260 billion riyals; the value of expected e-commerce revenues in Saudi Arabia by 2025, according to the Small and Medium Enterprises and Promising E-Commerce Prospects Report issued by the Saudi Small and Medium Enterprises General Authority (Monsha'at). These forecasts confirm how promising the e-commerce market is, driving many young people to think about entering it.

But desire alone is not enough; it is important to think carefully about whether you are truly cut out to be a merchant. Because the answer is not as simple as a "yes" or "no" the moment the question is asked, and because there are many details to the answer, we decided in this article to discover them together, so you can assess yourself and your ability to enter the world of commerce.

Is commerce hereditary?

When you think about starting a business, you wonder: Is commerce hereditary, or is it a mindset you can acquire? Seeing the family businesses around you, and the real success of Saudi companies in this context, might give you the feeling that commerce is indeed hereditary. For example, in the Forbes list of The Top 100 Arab Family Businesses for 2023, Saudi Arabia topped the list with 33 companies, and in the top ten, we find four Saudi companies: Olayan Financing Company - Abdul Latif Jameel - Al Muhaidib Group - SEDCO Holding.

But the truth is that commerce is not hereditary. It is true that a family's prior history may facilitate the idea of entering commerce, as children find a ready-made business to join, but in the end, success in commerce requires effort from everyone.

Believing that commerce is hereditary creates an imaginary barrier to your ambition to start a business, even if you possess some of the skills that qualify you for success.

On the other hand, if you are truly convinced that it is not hereditary, you will begin looking for ways to help you succeed, starting with choosing an idea related to your field of work, going through knowing the basics and paths of commerce, determining based on that what skills you need to learn, and then actually starting to establish your business, while accepting failure as part of the learning journey.

Therefore, whether your family works in commerce or another field, the way to succeed as a merchant is to acquire a merchant mindset, understand the roles required of you as a merchant, develop the necessary skills to handle different aspects of commerce, and finally choose the right path for your business.

What is the merchant mindset?

Mindset is the set of thoughts and behaviors you adopt in your work, and it is the key to success in any field. Of course, the required mindset differs from one field to another, so the next question before us now is: what is the merchant mindset, and do you possess any of its traits? 

Among the most important characteristics of a merchant mindset are:

• Your basic knowledge of how a business activity generates money.

• Understanding how all the different parts of a commercial project work together to achieve its goals.

• Your awareness of the challenges in your business field, and how to deal with them.

• Your continuous monitoring of developments in your chosen field and keeping track of updates.

• Understanding well what satisfies your customers while maintaining the real value you provide them.

• Understanding the needs of the market you intend to enter, and discovering the opportunities for success within it.

• Continuous monitoring of the market and its key competitors and influencers.

• Understanding financial basics, such as the ability to understand, analyze, and employ financial statements to make informed decisions.

• Focusing on continuous learning and development in your field of work.

• Accepting criticism and feedback and utilizing them to develop your business.

With a merchant mindset, you will be able to form conscious perceptions about it, its requirements, and what you need, and you will be on the right path to taking a real step towards commerce.

How to acquire a merchant mindset?

Note that knowing information related to the field is important, but having a strong perspective on this field will give you an extra edge.

For example, knowing and keeping up with the latest regulatory laws in the Kingdom is important and vital. However, think about the issue from a broader perspective; what do these developments mean for the field in general? How could they affect your business opportunities if you have chosen to start in this field? What will you do to prepare for these laws?

Simply start using critical thinking and then try to analyze, and you will find yourself more informed and connected to the fields you care about. Try to ask a lot of questions, benefit by gathering as much knowledge as possible, and then finally form your own opinion on what is happening.

Remember that commerce, like any field, has some common obstacles and risks, so you must know them and assess your ability to prepare to face them. We have talked in some detail about the risks of beginnings and how to handle them in the article: How do I reduce the risks of starting a business?

What are the most important roles of a merchant?

Throughout the history of the Arabian Peninsula, commerce has been one of the essential pillars for building societies. Looking at the bigger picture, we can define the role of a merchant simply as playing a pivotal role in the economy, being responsible for executing a variety of different operations that contribute to buying and selling goods or services in their country.

Note here that this role is diverse, multi-faceted, and constantly evolving as your business grows and your operations scale, but it is often classified into major categories as follows:

1. Operations

Includes the set of roles related to the daily operations of the store. Some of the most important operational roles are:

• Storage: Organizing and controlling inventory to ensure product availability and avoid surplus or shortage.

• Sourcing/Supply: Following up with suppliers to ensure the availability of required materials or products.

• Production: Monitoring the workflow of the production process and ensuring quality.

