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Steps for a Company to expand from Offline to Online Sales

  • Praga C
  • Jan 3
  • 2 min read

Updated: Apr 9

It’s common for any retail urban business from offline sales to online sales, B2C > D2C shifts are a common sight for shops and establishments. Thanks to Amazon, Swiggy, Zepto, and thousand others who helped to reduce infrastructure costs and made the consumers to get their needs delivered at their doorstep. Shops without their online presence over a time gets overshadowed by new e-commerce stores. Hence, a company has to start thinking of this transition and it becomes essential to understand how this shift impacts revenue streams, scalability, market positioning, and various other business parameters. As part of this exercise, assessing the company’s offline portfolio value and estimating the future potential is significant to strategise the business. Here are the key steps:


  1. Analyze the existing offline revenue and assets:Offline traction with a good sales record is an important asset for shops. This would cover the past history of sales performance, customer acquisition costs, profit margins, inventories, cash burns including capital and working costs, employee skills and wages, products/services based on the weightage of offline to online sales, etc.


  2. Assess online market potential: Do a thorough market research of market trends, online market potential, estimate the TAM, SAM, SOM, etc.


  3. Create new revenue streams in the online channel: Online channel does not usually have direct sales alone, there are various other revenue streams based on the product or service that is sold to different customers. Identify the possible checkpoints, different customer avenues, and build a established revenue model.


  4. Forecast online revenue using key metrics: Analyse the expected website traffic, average order value, customer lifetime value, subscription costs, conversion rates, and expected RoI with some financial projections. Factor in digital marketing and customer acquisition costs.


  5. Evaluate operational changes:  Determine the investments required for online infrastructure, logistics, inventory/warehouse management, and compare it with the offline RoI, this should benefit in huge cost savings over a five year period. This can be tracked on actuals as and when the costs can be saved on physical stores.


  6. Valuate the company: Use relevant valuation approach - DCF, Scorecard Valuation, or Comparable Company Analysis to determine the value of the company.


  7. Monitoring and tracking: Regularly track metrics like website traffic, conversation rates, CAT, customer retention and its costs, and update the financial projections based on the actuals as well recorded.



Transitioning or expanding from offline to online sales is not just a shift in channels, but also helps your company grow, evolve and expand your markets as global as possible. Following the above steps can help to create a sustainable and scalable business expansion.


We at #StartXVentureServices not only can help you to provide valuation, but can also work as a consulting partner in collaboration with our service partners to work on #BOT (Build-Operate-Transfer) model. We can help you for - startup / portfolio creation, branding, technology development, create revenue streams, engage in social media marketing, prepare a valuation report, project document and pitch decks to attract investors, and give our strategic recommendations.




 
 
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