I am subscribed to a number of free and paid business magazines, I don’t really get much out of them but it does give me something to chew over once in a while. Occasionally these magazines have case studies whereby they interview small business owners and long time business owners alike.
I read every few months about an entrepreneur who has decided to start an e-commerce business. I mean, we can all see how this will pan out, e-commerce will be a driving force in retail very shortly. I am a firm believer in this. Infact, in many industries traditional retailers are already feeling the pain at the cash register.
But I can tell you that running an online business and specifically an e-commerce business is no magic bullet. Even though you may have what seems like a great idea it is still vitally important to carry a large amount of market research.
Before You Start Your E-Commerce Website, You Need To Ask These Questions:
- How may established players are there in your chosen industry?
Although it may still be growing, you’ll be surprised to find that many of the retail sectors have large and established websites already serving them. This means it’s going to be harder and take longer for you to rank on the first page of Google, which is VITAL for your business start-up.
- How will you bring your customers come back to your store?
This is an important and often overlooked area. Building a business online is about offering valuable content to your visitors. Sure, you can offer them cheap prices, but at the end of the day anyone can do the research and find a decent wholesaler. You need not only cheap prices but also give something to your customer so that he/she thinks of you next time they go to buy.
- Do you have the sufficient finances, AND, after time spent packaging, mailing and answering emails, what will your real return on investment be?
It’s great to have a product that you can see at a 300% mark-up. However, if the dollar value of the product is small how long will you have to spend doing all the little tasks required to get that product to the customer. Have you factored time into your costs?
- Who will build and maintain your website?
This is a minefield for start-up business owners and I will be devoting my whole next post to just this topic. It’s so unfortunate to hear of people having a great online business idea, spending up to $30,000 on a great, you beaut e-commerce website only to have them not realise the full scale of the arena they are entering. Websites are complicated not only in the design and creating stage, but they also need to be constantly updated. Uploading content, pictures, responding to comments and other associated things take time. Infact, if your business gets a large enough web presence, you may find yourself spending half the day answering questions via email, rather than sending shipments out the door which is what brings in the dollars. You need to consider this from the start.
The last and final question, and one which I feel is of utmost importance:
- How will you scale your business?
Do you have the plans in place and infrastructure to grow quickly if required? It’s no good having orders if you cannot fulfil them. It’s no good having customer enquiries if you cannot handle another phone call. I honestly believe that much of a start-up businesses success comes down to taking a long term view and living in the present whilst planning for the future. You need to at least have an idea about what you will do when you finally start to place those large, shipping container size orders. If you’re not prepared for this then you can expect a long and slow growth curve.
How do I know about starting an e-commerce business and running websites? Well, I currently manage a number of large scale search engine optimisation campaigns for many businesses around the country. In my internet marketing business I maintain and grow my clients web presence on a daily basis. I also run a large number of online businesses myself and this allows me to have a semi-decent perspective on what is required if you are looking to start an online business.
In the next post I will be giving an actual run down of the steps my brother and I have been taking to set up what we feel is going to be a major player in a chosen industry. We have spent the better part of a year doing market research, analysing the sales of the current players and sourcing wholesalers.
As we move towards the stage of placing our first large orders I now am undertaking the tasks of implementing our complete web strategy, building the websites required and stating the search engine optimisation campaigns which we will need to be successful. Realistically I should have started this 9 months ago (hint hint, get moving on your ideas people) but didn’t, now I am behind the 8-ball and playing catch up.
Join me in the next post to see the step by step checklist we are marking off as we build and launch a new online business.