Start Your Own eCommerce Business
in 2021 - A Step-by-Step Guide
Intro
around the globe with astonishing speed, and it's likely that this growth will continue to skyrocket.
It's been predicted that more than 95% of purchases will be made online by 2040, according to a study conducted by 99Firms in 2020. According to Statista, there are already over two billion consumers who are shopping online around the world.
The COVID-19 pandemic has only amplified the dramatic growth of eCommerce around the world, as consumers have retreated to their homes and computers to purchase everything from dog food and household goods to mattresses and educational content.
This "new normal" of making digital purchases has fueled the growth of eCommerce and order value: 44% of consumers reportedly tried new brands over the past year, according to Arlington Research, and the average items per order increased by 60%, according to Contact Pigeon.
This eCommerce startup guide will give you all the secrets to build your own successful eCommerce business, including choosing the best product to sell online, writing your business plan, choosing a business model, pricing your products, and selecting a digital platform, as well as tips for branding, creating your website, and marketing.
Let's get started!
Choosing the Best Product to Sell Online
One of the first questions you will ask when embarking on starting your own eCommerce business is "What products should I sell?" You are correct to consider this decision carefully, with several factors in mind.
First, it's wise to do a fair amount of research. Look at the products that are currently popular and critically assess whether they are trends that are likely to stick around before joining the crowd. Starting your own eCommerce store can be time-consuming, so you'll want your product to have lasting power beyond the fads.
So, what's the best way to pick the product you'll be selling?
guidelines for you to consider as you embark on this journey.
What kinds of products could I sell online?
Physical Goods
Digital Goods
Digital Services
- eBooks are published content, available online, that can educate, entertain, or advise, and are almost immediately accessible, making them an easy and convenient choice for customers. ePublishing revenue is rising at a rate ofly almost 5% per year, and its projected market volume is almost $35 million, with 23.3% user penetration by 2025.
- Software is needed in almost every industry today, and all your product has to do to be successful is solve an existing problem. Naturally, there is coding, technology, and process development to consider, but if you can pin down a need in the market, you're on the right track.
- Graphics and digital imagery dominate websites, blogs, and marketing materials online, and your creative skills in this area could be the perfect product for your eCommerce business.
- Videos have become a critical piece of content marketing; Facebook alone has a staggering 4 to 8 billion video views per day. By creating informational, promotional, or educational videos for individuals or companies, you can charge for their use or even set up paid memberships to view your content.
-
REPER
- Audio is increasingly in demand from consumers; sites like Soundcloud and Bandcamp have seen considerable growth in their user base in recent years, and it's estimated that 160 million consumers will listen to podcasts by 2023.
- Documents like manuals, guides, whitepapers that can be sold online individually or on a subscription basis, are increasingly in demand.
- Online courses are more and more popular, consisting of audio, video, text, or a combination of all three to appeal to different learning styles. You could offer a certificate of completion for a series of courses, or offer them individually, to share (and charge for) your area of expertise.
Digital Services
As you consider what product or service you will feature with your eCommerce business, keep in mind that having a personal passion for your chosen product will go a long way towards its success. This, along with finding a product that is high-quality but inexpensive to produce and ship, and is popular and solves a problem, and you'll be well on your way.
Now, on to creating a business plan for your eCommerce startup!
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Creating the Perfect Business Plan for
Your eCommerce Store
If you're thinking about starting an online eCommerce store, the timing is perfect. Spending behavior around the globe has shifted dramatically over the past few years, and in particular during 2020 and COVID-19, from brick-and-mortar to digital. More often than not, both consumers and businesses are finding what they need on the web.
Of course, starting an eCommerce business from scratch is challenging. This is where writing a business plan is an invaluable first step that will establish a firm foundation for your success. We can guide you through the process.
A business plan is a comprehensive overview of what you are hoping to build, with the future always in mind. A successful business plan will move step by step through an initial executive summary and the problem you'll be solving, all the way through the financial plan, marketing, and the team you'll need, among other components along the way.
Here is a complete list of the essential pieces of an effective business plan for an eCommerce store:
Company overview/ executive summary
Problem and solution
Market research
Competitive analysis and product differentiation
Business model
Financial plan
Marketing
Operations
In the end, although it may seem challenging to create a comprehensive business plan from scratch, remember that by carrying out this step you will lay the all-important groundwork for a successful business - without it all you have is an idea.
Picking the Business Model That Will Guarantee Success
If you're just getting started building an eCommerce business, you might not be sure how to start. What exactly is a "business model", you might ask, and how do I choose one? Fortunately, it's quite easy to select which eCommerce website business model will best fit your unique product, business, and goals.
Of course, the first part of that formula is what you are selling, whether it's a service, a digital product, or a physical good. Next, you need to make decisions about to whom you will sell to, whether it's consumers or a business. Finally, it's essential to nail down how you will get your product to your customers.
