5 Keys to Running a Successful E-commerce Business
Most first-time entrepreneurs want to know the big secret to running a successful e-commerce business.
And while there are many factors that can affect the success of a business venture (i.e. timing, market readiness, or slow development in the cases of former stalwarts like Kodak and Blackberry), I’ve found some common elements of sound business strategy that have helped new entrepreneurs and even seasoned pros undergoing a re-brand or product expansion take their businesses to the next level.
I’ve outlined 5 main points that will lead to sustainable success in online retail.
1. DO YOUR RESEARCH
Great business ideas fail they’re not supported by great execution. Preparing for a successful e-commerce business starts with the research phase: knowing your market, your customer, and your competition. These three factors will determine what you sell, at what price, and what strategy you’ll implement to attract, engage, and eventually retain customers.
What tactics are other, established brands using to acquire new customers?
What makes their products different or more attractive?
How many products do they offer?
All of these questions will help you create a competitor matrix and you can log your progress against the companies that customers are already shopping from. This gives you a competitive advantage as you can start to see what gaps in product, customer service or even branding you can exploit to make your brand standout when you actually do launch.
And speaking of launching, be wary of ‘analysis paralysis’. You may so much time in the research phase that it never seems like the ‘right time’ to get your business out there. To prevent this, set a soft and hard launch date so you have an outcome to work towards. Then outline process goals that will serve as ‘mile markers’ to make sure you stay on track.
Without a time-bound strategy, you may read your way out of entrepreneurship. Set a course, stay focused, and attack your goals chunks at a time.
You’ll create a positive feedback loop that helps you feed off of the momentum you have and you’ll be closer to your launch with each move. With all of this research, you need to find a product or product(s). And once you do, you’ll be ready the next step.
2. SECURE YOUR SUPPLY CHAIN
In order for you to have customers, you need products to sell. When value is communicated effectively, then browsers turn into buyers.
But incorrect, delayed, damaged or missing items have a lasting effect on customer relationships. When it comes to selling online, social proof plays just as an important role as word of mouth did for the door-to-door or brick & mortar salesman.
Positive reviews from verified buyers help you attract new customers. But you only get those if you deliver on expectations.
That means shipping the right product to the right person in a reasonable time—without incident. Of course, you can’t control what happens once it’s passed off to a shipping service but you can put a system in place that helps reduce potential mistakes.
Securing your supply chain will also inform your pricing—taking into account shipping fees, lags in product availability, and what occurs when you receive a damaged product (if you’re housing inventory and not choosing to dropship).
Issues with shipping decreases customer satisfaction and therefore customer retention; great businesses are sustained on repeat buyers, not just new customers. You want shoppers that will not only purchase from you but get involved in your full brand experience, eventually become advocates and evangelists.
This is an essential piece of the puzzle. Customer acquisition is based on awareness. That means you have to be visible to your target audience. To have a successful business, a marketing budget is absolutely necessary. You can choose to allocate it in various ways from online ads or influencer gifting or sponsored events.
Being active on social media, optimizing your store for mobile devices, creating a brand partnership to offer a limited edition product or running a giveaway are all ways to generate more traffic and invite more sales. Adding relevant and valuable written or video content can also extend your brand reach to meet customers where they are and lead them back to your e-commerce site.
Automating things like email marketing or social media free up your time to be able to think ‘big picture’ about the growth of your business (including investments in your own personal development as an entrepreneur).
Hiring freelancers or consultants is also a great way to optimize your efforts so you save time in the inevitable ‘trial and error’ of business growth.
Systematizing your business is important for growth, it saves you time & effort which allows things to run smoothly and is major key before hiring your first employee.
As an e-commerce entrepreneur you should have a system in place for order processing & fulfillment, product creation, marketing & promotions, customer follow up, etc.
Your system is successful if it can be followed by anyone and achieve the same end result.
Fostering community usually takes a bit of a push. Remember: social proof is your friend! That’s why incentivizing things like customer testimonials, product reviews or other forms of user-generated content are great ways to get the ball rolling.
When customers see more options for engaging with your business, they tend to get involved. But you can also be explicit.
Using email to bridge the gap allows you to make explicit requests to get the results you want and you get the benefit of being able to track the effectiveness of campaigns. E-commerce is customer-focused but just as equally data-driven. You have to balance both in order for your online retail business to grow and thrive.
Whether you’re just starting out in e-commerce or launching a new product on an already established platform, these principles are crucial to your success.