How to Start a Successful eCommerce Business Bold & Basics Starting an eCommerce business is no longer what it used to be even two years back. Today, knowledge and expertise in eCommerce have extensively broadened. New-age entrepreneurs are well-aware and well-informed. Standing out as a brand has become extremely challenging. It is not easy to identify a profitable and sustainable niche and as difficult is finding reliable and cost-effective suppliers. Buyer personas have become more complex. The redemption of offline channels has made things more complicated. Ecommerce without offline presence, even symbolic, is proving to be disadvantageous. Drawing attention via digital marketing only keeps on getting more challenging with the emergence of new SEO, SEM, and SMM practices and strategies. So, what is the answer? If there is one straightforward answer to this – it is to be ‘Bold’ without losing out on the Basics. To be bold as a brand means you are willing to disrupt the markets and expectations with your value propositions. We will leave that up to entrepreneurs to decide. But in this blog, we will discuss the fundamentals, which we highly recommend as retail and eCommerce consultants, that eCommerce startups should consider seriously. What if these fundamentals are avoided? We urge that the blog be read till the end because we have cited examples to show why each of these fundamentals is so important. #1 Market Research Even if an established retail brand makes a foray into eCommerce, nothing takes away the need for carrying out market research. The existing repository of insights, knowledge, and cognizance may not be sufficient to make an effective business plan. On top of that, eCommerce is a dynamic channel of distribution that is subject to changes resulting from competitors’ actions, pricing mismatches, and quickly shifting customer buying decisions. Competition is one of the most influential elements in a business environment. What one player does, affects its direct competitors, and vice versa. The positioning and strategies of direct competitors affect the abilities of a startup to execute its business models and plans. This necessitates that eCommerce startups carry out a detailed assessment of the prevailing state of competition in the targeted markets via eCommerce competitor research. Sometimes even good offerings get hammered in the eCommerce market if the pricing strategy is not well-aligned. Ecommerce pricing research is a planned approach to comprehend and decide ‘competitive pricing’ for the intended product mix. For eCommerce entrepreneurs and startups, some of the pertinent questions are: · Who are my customers? · Where do I find them? How do I reach them? · What products and services do they want? Can I provide them value? · Where do they currently buy from? Will they buy from me? · What prices are they paying and what drives them to pay these prices? Ecommerce Customer Research is an attempt to answer these questions. The objective is to draw insights into consumer behaviour in the target segments and market regions. #2 Identifying Niche within the Red Ocean One of the fallouts of diversified and intensified levels of competition in traditional eCommerce is difficulties in finding a niche market space. Take the example of fashion apparel. The online markets are flooded with all kinds of brands. The similarity of product designs across multiple players is a reflection of brand imitation. If you remember the Batman logo t-shirt: once it was a coveted design but today you will simply not be able to make up your mind on which online seller to buy it from. So, in such competitive states, how do new brands make it? We are reiterating the answer to this question – it is by being ‘bold’ and doing something disruptive but sustainable both as a business idea and the business itself. An example of this would be Apple’s iPhone. Before the iPhone was launched, no mobile phone company could see that there were customers who were willing to pay a premium for premium quality. The mobile phone market was highly competitive and saturated when the iPhone was launched. #3 Product Listing and Product Pricing Finalization Product Listing is one of the most important activities for retail eCommerce companies. It is the database of products with detailed descriptions (including prices) that an eCommerce brand wants to offer for selling. This information is uploaded on the eCommerce website or app platform. But before going there, the product list and pricing are finalised. You have to be meticulous here because customers prefer having accurate and all the product details like feature descriptions, supporting pictures and videos, variants available, prices, warnings, etc. Any misleading information, misrepresentation or suppression of material information could lead to a flood of negative reviews and other ramifications. Customers rely on this information to make their purchase decisions. #4 Business Plan – Financial & Commercial Aspects Financial and commercial planning is a must for all organisations – whether it is retail or eCommerce, B2C or B2B, franchising or regular business. F&C assessments are a part of business plans. Clear and comprehensive assessments of various financial and commercial aspects involved in executing an eCommerce business do not just help to impress potential investors but these assessments also serve as a guide map for financial and commercial decision-making when the business comes into existence. Various important areas of assessments covered here are: · CAPEX and OPEX requirements · Inventory Purchase Planning for at least 6 months to 1 year · Sales and Revenue Estimates for at least 5 years · Financial & Commercial Plan for at least 5 years · Estimated ROI and ROC · Estimated Timelines for achieving breakeven #5 B2B ECommerce Strategy (if applicable) When buying and selling of products or services take place between businesses over the internet i.e. eCommerce or online sales platforms, such trading is called B2B Ecommerce. A B2B eCommerce strategy establishes the best ways to conduct this trading (from marketing to distribution). There is no universal format for this because every B2B eCommerce entity has unique requirements and specifications. However, there are some areas requiring prioritised consideration; a few