E-commerce will undoubtedly be one of the most vibrant industries in the next few years and it presents great opportunities for aspiring entrepreneurs. What’s great about e-commerce is how accessible it is. Virtually anyone with a computer and an internet connection can get started. But that also means that the competition is fierce and that far too many inexperienced people enter the field and end up failing. If you want to start a successful e-commerce business, you have to approach it like a real business. Let’s take a look at the steps you should take to successfully start an e-commerce business.
Table of Contents
Research Your Chosen E-Commerce Space
There are many different ways to make money through e-commerce. You could manufacture products and sell them through your website, or an application, and you can learn how to start one here https://doit.software/blog/create-a-shopping-app. Or you could set up a dropshipping site and have your suppliers ship items directly to your clients. Decide to sell digital goods as well.
Research these different business models and the pros and cons of each. You might’ve been excited at the idea of starting a dropshipping business, for instance, but you have to know about things like returns, chargebacks, and unreliable suppliers tarnishing your reputation too. This is why you can’t just jump in, register a domain, and open a Shopify account.
Speaking of which, you might also want to start researching different platforms that you can use. Shopify is one of them, but if you want to sell digital products, you could also use a tool like Magento or WordPress with e-commerce plugins like WooCommerce.
Shopify can be a great platform, don’t get us wrong, but it has its limitations. For one, you won’t be able to move your site from their server no matter how big it gets, so you’ll always be at Shopify’s mercy. You will also be limited in your design choices and have to pay a lot of money for extra features.
WordPress, on the other hand, can be customized as you please. This is a better platform if you have some technical experience. If you don’t, however, then Shopify might indeed be the best option for you. The more you know about these platforms, the less likely you’ll be hit by nasty surprises later down the line as your business is expanding.
Choose a Domain Name
Having a catchy, memorable, and easy-to-recognize domain name is very important. If you have a domain name that is difficult to search for or remember, people won’t be able to find you.
Here, you should forget trying to be descriptive. If you look at the biggest e-commerce sites out there, most of them have short catchy names that don’t mean anything. Take Amazon, for instance, or eBay. There’s nothing in those names that says what they’re about, but they’re still very effective.
Another thing you’ll have to consider is whether you’ll be using a dot-com domain or a different suffix, or a top-level domain (TLD). It’s usually not recommended to go with a .net, .biz, or .io domain. You might be able to make a few savings per year on your domain registration, but it won’t be worth it as you’ll get less recognition. Not only that, but some people will see a website with an alternative top-domain as less reliable and trustworthy.
The only exception here is if you find the absolute best name on the planet but it isn’t available. In this case, you can look for a less popular TLD or look to see if the name you want is actually attached to a real website. If it is, it’s unlikely that the owner will agree to sell the domain to you. And if they do, the cost will probably not be worth it.
If the domain is parked, meaning that it’s sitting idle and still on the registrar’s main server, then there will usually be a procedure you can follow to make an offer on that name. It’s up to you to see if the name’s branding power warrants its asking price.
Know that buying a domain is an extremely simple process and very cheap. You can get .com domain names for as little as $8 these days and they will have to be renewed every year. You should also spend a bit more on WHOIS guard protection. WHOIS is a directory that can give you information on various domains, including the name and address of the person who registered it. If you don’t want that information to be public, then get WHOIS Guard. It’s only a few bucks and the protection you’ll get will be worth it.
Get Good Hosting
One area where you need to be very careful is web hosting. If you’re going with a platform like Shopify, this isn’t something you’ll need to worry about. But, if you want to host your website on your own, performance will be very important.
Do not make the mistake of going for one of these dirt-cheap shared hosting plans out there. A shared server is no place for an e-commerce store. Shared hosting literally means that you’re sharing server space – and bandwidth – with other websites you know absolutely nothing about. If one of these gets a sudden surge in traffic, your site’s performance might suffer and people might not even be able to access it.
Consistent performance is extremely important not only for clients but for search engines as well. Search engines love sites that are reliable and fast, and, if you go with a cheap plan with slow loading speeds, your rankings will suffer and you’ll be all but invisible to a wide majority of users.
So, take the time to get a real hosting plan that will allow you to scale. If you need something reliable but don’t want to spend on a dedicated server, go with a virtual private server. While you will still be sharing the server with other users, they will all have their dedicated resources and won’t encroach on other websites.
