Cashing In On The E-commerce Boom
E-commerce is just another word for business transactions that happen online. Popular e-commerce websites include Amazon, Zappos, eBay, Overstock, and others. It’s a billion dollar industry that continues to grow with each passing year.
According to the United States Census Bureau, e-commerce sales for retailers were over 340 billion in 2015, the most recent year to date. To learn more about e-commerce data, download this PDF, E-Stats 2015: Measuring the Electronic Economy.
The exciting thing about e-commerce is that it levels the playing field. Fifty years ago, you would have needed a large amount of capital to start your own business. You would have spent that capital by renting a store, buying inventory, paying for advertising, hiring employees, and more.
Thanks to e-commerce, you don’t need to have deep pockets to get into the business. What you need now are a desire to serve customers and a strong work ethic. If you have these two traits, then you can become part of the e-commerce movement.
Choosing a Niche
The first thing you need to consider when starting an e-commerce store is what your niche will be. Picking a niche will allow you to focus your e-commerce shop on a particular customer or a specific type of product.
Amazon originally started as an online bookstore. Zappos began by offering only shoes to their customers. Biz Chair only offered office furniture, when it first launched.
Now, all three of those shops are household names and they offer a variety of products. By focusing on a small demographic early on, they were able to build their brands as they earned the trust of their customers.
When you choose a niche, you should start by looking at what you’re passionate about. If you hate being in the kitchen, starting a business that sells cookware won’t work out well for you in the long run.
Spend a few minutes brainstorming and try to come up with 5-7 ways you like to spend your time. Choose the activities that light you up and leave you feeling fulfilled.
Think about what you would do if you were given $10,000 to use any way you’d like right now. Maybe you’d spend it on computer equipment. Maybe you’d purchase a new set of golf clubs. Maybe you’d use it to travel for a week.
Keep in mind that you don’t have to focus on an existing passion. You can explore a niche you’ve always wanted to learn more about and build a business at the same time.
When you have a niche in mind, start thinking about the problems you could solve. For example, you decide to focus on healthy eating and fitness. You look around and realize there’s a huge market for people who want to get fit, but they have medical conditions that make it difficult to exercise or eat right. Maybe you even have a medical problem of your own that allows you to relate to your audience.
So, as you think up problems, pause to list them. Some problems you could solve for your niche might include:
- Easy Meal Prep for Diabetics
- Workouts for People Who Are Immobile
- Exercises for Patients with Back Pain
- Fitness Activities for Asthmatics
- Healthy Snacks for People with Allergies
Researching Your Competition
Now that you have a few ideas in mind, it’s time to look around for your competition. If you’re considering a niche and you can’t find any competition, be careful. A niche without any competitors may indicate that you’ve stumbled upon an unprofitable market.
When you find a niche that has plenty of competitors, make a list of sites and industry leaders who are popular. Note common themes, how big their following is, and what topics they regularly cover. Then list what they aren’t focusing on. This can help you spot gaps in the market so you can stand out.
Next, go beyond websites and start exploring social media. Which sites have the biggest followings? Do they spend most of their time promoting their products on Facebook? Do they use Instagram or Pinterest? Which one seems to be getting them the most traction?
As you research your competition, observe what they’re doing right and what’s working for them. For example, you might notice a fitness website has a ton of followers on Instagram but isn’t active on Pinterest. This may mean that your audience prefers to get their content through Instagram and not Pinterest.
Of course, once you start your own website, you’ll want to test these theories. You may even discover that what works for one site doesn’t necessarily work for yours.
Keep in mind that every niche has their influencers, too. You want to spend time examining these people. They can help shape the direction your industry goes in. But don’t just research influencers; look for up-and-comers, too. These people aren’t quite at the top of their game yet.
But they usually have a solid social media presence, a well-written blog, or vlog, and a website packed with information. These influencers are happy to talk about your niche as well as where they see it going, within the next few years. If you’re willing to listen, they can give you some amazing tips that will allow you to position your e-commerce site for success.
Don’t let your research lead to feeling threatened by others who are seeing success in your niche. Many well-known solopreneurs and small businesses work together behind-the-scenes. In fact, these sites occasionally promote each other using affiliate links.
The reason they do this is that one person or one business can’t serve everyone in a niche. And even if they could, customers like options. After all, there are dozens of burger chains serving customers and making millions.
Doing your research will also help you narrow down exactly who you want to serve. A website centered around fitness advice for anyone with a chronic illness might be too general. Instead, you may want to focus on selling health and wellness gear and aim it strictly toward diabetics.
