Starting an E-commerce business is a great way to make money online. Perhaps you’ve been thinking about it, too? With the right product, proper research of your target demographic, and the right marketing strategy, starting an E-commerce business can be a brilliant investment.
During these challenging times, E-commerce has become a global necessity. The pandemic has pushed so much of our daily activity online. Most business owners are even more aware that they need a digital transformation now more than ever. In fact, a lot of businesses will only move forward if they move their operations online.
But starting an E-commerce business is not a day’s task. It being the age of digital transformation, there are many opportunities out there. However, with ample opportunity comes large competition and many possible drawbacks. This is why it’s important to plan your steps carefully. In this article, we’ll share with you some important things to consider as you prepare to start your E-commerce business.
Why does an E-commerce business carry so much potential? Well, millions of people will agree that one of their favorite hobbies is online shopping. On top of that, the current conditions make no-contact, virtual environments preferable. Many people will even tell you that they rarely shop in stores anymore and only shop online.
Every day, new E-commerce sites emerge online. Some of them seem to become successful overnight. This success comes from a good marketing strategy and the demand for their unique product.
E-commerce sites such as Amazon, eBay, Etsy, and Shopify are the big online retailers many consumers prefer to go to for their online shopping needs. Other consumers, however, prefer to support smaller, more niched E-commerce businesses.
If you want your E-commerce business to be successful, you can’t solely rely on the quality of your products. Yes, your offer is important, but what you really need is a killer marketing strategy. You’ll need to upgrade your business skills if you want to succeed in E-commerce, and you’ll especially need to upgrade your marketing skills. Keep that in mind as you read on.
Now, let’s look at some of the most important steps to ensure success for your new E-commerce business.
1. Do your research
Perhaps you already have a side-hustle you are considering turning into E-commerce. Or maybe you have brand new ideas. You may already have the perfect offer to release to the digital marketplace. Regardless of the starting point, you must still do proper research.
Any online business is an investment. You may not think of it that way if you do not need to spend money right away. However, you are investing your indispensable assets: time and skill.
Before you set off into the world of E-commerce, you need to do thorough research on:
- Keywords to frame your offer
- Competition and trends
- Audience and outreach strategies
There will, of course, be a lot more to learn along the way – your research never stops. However, research in these three areas will set you up for a good start, no matter what kind of business you want to start.
Keywords – also called search queries – are the words and phrases entered into search engines. These are the words customers type in when looking for their desired products. You want to have these words across all of your content – videos, images, product descriptions, blogs, social media pages, and so on.
In other words, keywords are what the content of your E-commerce business boils down to.
Whether you are looking to switch to an online business model or starting from scratch – you will need to think about how to frame and focus your offer. The quality of your products may be high, but online marketing does not always make this clear. How you market your product needs to match and represent the high value of your offer.
Start with the main concepts of your offer. Think about the words that may best represent the value your products carry.
Let’s say you would like to open an online women’s retail store. You may already have an idea of what you will be selling. Perhaps you’re looking to digitize your existing retail store. In either case, you have a good sense of your product.
But how will you communicate its value in the online marketplace? Start with keywords research. See what customers find when they look for your product. This can help you position yourself to stand out from the competition right away.
So how do you research keywords? Google Keyword Planner is a useful tool. It helps you generate ideas on how to structure your online business presence.
Researching keywords will help you structure your content, and it will also tell you what consumers are searching for. You will get the sense of current trends – as well as who the trend makers and market leaders are at the moment.
Competition and Trends
Remember – time moves fast in the world of E-commerce business. Before you know it, a better and newer version of any product is being released. Leaders in your industry provide you with a learning curve: researching them is vital for your success.
Once you identify the main players in your market – analyze them. What are their strengths? Do they have weaknesses? Think carefully about all aspects of their business model and offer.
Make a list of what works and what could be improved. Use the knowledge you get from this analysis to directly improve your own business model and offer.
Now, what if you don’t find any competition? This is not always a good sign. Many entrepreneurs think having no competitors is great, but this belief is misguided.
A lack of competition in your chosen market may indicate an issue. It may mean that there isn’t a market for your offer. Or it may mean that your product is outdated. What then? Look at alternative offers to yours and see if you can compete with them. Is your product better? What are the advantages it gives to the consumer?
Audience & Outreach
All research you do will return to this important part of your business model – your customer.
What do you know about your ideal customer? How old are they? What might their life be like? Where do they live? What do they like?
Your research should give you a sense of their socioeconomic, geographic, and personal traits. You can do this using Amazon reviews. What do the reviews tell you about the people who buy and use a certain product? What do they sound like?
You can also use social media platforms to research your target customer base. Search for people who have an issue that your product resolves. What do they sound like? Who are they?
Ample research on your ideal customers is crucial when it comes to developing marketing strategies. If you know your potential buyers, you know which software and online platforms to use.
2. Figure out where your customers are
It is your responsibility to go out and find potential customers. This process is ongoing for most E-commerce business owners. You are always on the lookout for clients.
But if you do a thorough search, you will get a sense of where they spend most of their time. Are they online at all? If yes, what platform do they use the most? How do they get their information?
