Not too long ago, starting an e-commerce business was a difficult and costly endeavor. The time and cost to set up a store and deal with inventory prevented many aspiring entrepreneurs from getting involved. Running a successful e-commerce store is by no means easy now, but it is possible for virtually anyone to get started, reducing costs through various platforms and drop shipping products.
According to a study by UPS, four out of every ten purchases are conducted using an online channel for searching and buying. These figures are only likely to grow, so there is a huge potential for anyone looking to set up a store. If you are considering venturing into e-commerce, the following method should give you a good outline for getting started.
Research Products
Many entrepreneurs are attracted to the idea of starting a business, so they don’t necessarily have a specific product in mind. While you might hope to come up with something unique, most vendors achieve success producing something that is already in demand. Look through Facebook, Google Insights, the Google Keyword Tool, Amazon, and other marketplaces to see if consumers are interested in a type of product. Ideally, you would also have the opportunity to expand into related product lines if you achieve success.
Decide on Product Development
You may want to develop a product from scratch, but there are other options. Product development can be expensive and time-consuming, with no guarantees the end result will be a hit. Alternatively, you could choose to buy stock from wholesalers. While you won’t have a unique product, you can save a considerable amount of development costs. The easiest option of all is to use a drop shipping service, so you don’t actually have to deal with storing or delivering the products at all. However, the profit margins for drop shipping will typically be lower.
Analyze Pricing
Pricing will play a key role in your success. You need to be able to pay for stock, hosting, payment processing fees, and marketing, while still making a profit. Understanding your overall costs will enable you to determine a viable price that ensures your business can survive. A simple method to start with would be to look at your competitors, determining the typical prices consumers are willing to pay.
Think About Shipping
Shipping can play a major factor in your conversion rate, with consumers making buying decisions based on your policy. You will typically get a higher conversion rate if you cover the shipping costs, but it won’t always be the case. You might prefer to add some shipping fees to the overall cost of each item, but you could start to look expensive compared to your competitors. To find out what works for your store, it is important to run tests, but the most important thing is to be clear and direct with customers.
Choose a Platform
Most store owners will be reluctant to change platforms when their store is set up, so think about the right option for you before you get started. Shopify is an incredibly popular option, making it easy to get started selling products. Everything from design and branding to fulfillment and order tracking can be performed within the product. Alternative options include WooCommerce for WordPress users, Big Commerce, Magento, and Volusion. Try to make a decision based on a long-term plan, enabling you to grow and adapt with the software.
Develop a Brand
Brand building is one of the elements that will let you stand out from the crowd. You may be offering similar products to other stores, but your brand can indicate quality, value, reliability, and many other elements. Developing a brand will take time, with customers needing to spread the word through reviews and feedback. You can build a community using social media channels, encouraging customers to post their experiences with the product and other related content.
Start Advertising
While it is possible to get organic traffic through SEO and social media, most new e-commerce stores rely on paid advertising for their visitors. Investing in advertising may be daunting initially, but you can work on your campaigns until they are profitable. When you know your sales funnel works, you can feel secure spending more knowing that you will remain in profit. Additionally, when you consistently buy paid ads, consumers gradually start to recognize your brand and you gain extra organic traffic.
There are many business opportunities available online, but e-commerce should be of prime consideration. Consumers are becoming more willing to buy items online, with many offline stores suffering as the market changes. You can also find unique opportunities to sell in small niches, branding yourself to a highly targeted audience. Of course, there are many challenges to be faced when setting up a store, with competition a major factor to consider. However, if you are committed to the process, e-commerce is a great way to build a business online.
