My own opinion: to consider an eCommerce store as a type of business – it’s a big conceptual mistake, which can ruin all your endeavors on the root.
After all, what is business?
Business – is primarily the creation of a product, the formation of why customers will come to you in general and for what they will pay money: range, prices, service, and so on.
And the eCommerce store – it’s just a virtual showcase, allowing with a certain degree of relative convenience to study the goods, their photos, descriptions, characteristics, collect the goods in the basket, and place an order.
So, we open an eCommerce store: a step-by-step plan.
Step One: selecting a niche
The fuel of any business is the customers. No inflow of clients – no opportunity to organize a profitable business process and earn.
What to pay attention to when choosing a niche? I used to think, like many people, that markup on the goods is important. And it is logical: no good markup – no good income.
But it is not! Accordingly, to shopify reports, you can earn on any product, but you will not be able to organize it if there is no flow of customers for the same type of goods.
Therefore, there are two key factors:
- The popularity of a product – the more demand for one thing, the better.
- The cost of the client attracted through simple and predictable sales channels, such as contextual advertising.
This is the basis of my niche analysis, which shows: what exactly are the most people looking for and how much this traffic is worth.
The cost of the client is important, because the higher its price, the more money you have to spend on advertising before the business starts to generate income.
Typically, I recommend starting a business with niches, where the cost of moving from a special location does not exceed 0.3$. However, this is a conditional recommendation.
When you start a shop and debug the simplest processes, you can add any other goods, and more expensive advertising will start to pay off.
Step two: additional analytics of the selected niche
Trade is always assortment. Do not be afraid of niches with a large assortment – all the money is there. But you have to start with something.
Namely, to make analytics inside the niche to understand what specific products should focus on the start, in what sequence to form an assortment, what to advertise in order to reduce all costs: advertising and product balances.
Once again, the key to profitability: it is advertising and sales of similar products on which the system business is built.
Step three: find a supplier or several suppliers.
We start looking for suppliers who have the goods identified in the second step.
The ideal supplier to start – this is the one who has a catalog site for convenient and fast filling eCommerce stores with the greatest range.
The fewer suppliers at the start, the better, but in practice to start a business from one supplier is rarely possible.
As part of my services, I help to solve this problem, offering its customers to launch not only retail but also wholesale.
For example, you want to start a wholesale business, and I already have customers who sell something at a retailer but order from different suppliers, which is not very convenient and cost-effective.
Your task is to collect the assortment in one place to make the work in retail more convenient and cost-effective through faster turnover, because you can take everything you need, saving time and money on delivery.
Next, I can find partners from other cities, who will open the sale of these products in their territory. In addition, you will use the classic sales channels: advertising, working through distributors, marketplaces and so on.
Step four: analytics of the supplier’s catalogue
If we get involved with a supplier, it would be logical to look at what else of its goods could be sold.
At the same time, uploading all the goods he has is not the best option, as we have to form our strategically correct assortment. And strategically right now is to get involved in goods with direct demand to start the flow of customers.
That’s why we take the supplier’s catalogue and analyze: what other market positions he has.
If the prices are acceptable for them, we can launch them as well.
Step five: launch advertising
I recommend starting with the most simple, flexible and predictable tools: search and contextual advertising in Google.
There are many subtleties, but we will not dwell on them in detail.
Step Six: Output five to ten orders a day
Such an amount of orders allows more or less to adjust basic processes: interaction with suppliers, order processing and so on.
How to increase sales if there is not enough?
Option one: add new categories of products, including those with higher competition, well-established basic processes allow you to do the same.
Option two: launch new sales channels, including through social networks
Step seven: scale-up
There are several options and ways of development at once:
Develop the store further by adding new products.
Open a point of sale, having secured a stable inflow of customers.