There has never been a better time to start an online business.
ShopifyPlus projects a 276.9% increase in global ecommerce sales from 2014 to 2021.
What's more, China and the United States lead in ecommerce sales, clocking in at 672 billion and 340 billion respectively in online annual sales.
That's a lot of cash flow.
Despite the highly competitive nature, you, too, can develop and launch a thriving ecommerce business with the help of this step-by-step guide.
Step One: Define Your Project
There's no denying the power of ecommerce Statista estimates 1.92 billion global digital buyers in 2019.
What does that tell us? There's never been a better time to start selling online.
But before you turn into a profit machine, you have to figure out what type of ecommerce business you want to start.
So how do you do that?
When it comes to products you can sell, the sky's the limit. As technology continues to influence the way we go about our everyday lives, including how we shop, the opportunities are endless.
Perhaps you want to try your hand at a newer, unique ecommerce idea like subscription-based products, which have seen a 100% market increase in the last five years.
Maybe you're more interested in selling a product that is more of a staple in the ecommerce industry, like clothing or jewelry, which are expected to reach 713 billion dollars and 284 billion dollars by 2022 respectively.
As you can see, there's no shortage of industries to explore.
But with so many options, how do you narrow down all those possibilities to something that is going to meet market demand?
Consider these questions to help guide you:
- What problems do you want to solve?
- Are you interested in selling something to a particular audience?
- Do any particular ecommerce trends stand out to you?
- What existing products are you passionate about or interested in?
- Is there a product you wish existed that you could make?
Think about what types of products pique your interest as well as what market you may want to break into. Knowing which niche you're gravitating towards can help you hone in on the product or types of products you're most excited about selling.
Look around you. Chances are, there's a product you use every day that could be improved or expanded upon.
Remember, You don't have to invent a new, never-before-seen product to start a successful ecommerce business.
Step Two: Conduct Market Research
Now that you have an idea of what you want to sell, it's time to roll up your sleeves and research its viability and the market you want to sell within. In other words, it's time for market research.
Market research is a critical part of the development of any product or service. It helps you figure out not only if what you want to sell is lucrative, but it'll help you make sure your product is market-ready.
When conducting research, it's important to be realistic about any potential flaws or issues with the product concept, logistics, or manufacturing. This is an excellent opportunity to lay all the details out on the table and build a product you know will be prosperous from the start.
With that being said, there are a few ways to collect market research data, including:
- Prototype/concept testing
- Focus group feedback
- Competitor research
- Market reports
These methods fall into two types of categories: primary research and secondary research. Both primary and secondary research is pivotal when collecting your data.
This kind of research has an exploratory nature to it, meaning u you are focusing on any potential issues or faults with the product. Instead of looking at trends and other measurable items, you're investigating any glaring problems that might prevent it from selling or cause issues for customers down the road.
Once the exploratory research is wrapped, you can then investigate each of those issues and figure out how to solve or combat them. This is known as specific research.
This is a component of the market research process you can't overlook. The sustainability of your business depends on it.
This component of your research process involves a few components. Secondary research is equally as crucial as primary research, and together the two types help pull together a comprehensive report.
Market Statistics And Reports
This information is comprised of demographic information of potential customers like location, age, income level, shopping behavior, and buyer preferences. Market statistics can be helpful when figuring out who your target consumer is as well as who your competitors are and if your business is viable. You can find this data online one trusted resources like Statista and IBISWorld.
Industry Case Studies
What if you could take a peek at the experiences of similar businesses, including how they overcame any obstacles or pain points? Case studies are a great resource when it comes to learning not only about your competitors but what challenges you may encounter and how to address them. To find case studies relevant to your business, Google [product/industry] + case studies and you should have plenty to pick from.
Like market statistics, understanding the full picture of the market you're interested in can guide your business development. This data is also a great resource for determining the vitality of your business.
It can be tempting to want to skip right ahead to selling, especially with how easy it is to sell online. But if you overlook the gaping metaphorical holes in your product, you're going to be back at the drawing board before you know it.
The more time you take to hash out the ins and outs of your product and understand how it will do, the better your business will be from the get-go.
Step Three: Test Your Product
This stage goes hand-in-hand with the research piece of business development.
Just as it's essential to test the viability of your product and understand your target market, you must verify that your product works as intended.
This stage might not necessarily apply to all ecommerce businesses in the same way. For example, if you're going to run a clothing boutique and obtain pieces at wholesale price, you likely just need to test for quality, fit, style, etc.
However, if you're building a product from scratch, it's imperative to make sure it works as advertised. Let's say you've landed on selling DIY toy kits for kids with a STEM twist. First thing's first, you'll want to make sure that a) the instructions are followable and that b) once built, the product works as intended.
It's also a good idea to make sure your product doesn't pose any risks to the user. The last thing you'd want to happen is to realize that your product has several flaws that could have been avoided or fixed that will negatively impact your business if they're not dealt with.
Step Four: Create An All-Encompassing Business Plan
You have your product, and it's ready to go to market, so you can start selling, right?
