Is the Online Business Model Suited for Small Scale Hardware Manufacturers?

Is the Online Business Model Suited for Small Scale Hardware Manufacturers?

If the success of companies like Amazon and Alibaba are anything to go by, one would have to say that the online business model is just perfect for the retail industry in any sector. In fact, even Walmart and Best Buy have experienced severe boosts in their revenue generation since they opened their online wings to stay relevant amidst the growing competition.

But, Is Any of that Applicable to SMEs?

Does all of that hold any relevance to the small scale hardware business? If you are not a huge brand, does it make sense for you to follow the online business model? Can the internet actually help hardware manufacturers in any significant way?

The answer to all of these questions would be a simple yes, but the explanations behind this answer are definitely not simple.

Stay with us as we try and explore the question from various angles to see how small scale hardware product manufacturers can use the internet to boost their business performance.

Integrated Designing Platforms Make It Easy

Directly dealing with suppliers is the traditional route to take, but the internet gives SMEs a better opportunity. For example, if the concerned business deals with manufacturing consumer grade electronic hardware or specialized B2B parts, the custom motherboard design can be completed in just a few minutes on Gumstix, and ordered directly after.

The main advantage here is that you can actually create custom motherboard design elements with the help of their Geppetto platform on the website, which makes the entire process so much easier. Gumstix and other similarly integrated platforms offer speed, customization options and are easy availability to SMEs, making them a very important resource for small scale hardware manufacturers.

The Online Business Model: Should You Retail Online or Offline?

All online business models are meant to provide value to the customers while reducing cost and effort for the manufacturer, so the question is this – why shouldn’t you retail online?

If the business is just starting out, the financial setup costs would be huge if you want to manufacture and retail your products offline. The equation is quite simple – if you can’t manufacture hardware offline and it is a cost you can’t avoid, but you can start selling your products on the internet. The difference in establishment costs between online and offline retailing are huge, and the latter is certainly not suited for small scale hardware manufacturers.

Those that already have an offline establishment for retailing should consider two things, which are as follows:

  • Online retailing can only improve your current sales, as the target customer range will increase.
  • Shifting to an online-only retail platform might reduce your costs and expenses significantly.

Aside from the actual manufacturing, almost everything else can be completed in a virtual, connected environment, which is something that stands to benefit SMEs more than the big businesses. Therefore, not only is the online business model suitable for small scale hardware manufacturers, but it is actually ideal.