• Shipping: Managing shipping processes to ensure products arrive on time.

2. Procurement

A large part of business profit lies in buying, not just selling, making procurement a vital process for the store. Some of the most important procurement roles include:

• Determining your business's needs for raw materials or products to source them.

• Gathering a list of potential suppliers for raw materials or sold products.

• Comparing suppliers based on the following: quality of materials and products - prices - payment terms - delivery dates, and choosing the most suitable for your business needs.

• Analyzing procurement costs to ensure economic efficiency and reduce unnecessary spending.

3. Marketing

Marketing represents a major part of the store's operation and the success of promoting your products. Major marketing roles include:

• Analyzing the market and identifying the target audience.

• Developing marketing strategies to increase brand awareness.

• Managing advertising campaigns across digital and traditional channels.

• Monitoring competitors and adjusting pricing and promotional strategies.

4. Sales

Ultimately, achieving sales is the main goal of any store. Key sales roles include:

• Defining sales strategies to achieve sales targets.

• Building relationships with new customers and maintaining existing ones.

• Negotiating contracts and closing deals.

• Monitoring and analyzing sales performance periodically.

5. Finance

Managing money is an essential process for business success. Key financial roles include:

• Managing cash flows.

• Budgeting and controlling costs.

• Preparing financial reports and analyzing financial performance.

• Long-term financial planning and ensuring compliance with taxes and financial laws.

6. Customer Service

A large part of your success in commerce relates to your ability to provide professional customer service. Key customer service roles include:

• Providing prompt support to customers and addressing their inquiries and problems.

• Improving the customer experience and ensuring satisfaction with the product or service.

• Providing effective solutions to customer problems after sales.

• Monitoring customer satisfaction and improving the product or service based on their feedback.

7. Tech & Technology

If you decide that your business will be electronic, there are a set of technical roles related to the store. Key technology roles include:

• Managing e-commerce platforms and digital presence.

• Using analytics tools to monitor and improve website performance.

• Applying technical solutions to improve customer experience, such as e-payment and applications.

• Developing and using data management and analytics systems to improve business decision-making.

Do you have to perform all the roles yourself?

With such a large volume of roles, an important question will arise: Is it necessary to perform all these roles yourself? Of course not, you can hire specialists to work with you in different roles according to your store's needs. However, it is preferable to have a basic knowledge of these roles, whether you perform them yourself in the beginning or have solid theoretical knowledge about them.

This knowledge will allow you to select the right people for each role, and will give you the ability to assess their performance accurately, ensure you understand their work needs, and appreciate their efforts correctly, such as determining the fair compensation for each role. This will help you manage your business more efficiently and increase your chances of success.

What are the most important skills required in commerce?

The skills required for commerce are diverse, and they all stem from the core roles you perform as a merchant. We can divide these skills into two main categories:

1. Technical Skills

This is the group of specialized skills directly related to commercial roles themselves, including the following skills:

• Effective planning of various daily operations.

• Market analysis to discover promising business opportunities.

• Implementing appropriate marketing strategies for your store.

• Using different sales techniques to convince customers.

• Managing finances, such as the ability to budget and manage liquidity.

• Analyzing data to correctly evaluate your store's performance.

• Using and managing e-commerce platforms efficiently and easily.

2. Soft / Personal Skills

This is the set of personal skills that increase a merchant's chances of successfully performing commercial roles, including the following:

• Convincing the customer of the value your product delivers to them.

• Negotiating with customers and service providers (such as suppliers and shipping companies).

• Effective communication with customers to understand their needs.

• Making appropriate decisions across different aspects of the store's operation.

• Flexibility to adapt to market changes and fluctuations.

• Solving problems quickly and efficiently.

• Leading and managing the team effectively to ensure their ongoing productivity.

Do you need to possess all these skills at the highest level?

It is unrealistic to possess all these skills at the highest level, especially if you are at the beginning of your professional journey. Ultimately, the important thing is to have these skills at varying levels to be able to perform your work efficiently. So, what do you do if one of these skills is missing?

In any case, you are not required to perform all tasks yourself, and a lack of a certain skill might be the trigger to hire someone else to handle that task for you. However, it is important to include learning that skill in your plan, as this will benefit you generally in managing the business.

What are the paths of commerce?

Commerce is not a single field nor does it have a fixed way of operating; therefore, it is vital to understand the different paths within it. Business fields are divided into four main classifications, and these classifications combined form the business model on which your trade is based.

1. Paths of commerce in terms of the sales channel

These paths are divided into two main types as follows:

• Traditional Commerce: Relies on the physical presence of a store or point of sale, where sales are made face-to-face with customers.

