In 2017, an estimated 1.66 billion people worldwide purchased goods online. During the same year, global e-retail sales amounted to 2.3 trillion U.S. dollars, according to Statista.
Whether you have the perfect product in mind or you’re looking for a high-growth business opportunity, e-commerce provides an appealing marketplace.
If you’ve made the decision to get into e-commerce, you’re likely wondering: Now what? Here is your primer for getting started with your e-commerce business.
Step 1: Find your niche
In the vast world of e-commerce, it’s not enough to have a great product or great service. Your business has to have a niche market. Having too broad a business concept or too broad a product base will lead to getting lost in the expanse of the internet.
You might want to open an online candy shop, but just marketing yourself as a candy shop is too broad. Instead, you will want to think about opening an allergy-friendly candy store, or you might sell gourmet candies with unusual flavors and ingredients that can’t be found anywhere else.
As you contemplate your niche, do some market research to determine the competition within that niche. You don’t want to launch a new business in a market that’s already dominated by a leading brand or flooded with competing brands, but a niche with too few, or no companies represented can indicate that it isn’t a viable market.
Step 2: Create your customer persona
Once you know your niche, it’s time to develop a customer persona. Know who your products will appeal to. A well-developed customer persona includes your target customer’s gender, age range, income level, family status and geographic location. You absolutely have to know what problems you are solving for your target customer.
Once you understand your customer, you can start developing a brand that would appeal to that customer persona, pick out the ideal products and services for that customer and develop a marketing plan that will reach your target audience.
Step 3: Choose or refine your products and services
Understanding your niche, your customer and your value proposition will help you to choose the right products and services for your business.
Selecting your products before you understand your market and your target audience is premature. It’s best to launch an online business with a small, carefully selected group of products. As you see which products sell well with your customers, you can expand your offerings in line with what your customers are looking to buy.
Step 4: Select a business model
There are a host of online business models. If you already have a physical business that you’re expanding online, you might just be selling portions of your existing inventory online. The business model you choose will depend on your products and your market, and your preferences as a business owner.
4 common models for online business
- buy and hold inventory to resell
- run a drop-shipping business if you don’t want to physical handle inventory
- hire another company to manufacture and ship your unique line or products
- create an affiliate marketing site that offers appealing content around products sold by other retailers to draw traffic to their sites for a finder’s fee
Step 5: Find the right software or selling platform
The most intimidating part of launching an e-commerce business, for many, is the technology involved. Fortunately, there are a host of software, platforms and services designed to make setting up and operating an e-commerce site easier.
Cloud-based platforms with their own check-out services require nothing more than for you to choose a template and post pictures and descriptions of your products. There are firms who will operate the technical aspects of your e-commerce business for you.
The exact software, platform or service you choose for your e-commerce business will depend on your business’s individual needs, but your chosen service should ensure that your business is secure, that it’s easy for you and your customers to use, that it’s marketable and that it allows you to scale your business upward.
Step 6: Start marketing your e-commerce business
No e-commerce business can succeed without a strong marketing plan. Once you have all of the elements of your business in place, it’s time to start spreading the word about your business and building your brand. Because you’re marketing an online business, most of your marketing efforts should be online.
Fortunately, there are a host of online marketing options, so it’s easy to develop a marketing plan that fits your business’s budget. There are many online marketing strategies you can employ, but the important thing is to have a clear marketing plan and to tailor your marketing to your customer persona.
By focusing on these elements of starting a new e-commerce business, you will avoid many of the pitfalls and common mistakes that lead new e-commerce business to failure.
By finding your niche and thinking about your customers, you will develop a clear brand that speaks to your target audience.
As you perform market research in your niche and select your products and services, you will be better informed to price your products to avoid shortchanging your business.
By homing in on a business model and selecting your platform, you will gain a better understanding of your business’s operations and be better equipped to know where you need to seek supports from experts in the e-commerce field.
Through your marketing plan, you will reach out to customers and potential customers to grow your business.
There are a lot of considerations in starting your own e-commerce business. But with the right steps, and a strong business plan, you can be part of the lucrative e-commerce market.