Remember that you may start with one niche and find yourself broadening your site later on. For example, Amazon no longer sells just books. It can be a good thing to expand your e-commerce shop when the time is right.
Evaluating Your Ideas
You’ve found a niche that you can serve and you’re excited. But it’s not enough to be passionate about your idea. You have to make sure that consumers will want what you’re offering; otherwise, even huge amounts of marketing won’t be able to save your business.
You can begin your evaluation by doing some keyword research. If you’re not familiar with this process, it’s about analyzing the keywords people use to find products and services.
The best tool to use for keyword research is Google’s, Keyword Tool. This is a free service but you do need a Google account to login. Click on “Search for new keywords using a phrase, website, or category” and enter your keywords.
Google will display your results and even go a step further by providing you with related keywords. These keywords can provide even more insight into what consumers are searching for.
Another helpful way to evaluate your idea is to join online groups where your ideal customers hang out. For example, you may want to join a Facebook group of avid swimmers, if your products will be geared toward this demographic.
Pay attention to the posts people in the group are making. Are they complaining about a problem that your product would fix? Do they like an existing product but wish it functioned differently? What questions are beginners asking? How about advanced swimmers—what do they need?
One big mistake to avoid when evaluating an idea is asking friends or family for feedback. They may give your product or website glowing reviews. This can lead you to believe your idea is going to make you a lot of money or that your project is perfect the way it is.
Your family and friends mean well. But they don’t want to risk hurting your feelings. They want to encourage you and see you succeed with your idea. Add in the fact that most of your friends and family won’t be in your target demographic and you have a recipe for disaster.
Another helpful technique for marketing analysis is sending out a survey. To get people to participate, you may want to offer the chance to win a grand prize. This prize should appeal to many people. Examples might be a gift card to a certain store or a big-ticket item, like an Xbox.
If you don’t want to offer a grand prize, you could instead give each participant something in exchange for their time. For example, you might give people a free sample of your product or you might offer a discount code they can use on your website.
Keep in mind that you want people who are in your target demographic to take your survey. You’ll get skewed results if you invite just anybody takes your survey. Focus on the people you’re excited to serve and listen to their responses. They’re the ones who really matter.
Finding Hot Products to Sell
When it comes to e-commerce, you want to sell products that are popular or on the verge of becoming popular. Picking hot products means it’s easier to make a sale and you have to spend less time marketing because the product often sells itself.
But how do you find these hot products and tap into these up-and-comer ones? That’s where a little research can come in handy. The first place to look is on Google Trends.
Google monitors various keywords and can tell you how popular they are at any given time.
You can even use trends to compare what’s popular now and what was popular a few years ago. This can give you plenty of insights into the niche you’re targeting.
Another way to research hot product is to use Amazon. You may not know this but Amazon has best-seller lists for each product category. These lists allow you to see what the top 100 products are and it ranks them for you.
To find these lists, go to Google and type in ‘Amazon Best-Seller List for (Product)’ without quotes. Use a general niche to get the best results. For example, try ‘Amazon Best-Seller List for Makeup’ in Google. You’ll see best-seller lists for Best Face Makeup, Best Eye Makeup, Best Makeup Sets and more.
You can also find what the newest releases are on Amazon. Go to Google and use the phrase ‘Amazon Hot New Releases (Niche)’ without quotes. For example, you might look for ‘Amazon Hot New Releases Toys’. This will show you the newest releases in toys and games.
But that’s not all. Amazon also keeps a list of ‘Most Wished For’ items according to niche. You can find these lists by searching for them. Use the phrase ‘Amazon Most Wished For (Item Category)’ without quotes. So you might look up ‘Amazon Most Wished for Women’s Shoes’. This will give you plenty of ideas about what products your niche really craves.
Obtaining Your Products
When it comes to creating your products, you have a few different options. The first option is to make it yourself. This is a good choice if you’d like to be involved in every stage of production and you can get the materials to create your product.
You’ll also need the knowledge and experience to do it yourself. You can either learn through online videos or by taking classes locally. Products you may want to make yourself include jewelry, lotions, soaps, cosmetics, and other items.
The second option is to buy wholesale. When you buy wholesale, you purchase a product that’s already been made but you buy it in bulk. If you purchase a lot of the product or if the product is big, you may have to rent a space to store it in.
The disadvantage of buying wholesale is that you need a significant amount of cash in advance. But you do save money since you’re paying in bulk. These savings can translate into bigger profits for your business. However, it’s risky because if your product doesn’t sell then you’ve lost a lot of money.
