explanations tend to ignore the fact that any startup requires a lot of work and dedication. And, even with a streamlined, connective model, you will still need to invest some amount of capital. You can’t expect to just set up a site in ten minutes, make a few Instagram posts, and start seeing the cash roll in.
Explaining connective eCommerce is kind of like explaining how to write a book. You can explain to someone how to come up with a story, write it down, and find a publisher. Seems easy, but it hardly paints the full picture.
Some of the roadblocks you can run up against include:
- Ongoing cost to use eCommerce platforms
- Website templates may not be customizable enough to fit your needs
- Ongoing profit margins will be lower
- It’s up to you to find the right suppliers
- Not every provider works in every vertical or region
- Multiple suppliers may be needed, all with individual contracts
- Extensive self-promotion is required
Connective eCommerce pitches also gloss over many of the other aspects of running an online store. Even with this paradigm, you may still be responsible for:
- Pricing
- Updating your site and keeping inventory current
- Branding
- Customer support
- Creating policies and procedures
- Handling returns and refunds
- Insurance
The connective eCommerce model also doesn’t address potential problems like fraud management, or liability for chargebacks.
For someone wanting to test an online business quickly, connective eCommerce can be a very cost-effective way to go to market. Iit will probably not be enough if you hope to actually scale the business and grow, though.
How to Get Started with Connective eCommerce
So, you’ve weighed the positives and negatives, and decided you’d like to give the connective eCommerce model a try? Here are some of the steps you’ll need to take before you start:
Moving Beyond Connective eCommerce
Connective eCommerce is a legitimate business model for online retailers. It’s especially beneficial for beginners.
There are complete programs that walk would-be merchants through setting up an online store, arranging inventory and fulfillment, and promoting the business. Ironically, these programs require an upfront investment, though.
If you’re uncomfortable with starting on your own, package providers can give the support you need. However, the steps are straight-forward enough that buying a package may be unnecessary.
Regardless of the approach you take, you need to keep one thing at the forefront of your mind: connective eCommerce isn’t self-fulfilling.
There will still be a lot of work for you, including marketing, price monitoring, and customer service. There will also be cases of fraud and chargebacks that plague online retailers. In some scenarios, fraud management could almost be a full-time job in itself.
If you’d like to try the world of online selling without making a huge monetary investment, connective eCommerce may be the way to go. To take your business to the next level, however, you'll almost certainly need to adopt more conventional eCommerce practices and strategies at some point down the road.
FAQs
Is connective eCommerce a scam?
Not at all. Connective eCommerce is a legitimate approach to eCommerce. That said, it’s often sold as an easy, “foolproof” way of starting a successful online business with no investment. That’s not really the case; the financial costs may be lower, and there is much less of a barrier to entry. Even with connective eCommerce, though, an online retail store will still require a lot of work.
Can I really start an online store with no money?
We’ll say “very little” money, instead of “no” money. It would be close to impossible to open an online retail operation with no financial investment whatsoever. The connective eCommerce model, however, allows you to offload many of the most expensive (and riskiest) aspects of the go-to-market process.
Can I manage connective eCommerce on my own?
Theoretically, yes. However, it really depends on your experience, background, business savvy, and willingness to learn.
What if I need help with connective eCommerce?
There are complete programs that coach would-be merchants through the process, but they require an upfront investment. It will still probably be less than the cost of a traditional start-up, but connective eCommerce is generally straightforward enough that buying a package may be unnecessary.
