Starting an online store is an exciting challenge. If you are currently a retail store owner the rush of finding an extra channel to sell your products is special. Even if you are an entrepreneur looking to venture out in to the field of online retail, the challenge of putting together all pieces of the ecommerce puzzle is worthwhile challenge. However there are many aspects to ecommerce which most seasoned entrepreneurs wish they knew before getting started with ecommerce. Here is such a list which can help you be pre informed before you start your first ecommerce venture.
Do Not ignore legal – If you are selling through Amazon FBA or happy with your ecommerce income being a side or extra income you can ignore registering your business. If you are serious about making your online store business in to a full time income with people on your payroll then it is highly recommended that you register your company and enroll for a business checking account and merchant account. Running your online business needs that you register your business as one of the following
- Sole Proprietorship – Recommended if you are starting with marketplaces like Amazon FBA or Ebay
- LLC – Recommended for a small ecommerce businesses
Once you register your business you can get a business bank account which will take in all the money you will be making through your online store. The way you register a business is different for each state.
Think depth of the category more than breadth – If you are looking to start an ecommerce site it is important that you pick a micro niche and provide the best products and service in the niche. If you want to succeed as a small and medium sized ecommerce business picking a profitable niche and doing better than anyone else in the market is key. Large ecommerce players have deep pockets and can easily outplay you on broader categories like clothing, electronics and toys. Your success depends on how best you in micro niches like vintage hats, antique perfumes, hammocks.
Minimize risks – An ecommerce business is subject to hidden costs and risks. Credit card fraud and dangers of the website being hacked are every ecommerce entrepreneur’s nightmare. To fight such problems an ecommerce entrepreneur should use technologies which take care of safety and payment security very seriously. Hosted solutions like Shopify and Bigcommerce provide high level security and can remove certain amount of burden off your chest.
Apart from online fraud there are many ways your business could be subjected to offline issues like failure of fulfillment, faulty products, dishonest customers, warehouse loss and transit theft. Such issues are very common for any ecommerce business You must have a will to work through setting up processes in each of these areas to minimize losses in the long run.
Start marketing early – Sales is what keeps any business afloat. Survival is key component for success of a startup. An ecommerce business has to start marketing very early. It can start marketing even before launching the online store through a launch page. You must optimize your website for SEO from day 1 to attract free high quality traffic from search engines. You must exploit every source of free traffic be it social media, email or search engines. Starting early shows up as traction and validation of your idea which can be leveraged for investor funding in the future.
Know your competition but don’t follow them blindly – Your competition might have been in business for long. They might have had their own learnings. They might have learned which marketing channels work and which don’t. They might have shelved few product categories since they are no longer in demand. What kind of ecommerce platform are they using? You can learn a lot by studying your competition in every area of business. However, following your competition blindly would mean you repeating the same mistakes as them. Don’t follow the hype. Learn to rationalize decisions and test projects on a budget before scaling them.
Mobile is more important than you think – Mobile website is one of the most neglected aspect by most online retailers. Most online business owners assume that if their website is responsive enough they have optimized for the mobile viewer. It is time for online retailers to think “mobile first” NOT JUST “mobile also. 56% of traffic received by top websites in the world is from a mobile device.
Rigorous testing for usability, speed and performance have to be done on mobile websites before making them live. There are three approaches to making your website mobile friendly.
- Have a separate mobile website – Here you will be building a different mobile site. This will eat up extra development time and needs analysis of long term consequences like marketing, SEO, management and URL hiccups. If you persist to go this way be sure you implement right the SEO right using this official guide by Google.
- Have a responsive website – With responsive web design your desktop, mobile and tablet versions of the site sit on the same page/URL.This is a good approach as this does not need extra development effort. Pick an ecommerce theme which is responsive and you are good to go.
- Have a adaptive website – Adaptive website is where few aspects of design and content is loaded from the server for optimal performance. All though this doesn’t cause any SEO or marketing problems it will need extra development time.
Google recommends a single url approach across all devices. Responsive and adaptive are the best approaches in such a case.
Choose the right technology – Choosing the right technology could be a game breaker. Choosing an ecommerce platform which doesn’t match business priorities could mean unnecessary expenses and time delays. Before you pick an ecommerce platform you must be sure about your business and its objectives. You can start by asking the below questions –
- What is the scale of the business? Are you going all out with big money. Do you plan to hit 1000+ products, 1 Million users within first 2 years of inception?
- Are there any complex features you need to have in the online store?
- Do you have a team or plan to hire a dedicated team?
- Are you setting up an online store as an independent business owner or to run a full fledge company?
- Guide to picking a payment gateway
- Hosted vs Self Hosted ecommerce solution: Which is right for me?
- How to pick the right ecommerce theme?
What is your edge? – With starting an online store just a matter of few minutes many entrepreneurs have jumped on to the online retailer bandwagon. Although this is great news building a successful online store needs a certain level of commitment and talent. Your business should have a significant selling proposition for it to stand out from the card. Most online retailers today have the same products and the same offers targeted at the same audience. With big retailers eating up on market share of the minions and small online retailers competing against each other differentiating your business has become a critical aspect of winning the retail war.
- What products can I sell which my competition will find it difficult to source?
- How can i position my brand and products to out wit my competition?
- Can i be a leader of a very narrow niche and still win?
- What are offers I can provide which the competition isn’t but the users need it most? Example: Subscription service, try before buy, community buying, group discounts
Technology is easy running the business is the challenge – Any person can start an online store without any technical knowledge. You can run an entire online store from your holiday home without any technical help whatsoever. Today we have enough apps on accounting, marketing, inventory management, design and security which plugin in to these amazing ecommerce platforms and make managing business very easy. All you need is the patience to sit and learn through using the software. The real challenge is how the order received is process.
- Fixing communication gaps between your team in warehouse and your supplier.
- What happens when a customer gets a wrong product?
- How do you handle a customer rant on social media?
- Who arranges for reverse logistics?
- Who handles customer calls?
Get it right first scale it later – Building a large successful business is what most entrepreneur’s dream of. While it is a good dream to have an ecommerce entrepreneur must be aware of the various nuances, hidden costs, risks and surprises. Sometimes a small business running at a small scale could appear to be running smoothly without losses. When this business is scaled all the inner fallacies in the process show up sabotaging the business in a huge way. Premature scaling can sabotage a business more so with ecommerce as there are plenty of cases where it can go wrong.