For entrepreneurs who want to start their own e-commerce businesses, here are some things they need to know. Starting your own e-commerce business might be just the ticket, but there are many things to consider first before jumping in headfirst. One thing is for sure - it requires a lot of hard work and dedication from all angles; without it, you'll soon find yourself out of business in no time. To help aspiring entrepreneurs avoid falling into these common pitfalls, here are 10 things every budding entrepreneur needs to know about how to succeed at running an e-commerce business!
1) What type of products will you sell?
What products you sell can affect the viability of your business the most. For example, will you be selling services? What type of goods? Both. When you first start a business, you'll need to decide whether it fits into a category, or if you'll be starting new product lines in the future. Figure out how much time and money will be required to maintain these new lines of business. To illustrate, clothing items can be more expensive than books because they require more investment up front and have higher operating costs such as inventory storage in a warehouse. In a similar fashion, if you choose to either have an online or offline business, it can change from things like storage needs to hiring employees. If you want to sell merchandise, think about how customers will buy it - by phone or in person. Digital marketplace or not, purchasing from mail-order catalogs is outdated.
2) How much can you invest?
Not all eCommerce ventures can start out with a $1 million investment. Startups have to strike a balance between capital invested and runway—the amount of time your business has before it runs out of money. The lower you invest, sometimes the longer you’ll need to keep your venture afloat until revenues grow and profits roll in. An easy way to calculate how much cash you'll need is to determine how much revenue (total sales) needs to come in each month just to cover costs. Subtract that figure from whatever initial investment you put into your company, then subtract 50% or so for marketing expenses, office supplies, etc. This is your break-even number; it's how much total sales you need just to get back what you initially invested. Once you've determined how much actual revenue your company will need to generate per month, divide that by 30 (or 60, depending on whether you pay yourself on a monthly or weekly basis). That tells you approximately how many customers you'll need to acquire every day. Some entrepreneurs begin bootstrapping their startup by selling online as side gigs while working full-time jobs; others work full-time themselves but at other jobs they don't like nearly as well as running their own businesses. Either option requires patience and perseverance--it could take months before earnings go up significantly. However long it takes though, keeping at it without giving up will mean your chances of success are better than ever!
3) What is your marketing plan?
Although business ideas vary widely, many successful businesses have similar characteristics. They solve a problem for people and offer a solution that makes life easier or more fun. If you’re launching an e-commerce business, marketing is essential to your success. When you start an e-commerce business from scratch, it can be daunting to come up with a game plan for getting customers to notice you online. Instead of working in a vacuum, come up with answers to these questions before you launch: Where are my customers? How can I reach them? What are they looking for when they shop online? Why should they choose me instead of competitors? And then... how will I convince them they want what I’m selling? There are no hard and fast rules about answering these questions – but by taking the time up front to think about where you'll focus your energy, you’ll stand a better chance of making progress toward finding answers as quickly as possible.
Where are my customers? This question is all about understanding who buys products like yours, where they live, and why they buy. Are there certain sites where your target market hangs out? Do those sites draw traffic based on location or demographics like age or gender?