The main types of eCommerce business models
Business-to-Business (B2B)
Business-to-Consumer (B2C)
Consumer-to-Consumer (C2C)
Consumer-to-business (C2B)
Business-to-government (B2G) and Consumer-to-Government (C2G)
Understanding Your Buyer Personas
When you think of your ideal target customers, you can imagine them as characters from a story: these are your "buyer personas". How many personas you keep in mind is up to you - it can be 1 or 2 or up to 20 - but these personas should count for 90% of your sales and should be based on marketing data and your current customer base.
Buyer personas help you know your customer inside-and-out, understand how they'll benefit from your product, and ultimately will guide everything you do with your eCommerce business. They provide an image of the VIP you're always pursuing: the customer who is most likely to purchase your product and come back again for repeat business.
Why buyer personas are important
Understanding your customers - the way they live, their interest, what they want, how they shop - is one of the reasons establishing buyer personas is so important. They make it easy to target the right audience, know what marketing channels to use, and what and how to communicate, all helping to guarantee a high ROI.
Having buyer personas also keeps all your departments aligned, helping to eliminate silos that lead to a fragmented sales approach.
The best evidence of the value of buyer personas is reflected in the statistics:
71% of companies who use them exceed
revenue and lead goals
55% increase in
organic search traffic
2x open rates and 5x CTR
on their email campaigns.
How to create buyer personas
Creating your buyer persona profiles isn't as difficult as you might think - have them fill out a simple form on your website, to start, then use surveys, phone or in-person interviews, or focus groups to get to the heart of what they need, what motivates them, their interests, background and goals, and their demographics. Here are some of the questions you can ask:
- What role do you hold at your company, what industry is it in, and who does it serve?
- How many people work for your company?
- What are the skills, knowledge set and tools necessary for your role?
- What education did you get to prepare for your work?
- What does a typical day look like in your role?
- How do you define success in your job?
- What are the top five challenges for you in your work?
- What are your short and long-term goals?
You can also get a lot of information from what draws your visitors in when visiting your website; using heat maps to see what's keeping them interested also adds to the profile.
Bottom line, the key in creating the buyer persona is to get as much detail as you can about who this person is; you can even give them a fictional name if it makes them more tangible. Also, remember to review your buyer personas regularly to ensure that they continue to match the goals, plans, and strategy of your business as it moves forward.
Doing this part of the process well as you build your eCommerce business will show favorably in your marketing statistics, your conversion rates, and ultimately (and most importantly) in your bottom line.
Deciding on the Best Pricing for Your Online Products
Let's face it: choosing the right price for your online product or service could make or break your eCommerce business. The price you choose influences everything you do, including marketing and sales, so it's important to get it right. The price your select can make you a strong competitor - or the company that gets passed over - when in competition with other more veteran businesses in the mix.
Market share is also important, and although price isn't the only thing that affects it, it definitely has a role. The ultimate goal should be to maximize profits for continued growth and get as much market share as you can.
What are the factors to consider when aiming for a price for your product that is neither too high nor too low? There is no definitive formula, but things that come into play are your competition, your costs, the profit margin, and who your buyer is.
1. Cost-based pricing
2. Value-based pricing
3. Market-oriented pricing
4. Dynamic pricing
5. Loss-leader pricing
6. Price skimming
7. Market penetration pricing
8. Captive pricing
9. Anchor pricing
Many of these methods are not entirely foolproof, as they require a combination of factors to work out well.
The cost-based method, with its clear-cut formula centered around your business expenses to calculate the selling price of a product, is the most reliable and traditional approach, and it's quite simple:
Costs for Product + Profit Margin Desired = Price of Product
Another way to look at it:
Profit = Total Revenue - (Cost to product one unit) x (# of units) - Total Fixed Costs
When calculating your costs, don't forget to include things like materials, time, packaging and shipping, fees for credit card transactions, and marketing, as well as fixed costs like legal fees, rent, electricity, and any start-up costs.
The good news about pricing is that you can always change it and doing that can even be beneficial to your bottom line. The most important thing is to be realistic about your pricing, and honest with your customers about the quality they are getting.
SOLUTION BRIEF
Here's how to adopt an effective pricing strategy for your SaaS business!
Choosing the Digital Commerce
Platform That's Best for You
You've composed your business plan and have your preliminary pricing in place, and now you're ready to select a digital commerce platform that will manage the heavy lifting of your sales process, leaving you to concentrate on serving your customers and improving and/or expanding your product.
Picking the right platform to meet the needs and expectations of customers today is critical. You need to have tools at your disposal that will support them online 24/7 on a myriad of devices and be flexible enough to work just as well as your business grows and expands.
There are many aspects of your business that can be handled by the commerce platform you select, including payments, subscriptions, marketing, ordering, merchant services, APIs and customer experience. It's important to understand the full technology stack and the available payment processing models from which you can choose.
Some businesses use a merchant of record (MoR) / reseller model, where the digital commerce vendor is the merchant of record and is responsible for processing payments from your customers. With this model you need to have a merchant account. Alternatively, you can use a payment service provider (PSP) model, which can enable you to accept electronic payments with a number of different payment methods.
