When setting up an ecommerce business, you can get caught up in the excitement of launching a new venture, and fail to do the necessary groundwork. There have been many cases of ‘bricks and mortar’ brands that sought to transition to an online model, but they underestimated the amount of effort required. Remember, it’s not just a case of setting up a website, linking to PayPal, and starting to sell!
The COVID-19 pandemic saw many companies taking their business online in order to survive. However, setting up an online business requires careful planning and a clear understanding of what platforms to use and how to ensure operational efficiency. Then, once your business is up and running, you have to consider how to market it to attract customers and drive sales!
This article will cover the following areas to help you set up a successful business online.
So, let's dive in and see what's involved.
When planning your ecommerce website, you need to consider many factors, including the potential pitfalls and which ecommerce model works best for you.
The first question you need to ask is: Are you a business that plans to sell exclusively to online channels? If so, do you have the infrastructure in place to make this happen smoothly?
You have to consider:
Be ready to put in place an efficient stock management system to deal with the amount of business that your ecommerce company will attract.
Are you starting out as a new company, or are you transitioning a traditional business to the online space? If you already have a bricks-and-mortar business, you should have built up some brand credibility and have an existing customer base to build on.
Consider how your physical store can support your ecommerce store. Perhaps your store could offer a click-and-collect service for online purchases? Or maybe customers will see a product in your store, but wait until later (when they get paid, for example) to purchase it online. In these cases, both the physical and ecommerce stores are supporting your brand.
Your physical and online stores don’t need to be mutually exclusive. By combining your online and offline presence, you can offer a more holistic and focused customer experience that aligns with their purchasing habits.
Let’s now consider some of the pitfalls you might encounter.
Use of existing resources
Your existing resources may determine the type of ecommerce business you can launch. For example, if you’re a pet store, you're not going to be able to sell certain types of your products, such as birds, online! Similarly, you may find it difficult to bring your consultancy business online. So carefully consider whether your business is even suitable for ecommerce.
Lack of understanding of business models
The ecommerce space uses several business models that are very different from traditional business models. (These are outlined later.)
If you don’t understand what business model works best for you, your ecommerce business is likely to falter.
Lack of insight into capital investment
Many people underestimate the amount of money needed to set up an ecommerce business. Among the costs you’ll have to consider are:
Be sure to research the business models and choose one that is most likely to give you the best return on investment.
When setting off on your ecommerce journey, make sure you’re clear about your objectives. Are you going to be manufacturing your products, or will you be selling someone else’s products? What are the pros and cons of each approach?
As with any business venture, an ecommerce business requires careful and clear-sighted planning. Remember, just because you love your product doesn’t mean that everyone is going to love it. Here are some steps to help you uncover opportunities for your business.
Identify and watch your competition
Google is your friend for doing research. Are there other people in the industry selling similar products? How do they do it? How do they engage with the market? And how are you going to do it differently?
Find out about their product offering, their price range, and communication and social media strategies. Subscribe to their mailing list and follow their social media pages. You can get very detailed by using a competitor analysis tracker.
Follow industry trends
Where do you fit into the market? What value do you bring to the industry? To understand this, you must follow industry trends and know what’s happening in your market. This will enable you to offer a better product or service than your competitors.
Set up social listening and alerts
By paying attention to the market, you can find out what people are saying about your brand, your competitors, and the wider industry. Social listening will enable you to monitor the brand conversations. And alerts, such as Google alerts, will ensure you don’t miss out on any new trends or developments. You’ll be in tune with the real-time movements of the market.
Let’s now consider the different elements of an ecommerce website, and then look at some popular ecommerce platforms.
Most e-commerce websites share several common elements.
Now that you know the common elements, let’s look at some specific ecommerce platforms in more detail.
Shopify is a very good platform for anyone who's looking to set up an e-commerce offering fairly quickly and optimize their online business. It's generally suitable for small to medium-sized organizations.
Here are the main characteristics of Shopify:
Bear in mind: The prices really go up when you start getting into the larger enterprise-level offerings.
There are many compelling reasons to use WooCommerce, but perhaps the biggest attraction is that it’s essentially free.
Here are the main characteristics of WooCommerce:
Bear in mind: You do have to pay for additional features, such as widgets and plugins.
A Wix ecommerce site can certainly get you started on your global ecommerce journey. Its ease of use makes it ideal for beginners.
Here are the main characteristics of Wix:
Bear in mind: Depending on the amount of functionality and widgets you add, it can be slower than other ecommerce platforms.
Here are the main characteristics of Squarespace:
Squarespace is a more expensive entry-level option, but it does enable you to create very impressive websites.
Bear in mind: You have to pay extra for additional functionality, such as abandoned checkout recovery.
Although Magento is more expensive than the other options, it does have a powerful, agile, and flexible ecommerce experience.
Here are the main characteristics of Magento:
Bear in mind: For the majority of people, Magento is probably just a little bit out of reach. It is generally suitable only for enterprise-level e-commerce organizations doing around €50,000 in business a month.
The platform you choose may also depend on whether you are selling a service or a product.
Having set up your ecommerce platform, you now need to consider your operations. These enable you to get your ecommerce store up and running.
Note: Although marketing may seem to be the fun part of running an ecommerce store, you must not neglect your planning operations. No amount of clever marketing can compensate for poor planning!
Generally, you have three options for warehousing: self-managed, outsourced, or drop shipping. Self-managed offers you the most control but may bring the most risk.
Consider how you are going to package your products. What will people see when they receive your product? Does the packaging reinforce your brand, or undermine it? Does it enhance the customer experience? Add a personal note or consider unboxing, both of which can help build up User-Generated Content (UGC).
Marketing your ecommerce business involves:
To build the brand, you must engage with customers at the top of the sales funnel. You can do this using channels such as social media (which has become a key part of any ecommerce strategy), PR, and content marketing. Position your brand as being important to customers, aligning with their values and needs. When people search online, they are asking a question. Position your brand as the answer to their question!
When you start noticing more traffic coming in from organic search, consider investing small amounts in paid search. You might focus on your brand name in one campaign and on keywords in other sets of campaigns. There are still people looking for your product or service, even before your brand is established.
You can drive sales using:
Start off small, and then grow your budget. You could consider splitting your marketing budget like this:
If you want to know whether your ecommerce business is successful, you need a single source of truth. This is why metrics and analytics are so important to your business. All the traffic that goes to your website needs to be managed in one system, such as Google Analytics.
You can use several strategies to retain customers:
If you can delight customers with a unique customer experience, you can build a loyal following of brand advocates who will help you promote your business. For all of these it’s important to understand the principles of data privacy.
Social commerce has become an important element of any ecommerce strategy. Customers are increasingly using social media channels to research products and also buy directly from brands’ social pages. It's a channel that's on the rise for driving sales and revenue, so consider looking at your most active social media platform/s to see if you can optimize it to drive sales.
This article was adapted from our webinar on Setting up an ECommerce Business. Watch the full webinar here.
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