While there are many opportunities out there for people who want to break into ecommerce, it’s important to engage in the preliminaries before jumping in headfirst. Starting wrong will make life a lot more difficult down the line. Here are seven business decisions ecommerce entrepreneurs must make when putting together an online store.
How to Define Your Niche
A lot of people get into ecommerce with outsized expectations. Your e-store isn’t going to replace Amazon or eBay. Defining your niche is one of the first steps you need to take when planning your ecommerce business. It’s certainly one of the most important aspects. Choosing a market that is already saturated will leave you lost amongst the competition. Getting really specific with your niche will help you attract customers looking for that exact thing.
Sourcing Materials and Structuring Inventory
Once you’ve determined your niche, you’ll need to make some decisions about the products you’ll sell. This can be challenging when there are so many possibilities—all of which are capable of affecting your bottom line in different ways. As an example, cheaper products will lower your upfront costs, but they might not reflect as well on your image.
Approaching Brand Building
Your brand should be one of the top driving factors when it comes to making conversions on your ecommerce site. Of course, you want your company to offer consumers superior products that are actually useful or relevant to their lives. But branding does so much more than this, including leading to long-term customer loyalty.
When people identify with a brand, it’s often an emotional appeal just as much—if not more—than a love for the merchandise itself. This is why major brands such as Apple and Nike are able to retain customers, while still getting great returns on their goods.
Build a strong brand presence on social networks like Instagram, Facebook, and Twitter. This will help build your brand awareness, social support, and reach. This is a great way to make yourself known, showcase your product, and drive traffic to your site. Statistics show that Instagram posts attract more engagements compared to Facebook and Twitter. However, let’s not focus on this point, InstaGrowing experts know more about how to get the most out of social media.
Choosing an Ecommerce Platform
Deciding upon an ecommerce platform is incredibly important to the success of your e-store. Choosing the best ecommerce website builder, like Shopify, will give your company a competitive advantage in several ways. You’ll have better themes and templates, as well as stronger customer service when you need it.
Choosing the wrong ecommerce platform – like one that is clunky, difficult to use, prone to crashing and contains security flaws – can be the difference between success and failure for your business.
Determining Your Business Model
Your ecommerce store doesn’t need to be confined to a specific sales model. The only requirement is it makes money. A traditional online shopping experience might work best for your particular brand. But don’t be afraid to push the boundaries. Companies such as Birchbox have shown it’s possible to approach ecommerce from totally new directions. In fact, the subscription and curation services marketplace is on fire—growing over 100 percent per year for the past five years.
How to Deal with Inventory, Shipping, and Returns
You can’t run an ecommerce site without figuring out some logistics first. Your top priorities in this realm will be inventory, shipping, and returns. Are you going to warehouse your inventory, or drop ship it?
There are different costs and challenges associated with both options.
Your return policy is critically important to the overall functionality of your online business. The average return rate is typically higher on ecommerce purchases than in-store due to a variety of factors. You will lose money, as well as make customers angry, if you don’t make your return procedure transparent.
Allocating Your Marketing Budget
Marketing is critical to the success of ecommerce stores. You need to find ways of attracting customers to your website. People won’t just randomly stumble upon it unless you have incredibly strong organic search power. But this typically takes a long time and a lot of traffic, to build up. You’ll likely want to do some research to see where your potential customers hang out online.
Social media outlets is a good bet. Don’t just mindlessly throw your money into campaigns though. Find ways to get a better return out of every dollar spent.
Influencers are a great way to increase engagement with consumers in a more organic approach than traditional marketing methods. These individuals have online followings that overlap with your business. People listen when influencers recommend a product or service.
Entrepreneurs must make a lot of tough choices when starting an ecommerce business. The most successful ones take the time to consider the pros and cons of each before acting.