Before you start selling, you'll need to draw up a business plan.
Business plans are critical for a couple of reasons. They can:
- Help you get financial backing if you want or need it.
- Serve as a guide when making business decisions.
- Gauge growth and guide future plans.
It can seem like a lot of work, and it is, but similar to product testing and market research, it's another component that will set your business up for long-term growth.
Most business plans include the following sections:
Logistics and Operations
This section should contain information regarding everything from how your product is made or bought to how it's packaged and sent to customers.
You'll quickly learn that your business needs to have smart processes in place to keep things functioning. Your systems are likely to change as your business grows, but it's a good idea to have a centralized location where these details live.
How are you supposed to track growth, profits—or anything else, really—unless you have a detailed sales breakdown? Understanding how many items you have to sell to break even, make a profit, etc. is critical information to keep at your side. This will help guide many of the decisions you'll have to make as a business owner.
Marketing Plan And Customer Acquisition Strategy
Having a marketing plan and customer acquisition strategy is vital to the growth of any business. You won't be in business unless you know how to reach and convert customers continually.
This section should include everything from your quarterly and yearly budgets to your sales reports. Having an accurate pulse on the financial health of your business will help you avoid any pitfalls.
Step Five: Build a Store That Can Foster a Memorable Shopping Experience
Ready to get selling?
We're almost there, we promise.
To start selling, you need to build a store. But not just any online store.
You have to create an outstanding shopping experience for every customer that visits your shop. Providing customers with a memorable and easy shopping experience will keep them coming back.
What Makes A Great Ecommerce Site?
Before you start playing with templates or adding your product catalog, let's take a look at what makes an online store great.
Elements that set great stores apart from the rest include:
- Intuitive site design
- Easy navigation
- Excellent site speed
- A helpful (and easy-to-use) search function
- Detailed product descriptions and clear product images
What Store Builders Should You Consider?
Those are just a few things to keep in mind when building your ecommerce store. But depending on your product and your audience, you may need to focus on some things more than others.
So how do you go about building it?
These days, there are several ecommerce store builders to choose from, including:
- Shopify: Shopify is a leading ecommerce platform that allows business owners to completely customize their online store, as well as manage their products, inventory, payments, and more all within one hub.
- BigCommerce: BigCommerce is a versatile ecommerce platform packed with features that help business owners grow and manage their business such as cross-channel commerce opportunities, localized payments, and digital wallet capabilities to name a few.
- WooCommerce: Built specifically to integrate with WordPress sites, WooCommerce provides similar features to that of Shopify and BigCommerce in terms of payments and storefront design.
- Squarespace: Squarespace is an all-in-one platform complete with tools like merchandise management and product catalog, to single-page checkout and mobile-optimized store templates.
Some may work better for your business than others, so it's in your best interest to look closely at each platform.
Building your store with an ecommerce store builder is one of the more affordable routes to take when it comes to this phase. However, if you want to hire someone to develop your online store for you, that's certainly an option as well.
Just be sure you work with someone that has experience building ecommerce stores before and who has an eye for what customers are looking for in a shopping experience.
How Can I Optimize My Storefront?
Unless you're a complete stranger to the digital landscape, you've likely heard of search engine optimization (SEO).
If you aren't familiar with SEO, it's how you produce more organic (free) traffic from search engines like Google, Bing, and Yahoo.
So how can SEO help?
There's a lot of clutter out there.
In fact, there are an estimated 2 to 3 million ecommerce companies in the world today.
Therefore, SEO is a vital part of selling online as it can help you get your products in front of the right audience and help build your authority.
Devising the right SEO strategy for your business involves:
- Conducting keyword research.
- Organizing your ecommerce store site pages for SEO, otherwise known as your site's structure, and optimizing them.
- Continually revising and improving your store pages to maximize results.
SEO, like other customer acquisition tactics, requires continual trial and error until you get the results you want. And it doesn't stop there. You must continue to optimize your store as algorithms and search queries evolve.
It may not be as clear-cut or intuitive as other parts of starting a business, but it's an essential piece.
Step Six: Implement A Winning Marketing Strategy To Find New Customers
You've done all the heavy lifting, so now the customers are going to start *hypothetically* lining up, right?
Not so fast.
Getting your first customer is a fantastic accomplishment, but what separates successful businesses from those on the fast-track to failure is their ability to bring in new business repeatedly.
If you don't have a constant flow of new customers, you're going to have a difficult time keeping the lights on.
Track The Right Key Performance Indicators
How are you supposed to know if your strategy is working, or if a tactic is worth the investment unless you have accurate data and insights to back it up?
Key performance indicators (KPIs) help us understand how things are working and can help determine what needs to be adjusted.
KPIs like shares, likes, and comments, though important to the big picture, aren't as crucial as other metrics. The KPIs that will determine if you're moving the needle are conversion rate, average margin, and cart abandonment rate, to name a few. Let's take a closer look at those three metrics.
Conversion rate is the rate at which your customers complete a desired goal like making a purchase or signing up for your newsletter. This metric gauges the impact of your tactics and if you need to reevaluate your strategy in relation to those goals.
