Entrepreneurs entering the ecommerce space are urged to use simulation platforms to determine what products can deliver the most return on their investments and ensure they earn profit from starting the business.
Bonnie Factor, talent instructor at iACADEMY Alibaba Global Digital, said the Alibaba simulation platform uses artificial intelligence (AI) in the business processes.
“The simulation will give you the most profit without losing your money immediately because you get to interact with an artificial intelligence buyer for your product,” Factor, also founder and chief executive officer of Leading with Success, said in a webinar on future-proofing ecommerce business.
Factor said the business framework involves AI buyers, e-markets, sellers, supply chain and products.
“In our simulation, the AI will give you a complete analysis of what is going to happen. One, if it’s (product) is sellable, two, if the capital expenditures that you are going to spend will be very expensive rather than the profit that you are going to have…” she said.
Under the fundamental process, Factor said sellers do market research then procure, market and sell products, and lastly analyze results.
Market research pertains to environments, early investigation, ecommerce markets, and warehouse and logistics, she said.
“Very important are the warehouse and logistics. And next, you are going to decide, what are you going to decide? Purchasing, stocking, store operation, and your finance. And then last is you are going to do data analysis. In the data analysis, you are going to have your finance profile, order profile, profit profile and inventory profile,” she added.
To effectively sell products, Factor said ecommerce entrepreneurs need first to know who their customers are to determine how to sell their goods to them.
“…If you are selling your product to everyone, you are already losing,” she said. “Who are they? Where are they in the market as well? Can they spend so much if your price range is very high, who can afford your product? If your price range is low, then who are you targeting?”
Factor underscored the need for ecommerce entrepreneurs to maximize profits with the resources they have.