It’s always a great time to start an online store. It’s a business with low overhead costs, high growth potential and a truly global market. However setting up an efficient and successful online store is quite challenging. There are numerous important considerations that can be easy to overlook. Especially to someone who’s new to e-commerce.
Which is why we’ve put together a comprehensive step by step guide you can use to get started with your e-commerce store.
Table of Contents
Choose what to sell
The first step in setting up your e-commerce business is to choose the product you wish to sell on your store. Irrespective of whether you manufacture your own product or source it from a supplier you need to evaluate its value. A good place to start is to ask yourself the following questions:
- Is a similar product already being sold in the market?
- Does your product fulfill a need or want?
- Can your product address a pain paint faced by a sizable audience?
If your answer to even one of these questions was a yes then proceed to validating your opinions through market research. Use Google’s Keyword Planner Tool to evaluate online demand for your product. Begin by taking a quick look at search volumes for your product idea/similar service. Speak to prospective customers in your immediate network. Discuss their needs and inquire if they'd be interested in your product. Distribute free samples if you can and collect feedback. Upon receiving positive feedback from users you can safely conclude that your product can “sell”.
Suggested Additional Reading :
- Find a Product to Sell: 12 Strategies for Finding Your First Profitable Product
- The Comprehensive Guide to Finding Ecommerce Products to Sell Online: 2019
Select an order fulfillment model
Once you have a product to sell, the next step is to work out logistics. Broadly speaking, there are two options available to small businesses in e-commerce. Dropshipping or traditional inventory. Each comes with its own set of pros and cons. Understand them in their entirety and choose what suits you best.
Dropshipping is a model where you(the e-commerce store) market the product on your store and accept payments from customers but your partner(manufacturer/supplier/wholesaler) is in charge of delivering the product to the customer. Such a model helps you steer clear of any direct inventory costs. Which means you wouldn’t need to spend large capital on a storage facility. No need to hire additional labor for handling inventory or shipping. However this can adversely impact the quality of service you provide your customers. As when you abandon all inventory and shipping concerns you also relinquish control over order fulfillment. Your partner's errors or delays in shipping will reflect poorly on you. Also dropshipping stores usually end up spending more than they should on order fulfillment per order. This is because your partner will probably charge you for the inventory and shipping costs they’re incurring along with their cut.
The traditional model of holding inventory is where you(the e-commerce store) market the product on your store, accept payments from customers and take complete responsibility for fulfilling the order. Which means in this model you'd need to stock up on finished goods in a warehouse. The obvious benefits of this model are the greater control over customer service. You could further expect higher profit margins per order. However, maintaining an inventory yourself is fraught with challenges. You'll most probably need to make a large initial investment to setup the required infrastructure. Large pile of finished goods may attract capital risks. You might find yourself in a situation where you’re forced to sell your products at reduced prices for thin profits to clear ageing stock.
Spend some time in assessing the costs associated with shipping. Speak to prominent shipping companies and understand their standard rates. Depending on the nature of products on your store you’ll need to invest in proper packaging to avoid damage during shipping. If you wish to ship internationally there may be additional duty levied against an order. After gaining clarity over these additional costs you must decide how much of it you’re willing to bear and how much of it you'll pass on to your customers.
Suggested Additional Reading :
- Make, Manufacture, Wholesale or Dropship: The Pros and Cons of Each Model
- The Truth About Dropshipping: The Good, The Bad, and The Ugly
Find out what your competition is up to
Chances are the product you’re selling is not unique and is therefore being sold by a handful others. Conduct thorough research around your competition. Visit their store and figure out what website builder or e-commerce platform they've used. Understand their pricing strategy and use of promotional offers. Follow their social media profiles and make a note of posts that get the most engagement. Find out what keywords they rank for on Google. Search engine optimization tools like SEMrush and SpyFu are best suited for this(We'll get to what Search Engine Optimizations is in a bit).
Once you collect all the information. List down what your competitors are doing well and what they aren’t. Your competitor's shortcomings are opportunities to position yourself as a better alternative. Use them to come up with a business plan for your own online store.
Suggested Additional Reading :
- How to Conduct a Competitive Analysis for Your Business
- How to Do a Competitive Analysis for E-commerce :Comprehensive Guide
Come up with Plan of Action
A business plan is a well documented road map. That tells you how to go from an aspiring entrepreneur to a business owner that makes upwards of 30,000 USD/month in e-commerce sales). It is an exhaustive account of activities and strategies you will use to set up and grow your business. Therefore, be sure to take into account real life constraints you might face like limited man power or budget. A carefully thought out business plan will have the following elements.