Otherwise known as average profit margin, this percentage represents your profit margin over a certain period.
Cart Abandonment Rate
This KPI tells you how many shoppers are putting items in their cart but not making a purchase. As you might have guessed, you want your cart abandonment rate to be low.
Figure out what other KPIs you need to keep track of to help you gauge the performance of your tactics and campaigns. That data is one of the best ways to see how your business is progressing.
Not to mention, this information can help you make decisions about future campaigns and products.
Test Multiple Marketing Channels
A solid marketing strategy will have several components that work together to help you achieve your goals. Because this is a new business, testing different tactics and seeing how they work together will give you insight as to what's resonating with your target audience and where you need to adjust.
Let's take a look at some of the most popular marketing channels.
Social Media Advertising
With over 3.2 billion social media users—or 42% of the world's population—these channels are a prime place to advertise to your target audience. Facebook, Twitter, Instagram, and YouTube are a few of the most popular channels to advertise on.
This ad from Cotopaxi is eye-catching, colorful, and does a great job of demonstrating the versatility of the featured product (in this case, the Batac Del Día backpack).
Each platform offers several types of ads, like video and static image, as well as ad formats unique to the platform in question.
Search Engine Marketing
Search Engine Marketing (SEM) refers to gaining website traffic through purchased ads on search engines like Google and Bing. When you search for a product you're interested in buying, you'll likely see several links to product pages from various brands.
This is SEM in action. It's easy for customers to click right to the products they're interested in as well as get a snapshot of important product information like price and brand.
Influencer Marketing And Partnerships
You've probably heard the term "influencer" unless you've been hiding under a rock. Breaking into this 5-10 billion dollar industry is a great way to expose your brand to not only your target audience but to people you may otherwise not have access to. Influencers have almost cult followings, which make this marketing tactic powerful.
Sponsored posts like this one from @goldenwoofs, who has over 28,000 followers on Instagram, spread the word about your product in a more "genuine" way as opposed to ads. Followers trust influencers, so consumers think, "if they're using these products and recommending them to others, they must be great."
Anyone that says email is dead probably doesn't know how to properly use it. Email campaigns are another excellent way to engage with customers for a variety of purposes. Are you adding another product to your lineup at some point down the road? Send a teaser email with exclusive access to those who are on your email list. The possibilities are endless.
This timely email from Jeni's Splendid Ice Creams is attention-getting and has a clear call to action for the recipient.
The bottom line is that there is no "right" way to market your business. In fact, it's wise to try numerous channels and genuinely see what works best for your company.
Step Seven: Keep Customers Coming Back Again And Again
You may be thinking, "Can't I just find brand new customers instead of relying on old ones? Won't that work best?"
The Importance of Customer Retention
Customer churn, otherwise known as the percentage of customers that have stopped using your product or have stopped buying from you, can have a severe impact on your business.
There's a lot to be said for the customers who know and love your product.
CallMiner reports that an estimated $136.8 billion per year is lost from U.S. companies due to avoidable consumer switching.
Also, 67% of customer churn could be avoided if companies addressed and worked to provide a solution to a customer issue during their first interaction.
What does this tell us?
It costs more to find and convert new customers than it does to return existing ones. Plus, you spend so much time, money, and effort in finding customers, so when you finally have them, don't let them drift off.
Never stop trying to generate new business, but don't forget about your existing customers either. You may be leaving money on the table if you let them slip through your fingers.
So how does a business retain customers?
Successful Methods For Increasing Repeat Customer Rates
You understand the importance of customer retention, so how do you put that into action?
Let's take a look at some of the best ways to retain your customers.
Transparent Social Proof
Did you know that 83% of consumers say that they are more likely to purchase a product if it's recommended by family or friends? Social proof is a great way to establish trust with your customers by keeping things honest.
Reviews, customer-generated images, and ratings add transparency to your relationship with your customers, which is integral in keeping them around.
Outstanding Customer Service
How much does customer service matter to your customers? A lot. American Express found that seven out of ten U.S. consumers report having spent more with a company that provides better customer service over a company that does not.
Retailer Urban Outfitters provides customers with several ways to contact them, so they can choose the method that works best for their schedule and communication preferences.
Reduce Friction With The User Experience Of Your Storefront
Customers that don't understand how to use your website or get frustrated with it probably aren't going to be returning any time soon. A great way to remedy this is to audit your store's user experience and identify areas that could be improved or streamlined. For example, if your checkout process is difficult to navigate, think of ways to make it easier for the customer. The better your site's user experience, the better it is for your customers.
Fashion brand, Madewell, has a streamlined checkout window that makes it clear what's in your cart, how much it costs, how many are in your cart, and other relevant product details. It's also really easy to add in a promo code, which customers always appreciate.
Always Look for Ways to Improve Your Business
The hard work doesn't stop after your store goes live and you sell your first product.
Because you're just getting started, focus on implementing best practices and testing. Once you have reliable data to analyze, then you can begin optimizing and making data-backed changes.
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