Have you heard of ghost commerce before?
If not, you should prepare yourself for this business model, which in plain English can be called “ghost trading,” as it will gain increasing attention and intensify e-commerce competition both nationally and internationally.
What is ghost commerce?
Ghost commerce (also known as dropshipping) refers to a new online business model where the primary focus is on marketing, website maintenance, and delivering top-quality customer service.
You might be wondering why the primary focus isn’t also on inventory management and production when we’re talking about e-commerce?
When it comes to ghost commerce, we’re dealing with companies that act as intermediaries without holding their own inventory, instead handling orders that are automatically sent to the manufacturer, who then takes care of the final delivery of the product.
Increasing interest in ghost commerce
The business model behind ghost commerce avoids the typically high costs associated with maintaining inventory, which is always somewhat affected by the ever-changing market trends.
Ghost commerce companies are often found on major platforms like Shopify and Magento, where they can build a solid online store that quickly becomes a strong player in the intense e-commerce competition.
The final focus is on branding and effectively targeting the company’s marketing strategies, as with the right efforts, a ghost commerce business can go far!
Focus on customer service
Without actual inventory, it’s necessary for companies to have reliable relationships with their suppliers and to be present for customers by providing top-class customer service.
Delayed deliveries, product questions, and warranty claims are all things that any company must put significant energy into if they want a good relationship with their customers.
The same applies to ghost commerce, which, without a direct connection to its products, must expect to take responsibility for any complications or similar issues with delivery as well as customers’ expectations of the product.
Ghost commerce has revolutionized the traditional business model
Since ghost commerce businesses do not hold inventory but rather act as intermediaries, there is a greater degree of flexibility.
The costs of holding inventory are eliminated, offering more opportunities to meet consumer needs, price products competitively in the online market, and keep up with market trends, with the ability to pivot if necessary.
Resources not used for inventory management can be heavily invested in brand development and partnerships with influencers to build trust around the business.
Can you succeed with ghost commerce?
The answer to this is the same as for any other webshop you want to set up: yes, you can succeed if you find the right niche and meet consumers’ exact needs.
When it comes to ghost commerce, it’s just as important to have reliable relationships with your suppliers and to keep the optimization work for both the webshop and the underlying marketing strategies on track, as well as to offer quick assistance for customers who reach out through customer service.
Ghost commerce and dropshipping place the primary focus on marketing, so it’s essential to be adept at using the data generated from daily customer interactions.
Dropshipping market in numbers
The ghost commerce and dropshipping market has gained significant traction globally, valued at over 150 billion USD back in 2022.
Shopify is one of the platforms that enables ghost commerce, and by 2021, there were already over 1 million webshops using this business model.
Success stories in ghost commerce
Ghost commerce can manifest in various ways.
Some companies fully embrace the dropshipping model, while others use it partially, and there are also examples of businesses that have used dropshipping as a springboard for their later success.
Another example of ghost commerce success is the numerous food delivery services that connect users with their favorite restaurants or groceries from local producers.
Finally, major transport services like Uber and Cabify can also be mentioned, functioning as intermediaries between consumers and their access to easy transportation, without the need for significant investments in vehicles from the transport service providers.
Potential challenges with ghost commerce
Like many other business models, ghost commerce comes with its own set of challenges.
Consumers are increasingly accustomed to a saturated online market, making it difficult to offer something that hasn’t been seen before.
Therefore, it’s crucial to stay ahead of user needs and behavior to better target marketing efforts that ultimately drive customers to the store.
Moreover, it’s essential for a ghost commerce webshop to build trust around the product or service offered, especially since the webshop isn’t directly handling the product and delivering it to the customer.
Another read: My guide on which tools to use for marketing
This requires building credibility around the brand and a positive relationship with the target audience, contributing to the necessary trust that encourages customers to return and even recommend the business to others.
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