Everything You Need to Know Before You Launch an Online Store

There are many advantages to opening an online store rather than a brick and mortar business: fewer overheads, access to millions of customers and the ability to remain open 24 hours a day, 365 days a year.

That’s not to say opening an online store is easy though. You’ll need a superb product, a well-defined marketing plan and a thirst for learning the technical aspects to running a modern e-commerce store.

1.    Find Your Niche

Finding the perfect niche to exploit can be tough work even for experienced marketers. It’s a very important part of online marketing, businesses that discover their perfect niche and USP (Unique Selling Point) have a far greater chance of success than those that don’t.

• Check out the competition. A good niche is one that’s both profitable and not saturated by competing businesses. If you’re going to be using popular marketplaces to sell your products, check how many other businesses are selling your product right now.
• Offer originality, experience or quality - Ideally all three! Small retailers often compete with larger ones by offering something they can’t - typically service, quality or experience.
• Check out the SEO. (Search Engine Optimisation) If you’re going to be operating your own website, a    large route to market will be Search Engine Optimisation. Check the keywords for your main products and seek the advice of a seasoned Search Engine Marketer to discover how easy it will be for your website to compete on Google.

2.    The Business Plan
 

Before you start building the store, you’ll need to plan the process of opening, running and turning a profit. You’ll also need to work out your operating costs and a reasonable set of sales figures to prove your new business can become profitable.

You’ll need to consider:

•    Fees for running the store (Hosting, Maintenance & Transaction Fees)
•    Production costs (If you’re manufacturing the Product)
•    Shipping costs.
•    Taxes.
•    Wages (If you’re employing Staff)
•    Overheads (Office / Warehouse rental, Heating, Lighting, Internet Access, Telephone)

The business plan forms the basis of how your business will become profitable. Spend as much time as you can developing it, you’ll be thankful later on!

3.    Choosing A Web Host / Store Service

In the modern era, you don’t actually need a dedicated website to sell goods. Ebay is the most recognisable option, yet many hosted shop fronts are available to take advantage of.

•    Ebay
•    Shopify
•    1and1
•    Big Cartel
•    Etsy
•    Sell Simply
•    CaféPress

All services have their plus and minus points and not all are suitable for every type of store owner. This is one area where research and patience will be required to discover the right option.

Ideally, this should be factored into your business plan because it’s one of the main operating costs.

4.    Getting The Design Right

Whatever you do during the design phase, steer clear of flashy gimmicks. Keep it clean, well designed and add a touch of flair rather than heavy handed branding.

Choosing a good web / graphic designer is a great investment at this point. A great design will boost your SEO, Conversion Rate and help draw customers back to your shop again and again.

•    Collect email addresses (Great for advertising sale events and new Products)
•    Pick a color scheme and stick with it. Your web / graphic designer will be able to help you with this.

5.    The Payment Gateway

To take debit / credit cards, you’ll need to open a payment gateway account:

•    Paypal
•    WorldPay
•    GoCardLess
•    Stripe
•    Nochex
•    Sage Pay

Important: Most payment gateways have high security measures for new account holders. Always take the time to fill out financial forms properly and ensure you have all the details ready to hand. It’s also worth noting that many payment gateways will use a credit reference agency such as Experian or Equifax to check your credit score. If you’re concerned about this, it’s worth conducting a check yourself to see what financial data is held about you before you make your application.

6.    The Marketing Plan

Most online stores use a variety of platforms to market to new customers:

•    SEO (Search Engine Optimisation)
•    SEM (Search Engine Marketing) & PPC (Pay Per Click)
•    Social Media Marketing
•    Email Marketing

In the early days, you may have to work hard to attract an initial crowd to your website. Time spent crafting and implementing a marketing plan early on will make a huge difference to your business profitability long term though.

It’s also worth understanding that different demographics reside in different places online. Take the time to understand who your customer is and where they spend their life online. Once you have this information you’ll be in a great position to target them with adverts and promotions.

•    Offer regular promotions and sales.
•    Keep social media accounts updated frequently.
•    Discover where your customers live online and target them.

7.    Start A Blog

Content Marketing is one of the most popular marketing methods online right now, with good reason. Running a quality blog about your product and interesting aspects of your niche will help you.

•    Attract more customers.
•    Give them inspiration and ideas.
•    Help boost your SEO (Search Engine Optimisation)

Most online stores update their blog at least a few times a week. You might consider employing a copywriter to help build your online store blog and keep it updated with fresh content on a daily basis.
Another positive aspect to running a blog, is the easy integration with social media. If your marketing plan involves Twitter, Facebook or Pinterest then operating a WordPress blog is a great idea.