• E-Commerce: Takes place over the internet, allowing the purchase of products or services digitally.

2. Paths of commerce in terms of target customer segments

This classification focuses on dividing commercial paths according to the target customers of the operations. The key target customer groups are:

• Business-to-Consumer (B2C): Selling directly to the final consumer, for example, a store selling clothes to consumers.

• Business-to-Business (B2B): Selling to other companies, for example, a store selling car spare parts to car manufacturers.

• Business-to-Government (B2G): Selling to government institutions, for example, an office supply store supplying various office tools like printers and paper to miscellaneous government entities.

• Consumer-to-Consumer (C2C): Exchanging products or services between individuals themselves, where the store acts as a mediator between both parties, like a marketplace for selling used products.

3. Paths of commerce in terms of business model style

This classification focuses on dividing business paths in terms of their nature and the pattern followed in them. Examples include:

• Retail Trade: Selling products directly to the final consumer in relatively small quantities, such as a perfume shop selling to consumers.

• Wholesale Trade: Selling products in large quantities to other retailers or companies that reuse or resell these products, like a wholesale clothing distribution store selling to retailers who then resell them to customers.

• Agency: Representing other companies and selling their products in your store and marketing them to customers, like a store selling products of a famous brand to customers.

• Dropshipping: Selling products to customers without the need to hold any inventory, as the store displays the products, and when a purchase order is completed, the order is forwarded directly to the supplier or factory that ships the product to the final customer. For example, a store selling wristwatches but owning none, instead sending the order to a supplier who ships the watch to the customer.

• Marketplace: Playing the role of the mediator that brings together sellers and buyers. The store does not sell products directly, but provides the opportunity for merchants to sell their products to buyers, such as a platform displaying used cars for others.

• Service Commerce: Stores that focus on selling services instead of physical products, such as a printing and design services store offering print-on-demand services.

4. Paths of commerce in terms of revenue model

This classification focuses on dividing business paths in terms of how they generate revenue from customers, examples include:

• Direct Sales: Selling products or services to target customers and receiving financial compensation for each sale. For example, a store selling electronic appliances, where the merchant gets paid when any appliance is purchased.

• Subscriptions: Providing products or services in exchange for periodic fees, monthly or annually depending on the type of subscription, such as a children's online bookstore, where parents get access to a library containing different types of children's books in exchange for a monthly subscription.

• Commission: Earning a commission from sales made, such as a marketplace for selling used products, where merchants list their products, and the platform gets a commission when any of these products are sold.

• Advertising: Monetizing through ads displayed in the store, such as a book review store that allows publishers and libraries to place ads in the store in return for an advertising fee.

• Rental/Leasing: Renting products to customers for a specified period instead of selling them and getting a rental fee, such as a car rental store for a setup fee.

How does your knowledge of commercial paths affect your ability to become a merchant?

Your business model consists of a mix of the four aforementioned paths, and part of knowing that you can become a merchant is your ability to choose the right path for your idea from the four paths, and knowing that you have the mindset and skills that qualify you to perform the roles required of you in the business model you have chosen.

To clarify the idea in deeper detail, let us share the story of Sami, a young man interested in fashion who decided to start a business selling trendy clothes. After thinking and analyzing, he chose the following paths to achieve his goal:

• First: He chose the Business-to-Consumer (B2C) path, deciding to target individual consumers directly through his store, because his goal was to sell trendy clothes to a wide segment of customers in Saudi Arabia, especially young people who love fashion.

• Second: He chose e-commerce through Salla platform, instead of opening a physical store, as he decided that this option was best for him, because Salla platform offers him the ability to set up his online store in a simple and effective way, while matching the target audience of the store.

• Third: He chose the retail business style, since he will be selling clothes per piece to the final consumer, making this the right format for him.

• Fourth: He chose direct sales, as this is the appropriate revenue model for his store; he will receive revenue in exchange for every sale made by customers on his store.

Thus, thinking about the four paths and the shape of the business model you will use, just like Sami did, will make you think about commerce comprehensively in accordance with your capabilities and resources, and this can help you confirm if you are suitable as a merchant.

In conclusion, we tried in this article to put in your hands everything you need to know about commerce, and by reflecting on every part, you will be able to answer the question: "How do I know if I'm cut out to be a merchant?", and you will have a clear vision of what you have and what you exactly lack in terms of mindset, roles, and skills, and you will ensure that there is a path of commerce that suits you.

We always advise you to have a growth mindset in commerce, as it will be your weapon to learn and know what you lack, to ensure you reach a higher level in what you learn. Nobody possesses all knowledge and skills, but the difference maker is your decision to learn, and be sure that what you learn will definitely reflect on the success opportunities of your business.