The third option to consider is drop-shipping. When you get a customer’s order, you collect payment and send the information to the drop-shipping company. You pay the drop-shipper and the company puts your customer’s product in the mail.
The advantage of drop-shipping is that you don’t have to worry about inventory or associated costs. You can simply focus on marketing and advertise your e-commerce website.
However, the disadvantage of drop-shipping is that your profit margin is smaller. You also have less control over your product. If there’s a problem, you may not know about it, until your customer lodges a complaint.
Evaluating Wholesale Suppliers & Dropship Vendors
If you don’t want to be responsible for making products yourself, then you’ll need a wholesale supplier or dropship vendor. But you don’t want to pick just any supplier or vendor. You want a company that’s going to be reliable and trustworthy.
You can start your search by looking at the manufacturer of the items you’d like to stock. Call the company and ask if they offer wholesale or drop-shipping services. If they offer one or both of these services, ask about a minimum order.
Most large manufacturers prefer to do business with large companies and have strict minimum order requirements. If the company isn’t right for you, thank the representative you’re speaking with and move on.
Keep in mind that when it comes to suppliers, the price you pay depends on the size of your order. If you only order 100 units, don’t expect to get rock bottom prices. The way it works in wholesale and drop-shipping is that the bigger your order is, the bigger your discount will be.
You can find plenty of suppliers and distributors by attending trade shows, searching directories like Worldwide Brands, or looking in trade magazines. If you already have contacts in the wholesale or drop-shipping industry, reach out to them and ask for guidance.
If possible, arrange a face-to-face meeting with your supplier. This lets you get to know the people behind the company and gives a chance to get a feel for their personality. Remember, you’ll be working closely with your supplier in the coming years. This means you need to be polite and professional in all of your dealings with each other.
Steer clear of companies or individuals that have a constantly changing business name. If your supplier re-invents themselves every 2-3 years, it’s a sign they may not be using the best business practices.
Popular Platforms for Selling Products
Regardless of what products you’re selling, you’ll need a platform that allows you to accept e-commerce transactions. The good news is there are a variety of solutions you can try. With so many options, you’re sure to find one you like.
Shopify is an online e-commerce website. You can use it to open your online store. The advantage of using Shopify is that their software is simple and easy to use. You won’t have to spend hours learning how to use complicated software.
Big Commerce allows you to create an online store through their website. Not only can you create a beautiful store, but you can also see detailed analytics. This data can help you determine which products are your most popular and profitable.
Magento is an open-source software that can be used as an e-commerce solution. If you’re not techy, Magento can create your store on their server. This prevents outages and other hosting problems. If you’d rather have complete control, you can download the software and install it on your site yourself. However, you may need a programmer to help.
Big Cartel is another e-commerce solution. It’s different in one key way—you don’t have to the transaction or listing fees. Instead, you pay one hosting fee a month and you’re done. But there is one downside to Big Cartel—it doesn’t support shops that have over 300 items for sale. So if you plan to grow your commerce store, you may have to move later on.
WooCommerce is a WordPress plugin that you can use on your website. When a customer places an order, she’ll sign up for an account and checkout. After the transaction is completed, you’ll get an email in your inbox informing you of the order.
Other Ways to Sell Your Products
If you don’t want to open an e-commerce store to sell your products, don’t worry. You can always join an existing e-commerce shop and sell your items that way. Here are a few sites that welcome independent sellers:
The advantage of becoming an Amazon seller is that you’re siphoning traffic from one of the biggest websites in the world. You’ll also be associated with the Amazon brand, which customers already know and trust.
eBay is a good place to sell items that have been discontinued, are rare, or collectible items. But you have to study your competitors and make sure you’re pricing your items correctly. If you price too high, customers may not buy your product. If you price too low, potential customers may worry there’s a defect in the product.
Rakuten is a global marketplace that was started by Hiroshi Mikitani in 1997. It generates over seven hundred billion dollars each year and for a small monthly fee, you can list your products for sale on Rakuten.
Alibaba is an online site where consumers and businesses can shop. Although you may not have heard of this site, it’s more profitable than Amazon and Wal-Mart. It also offers a more robust product line and is trusted by consumers.
3 Essentials Your E-Commerce Business Needs
You’ve decided on your branding. You know what products you’ll be selling. You’ve chosen an e-commerce solution and you feel like you’re ready to start your business. Before you fulfill your first order, there are a few more things your business needs.
Just because your business is online doesn’t mean you should skip the invaluable step of creating a business plan. Your business plan is a bit like a GPS device. It helps you chart your course so you can arrive at your intended destination.
