Even though traditional physical stores account for 9/10 of all retail sales, e-commerce showcases continuous growth on a year-to-year basis. Online marketplaces are expected to extend their reach and the revenues made via digital channels are estimated to be around 4.88 trillion US dollars by 2021 (according to Statista – The statistics portal.)
But given the extremely competitive nature of modern e-commerce, it’s hard to estimate and predict the potential revenues and risks which may accompany a new online retail venture.
But by following the example of McDonald Paper, it’s more than possible to provide unparalleled support and remain competitive.
This guide has been prepared In order to alleviate that and provide a solid starting point for anyone willing to do the basic legwork.
Below you’ll find a few tips for running a successful online retail business when you’re starting from scratch.
Market analysis and niche selection
As was previously expressed, the online retail landscape is extremely competitive. Major players such as Amazon, Alibaba and eBay have arguably monopolized the online retail market. In addition to that, it’s possible for anyone to enter online retail with relatively small initial investments (that is when compared to traditional physical stores).
But despite all this, there is no shortage of smaller niches and product categories to explore when answering the question of how to start an online retail business.
How to find a profitable product to sell online?
There’s a saying, “Follow your passion,” but truthfully, this can only apply to small passion projects which have room for error. In conditions of strict planning and funding, the need to pinpoint an exact niche is absolutely vital.
As for the basic “starting an online retail business,’ make sure to:
- Research consumer buying trends and predict demands.
- Consider seasonality of certain product categories.
- Select 5-10 product categories and research businesses which are based around them.
More about finding a niche can be found here.
Financial planning, strategy and logistics
Every e-commerce project is expected to have an extensive online retail business plan in order to justify investments. Just to start, it’s essential to identify business objectives, pinpoint the mission and select key performance metrics.
What are the start-up expenses?
How much do the assets cost?
How much will the shipping be and who will be handling those deliveries?
The list goes on and on, but business worksheets can be found here.
Launch a website and use promotional channels
The website will act the face of the business, since bulk of the sales will take place online. With the advent of services like Wix and Squarespace, it’s quite easy to set up an e-commerce website. Other associated important bits have negligible costs as well, such as getting a domain name, an SSL certificate and paying for hosting. But even the smallest things matter.
Create a website with UX in mind, first and foremost.
Once the site is up, coordinate marketing efforts. It’s not likely that every marketing channel will be used, but it’s important to pick at least 2-3 to get a solid foundation. The 3 pillar channels for e-commerce are SEO, PPC and SMM.
How to choose the right one? That wholly depends on the online retail store business plan and how you’re expected to run it.
- If you intend to play the long game and rely on organic traffic, then invest into SEO.
- If you intend to quickly begin selling, then invest into paid ads, but keep track of ROI.
It’s worth mentioning that email is arguably the most used channel for e-commerce, so using that is a no-brainer.
Optimize for the buyer
Customer experience is arguably the most important aspect for any aspiring e-commerce project. Make it easy for people to browse and buy. Go out of your way to provide the most satisfying experience for. For this, there are a few basic rules to uphold:
- Intuitive cataloguing and navigation.
- Real-time product filtering and searching; autosuggest and autofill.
- Support of convenient payment methods.
- 24/7 chat support.
- Personalized shopping suggestions.
- Return policies, warranties and security.
On top of that, using the performance metrics and sale figures becomes (or big data, if you will) becomes a necessity. Not only will you be able to understand your buyer more intimately, but it’ll make it easier to predict their behavior in the future.
The less clicks it takes to buy, the better.
It’s not hard to begin, but there are vital aspects which a retail business is expected to do in order to perform. You need a profitable niche and sound online retail business ideas, a well-designed and promoted website, and an unparalleled customer experience.
Don’t be shy to examine your competitors. There’s no need to make mistakes if they were made prior by others. Make sure everything functions as a unit. Think of a minimal growth strategy and handle the budget.