of them are highlighted below: · Distribution Strategy – Store/Omnichannel/Multichannel · Digital Marketing (Email Marketing, Social Media Marketing, SEO/SEM Content) · Selection of ECommerce application platform · Website/App Development keeping in mind B2B requirements · Product Listing · Payment option flexibilities · Client Support Systems (like CRM) · Digital Security #6 Supply Chain Strategy A supply chain strategy is required to effectively manage supply chain operations so that the same are aligned to achieve the business goals along with other functional objectives. Formulating a supply chain strategy involves the alignment of processes, technologies, and associations that a business enterprise uses to procure, produce, and distribute/deliver products and services. Thus, it covers all three stretches of delivery along the value chain – first-mile, mid-mile and last-mile delivery. Formulating a supply chain strategy is an opportunity to enhance the flexibility and resilience of supply chains in the event of uncertainties and disruptions. Some of the important considerations while developing a supply chain strategy are: · Existing competencies and advantages in the supply chain · Value Chain requirements · Understanding of clients and their customers · Product lifecycle, Service delivery · Existing industry strategies and practices · Suppliers’ capabilities · Network of logistics and logistical infrastructure · Digitisation and automation · Quality Control and Quality Assurance · Regulatory Norms #7 Website & Mobile App Development Website and mobile app development in eCommerce is the process of creating and maintaining online store platforms from where customers browse, choose, and buy goods and services. While it is important to develop user-friendly, secure and scalable online platforms, but tools, technologies, and frameworks come later. A strategy is required first covering: · What are the ideal buyer personas? · What are the demographic factors (e.g. most-used languages)? · Where are the ideal buyers (potential customers)? · What devices and technologies do they use? · What is the quality of the internet services used by them? · Are they open to digital payments? Which payment platforms are popular? · What are the prevailing industry standards and practices in terms of eCommerce apps and websites? · Cyber and data security measures · Regulatory norms #8 SOPs for Brand Reputation Management Building and maintaining brand perception in the digital age is a lot easier than it was 10 or 20 years back with traditional media or the early forms of digital marketing like SMS or email marketing. The challenges arise when businesses ignore brand reputation management. Not planning for brand reputation management is leaving to external variables to decide the fate of a brand. Without any developmental measures and response planning in place, when something goes wrong and inappropriate responses to it adversely affect brand reputation. Brand reputation management involves monitoring, listening, promoting and disseminating information, and regulating the spread of misinformation via online and offline activities which have direct or indirect ramifications on the image and credibility of a brand. Developing and implementing Standard Operating Procedures for brand reputation management helps precisely and timely implement the planned course of action for both brand development and sustenance of brand reputation. The significance of SOPs is highlighted when the consequences of one small misstep are recognised in brand reputation management. #9 Brand Launch Strategy A brand launch strategy is necessary to ensure that everything before, during, and after a brand is launched or inaugurated goes smoothly and as per plan. A brand launch activity is like a small project in itself. Budgets have to be prepared. The online and offline PR activities must shoot off on time. Teams must be formed and trained. There could be multiple locations involved. Assets and infrastructure have to be made available. Without planning, anything could go wrong. For example, a brand launch event may involve taking permission from municipality authorities. These permissions must come on time for all locations as per event dates. #10 Digital Marketing ECommerce and digital marketing go hand in hand. Digital marketing is a staple for retail eCommerce brands. The benefits of digital marketing need no separate highlight. The question is what is done in digital marketing for eCommerce? Given below are the focus areas in eCommerce digital marketing. · ECommerce Platform and Technologies · Website/App Layout · Content Marketing · Product Visualisation, Filtering · Device Compatibility · Content Localisation · Social Media Marketing · Personalisation · SEO Practices · Budgeting, ROI, and CAC · Analytics While it can be tempting to jump at any eCommerce business potential, all entrepreneurs must do is keep the fundamentals intact to build a successful brand from the moment the idea was born. The fundamentals explained in this blog should be a good place, to begin with the thinking and planning. FAQs Is eCommerce profitable? Despite competition and growing saturation, eCommerce remains a lucrative business avenue. The deciding factors are value to customers and implementation/operations. You can have a very good business idea but still not be profitable because of poor roll out. Which products are most profitable in ecommerce? Fashion apparel Beauty products Healthcare products and services Smart Electronics and Electricals Online Courses and eBooks Kids’ toys and games How do I start an ecommerce startup? How to make my eCommerce business successful? Please read the blog. How can I increase sales? (ECommerce) Extend product mix, remove low-performing-low-margin products Improve UX on your website/app Decrease margins temporarily Personalised offers and discounts Start social commerce Promote your brand on suitable social media platforms Build a strong customer support system Reposition your brand to fit into target segments’ needs and expectations Increase traffic to your website via engaging content and best SEO practices For more information on our eCommerce business consulting services or to speak to one of our retail and eCommerce consultants, please drop us a message on our website.