8.    Don’t Forget To Register The Business

Depending on where your business is located, you’ll need to register it and fill in all the relevant legal paperwork. You might need to consider:

•    Tax laws and book-keeping.
•    Registering a Limited Company or Incorporating.
•    Business permits.
•    Business liability Insurance.
•    Financial registration and accounting.

The legal aspects to running a business are very important. If you’re building a business for the first time it’s always worth getting expert help from an accountant, solicitor or even using an experienced business person as a mentor. They’ll help you perform the correct duties at the right time and might even offer you a few tips to help your business thrive!

A Guide to Building an Ecommerce Business from Nothing

You might have thought about starting an ecommerce business recently – many people have. And this wouldn't be surprising considering that ecommerce sales within the US increased by 12% in the year of 2013 alone, meaning that the total revenue produced from these activities was approximately $294 billion. In addition to that, India's ecommerce industry has also grown by more than 30% compared to the previous year of 2013. India now has a $12.6 billion revenue share in the whole ecommerce industry.

By looking at the numbers listed above, you might think that the industry is too large for you to get involved but this simply isn't true. In fact, it's easier for you to get involved and start selling your products because the market is so large. There is competition, yes, but there is also a large number of buyers browsing marketplaces and ecommerce websites with their wallet right beside them.

This article will be a guide to building an ecommerce business from the ground-up, how to build a solid foundation so that your business can grow and develop as it should. We won't talk too much about the advanced factors such as sales and logistics as that's not a problem when you're getting started.

Getting Started

Ecommerce is one of the easiest businesses to get started in simply because the barriers to entry are so low. You don't need a lot of capital, you don't need a $10,000+ website, you don't need to spend $4,000 per month on overheads, you don't even need to hold stock! We will talk more about stock in a moment.

The first thing that you need to do is figure out what your goals are when it comes to this ecommerce business – do you want to be a “superstore” and source anything you can get your hands on? Or would you rather be a “specialist” store, focusing on solving a certain problem in society with the help of your products?

Superstores have a much greater chance of being successful on a larger scale, most of the time they are very risky if you don't have a lot of capital to invest, don't have the resources to do proper market research, and things of that nature. It also take a lot more time to source a wide range of products from reliable suppliers.

Your best option when getting started is to choose a specialization, a niche in other words. This is a small corner of the market that you try to dominate by branding yourself as an expert. Some examples would be: horse riding equipment, scooter accessories, custom helmets, t-shirt printing, or toys for 3-6 year olds. By choosing a niche you are essentially increasing your chance of success, it will also be a lot easier to source suppliers and handle the sales and logistics aspect.

You'll want to look for some reliable suppliers so that you have good products to sell. Look for suppliers within your industry and take a look at what they are offering. If you are sourcing from a different country you should research the import laws and taxes. If you don't want to hold a lot of stock then drop-shipping is also an option, you essentially buy an item from the supplier only when a customer makes the purchase from you. So it's risk-free making it a great option to get started.

So now that you have figured out what you want to sell, the next step is to figure out where to sell. Don't worry too much about this, ecommerce has become a huge operation and there are dozens of marketplaces where you can list your products for sale, even with a tight budget or no budget at all!

The two biggest ecommerce platforms in the world (eBay and Amazon) should be of most importance to you, this is where you will want to spend the majority of your time building up a reputation and establishing yourself as an expert in your niche. There are both free options and paid options on these ecommerce platforms, the best route for you will depend on your budget – you will have greater success with the paid options, but don't let it discourage you if you can't afford it.

Developing a More Professional Brand

Once you have built your brand using the popular ecommerce platforms mentioned above, you should now have a loyal customer base as well as a decent amount of capital. You should use this capital to reinvest back into your ecommerce business, generate more sales, and improve your whole ecommerce operation.

The first thing that you'll want to do is establish your self online properly, this means having a dedicated ecommerce website where you can sell your products – allowing you to move away from the platforms such as eBay and Amazon and thus save on the fees that they take. Don't completely negate these platforms though. Amazon receives an estimated 81-million US visitors per month – eBay receives even more at 105-million visitors per month.

Building an ecommerce website is a complicated process so the best option is to hire a web designer, don't try to build the website yourself. You should ask your designer to use a platform such as Magento or WooCommerce. These platforms will allow you to make minor adjustments yourself, without the help of your web designer – so you'll save money in the long-term.

Your logo and branding is another very important factor to consider. It's what your customers remember you by so you shouldn't compromise on this. Hire a professional graphic designer and have him/her craft a beautiful logo that demonstrates the personality of your ecommerce business perfectly.

