Ecommerce represents an exciting frontier in which entrepreneurs can potentially turn a profit without even needing to leave their homes. However, just like there’s no guarantee customers will flock to a brick-and-mortar retail store when the “open” sign lights up, success in ecommerce does not come automatically. Rather, it comes to those who do their research ahead of time and make savvy choices along the way pertaining to product, marketing, website design and more.
Here are four things to know about starting an ecommerce business before you go full steam ahead.
Make Sure You’ve Found a Niche
Some sellers launch an ecommerce brand based on a product or collection they want to sell. Others first decide to start an ecommerce business, then later decide what to sell.
If you identify with the second statement and are currently figuring out what your store should sell, think niche. Get specific — then get even more specific. In other words, rather than choosing a general range of products to sell, instead focus on coming up with a unique selling proposition that will guide your product lineup.
Starting your store with a well-defined niche right off the bat will help you define your target audience and make more targeted product decisions from day one. In other words, you’ll already understand what sets you apart from the competition and to whom you’re trying to appeal.
Define Your Ideal Customer
Taking the time to define your ideal customer — down to the demographics and online behaviors — before you go live will help inform your decisions about how to create a website, how to brand your business, how to communicate with ads and messages, where and how to reach your audience on social media and how to incentivize customers to be loyal.
Instead of thinking of your audience as a general group of people, try creating specific buyer personas. So, your store isn’t trying to appeal to millennial buyers in major U.S. cities with outdoorsy hobbies and a yearly income of $75,000 – 150,000 per year. Rather, your store is talking directly to Jamie, a 32-year-old project manager making $90,000 per year while living in Chicago. Jamie bikes to work when the weather is nice, goes on a handful of hiking/camping trips with his friends and pet dog each year and scores above-average in eco-consciousness.
Pro tip: Create as many data-driven buyer personas as necessary to understand the full range of your customer base. Then, whenever you are making a decision, consider how “Jamie” and the others would react.
Product Quality Is More Important Than Quantity
It’s tempting when you’re starting an ecommerce business to want to sell as wide a variety of products as possible. However, this approach has several downsides. If you’re buying the products from a manufacturer and wholesaler, you’re assuming lots of risk of ending up with deadstock. This also blurs customers’ perceptions of what you do.
A better approach is selling a few types of items really, really well. Of course, offering different product variations and customizations is still a smart idea. Just avoid spreading yourself too thin and trying to sell an overwhelming number of products — especially if doing so sacrifices product quality.
Ecommerce Marketing Can Make or Break You
Take advantage of all the many ways it’s possible to reach customers nowadays: email newsletters, social media, paid ads, blog posts, YouTube videos and many more. Offer incentives for customers to refer their family and friends. Populate your website pages with captivating, keyword-rich content. Above all, never underestimate the power of marketing in customer acquisition and retention. There’s lots to know about starting an ecommerce business, but thankfully it’s all available online for entrepreneurs who are willing to seek out learning opportunities.