Learn the Different Marketing Methods
Proper marketing is essential for any e-commerce business. Marketing approach will be very different than with your traditional business. So, if you are coming from a marketing or business background, you might want to consider getting some e-commerce marketing courses. If you have a bachelor’s, then we would suggest you look at something like Emerson University’s online masters in digital marketing program. This will not only teach you about all the different online marketing methods that you can use. Also how to gather, analyze, and compare data to gauge the impact of your campaigns and make the proper adjustments.
One of the most important marketing methods you’ll need to master is SEO. SEO is the science of building maximum visibility on search engines. There are two main aspects to SEO: on-page SEO and off-page SEO.
On-page SEO is all about making your site’s content as relevant as possible, offering the best experience to visitors, having great site performance, and using the right keywords properly. Off-page SEO is about releasing content that people will want to read and share through the right channels. It’s also about building links back to your site and mentions of your brand as organically as possible.
PPC is another marketing method you’ll need to understand. It is probably the most powerful online marketing tool for e-commerce as it allows you to get highly targeted traffic to your site on command.
PPC allows owners to bid on keywords that are related to their product. They can then have their ads displayed whenever someone searches for that term in search engines. You can also choose to have your ads displayed on related sites that are part of the search engine’s advertising program.
In addition to PPC and SEO, you will need to get familiar with things like social media marketing, email marketing, and content marketing.
Have a Business Plan
One of the best things about starting an e-commerce business is that it doesn’t have to cost a lot of money upfront. This means that you don’t necessarily need to seek financing. For this reason, many owners are under the impression that they don’t need a business plan. There’s this idea that business plans are only good if you want to get a loan from a bank, but that’s a very dangerous assumption to make.
A business plan is like a road map, and no one should go on an uncharted trip without a map. A business plan will give you direction. If you ever lose track of your goals, one look at your plan will get you back on your original path. You don’t necessarily have to follow a pre-set itinerary. A business plan is not about organizing every single detail of your business. It should give you a general idea of where you want to go, how you need to get there, and milestones along the way.
The very first thing you have to do when building a business plan is to clearly identify your goals. It can’t be just releasing some product and wishing people will buy it. Is there a certain need that your products aim to fill? Are your products trying to solve a specific problem? You need to speak about what pushed you to get into that business and what’s sellable about your idea as well.
You will then need to lay out general information about your business and identify members of your core team and their competencies. See where there could be skills gaps to fill and what approach you’re going to take to fill them.
You’ll then need to add information about your products. Your target market, which marketing strategies you’re intending to use, and the current state of your finances. You may also start etching out some of your processes.
Look at Payment Providers
Payment providers play a very important role in e-commerce. If you go with the wrong provider, your customers won’t be able to pay you or you may have difficulty accessing their funds when they do pay. Choosing the right payment provider will facilitate cash flow, lower fees, and keep everyone’s information secure.
When picking a payment provider, don’t be too impressed by people who offer rock bottom fees. 3% to 3.5% is average, and you should beware of anyone who offers anything much lower than that. Anyone who offers outlandish fees is probably not offering the best service or might hit you with hidden fees later on.
Take Your Site Live
The next and final step is to take your website live. From this point, you will need to use all the tools at your disposal to properly track its performance. You will need to look at things such as conversion rates and bounce rates. How much time people are spending on different pages, and shopping cart abandonment rates, among others.
Be prepared to do a lot of testing at the beginning. You might have to test different fonts, colors, navigation, calls to action, etc. This can be done by doing some A/B testing. You’ll be showing alternate versions of your site to different visitors and see which ones work the best.
When doing A/B testing, however, you have to be careful to only test one or a few elements at once. You will not be able to see which elements are responsible for your customers’ responses.
As well as this, you will need to provide sound customer service to customers. You can limit your interactions to email only. You’ll have better results if you have a toll-free number and free chat. Getting a 1-800 number is not that expensive. You will have to set money aside for customer service staff, whether you work with a subcontractor or hire in-house.
This is all you need to know to start an e-commerce business in 2021. Don’t let the low barrier of entry fool you. Learn as much as you possibly can about the industry before you make the jump. Consider getting some higher qualifications. You can measure your marketing efforts and have a better understanding of where your business is going.