Every day, the number of online buyers continually increases, making more businesses transform into eCommerce ventures. The digital era is welcoming conventional as well as new business concepts to have online startups.
For some, it is
easier to take the plunge, whereas for others, it is a nightmare. To help you easily plan your journey to become a web entrepreneur, here I am sharing the essential considerations on how to start an eCommerce business.
1. Select products after extensive research
Choosing a
product or service to offer on your eCommerce website is the biggest challenge.
We often copy the complete business model of an online business when we know that they are earning a lot by selling a particular set of products.
It is a viable
strategy if a few stores deal with similar products. However, as
soon as more stores join the bandwagon, your store may face tough competition.
It may make you close the eCommerce business or move on to another niche.
Therefore, it is mandatory to think twice before offering the products
or services online.
Do your market
research. Visit local markets to view what is available and what is not. Look
into industries where the existing product or service quality needs
an innovative solution. Try to be creative in deciding on a product that is
not replaceable in the same form so that your target audience remains glued to
your eCommerce business for the near future.
2. Define your target audience
Defining your target audience also involves understanding the region where you would like to operate. With a proper understanding of who your target audience is, you will be able to use the right kind of communication and platforms to get in touch with them. Such vital details form part of what leading mentor programs like the Ecom Warrior Academy teach to budding entrepreneurs.
Decide the
product or service, and find the target audience around it. Get to know their
behavior as to how they buy. Do they use mobile devices, or are they still habitual to
browsing on personal computers? Know their cultural preferences and geographical
differences to better cater to their needs.
Knowing your
audience may help you devise an effective strategy for your eCommerce business; you may be offering products and discounts without any fruitful
results. For example, you can choose women of ages above 30 years in the local
town to reach them with attractive cultural attire.
3. Speculate your sales figure
Product
selection is half of the game. The real thing to consider is the volume of
sales. On one side, a cheap product with higher sales may give you more profits
than an expensive item with fewer conversions. Evaluate your product or
service to assign budgets accordingly and expect realistic profit margins.
Deciding the
sales figure of a local eCommerce business is more accessible, but it becomes
challenging when you think of expanding to other territories. You can run
multiple checks along with competitor’s analysis to find how much money they
have injected into their business and their return on investment. With this,
you can plan finances and expect to earn that initially covers the
costs.
4. Price your Products
Product pricing
is also tricky in the eCommerce business. A product or service can be priced in
line with your business strategy. For example, you can set monthly
subscription charges for digital products like web applications or
magazines. The subscription-based model also works well for products consumers order frequently, such as skin and beauty care products or grocery
items.
You may often
consume to set a product price above, below, or equal to your
competitor. However, this is malpractice. Evaluate your product independently
and know the price your potential consumers are willing to pay. For example, if
you are selling highly customized shirts, your customers may pay twice the
price of a simple shirt that is available in every random store. Improve your catalog quality, which may compel you to construct more
consumer-centered pricing strategies.
5. Do a rigorous analysis of your competitors
Competitors’
analysis is as vital as deciding over the products or services for your
eCommerce business. It is a significant factor in product selection as entering
a competitive market requires you to offer outstanding quality, the lowest rates,
and an impeccable marketing strategy.
Despite this, you may also need to develop an innovative solution unavailable in the market. It is the competitors’ analysis that helps you make
firm decisions. Therefore, build your business strategy only if you know what
the competitors have in store for the target audience so that you can formulate
a different way to approach them.
6. Plan your inventory
For selling
digital products, you need neither a warehouse nor an inventory management
system in place. However, if you are selling physical products, you may need to
plan to manufacture, order, and hold the inventory.
To effectively
manage inventory, you may need to use different web applications compatible with the eCommerce platform you aim to use. It happens most of the
time that companies buy a desktop solution for inventory management, and when
they seek to go online, they are unable to carry forward the data.
A small
eCommerce startup may not initially need a dedicated warehouse as their sales
volume may not permit it. They can share a warehouse or hold the stock
in their garage or a dormant room and move to a dedicated facility as the
sales grow.
7. Allowing order tracking
Your eCommerce
business can allow tracking orders until it is in your hands. Tracking it in transit depends on your courier company. Check if they offer order tracking
or not. If yes, you may need to find out if you can configure their order
tracking in your web portal or not.
8. Engage with reliable shipping partners
Every shipping service provider has terms, conditions, and territory to cover. Collaborate
with local courier services for cheap and fast deliveries while engaging
reliable companies for international consignments. It may not only help you in
routine business operations but also in pandemics like COVID-19. You may need commercial fulfillment services to streamline your product fulfillment and logistics.
In a situation
of strict lockdown, when everyone is advised to stay home, a few courier
companies are making e-commerce operations possible. If such a widespread
disease occurs, your eCommerce business must be capable of serving your customers. Otherwise, it may badly affect your sales and goodwill. Learn How
COVID-19 is Affecting E-commerce to take preventive measures for making
your online business a success.
Final words
It takes a
whole lot of effort to plan and launch an eCommerce business. Every step takes
excellent care. Missing any of it or committing mistakes can be devastating. Plan ahead
of any misfortune by taking care of the above factors and keep your online
business safe.