The pandemic influenced people to use social media on a daily basis more expansively. Most people now use social media platforms as a research and outreach tool.
You want to identify which platform your chosen demographic uses the most. Then, you want to establish a presence there and continue to reach out. Keep asking questions, seeking out feedback, and generating content that would draw potential clients to you.
Now, figuring out where your customers are will determine what type of software you use for your E-commerce store. What is the most user-friendly option? That will depend on your customer profile entirely.
3. Validate target market and product ideas
Market validation is crucial. What does this mean? In essence, it means presenting a product to the target market and evaluating their response. Are they interested? Or do they seem ambivalent?
The feedback will determine whether your ideas are marketable. It is important to take this step early on. Imagine making a significant investment in the project, only to find it unprofitable. You do not want to be adding another brick to the wall.
Now how do you get the proper feedback? These are some of the things your questions should capture:
- Does your offer address a big problem your customers face?
- Do your customers see your product as a solution to their problem?
- What’s missing for your offer to be the best solution to their problem?
The two most common methods of acquiring feedback are through interviews and surveys. You can easily do both online and send out to your entire network.
The results you obtain will provide you with a kind of cumulative strategy. This has proven invaluable to many successful entrepreneurs. You will get a sense of whether your startup idea will be a success, and you will get the opportunity to alter it. You will find out the key points of contact and the strongest values of your product.
4. Write a Business Plan
Many people think of a business plan as a set-in-stone document you need to present somewhere. This is completely inaccurate. A good business plan is fluid. It’s flexible and constantly evolving.
The best business plans capture the process and not the end-result. A business plan helps grow your vision. It helps you think your ideas through and to avoid possible oversights. The act of composing a plan – of writing it all down – helps you get the sense of how to carry out our ideas.
A business plan is also a check-list to assure your vision is communicated. It will help you run a team as well since everyone is on the same page as you move forward. Think of it as a tool – it is your way of making sure your vision, finances, and business strategies are all aligned.
Here are some key things to keep in mind when creating your business plan:
Do not use any filler language – your plan does not need to sound nice; it needs to be effective. Get rid of any embellishments, and stick to the point. Otherwise, your plan may sound unrealistic or even fake.
This is not a place to play by chance or luck. Be honest about the challenges, as well as the opportunities. If your idea is strong enough, it will speak for itself regardless of the obstacles.
Your business plan is also your brainstorming process. Using graphs and images may help not only communicate but to expand your ideas. Avoid big chunks of text – do something unique and only yours.
5. Register your E-commerce business and brand name
Once you finish research and create a business plan, start building a branding strategy, and register your business. If you want your business to succeed, your brand needs to match your persona. It is the palpable personality of your brand that attracts customers in E-commerce.
So what might be the best name for your business? It has to be somehow resonant for your buyer persona. It needs to match your niche and feel like it rings a bell. Think it through carefully.
The legal name of your business and your site name do not have to be identical, but consistency is always best as it keeps things simple.
There are important legal aspects and tax responsibilities to take care of. Registering your business protects you from thighs such as possible fraud and intellectual property theft. Decide on your business model and consult someone about the best strategies to legally register.
There are many online resources you can use to guide you through the legal paperwork process. For example, Small Business Association offers guidance and networking. They can connect you with a mentor to help you through the registering and licensing process.
6. Find the right software for your online store
Software is the backbone of your E-commerce business. It allows you to tailor a website to the needs of your business, such as managing inventory and processing payments. If you use it right, the software is set up to handle aspects of running your E-commerce business for you. It is supposed to save you time and energy.
E-commerce software manages products and inventory and also handles checkouts and order processing. What’s more – it calculates taxes for you and also helps with marketing strategies.
You will want to choose an E-commerce software vendor that best suits your business model. It is important to note that, although there are many different vendors, there are only two types of software: on-premises and SaaS software.
The first often comes with a license fee as it is installed on your server. The software is managed manually, on-site, and is periodically updated.
The second, SaaS type, is subscription-based and automatically managed. Paying the monthly or annual fee is often preferred, so many business owners tend to choose this easily manageable model.
7. Make customers your brand ambassadors
To succeed in running an E-commerce business, your marketing strategies have to be very strong. They must be geared towards both acquiring new and privileging existing customers.
Most dominant brands on the market know that their customers are their most valuable asset. Loyal customers are what allows any brand to grow and any E-commerce business to thrive.
Communication with your customers does not end once their purchase is made – it starts there. Your customer chose you – good. Now, you need to have them coming back. You want them to feel important and recommend your brand.
A social media shout-out share from a loyal client is the best ad you can hope for especially if they have an established persona. Once you get an influencer recommending your product, the opportunities will be endless.
Invite your customers to share reviews and stories about your product. Share their posts across your social media. This will put the customer at the center of your brand and show that you value them.
Whether you have a new business idea or trying to transfer an existing business online, research is key. If you do your research well, you will know how to frame your idea, as well as how to reach and attract ideal customers.
Remember that having a good idea is not enough. Rather than focusing on the offer or what you think is important – focus on your customer. Put your target audience at the center of your thinking, and you will know exactly what type of E-commerce business to run and how.
Updated November 2, 2020.