With more and more people using the online medium to buy their products, it is currently one of the best moments to have an e-commerce store. Considering that the annual growth rate of e-commerce revenue is around 11.17%, it is understandable why many would-be entrepreneurs choose this industry.
An e-commerce store is often easier to handle, as you don’t have a physical shop to tend to. All you have to do is take an order, pack the product, and send it out. That being said, certain things may affect the success of your business. If you plan to launch an online store, here is what it takes to ensure its success.
1. The Right Niche
For your e-commerce store to be successful, you should choose the correct niche. Not only should it be an area you know well, but it should also have reach. The last thing you want is to choose a niche that no one around is interested in. Given that you’ll be selling online, you will have more flexibility – but you still need to narrow down the niche.
2. Plenty of Research
If you want to be successful, you need to do your homework. You may have a good idea or plan, but you might easily fall behind if your competition improves. See who your main competitors are and try to determine what they are doing right or wrong. After that, research what you believe your ideal customer should be. This can help you formulate a good business model with the potential of being successful.
3. A Sound Financial Backup Plan
When it comes to launching a successful e-commerce store, you need to be aware that about 90% of them fail in the first four months. This usually happens because the business cannot keep up with the competition that has seniority over it. You are still a new company, so it may take a while for people to know you.
A good idea would be to have some passive income to back you up. For instance, you may share your Internet bandwidth and boost your income stream. This will offer you extra money and security and allow you to hold your ground.
4. Proper Product Sourcing
Consider where you will be sourcing your products from. Will you sell physical products or go for the digital type? If you work with physical items, you must collaborate with a manufacturer or make the products yourself. If you offer digital products or services, make sure that you describe them correctly on your website.
5. Good Postage and Packaging Method
Figure out how you will be packing and sending your products. Do you plan on packing things yourself, or do you want to send them yourself? If the latter is the case, you should consider what postage company you plan to use. If you are sourcing the products from elsewhere, check if the manufacturer already has their postage option.
6. Profitable Prices
Now that you have your items, you must figure out their prices. Make sure that you get a profit margin for the product. Consider all costs, including taxes, so that you get a percentage of the selling price. You should calculate it so you get a 60%-70% profit margin. If that’s not possible, you can go for 50%, but this can potentially affect your budget.
7. A Good Marketing Strategy
You have decided on the items you want to sell and how to ship them. Now, the next thing you must consider is how to draw people your way. Plenty of marketing channels are out there, and most are free. Think about where your ideal customer will spend most of their time and start from there.
The Bottom Line
Starting an e-commerce store can initially feel overwhelming, but with a good plan, you can easily get things going and be successful. Focus on what your customer wants and ensure all the numbers make sense. Once everything is in order, you should be able to launch your product smoothly.