The Creator Economy Draws Entrepreneurs

The creator economy is attracting new entrepreneurs, perhaps supplanting retail ecommerce as the starting point for many small and new ventures.

Just a few years ago, if she wanted to own a business, an entrepreneur would frequently turn to ecommerce — opening a small online store, adding a few products, and advertising to drive sales.

In 2022, that same person might instead launch a YouTube channel or publish an Instagram Reel. Barrier to Success

While opening a small ecommerce store is easy, success is not guaranteed. The many retail ecommerce businesses and direct-to-consumer brands make competition tight.

In 2005, I started an online toy store selling Papo and Schleich figures. At the time, a handful of other online shops offered these toys. A simple search ad could generate thousands of dollars in sales.

Now, Google Shopping lists dozens of merchants selling Papo figures, and Google search results show more than 4 million pages indexed for these inexpensive toys. There are hundreds of online stores selling identical or similar products, such as inexpensive toys. With so many merchants selling identical items, price is often a key differentiator. Margins grow thin.

In 2005, if you wanted to open an online store, the barriers to entry were the cost of inventory and the technical challenges associated with launching a site.

Now those barriers are significantly reduced. Retail inventory is relatively easy to find (supply chain problems aside). Financing options abound. And many ecommerce platforms can have a store open and selling in just a few days, if not hours.Competition and the ubiquity of online commerce are the new barriers to success. Content Creation Just as retail ecommerce appears to be more competitive and therefore more challenging to start, content creation is becoming relatively more straightforward.Massive social media networks have built their businesses on advertising, and the fuel that […]

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