January 17, 2020 Blog, Toronto, Canada

Business Strategies to Start an Ecommerce Business

What is an ecommerce business?

An e-commerce business is one where the transfer and communication of information online allows real-life commercial transactions to take place.

E-commerce businesses have become the pathway through which many people who were unemployed due to geographical immobility have found ways to become aspiring entrepreneurs.

It has created the need for an entire fledgling industry – the third party delivery market – to spring up and cater to the needs of online shops.

Everything from clothes and jewelry to merchandise and cosmetics are sold in bulk using social media platforms such as Facebook and Instagram. Thus, even stay-at-home parents can now work at home and generate profits through an additional source of income.

However, most e-commerce businesses rely on a secure source of financing that will allow boosting of their products from time to time to various demographics.

It is often observed that most people start new businesses but are forced to shut down their shops due to a lack of funds and advertisement of their products.

Hence, it becomes important to lay out a comprehensive guideline to anyone who is thinking of starting an online shop so that the journey later on is smoother for everyone involved, including the team, the investors and most importantly, the consumers. 

The following strategies should be able to build a sufficient base of knowledge for those who are hopeful that their shops will gain brand value. An attempt has been made to keep it chronologically consistent with the growth of the business for simplicity of the reader. 

1. Choose the type of business you will own:

This will depend on a large number of factors. First, you have to choose what type of good you will sell.

This can range from services being marketed online and other courses, memberships or subscriptions that offer educational and other services, to physical, tangible goods that can be shipped or transported accordingly.

This will depend on whether you have third-party courier systems or postal systems available in your reach. Secondly, it will depend on how you will store your goods.

You can hold your own inventory, i.e. your house or your garage becomes the main warehouse of all the goods you will sell, or you can simply produce the goods and transfer it to someone else to complete the order.

Drop-shipping is also a popular method by which manufacturers are entirely responsible for orders being finalized and realized. Lastly, you will also have to choose whether your products will be sold nationally or also overseas, and whether you will go retail or wholesale. 

2. Understanding your niche:

A niche is simply a specific demographic or target audience who is likely to purchase your product or want to avail your services.

The first step in understanding the demands of your product is to conduct surveys and distribute questionnaires among your peers – friends, family members, coworkers etc. – and find out which product or which aspect of your product is most attractive to which cohort.

The results of your survey can be matched with some basic research on Google Trends and with the help of affiliate marketing, you can easily find out what is the most appealing idea or what is in the current discourse among different age groups and how it affects them.

The selection of a favorable niche will determine the overall marketing strategy of your shop and will ultimately affect whether your business is instantly successful in the first few months. 

3. Choose what to sell and the price:

The decision to choose a good depends entirely on having adequate research and reconnaissance on the barriers to entry to a market, the cost of entry and the competitors who are most likely to swallow up your share of the market.

Analyzing their core marketing strategies, their different approaches in customer interactions and transport systems, their fulfillment models and their pricing will give you an idea of what you personally like and dislike.

This provides you with the ability to design your business model in a suitable manner as you emulate different parts of their strategy and modify the parts you don’t like.

Adaptation is key – knowing that the entire goal of your business may change due to the presence of a rival firm is a definite possibility, but you must be able to have a backup plan for your business instead of simply giving up at the start.

Pricing goods also becomes an important decision: if you sell your goods at a lower price than the market equilibrium, you’re likely to suffer losses for the entire market, not just your own firm. So it’s important to take all the costs into account when finalizing the sale price of a good. 

4. Selecting the right e-commerce platform:

An e-commerce platform will allow you to connect to different marketplaces such as Oberlo and others and will also keep track of social media insights.

With the setup of Google Trends and other necessary modules, progress on marketing success and outreach can be monitored intensively. The platform will allow you to customize your online shop with detailed designs and menu-bars so that the products stand out to anyone who visits the sight.

Generating traffic and garnering new visitors to websites, regardless of web hosting, becomes crucial in letting everyone know.

A platform as wide and versatile as this will also introduce or integrate specialized software such as customer relationship management or CRM software, whether it be on desktop-based software or mobile apps

Once these steps have been taken, additional strategies can be used, such as making your website or your shop SEO specialized.

Customer support infrastructure can also be established to ensure that customers are satisfied with quick and effective responses that answer their queries.

Appropriate store optimization through effective designs will allow better conversion of leads and more people purchasing your products instead of simply window shopping online.

In this way, online stores can be benefited from the internet and their businesses can increase market shares significantly.

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