With the age of the Internet in full swing, launching online businesses has become more accessible and lucrative than ever. The digital economy has evolved the landscape of retail and created new ways for customers to access and acquire the products they want — at hyper-competitive prices.
However, just because starting an online business is simple, it doesn’t make succeeding with it easy. You’ll need to check your mindset, gain the right marketing skills, and always be learning so you can move forward.
To help you build a successful e-commerce business from scratch, here are some strategies you may want to apply:
Know Your Niche
The first step in building an eCommerce business? Identifying your niche. To do this, you may want to follow these four simple steps:
Identify passions + market need
While pursuing a business that you’re passionate about won’t guarantee success, it’ll make it easier for you to persevere when times get tough — which they undoubtedly will at some point.
Above and beyond being passionate, it’s critically important for you to choose a niche with a hungry market:
Figure out what people want, understand it better than they do themselves, and sell it to them with ease.
This isn’t about reinventing the wheel and coming up with the next big “thing” that’ll change the world. It’s about understanding current market demand and finding an opportunity to fill a need that already exists.
Research The Competition
For every idea, you come up with, try to research your potential competition. If you find that there is too much or too little competition, you may want to rethink your idea.
The presence of competition isn’t something you should worry about. However, if the market is too saturated, then there may be little opportunities for you to stand out, especially as a new player in the market. So, if you find a niche where you can thrive among a handful of competitors, then go for it! Otherwise, keep looking.
Determine the profitability of your niche
Look for top products in your niche or category. Once you identify them, you can work backward to figure out their rough profit margins.
Use sites like Ali Baba to find suitable suppliers and work out the cost of bringing a competitive product to the market. Perhaps you can create a premium version of an existing competitor product through your private-label brand and sell for more profit.
As a business owner, you should be willing to take calculated risks. You won’t know for sure if a product will succeed before testing it out. So don’t be afraid to put your money where your mouth is — in a small, calculated way, of course.
If you want to go the extra mile, you may want to consider using free keyword planners or free keyword tools to get an idea of what your market is searching for on platforms like Google and Amazon. By using free tools, for now, you can keep costs down.
Identify Your Business Model
Once you’re set on the type of products you want to sell, you need to determine the business model you’ll be using.
eCommerce has two primary forms of operation:
Dropshipping is a popular eCommerce model for aspiring upstarts, for many reasons. It allows anyone with a laptop and internet connection to sell physical products to consumers around the world without needing to physically ship products to customers’ doorsteps.
Here are some reasons why dropshipping can be attractive:
- Low investment requirement — starting a dropshipping business can be done with almost no money and just a laptop and internet connection.
- Location independence — Dropshipping business owners don’t need to store or ship their products to customers physically. Instead, the goods are delivered directly from supplier to customer.
- A tried and true model — thousands of business owners have found success with the dropshipping business model.
However, there is equally a litany of grim realities to consider with the dropshipping model:
For starters, it’s difficult to build a brand because the products you sell are cookie-cutter goods also sold by plenty of competitors. You cannot make changes to products on the manufacturing side either. So if you notice something that can be improved, you can’t make changes to it.
Also, you can expect intense competition thanks to the low barrier to entry and low-profit margins thanks to the knock-on effect of high competition.
Private-label is a powerful way to build a sustainable long-term brand in the e-commerce space. It has several advantages over drop-shipping that increase the barrier of entry but make it much easier to differentiate yourself from competitors.
Some of these advantages include:
- Control over the quality and design of the actual product — with private-label, you work directly with manufacturers to create products that satisfy your requirements. This makes it possible to produce goods of superior quality and design.
- More control over product labeling and packaging — allows you to further differentiate yourself from competitors by packaging your product in an attractive way, such as using a premium box to give your goods that luxury touch.
- More control over pricing and profit — your products are unique, so you don’t need to compete on razor-thin profit margins like you do with dropshipping.
Though private-label is an attractive eCommerce model, it isn’t a perfect solution. Be prepared to invest a few hundred dollars in prototype product testing. It’s also critically important for you to find the right supplier, as the wrong one can wreak havoc on your bottom line.
Private-label eCommerce is a popular way for aspiring entrepreneurs to build a thriving business and long-standing brand.
Avoid outsourcing too much.
At least in the beginning.
Rather than spending much money on hiring people to create your logo and build your site, use logo generators and learn how to launch your site through a CMS like WordPress or Shopify. Using WordPress or Shopify means you don’t need to learn how to code to build a gorgeous-looking eCommerce website.
Similarly, why hire a full-time writer to help you with your content in the beginning when you can learn SEO copywriting yourself? Granted, learning these skills yourself will take time, effort, and dedication. But these are core skills that can be applied in multiple areas.
All you need is to do is start with the basics of content creation. Over time, your writing skills will improve as you keep practicing. Websites like Grammarly and the Hemingway Editor App can help you clean up your grammar, article readability, content structure, and more.
Once you start seeing some traction with your site in terms of traffic and sales, then, by all means, hire a designer as well as a content writer to help you scale your operations. If you want to be successful with your business, you need to learn how to make the best use of your time as a Founder.
Harness The Power of Social Media
Many people question the viability of social media when it comes to free marketing strategies that work. And they have a point — channels like Facebook and Instagram have made it increasingly difficult to build an audience that can be monetized without spending money on ads.
However, this doesn’t render social media completely useless for brand-building on a budget.
Instagram, as an example, is still an incredible tool that can be used to build up a serious following in a short space of time. This is especially the case for eCommerce sites when you consider the picture-focused nature of Instagram. It is a great platform where you can showcase your products in different ways.
So how do you build an audience on social media?
- Research what’s working for your competitors and reverse-engineer their strategies.
- Establish relationships with influencers and get them to promote your products in exchange for a flat fee or percentage of sales.
- Establish yourself as a niche authority by consistently posting high-quality content that people want to see.
Bootstrapping an eCommerce business is more complicated than it seems. Being on a tight budget means you need to make any money you can invest, go as far as possible. You must also consider the increased time investment required because much of the grunt work will need to be done by you — at least at the start.
But if you can make it past the initial tough stages and start getting customers, you can slowly begin to scaling and growing the business you’ve always wanted on your terms!
So get out there, network with successful business owners and figure out a formula that works. Your wildly profitable eCommerce business awaits.