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    Barrier To Entry

    A barrier to entry refers to the obstacles a business faces when entering a particular market or competitive peer group.

    What Is a Barrier to Entry?

    Most markets — particularly within the ecommerce landscape — are highly saturated with competing brands and retailers. Barriers to entry are the obstacles that make it difficult for new businesses to enter into those markets.

    Common barriers to entry include:

    • High start-up costs;
    • Regulatory or compliance laws;
    • Lack of access to parts of a supply chain;
    • Overly competitive pricing in a specific market;
    • Consumer protection or data privacy laws; and
    • Costly licensing requirements.

    Many barriers exist to protect consumers from predatory businesses and to protect businesses from market-defining monopolies. Some barriers are artificially created by competitors in a market actively trying to keep other businesses out.

    Overcoming barriers to entry can be difficult. But by providing cohesive, consistent branding, a business can stand out among a crowd and earn customer loyalty over time. Brands can also win business in a market by differentiating themselves through their products, values, or consumer engagement initiatives.

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