- Mission statement - A mission statement is a clear account of why your organisation exists. Ask yourself what you wish to achieve through your business to come up with this. Your company’s goals and objectives are derived from this statement. It can further act as an important guide in critical decision making.
- Target market - “Anyone” can never be your target customer. You’ll need to identify your target audience accurately to get the best out of your marketing efforts. A good first step could be to come up with a customer profile based on who your product benefits most. A customer profile is replete with details like age, gender, location, spending power and interests.
- Product’s Unique Selling proposition - What makes your product unique? What are its most valuable features? It is important to identify and record what makes your product beneficial to customers. As this information will form a vital part of your product's positioning and messaging.
- Marketing Plan - Establish clear cut marketing goals and objectives. Sketch out the marketing strategy to be employed to reach them. Be sure to include a channel wise breakdown of sales targets and estimated budget.
- Logistics - Be it product sourcing or order fulfillment set up process flows for all logistics needed to support your business. Partner with shipping companies with wide distribution networks. Try to negotiate with them for competitive shipping rates.
- Financial Plan - Project anticipated cost of running your business. Further record all forms of estimated direct and indirect costs. Additionally include tax liability as per the local sales tax laws of your country/region.
Suggested Additional Reading :
- Business Plans 101: How to Write a Business Plan For Any Business
- E-commerce Marketing 101: Personas, Traffic Drivers, Advertising Channels & More
Setting up your store
The process of setting up an online business is quick and simple; thanks to the advent of mature e-commerce platforms. These e-commerce platforms or store builders provide an admirable layer of technical abstraction. They make it simple and easy for users to have their store up and running in no time. One need not understand the technical aspects of web hosting or web design to create their store.
Today’s e-commerce newbie has a plethora of e-commerce software options he can choose from to host and maintain his online store.
There's Shopify, a website building platform built specifically for e-commerce websites. Woocommerce is an open-source e-commerce plugin for a store hosted on WordPress. Bigcommerce is a popular choice among large scale businesses. You could consider Volusion if you prefer superior store analytics and visibility. Wix offers the most easy to use options.
Irrespective of which e-commerce solution you choose be sure to pay careful consideration to the following:
- Business name/Brand name - The name of your business is an integral part of your company’s identity. Put some thought into finding a memorable name for your business that is consistent with your marketing efforts.
- Domain - After deciding on a name you’ll need to buy a domain for your store. A domain is a virtual address where people can find your business on the internet. Be sure to choose a domain name that has a close relevance to your business name.
- Search Engine Optimization (SEO) - For those not in the know here’s a quick guide on what Search Engine Optimization is:
When a person wants to find something on the internet he makes use of a search engine like Google. Broadly speaking, SEO is the process of attracting relevant users to your website through search engines. This is done by consistently improving the visibility of your website in response to relevant search queries.
Why is this important while building your e-commerce site? Every web page, picture, listing on your site communicates something to search engines. It is therefore necessary to build your store in a way that's optimized for SEO. Below is a set of steps you can take to ensure the same:
- Get your keyword research right - Choose the right keywords for your store as per search volume. Do not be brief, be highly descriptive while writing product descriptions on your product pages. It’s also a good idea to include keywords in URLs of your web pages.
- Ensure every image has Alt-text - Your e-commerce storefront is sure to house hundreds of product photos and promotional images. An Alt text or an Alt tag is a short description of what any particular image is about. In addition to enhancing user experience these are an important opportunity to enhance SEO for your store. It is highly recommended that you ensure every image on your website has an Alt text. Briefly describes the image within the context of the web page it is placed inside of.
- Structure your site in a way that simplifies navigation - Ease of navigation , in addition to enhancing user experience, helps search engines better understand the contents of your store. Utilize a simple website design where moving from one page to another is fairly intuitive.
- Beware of duplicate content - Oftentimes, different product offerings have very little variation among them. Be sure to avoid duplicating large swathes of content across different product pages. As they could potentially hurt your SEO efforts.
- Keep an eye on your site’s performance - Search engines aren't impressed with websites that take too long to load. A website that isn't optimized for mobile screens is also a red flag. Be sure to avoid these pitfalls to maintain a good rank in Google’s Search Engine Results Pages(SERPs).
- Get an SSL certificate - Secure Sockets Layer certificates act as trust markers for search engines. Having one demonstrates the added layer of protection of user data on the website. It is inexpensive to get one and is readily offered by most e-commerce platforms.