So, start thinking about your e-commerce business. What do you want it to look like in 5 years? Do you want to be a small family owned business? Do you want to grow into a big industry name with thousands of employees? Will your business be a part-time or full-time operation?
When you have a clear vision guiding you, it’s easier to make the day-to-day decisions that come up as you’re running your business. Take a moment right now and make an appointment to write out your own business plan this week.
If you want a successful business, you have to know how much money you’re spending and how much you’re earning. Without this vital information, you’re flying blind. You have no idea if you’re making a profit or if you’re losing money.
Keep in mind that you don’t have to do your own accounting if you don’t want to. You can hire a professional bookkeeper. This can be helpful because a bookkeeper will be aware of taxes and laws that apply to your small business.
Coach or Mentor
There are always a hundred decisions to make when it comes to your business. That’s where a business coach or mentor can come in. A coach or mentor has years of experience and plenty of wisdom to share if you’re willing to listen.
A good coach will help you make sure you’ve set up your business correctly and guide you through common problems. For example, if your supplier didn’t deliver your order and has become unresponsive, you might freak out.
This is a great opportunity to call on your coach. Your mentor can calm your nerves and give you a clear action plan so you know exactly what to do.
Tips for Marketing Your E-Commerce Site
Once you have your store set up, you’ll need to spend time marketing and promoting your business. Even if you’re on a huge platform and you’re getting good traction, you still want to inspire brand loyalty in your customers.
A simple way to promote your business is to use content marketing and search engine optimization. You can do this by having a blog you keep regularly updated. Your blog content should be in the same niche as your store. If you sell pet supplies, then your blog should be about pet care. This gives you the chance to educate your readers and point them toward your products at the same time.
As soon as you have a blog, start a mailing list. Your email list allows you to contact your subscribers about sales you’re running, new products you have available, and discounts you’re offering.
When you have a mailing list and blog with some content, it’s time to get on social media. You should be on several different platforms like Facebook, Pinterest, Twitter, and Instagram. Use hashtags to find and share relevant content.
How to Scale Your Business
Scaling a business is all about growing it without creating more work for the owner. This gives you the freedom and time to focus on activities that bring in profits.
The biggest step to scaling your business is to improve the customer experience. As soon as your customer makes a purchase, they should be sent two emails.
The first one should be a confirmation of their order. The second one should let them know what’s happening with your order. But you shouldn’t be sending these emails yourself. They should be part of an automated campaign that’s triggered as soon as a new order arrives. This saves you time and reduces customer follow-up.
You should also focus on how to improve shipping. One of the easiest ways to do that is to offer email or SMS notifications. This way your customer will be aware of what’s happening to their purchase every step of the way. To do this, you can use a service like Twilio or Phone Tree.
Regardless of what products you offer, you need a backup way to complete orders. This can be done through a third party fulfillment service. You may have to pay a little more and you may even lose money on a transaction but it’s a great customer service move. When customers are satisfied, they return to your shop again and again.
Best Practices for E-Commerce Shops
The most important part of running an e-commerce shop is making it simple and easy for customers to check out. It doesn’t matter how great your products are, if customers can’t easily checkout, they’ll get frustrated and leave before the transaction is finished. Fortunately, you can prevent this from happening by following these best practices.
Use multiple payment gateways. When you only accept one type of payment, it can lead customers to abandon their cart. Try to offer at least 2-3 different payment gateways. That way, your customer can pick the one they prefer to use.
Offer affordable and quick shipping options. When your customer is ready to checkout, the first thing they look for is your shipping choices. They want to know when they can expect their item and how much you’ll charge for this service. Give customers several options so they can choose the one that works best for their needs.
Minimize page load time. More consumers are making purchases from their tablets or smartphones than ever before. This means that your page load time is important. If your shop takes too long to load, then your potential customer is likely to move on.
Keep your checkout speedy. Your customer’s transaction is more likely to be completed if your checkout requires only a few screens. Ideally, it should be no more than 3 pages of information—one for the customer information, a second one for the payment gateway, and the third for shipping options.
Make customer service accessible. Don’t make your customers hunt for a contact number or email address. This information should be visible on every page of your site. If you outsource customer support, be sure to train your representatives so they’re fast, knowledgeable, and friendly.
Major retailers are shutting down local stores, citing customer preferences for shopping online as one of the main factors. Big-name closings include JCPenney with 138 stores, Payless ShoeSource with 512+ stores, RadioShack with 1,000 stores, and others. With the number of online buyers increasing, it will literally pay to get in on the e-commerce boom as soon as possible. Use these tips and strategies to start cashing in with your own e-commerce business.