Platform offerings vary from full commerce solutions for digital goods to subscription and recurring billing tools. There are also payment gateways or processors, and shopping carts, and eCommerce tools.
There are some key questions to ask when deciding which commerce platform is right for your eCommerce business:
- What type of business is it?
- What are its short and long-term goals? Will you be expanding to new regions, doing cross-border sales, going global?
- What are the pain points and challenges you anticipate for your specific business? Will it possibly be difficult to release new products, and might your pricing go through frequent adjustments?
- What kind of support will you want if/when your conversion rates are low?
- Do you want to be able to customize your business' eCommerce experience?
Understand the costs
Choosing the best platform for your eCommerce business is critical for what it can do for you, but also because it is costly. The platform and tools, additional costs such as gateway fees, credit card fees, overhead, chargeback handling, tax management and more, will add to your overhead. Any extra features are likely to add to your total costs.
A good way to measure how successful your chosen platform will be (and whether it's worth the cost) is to know what key metrics you will track before and after you implement it. With some baseline metrics in hand, it will be easier to see how effective (or not) your digital commerce platform is contributing to sales and profitability.
Choosing the Right Branding for Your Product
Don't underestimate the power of branding - it not only makes your business and product look good it also can have a huge influence on your customers' purchasing decisions.
Building your brand online takes time, but it's worth it, as strong branding helps customers understand your product, the values of your company, and how you will solve their problems. It also builds trust, which is important with customers who are looking at a generic brand that is less expensive - they are more likely to select the product that has name recognition, status, and resonates with them on a personal level.
Additionally, making a purchase of a product with strong branding makes consumers feel connected to and within your brand's community, creating a bond that will bring them back for more purchases.
Essential steps in
building your
brand strategy
Know who your buyer is.
Establish your brand positioning.
Make very clear what your vision, values, and mission are.
Choose a brand name.
Establish your brand persona.
Choose your visuals, including logo, color palette, fonts, and photography.
Keep the focus on your buyer.
Be consistent.
In the end, branding is more than just selling products. It's a relationship you build with your customer, giving them a community and a mission with which they can connect.
Building Your Perfect Website
Your eCommerce website is the online incarnation of what would have been a brick-and-mortar store, with a lot of advantages. You don't have the complications and costs of a physical retail location or the salaries, benefits, and management of salespeople. Your store can be "open" around the clock and reach an infinitely wider audience, even crossing country borders, depending what your product is.
Creating a website is relatively straightforward and there are a plethora of online tools that can help; the costs are relatively low, depending on how elaborate and feature-rich you want your website to be. One thing is clear, however: successful online businesses have their own websites.
Key steps to building
a website for your
eCommerce startup
Your website can be the most powerful tool in your arsenal. Build it carefully and nurture it along the way, making optimizations when needed, and find ingenious ways to lead customers to it.
WEBINAR
Not all SaaS websites are created equal. Here's how to build a SaaS website that resonate with your specific audience.
Make Sure Your eCommerce Website is Secure
Naturally, the look, feel, searchability, and ease of checkout are among the most critical features of your website, but its security is just as important. Your website is the vessel for so much private information-names, email addresses, passwords, credit card numbers, etc.-and hackers may see this as a potentially easy target.
Security threats can vary from Distributed Denial of Service (DDoS) to malware, phishing, SQL injection, and others, all of which can be very costly to your customers and, of course, to the reputation of your business.
Fortunately, there are several steps you can take to protect your website and your business from security breaches.
Don't underestimate the value of a safe and secure eCommerce website, although it can be costly and time-consuming. Protecting your vulnerabilities against hackers will shield your customers and your business, and ultimately preserve your bottom line as well as your reputation.
Marketing Your Product
You've completed some of the most important steps already - chosen your product, your business model, and your platform, written your business plan and decided on pricing; determined what your buyer persona is, created branding, and set up a website that is secure - now it's time to tell the world why your product is the best solution to their problem and get your first customers on board.
There are many marketing options that can help you reach your target audience to share your product and what it does best; here we'll share eight of the top avenues to pursue.
Educate your customers with great content
Make sure to keep SEO top-of-mind
Use paid advertising strategically
Make yourself known on social media
Let media outlets do some of the heavy lifting
Use email to your advantage
Affiliate marketing
Try working with influencers who will market for you
WEBINAR
Here's how to help your eCommerce business stand out, without needing to spend millions on advertising.
Conclusion
Shopping online used to be a novelty, but after years of growth topped by a sudden surge due to COVID-19, it is now a necessity, and that landscape shift is unlikely to change. It is a better time than ever to start your own eCommerce business, and we hope we've helped you with our step-by-step blueprint for doing just that.
Launching your eCommerce business from scratch can be daunting, but it is also an exhilarating endeavor. Pick a product you're passionate about, come up with a surefire business plan, build a website you're proud of, and set about marketing with the knowledge that your product is the best option for your target audience.