E-commerce has been slowly and steadily growing for years. And in the unpredictability that was 2020, when almost everything else seemed to close down, the e-commerce business flourished. An industry that emerged as a form of convenience turned into a necessity during the pandemic.
But what seems fairly straightforward from a user’s standpoint (a few clicks et voilà!) is not that simple when it comes to starting your own business. So in order for you to avoid common pitfalls, we made up a list of important guidelines that will serve your long-term success.
To kick things off, let’s begin with the basics:
- Getting to know the trade
- Choosing a profitable niche
- Finding your target market
Getting to know the trade
We know, researching and preparing are not super exciting when you are eager to start your business and see it grow. But without proper preparation and the right strategy, you might find yourself swimming in uncharted waters.
Starting your online business is an investment so don’t act on a hunch. Before deciding on what to sell online, make sure you understand all business models out there and then choose what works for you. Are you thinking about making your own product or partnering with a manufacturer? Maybe you already have a product in mind you would love to sell under your brand – in that case, you should look into white labeling. Another option is to partner with a manufacturer and resell their goods. If you don’t want to deal with inventory, you might want to think about dropshipping or printing on demand. But if you like the idea of investing more upfront and storing your goods, research a warehousing model. If you want to sell digital products like e-books, online classes or anything downloadable, you will have to look into the best ways of offering it digitally. And then there are subscriptions, where you offer your product or service to be regularly delivered to your customers.
Choosing a profitable niche
This is a crucial step ‘cause let’s be honest – you are not just going to become the next “store for everything” overnight. You have to do your due diligence and find a profitable product idea niche. At the first glance, it might seem like a catch 22 because almost everything you can think of is already selling in some shape or form. At the same time, you have to find an area that is competitive, which means a business that has an interested clientele but is not oversaturated. Still, windows of opportunities are there since there are numerous proofs of product succeeding online. Do your research on the emerging trends (not fads!) and engage in social media listening, use your past experiences, passion and know-how as an incentive, look into particular hobbies and expand on good ideas, read customer reviews and gather the info on their most common complaints. You don’t have to lock on an idea at once, dig deep – the internet is a gold mine of ideas – you just have to find a good place to mine. Once you whittle down your niche, research successful companies already working in that domain. How did they start, what’s their business model, what can you emulate from them and what can you do differently? Knowing what your competitors are doing and learning from them is the key aspect of every thought-out business strategy.
Finding your target market
Before you start crafting your sales strategy, ask yourself – who is my target audience? What are their characteristics? Develop your buyers’ personas or semi-fictional representations of your ideal customers. Ask yourself who would benefit the most from your product and expand on that idea. What’s that person’s age, where do they come from, what field of work are they in and how much do they make? What are their discernible behavioral patterns, goals and problems they face within your product niche, how would your product solve that problem and what would drive them to purchase? When you know who they are, it will be much easier to target them online and cater to their needs.
And wherever you can, back up your customer assumptions with data. There are amazing tools out there that can help you form a clearer picture of your buyers’ personas. If you don’t have enough of your own customer data, you can use software like Similar Web which allows you to study any website’s statistics. Check what your competitors are doing, draw conclusions and empower your marketing choices. If you already have a web store, one of the free and most widely used tools is Google Analytics that provides a detailed report of who your customers are and what they care about.
Digging deeper into your personas will help you reevaluate your business idea – you will notice patterns and get a clearer picture of your product’s value – is it in demand, is it trending, will people want to buy it, etc.
Do your work on keyword research, as well. Type in the product name on Google or Amazon, and the results will give you a good insight into what customers are looking for in certain products. Let’s spitball here and say you are thinking about selling cutting boards – you might discover people are looking for durable and cleanable cutting boards. The information you gather is an opportunity to solve their pain points with your own product.
Now that we’ve established that preparation is half the battle, here are some other equally important things to consider:
- Choose the right business name wisely
- Start small, test and get feedback from the market
- Pick out the right team
Choose the right business name wisely
Naming your business is one of the fun parts of starting off but it doesn’t mean you shouldn’t take this step seriously. Nomen est omen (the name is a sign) is a Latin proverb signifying the importance of names. It was believed that choosing a certain name will influence that person’s future. And whilst your business name won’t make for your success, it will serve as a symbol for your business in your customers’ minds and oftentimes be their first contact with your brand.
Here are some tips to consider:
- If you already have a product, choose a name that is similar to it – consistency can only benefit you, in terms of SEO and building trust.
- Keep it short and simple – make it unique but easy to remember and easy to find.
- Less is more – try and avoid numbers, hyphens and incorrect spellings (a good rule of thumb is to ask yourself would people know how to spell the name right after hearing it, also known as radio testing)
- Include relevant keywords if you want to drive organic search engine traffic – indulge search engine algorithms but don’t forget they cater to people using them; so
- Ask your friends and family for advice – run some ideas by them and see what sits well.
- Check availability – make sure your wanted name is not already being used by another business.
Once you decide on a domain name, make sure you purchase it and try considering a longer-term purchase (at least several years) because it’s one of the factors that search engines consider upon evaluating your trustworthiness.
Think of it this way, if you were searching for your brick and mortar location you would choose a place that’s accessible and easy to locate. Apply the same rule when deciding on a domain name – if it’s not easy to remember or search for, there’s a good chance your customers won’t find you.
Start small, test and get feedback from the market
It’s important to have a sense of what kind of business you’ll be running so make sure to write a business plan, or a roadmap to follow on your journey. It’s especially important to have one if you plan on searching for investors or applying for loans. Include information like what will your business be, what your market research showed, what will you sell and how will you earn money, what business model do you plan to operate on and how will you execute your marketing strategy.
But no matter how great of an idea you have (and how great your business might be one day), it’s always smart to start out small and better your strategy and product along the way. You don’t have to go off with a bang, opt for a soft-launch or beta testing, offer some incentive to people willing to test your product, gather their feedback and make adjustments. You could use surveys offered by tools such as Survey Monkey and get valuable info on your product, or ask for feedback on social media and various forums. Feedback is crucial, not just when validating your business ideas but also in establishing yourself as a trusted business. Statistics show that nearly 9 out of 10 customers read online reviews before purchasing, whilst 3 in 4 say that they trust them just as much as personal recommendations. To see if your business is moving in the right direction, make the process of collecting quality feedback from your customers a standard practice.
Pick out the right team
And last but definitely not least is picking out the right team to work with. Whether you plan on building an in-house team, hiring remote workers or outsourcing, it’s a challenging task because choosing the right people is one of the stepping stones to success. The first thing you have to be clear on is what your needs are, in order to know what you’re looking for in your team members. And it’s not just the skill set, it’s the personality and attitude, resourcefulness, the way they listen and communicate, their organizational skills, level of commitment and proactivity, etc. Take a look at your strengths, as well as your weaknesses in order to determine what characteristics will complement yours.
There is no one-way path to success and no shortcuts to the top but we hope this information will help you on your way there. We are rooting for you!
If you are looking for a partner who can help your e-commerce business set off or you have a question or two, feel free to get in touch with us. We are always looking forward to hearing from you.