- Build for optimizing sales - Try to keep the distance between the landing page(in most cases this is the home page) and the checkout page to a minimum. Additionally, there are small changes you can make to your website which can have a big impact on your sales and conversion numbers. You could make your “Add to Cart” and “Buy Now” buttons bolder and more prominent. You could also use trust badges on your checkout page to reassure users that their sensitive bank account information is safe. Adopt a payment gateway that offers flexible payment methods. There are a lot buyers who prefer using Paypal to credit cards/debit cards.
Suggested Additional Reading :
Driving sales on your store
After building your online shop it is time to work on driving online sales. Let’s look at this process in stages. You’ve already put in considerable work towards driving traffic to your store. Back when you set up an SEO friendly store. In due time your store should be able to generate considerable organic traffic to your website. An additional and low cost avenue towards building organic traffic is blogging. Blogs can help you establish an added communication channel with your visitors. It's a great way to communicate your company’s brand personality.
It takes time to grow organic traffic through SEO and blogging. A quick way to generate traffic for your store could be through the use of online advertising. Google’s Adwords is one such prominent advertising platform that can help you attract relevant traffic. Adwords lets you run both text and display based ads throughout its network. If you know your target customer profile and are familiar with their pain points(which your product can address). You could leverage Google Adwords to engage with them.
Most of the world is on some social media platform or the other and so are your potential customers. Building your company’s social media presence is a must do activity. It provides a great way to engage with your target audience and build a following. You could share updates around new blog posts, product launches or seasonal promotions via your social handles.
A common mistake most e-commerce founders make is following a “digital only” method of marketing. It is important for founders to leverage their immediate community in the real world to help drive sales. Especially during the initial days of your business. Distribute free samples of your product within your social circles. Demonstrate the value of your products. Serve and delight your immediate community to help drive word-of-mouth publicity for your business.
Get your customers hooked on your product. It’s not a bad idea to offer heavy discounts on a user’s purchase. If you have superior quality products you can expect repeated orders from the same client. However, be sure to sell under a thin profit margin and never under a loss. If you have a subscription type business model then explore offering free trials for limited periods.
Most people who land on your website are not interested in making a purchase right away. It’s important to maintain engagement with these visitors and push them towards making purchases. A great way of doing that is through building an email marketing list. You could place opt in forms across your site to collect email addresses of willful subscribers. Once you have the contact information and consent of your visitors, you will have established a valuable communication channel. One that you fully own and control. A channel that has been a proven winner for marketers for decades.
One of the most cost effective ways to acquire new customers is through referral marketing. In referral marketing your existing customer is incentivized to endorse your brand to a new customer. Here, the only cost of new user acquisition is the cost of incentivizing the referring customer. Dropbox used this method to grow from a 100 k user base to 33.9 M user base.
Try and implement a similar referral program for your business.
Suggested Additional Reading :
- 11 Best Ways to Boost E-commerce Sales Fast
- 53 Experts Share Their 10 Quickest Ways to Increase E-commerce Sales
Consider multi-channel selling
Your potential customers spend time on a host of different places on the internet. While it is sensible to start small by opening an online store, it is beneficial to explore additional sales channels. Most e-commerce platforms readily facilitate social selling. Prominent social media channels like Facebook or Instagram have a massive user base. Some of whom could be interested in your products. Everyday millions of users make purchases on global marketplaces like Amazon, Etsy or Ebay. Become a seller on these platforms to engage with this community of active buyers.
Multi-channel selling comes with its own caveats. For one it takes up a lot of time and effort to set up and maintain multiple sales channels. If you've chosen a channel that doesn't suit your product/industry you're only wasting time. Therefore put some thought and figure out if multi-channel selling makes sense for you. Use it as a means to scale your business once you've established a successful one.
Suggested Additional Reading :
- Multi-Channel Retailing and the Buyer’s Journey: Opportunities and Challenges
- 10 Best multi-channel listing software solutions for e-Commerce sellers
Track user behavior and optimize
Monitor your website’s analytics and track visitor behavior. Identify bottlenecks in your desired user journeys and optimize accordingly. If most of your visitors aren’t completing their purchases after adding items to their shopping cart, send them cart recovery emails. If you’re having trouble adding subscribers to your email list then experiment with the placement and design of opt in forms on your website. If you notice a low inclination among visitors to add products to their cart use product ratings and testimonials to inspire trust. You get the idea, look for problem areas and address them.
It’s one thing to sign up as a seller on amazon, ebay or etsy and quite another to start your own online store. The road ahead is sure to be full of unforeseen hurdles and challenges. This blog post is meant to address some of the initial challenges that aspiring entrepreneurs might run into. It is only a primer to help you get started. We hope you found it helpful.