To succeed in business, it takes hard work, determination, and a lot of trial and error. Research is vital, and this includes market research and an understanding of your target customers.
1. Start with Passion and Develop Your Mindset
Some people want to start an e-commerce business, but they don’t yet have an idea or product to sell. Other people have a product they make themselves or have invented and want to start selling it online. Either way, you’re an entrepreneur, and you’re starting with a business idea. You could choose a proven business model or niche. Or you can go the less-travelled route and discover something unique that means something to you. It is essential to be clear about your goals. What is your purpose in being in business? Are you gifted at creating products? Or are you able to provide services? What are you passionate about?
Believe in yourself. Your best advocate is you. Don’t let anyone doubt your abilities, including your spouse, mother, father, or siblings. Failure can be a mindset and a self-fulfilling prophecy. Confidence sells.
As your idea takes shape, write a mission statement. Define your values and benefits to customers. What will differentiate you from the competition. Why would someone choose to buy from you over another? Who is your target customer?
Work on developing what is called an elevator pitch. For example, imagine having 45 seconds to present your business idea to the most significant potential investor or customer. What can you say about your business and why it matters/what makes it unique in just four sentences? Or 45 seconds?
If your idea is good, get it going. If you launch it before you feel 100% ready, you will keep building. You can use your customers’ feedback to determine what information or tweaks you should make to improve their shopping experience.
2. Make Sure Your Idea is Good
A product, service, or idea must be appealing to people. Passion is essential, but you must be selling something that people will buy. It is very unusual for someone to have a unique idea that has never existed before. Most things have already been invented, so you will join a sea of other people trying to sell the same product or service.
Find something you are passionate about and make it better than all the other options.
3. Take Intelligent Risks and Push Yourself
Getting out of your comfort zone is essential. As you progress into the CEO role, you will need to recognize and actively accept new norms. Taking smart risks is a rewarding and vital part of learning. It also allows you to go beyond the years of self-limiting behaviour and self-doubt and overcome challenges.
Taking intelligent risks is key to not only creating but also maintaining opportunities.
4. Take care when deciding on pricing. Understand profit and cost.
Pricing decisions are complex. In some cases, people make more money and more sales when they raise their prices (this has to do with buyer psychology). Many businesses jump at the opportunity to implement a penetration pricing strategy that lowers the average market price (undercutting the competitors). Business owners must make this decision carefully. It depends on whether you can afford to lose profits temporarily and if this pricing strategy is feasible in your niche. Setting low prices at the beginning can backfire, and raising them later can become impossible.
One of the most important lessons is to make intelligent pricing decisions and not leave money on the table.
Run the numbers! You need to understand your numbers to have a successful online company. You need to know how much you can make each item to cover the costs and earn profits. Pricing a product should include all expenses and taxes, as well as the profit you wish to make on each sale. You have many options, but you need to calculate the numbers. Otherwise, you might be losing money.
Here is an example of mapping out the cost per unit of an (imaginary) face cream. Note that the numbers are simulated for a startup company manufacturing batches of about 500 units at a time. If you work from home and make things in your basement, some of these numbers will be much lower; others will be higher. The exercise is meant to simulate your price decision making:
- Per unit cost for 50ml of cream (ingredients, manufacturing, labour): 4.75
- Jar: 1.25
- Adhesive label: 0.55
- Retail box: 0.75
- Branded/custom promotional package inserts: 0.50
- Branded shipping box: 2.75
- Average Shipping to the customer: 7.00 (note: free shipping is a major selling feature, but it’s not actually free)
- Fee paid to have your fulfillment center pick/pack/label/ship the item: 3.80
- Average cost of service fees paid to credit card/PayPal/etc. used by customer: 1.75
That is approximately $23.10 to manufacture and ship 1 unit of face cream to a customer.
As you know, a 50 ml face cream can range from about $10 to $300. When you set your price, you are setting your gross profit. If you set a price of $75, your gross profit will be $51.90 per unit (but if you give a 15% first-order discount it would bring gross profit down to 40.65 per unit sold at introductory pricing).
Your net profit comes after all the expenses which include include monthly subscriptions, warehouse fees, website maintenance, rent, insurance, research and development, and advertising.
If you’re in e-commerce, your advertising will be a substantial amount. Somewhere between 6-12% of your gross sales are recommended. Becoming truly profitable can take a long time, especially if your pricing is too low initially.
5. In E-Commerce, Visual Presentation Means Everything
Customers can’t touch it, smell it, taste it, try it, or hear it. All they can do is see it on your website. And your website is nearly the only way they meet you or get to know your business.
Your brand needs quality product photography. It is one of the most important things a customer will consider before purchasing from you. Stick to the brand’s aesthetic. This will allow your audience to immediately recognize your content and make them more likely to interact with it. A bright white poster board is an excellent background for photos of minimalist products. If your brand is more rustic, you can use an old wooden crate for your photos. This can be a DIY project, but only if it looks homemade. Professional is usually the best option when it comes to e-commerce product images.
It’s crucial to differentiate yourself from big-box stores when you are an independent online shop. Gift-wrapping products is a great way to stand out from the rest. A simple tie string and some nice paper can go a long way. Include a tag or note with the name and logo of your shop. This will help make your brand memorable and increase customer loyalty. Personalize the experience and make sure the customer knows and sees your passion. Put yourself in the customer’s shoes and make it easier for them. Even simple gestures like sending a handwritten message with their order can make a big difference in their shopping experience.
