04 Oct Tips for Setting Up an eCommerce Business
A wonderful thing about the internet is how it fuels business. This can clearly be seen in the proliferation of eCommerce: While major companies are seeing their online sales climb every year, eCommerce is also a great place for entrepreneurs.
From Amazon to sole traders, eCommerce is flourishing, with online purchases worth well over €500 billion a year in Europe alone in 2016 (and rising) and more than half of Americans preferring to shop online.
It’s also a perfect setting for setting up one’s own business. The overheads are much smaller than in a bricks-and-mortar business, your customers can (theoretically) be anywhere in the world and much (if not all) of the work can be carried out by one person.
1- Choosing the product or service
What will your eCommerce site provide? This is the hardest choice you’ll make: It’s bad news because there’s a lot of weight put into your first decision before you even begin. The good news is that you get it out of the way early, clearing the path for the real work.
If it’s a service (e.g. web design, coding, homemade product etc), make sure it’s something you absolutely love doing because – hopefully – you’ll be doing a lot of it. Look around at competitors’ rates to make sure you’re not over or under-charging.
If it’s a product, make sure the margins are favorable to you, that it’s affordable and that the market isn’t saturated. Your margin should be – at the very least – 33%. If your product is available locally or (worse) in a chain of shops, it might be an over-saturated market from a local point of view. That means that your product will be better suited to a foreign market (if at all).
A bespoke or luxury product (a painting say, or a niche electronic device) might require a harder sell (maybe even phone conversations) but would offer a larger margin and less work on the production side. Conversely, more affordable products (e.g. novelty items, plastic jewelry, quirky stationery etc) should sell more easily but may require more work per sale.
2- Research and strategy
If you’re not making the product or providing a bespoke service, that means that you’re selling from a wholesaler. Research wholesale vendors for eCommerce businesses to find the best deal. If your product is non-perishable, you might well be buying from across the Atlantic or the Far East.
Look into competitors’ offerings (both at home and abroad). Google Shopping is a good resource for product-only searches.
Research search engine optimisation to give your site the best chance possible. If SEO is new to you, it might be worth talking to a third party about potential SEO strategies.
3- Hosting and testing
Finally, assuming your website is in tip-top shape and you’re happy with its appearance, product and user-experience. We recommend Heroku as it’s relatively straightforward to set up and allows for a simple, intuitive UX.
And finally, test, test and test again. Market research it with friends (ideally ones who aren’t especially technically proficient) to see their journey through the site, how they choose products and what they think of the overall experience.
ECommerce sites have changed the lives of countless young businesspeople. Yes, the space is dominated by sites like Amazon, but there are more than enough success stories to give you hope. Good luck!