Defining Your Unique Selling Proposition (USP)

As you become more established you will want to focus on your unique selling proposition (USP). It's not very difficult to sell a handful of products every now and then, but scaling up your operations, bringing in more sales and more revenue is a lot more difficult and requires more planning, preparation, and more dedication to execution.

Your USP should be a factor of your ecommerce business that separates you from your competitors – a reason why your customers should buy from you instead of them. When creating your USP you will want to think about the gaps in the industry, where could it be improved? This might be something along the lines of extended warranty, faster delivery times, better customer support, or in-depth buying guides so the customer gets exactly what they need.

Many ecommerce businesses try to use price as their USP and in most cases this has a negative effect, the customers who shop around for the lowest price probably aren't the customers that you are looking for. Chances are that you aren't making enough capital just yet to obtain items at a very cheap price as this requires that you order them in huge bulk quantities. Furthermore, unless you are specifically a discount store then your customers will go elsewhere as soon as someone else is cheaper.

Tracking Important Data and Key Metrics

It's very important to keep track of certain data and key metrics as this will help you improve your business operations and break past any plateaus that you will experience. Looking at data means that you are looking at your business objectively, you simply can't dispute data if it is right in-front of you.

The simplest and most obvious key metric to keep a close eye on would be your conversion rate. This is the amount of visitors who will purchase from you compared to how many visitors you get to your store. For example, if 1000 people visit your store but only 20 of those visitors make a purchase, your conversion rate would be 2%. It's good to keep track of this because it determines just how valuable your website traffic really is and it can be helpful when thinking about other metrics.

Cost of Acquiring Customer (CAC) is another metric to think about, it is essentially the amount of money that you spend to get customers to purchase something from your store. For example, if you spend $2000 to get 50 visitors to purchase from your store, your CAC would be $40. The lower you can get this number, the better.

Shopping cart abandonment is also an important factor to consider as it tells you how many customers had an intent to purchase something from your store, these are considered potential customers. Make sure to keep this as low as possible, having a high rate might indicate that your website needs some adjustments.

Average Order Value (AOV) is the average amount of money that a customer will spend in your store. You always want to try to increase your AOV, perhaps by offering discounts for bulk purchases or utilizing “related products” options or something similar. Amazon does this perfectly with their “people who purchased this item also purchased:” section.

Lifetime Value (LTV) is considered to be the most important metric that exists in an ecommerce business. It's a calculation of the amount of money that one customer will spend in total, minus the cost of acquiring the customer. So for example, if a customer returns to your store four times and has spent a total of $600, their LTV would be $560 if you spent $40 acquiring that customer.

By keeping track of the data and key metrics that have been listed above you'll be able to know exactly how well your ecommerce business is doing at any stage. It can be very beneficial when thinking about scaling your business, increasing your product range, increasing revenue, bringing more traffic to your website and everything else that you can imagine.

Strategies to Increase Repeat Buyer Rates

As a salesperson or business owner, you spend a lot of time and resources to get people in the door to your business in the first place. Turning a prospect into a customer can be expensive. The truth is, however, it costs less to keep a customer than it does to make a new one. This means that we need to figure out ways to get one-time customers or clients back in the door so that they are repeat customers and then loyal customers. We need specific strategies to try to accomplish this.

Ask yourself what are the reasons a client or customer might NOT return for a second, third, or to make regular purchases? Chances are if they have a negative customer service experience, they will not return, likewise if the prices are too high or the merchandise or service just does not meet their needs. These may or may not be things you can control. It is a good idea to scrutinize these elements and control the pieces you can control. For example, you can decide what sort of customer service you will offer and doing the best you can, may not ensure customers will return, but it could eliminate one of the reasons they might not.

Incentives can be another way to get one-time customers back in the door. Offering a coupon or bonus or free product or service for those who have already purchased is a tried and true way to build customer loyalty and increase repeat buyer rates. This involves keeping accurate records of customers so that you can follow up with a special rebate, discount or offer. If you are in a retail business and you do not keep a database of customers, consider giving the discount coupon or rebate to customers when they make their first purchase and this may encourage them to come back for another.

Invite feedback and involvement from customers and prospects in order to give them "ownership" in the business relationship. Whether you are in a retail business, online business or have some other form of business operation, asking people what they think and how they think you can make improvements to your business or service can actually cut down on complaints and encourage repeat buyers. If customers feel as though they are being heard and you actually want to please them (and that they can talk to the individuals who can make changes), they may be less likely to take their business elsewhere.