8 Things New E-Commerce Entrepreneurs Need to Know | SMB
With something like 380 websites being created every minute, building an e-commerce shop can be a daunting task. It’s easy to look at all of the success stories out there and think, “How could I possibly be that lucky?”
However, the opportunity for growth in e-commerce is not slowing down. E-commerce sales are projected to grow 85 percent from their 2019 totals by 2022, according to a report from Statista. With financial odds like that, an online entrepreneur who is armed with a lot of knowledge, a good work ethic, and a powerful passion absolutely can be successful in today’s marketplace.
Every great business starts with a great idea — but as you well know, even the perfect idea won’t be successful without careful planning. It might be a helpful exercise to treat yourself like an investor. Don’t put a dime into the company until you see careful research, smart goals, and a method to get your money back and eventually turn a profit. Here are some tips to get you started.
1. Big Names Aren’t Necessarily Better
Many entrepreneurs entering the e-commerce space think they need huge retail sites to get behind their product to be successful. While ultimately selling contracts to big brands is a great way to make money, you don’t need to rely on Amazon, Etsy or eBay to sell your products in the beginning. In most cases, these hotshot names don’t do any marketing for you, and they take a cut of whatever you sell.
In some cases, using a ready-made platform to sell your idea might make sense — but do your homework. There are so many free and low-cost tools for building your own platform, you don’t need the big guys to come in and bail you out. If you’re doing your own marketing and driving traffic to your product anyway, you may as well keep the profits from your sales.
2. Differentiation Is the Key
Boutique products are having their moment right now. The challenge is convincing that first wave to spend money on your product above what they already are buying. Customers love finding the newest, trendiest brand or product and introducing it to all of their friends, so show them that your product is that best new thing.
What makes your product different from the competition? It’s important to think outside the box. Is it more environmentally friendly? Does it grow with your customers? Will astronauts be using your product on the moon? Don’t be afraid to make bold claims — provided that they are 100 percent true and verifiable.
Perhaps a good way to find your niche is by really getting to know your ideal customers. What is the one thing they want most? How will you make that wish come true? If you can answer that, you’ll have a great hook for luring new customers.
3. Marketing. Plus Marketing. Did I Say Marketing Already?
All jokes aside, good marketing is absolutely the make-or-break resource of every e-commerce business. Even if you have the best idea and the clearest differentiation message, no one can buy your product if they don’t know it exists. Business owners are busy people, so this is an area you may even consider hiring out to a third party to ensure it gets done right.
Whether you work with an outside company or bootstrap all of your marketing on your own, make sure you have a clear definition of your target customers and go where they are. Use a clear, consistent message to communicate what your brand is all about.
Think about how to make your product fun to share with friends. If you can get your customers to do some of your advertising for you, your reach will increase exponentially on a limited budget.
4. Compete With Creativity
It’s called the “World Wide Web” for a reason. There are billions of websites, and most of them get lost in the noise of the Internet. Whatever industry you’re in, you likely are competing with some huge brands. You’ll never be able to match their dollar amount for marketing, but you have a unique perspective and you can use that to your advantage.
Remember those ideal customers? Learn more about them. Where do they hang out? What are their online habits? What are some other interests they might have outside your products? I have seen brands go after audiences in very unconventional places with astounding success.
One beauty brand set up videos on Twitch, a platform typically viewed as dominated by male gamers. Finding the brand’s niche audience among the females who also utilize the service garnered enough cash to allow investment in bigger ad spends to stand out on other platforms as well. With some creative thinking, you can get your unique message in front of the right people to get your product off the ground.
5. Find a Dependable Supplier
Whether you are creating your own product or looking to dropship, you need the right kind of supply chain for your business. A successful relationship with your supplier starts with asking the right questions while you’re shopping around.
Keep in mind that most products must meet regulatory guidelines, so it’s essential to know if a manufacturer is equipped to do that in your chosen industry. If you’re ordering wholesale products, you need to know what kind of quality control they will undergo from their creation until they land on your doorstep.
Deadlines can be a big point of contention, so keep a clear line of communication open and have a plan of action for unexpected circumstances in your initial contract.
6. Consider Scalability
You will want to consider the future in every aspect of your business plan. From your initial negotiations with a supplier to hiring decisions, scalability absolutely should be in the forefront of your mind.
You’ll need to work with a manufacturing or wholesale facility that is prepared to do that with you. Beyond your physical product, the website platform you choose needs to be able to handle a greater volume of orders without losing any speed.
The frustration customers feel when websites don’t load correlates directly with bounce rates. As your business grows, you’ll likely reach global audiences, so make sure you also have a plan in place for accepting all types of currency, for international shipping, and for staying abreast of a variety of foreign regulations and tax laws.
7. Create an Experience With Exceptional Packaging
Loyal customers love to be immersed in the brands they love. When they walk into the quaint local shops they frequent they want to smell the smells, admire the perfect decor, snap selfies in front of interesting backdrops, and be greeted by friendly service people while they browse.
It’s an experience. While the brick-and-mortar shop is not part of an e-commerce brand, the touchable, multisensory experience absolutely can and should be. The way to do this well is with exceptional service and the right kind of packaging.
Successful e-commerce entrepreneurs will be on the lookout for packaging ideas that are more than just functional. Your packaging should tell an entire story about the purchase inside that makes shoppers want to share that experience with their friends.
Watch for trends with felt cartons, personalized notes, scented linings, and biodegradable boxes and bags. More than anything, the packaging you choose should fit the overall mission behind your products.
You want that moment of unboxing to be just as shareable as a beautiful mural on a store wall. A little extra investment in beautiful packaging upfront can result in the kind of viral marketing that money just can’t buy.
8. Keep Going
All good things are hard. Building a business might be one of the hardest. It’s easy to get bogged down in frustration when your launch doesn’t take off right away or your traffic plateaus, but if you don’t keep trying, you are guaranteed to fail.
If one idea isn’t working, it might be time to switch gears. As much as possible, arm yourself with data about the people you are trying to reach. Customer surveys can go a long way in helping you replicate and build on positive results.
Use this information to keep a solid plan with measurable goals in front of you and your team at all times. Always keep reaching for that next great idea, and don’t give up. Boutique brands are being sold in million dollar deals all the time — there’s no reason you can’t be next.
E-commerce is definitely a great space for entrepreneurs looking to get their feet wet. With relatively little capital, an idea can become a real business almost overnight. Stick to the basics: Research the right kind of platform for you; flesh out your messaging and marketing plan; look for new, interesting ways to tell your story; find a supplier you know you can work with; and follow through with a remarkable customer experience. You will get there.