Essay on Dependence on Others

The emergence of the online retail industry opens larger opportunities for online retailers to develop their business successfully compared to conventional retailers. On the other hand, online retailers face a number of risks, which they have to deal with to maximize the effectiveness of their business and to prevent their failure. Online retailers have just to identify key risks and eliminate them.

In this regard, one of the major risks is the dependence of online retailers on suppliers. Unlike large conventional retailers, online retailers do not have large storage facilities. Instead, they depend on their suppliers, who are supposed to supply the product online retailers need in time. Online retailers may use the just-in-time management to minimize such dependence. In addition, they may look for alternative suppliers, in case their major suppliers fail to supply products retailers in need.

Retailers also depend on the availability of online technologies and internet to their target customer group. For instance, they cannot sell their products to one thousand households, if only one hundred households have access to internet. Therefore, online retailers should develop their business in areas with well-developed internet network.

Another problem related to internet and online technology is the dependence of online retailers on the delivery of their products. Often online retailers operate nationwide or worldwide that implies shipping of products to customers. Hence, online retailers may become dependent on logistics company that provide shipping services or they are dependent on their logistics departments. In case of online retailers, logistics is crucial because customers want their products in time. Outsourcing of logistics is the best way to prevent such dependence, if several logistics companies are involved.

Thus, online retailers should minimize their dependences to develop their business successfully.