7 Core Concepts E-commerce Entrepreneurs Need to Know
As increasing numbers of purchases take place online, e-commerce is proving to be one of the top business opportunities available. Shopify has estimated that worldwide e-commerce sales will reach $3.9 trillion in 2020, with no sign that results will see a slump anytime soon. Stores have numerous challenges, as with any enterprise, but growing a successful business is extremely achievable. To maximize your chances of success, though, it is crucial that you understand some of the core concepts required to build a store.
Find a Suitable Market
A suitable market will usually already have high demand, but there should be an opportunity for new entrants. If you cannot find anyone significant operating in the market, it is usually a sign that demand is low. If you already have a product in mind, look through Google Trends, the Amazon marketplace, and similar sites to ensure customers are interested in what you intend to sell. The best option will usually be a sub-niche within a popular and thriving market.
Consider the Business Model
Several business models work for e-commerce. One option is to simplify the process and dropship goods. Typically, you would source products, often from China, and build a relationship with the product creators. The manufacturer would design, build, and ship the items, with your business paying a fee for each product sold. The profit for each sale can be minimal, but you reduce the complexity of running the store.
Alternatively, you could design and build the products yourself, finding a factory to manufacture the items for you. You can get some initial samples developed until you are satisfied, before ramping up production. You could then house and ship items from your facility or send them to a general fulfillment center. It is, of course, possible to use a combination of models to build a larger store.
Think About Logistics
Thinking about the logistics of your operation will work alongside deciding the business model. You will need to think about the entire process of creating an item through to the delivery to the customer. Additionally, you will need to factor in returns, making each part of the process as streamlined as possible. How you proceed with your choices will depend on the business model, with dropshipping varying considerably to an in-house operation. Fundamentally, though, you will want to limit friction during each stage, focusing on efficiency and simplicity.
Select the Right Platform
There are various existing platforms, while you could also choose to develop your own. A standard option is Shopify, providing a reliable product for numerous stores. The Shopify App Store contains many add-ons that help you create a distinct website. Everything from the design elements to shipping assistance can be improved using templates and apps. Some alternatives to Shopify are BigCommerce, 3dcart, Squarespace, with WooCommerce offering an excellent option for WordPress users.
Construct Your Marketing Message
There are countless e-commerce stores, so you need to have a marketing plan in place. A crucial part of the plan is constructing a message that will resonate with users. You may stock the best products, but consumers won’t immediately know that. Think about the audience you hope to cultivate, considering who they are and what they respond to in the content they consume. You may be focused on exclusivity and luxury, aiming to limit the number of items you have for sale. Alternatively, your marketing could focus on price, indicating you offer value for customers. When your message starts to take root, visitors will gain an expectation from your store, and your brand will begin to grow.
Improve Processes and Maximize Conversions
The first attempt at building a store won’t usually provide optimal results. You may find that customers don’t respond well to your product, the packaging, a brand logo, your web design, or marketing messages. It is reasonable to expect some negative feedback, with your response indicating how successful your store will become. Aim to analyze processes regularly, assessing where you can improve or test alternative options, factoring in customer feedback and analytics data.
Develop Traffic Channels
Popular stores don’t just rely on a single traffic channel. You may have one channel that produces the best results, but you should still aim to diversify. Options like Facebook advertising or SEO may lose effectiveness, with competitors copying campaigns or third-party companies changing their rules. Controlling various traffic sources reduces risk, allowing you to switch attention if required. Paid ads, SEO, social media, content marketing, answer websites, and video creation are all viable options.
The growth of e-commerce has proven difficult for physical stores. Increasing numbers of consumers prefer to shop online, choosing the convenience and choice of an e-commerce store. It is also possible to find smaller niche businesses that offer less common items than mainstream outlets. If you can build a store using the listed concepts, there is no reason you cannot find a segment of your market. E-commerce growth is not slowing down, so now is the time to develop a profitable store in your industry.