A clean and straightforward homepage helps users convert more efficiently by allowing them to follow a clear path to purchase. A user-friendly, attractive homepage can help you build your brand and represent the products you sell. This holds for your social media presence as well. Find your brand “look” and keep it consistent through all mediums.
Consider your website like a brick-and-mortar boutique. Your front door should be inviting and marked. Customers should be able to find what they are looking for as they move through your store. It is essential to optimize your website’s navigation in order to make shopping easy and increase conversion. If it is slow, clunky, or prone to errors, people will move on instantly.
Your Product Detail Page, which is usually placed at the end customer journey, is often the final chance to communicate the reasons why you want to purchase your product. The copy alone might not be enough to convert. Use mixed media to tell the story of each product, such as images and video. Show, don’t tell.
Optimize your website for desktop and mobile. Instead of focusing on one device, create unique strategies for each device.
6. Traffic and Trust Must Be Earned
People will not just find your website. You have to become visible to the search engines or through paid advertising.
Suppose you want to be found organically through regular web searches. In that case, you must optimize your website and rank for specific keywords. This is done through something called SEO (search engine optimization). It takes a very long time to pay off, but you will be rewarded with traffic when it does.
Trust is another critical factor. The more the customer gets to know you and your business and also sees that other people have used and enjoyed what you sell (i.e. verified testimonials), the more they’re likely to buy from you. Be visible. Be available.
7. Advertising and Social Media
Don’t spend much money on paid advertisements until you first invest in social media growth strategies. Social media is a great way to reach new customers and grow your audience. It’s also much cheaper. Pinterest and Instagram are two popular social media platforms for eCommerce. They focus on visuals.
Instagram is an excellent platform to engage with potential customers and gain social proof for your business. You can partner with social media influencers (also called brand representatives) to do some marketing. Spend your time building relationships with followers and showcasing your brand’s personality through Instagram stories.
Content is the king! SEO-friendly content is the best way to drive traffic to your site. What are your customers searching? Customers will flock to you if they find the right content. Sales will happen if your products solve the customer’s problem. Keep your blog updated and consistent. Search engines crawl and rank your site in search results. You should have an email capture form to collect email addresses from your visitors.
When You Advertise, Use Data to Help Decision Making
Advertise. Advertise. Advertise. Set your budget and create a complete circle plan for where you want people to go. Your full circle advertising plan is like a pizza. Each slice represents a marketing channel like Google, Instagram and Facebook that drops potential customers into your overall sales funnel. If your advertising budget is tight at first, you may have to test different areas a bit first to decide what has the best return on investment. Also, don’t forget that sales aren’t your only goal. I once hosted an online contest where I got 800 email addresses signed up for my email newsletter. I didn’t make one sale, but for the $100 it cost me to run the contest and give away products, I got a lot of engaged people who stuck around to get my future emails.
Google is king, and the data you get from google analytics is critical to help make future advertising decisions. It is important to set precise, achievable, and realistic goals and identify your most important metrics. This will help you create a successful campaign. You can check in at any point to see how your campaign is progressing. If you haven’t done so, do some research about your audience to find out who they are and create engaging content. People won’t pay much attention to boring content. Businesses are constantly competing for internet space. Find tools that make your content interesting and enjoyable.
Today’s most successful eCommerce companies are those that provide an exceptional, hassle-free shopping experience and cater to customers.
Research shows that 72% of consumers prefer business contact via email. However, consumers can connect with businesses via social media as a natural way to incorporate a digital presence in their daily lives. In addition, social channels offer shoppers a way to connect with brands.
BigCommerce showed that online stores with a social presence had 32% higher sales than those without. In addition, social media engagement with customers leads to 20-40% higher revenue per customer than companies that don’t. The biggest lesson for eCommerce merchants? Use these social media platforms to build relationships, connect with customers, and provide better customer service. You’ll be a blessing to your bottom line.
You can also use newsletters to share information on an ongoing basis. It is important to collect email addresses as often as possible. My website automatically logs this information whenever a customer creates an account to place an online order. When you turn them into sales, contact information is invaluable. Use reports to identify customers that have not ordered in a while and reach them individually. Also, track the top-selling products and those that have not sold many. Listen to your customers to help you make business decisions. You will benefit from planning and then working on your eCommerce website, especially if technology is your friend.
8. Time Management
You can save valuable time by consulting experts and delegating.
Find an eCommerce and digital marketing expert to review your website and offer advice about how to improve. Although it seems expensive at first, this will help you save a lot of time and money in the long term. It doesn’t take a whole digital marketing agency to help you, but a consultant who can guide you through the process.
It is essential to be able to delegate and outsource tasks. Although it is tempting to assume all responsibilities and jobs, you will soon realize that time is not always on your side. Therefore, you will be able to save a lot of time by delegating and taking a step back to see how you can expand your business.
Outsourcing and Prioritization
It’s a great time to be involved in e-commerce. My advice to you if your company is looking to grow would be to outsource as many as possible while still being true to your brand. E-commerce is like any other business. You get what you pay. Letting go is also important, you can’t be the one to do everything.
We’ve written about this in other articles. The bottom line is that entrepreneurship gives you the flexibility to control your life. Make sure to keep a balance, so you don’t lose sight of why you have chosen this road.