Based on how much we see and hear about eCommerce, it practically feels like everyone and their neighbor has an online store — whether they operate it full-time or as a side hustle. From time to time you may even see self-appointed experts on social media talking about how easy and fail-proof it is to get into eCommerce.
While it’s true that eCommerce has removed many of the barriers of entry into entrepreneurship — like allowing people to sell from home or from a small office without having to invest in costly physical retail space and inventory — it’s still important to approach it with the mindset you would when building any business. That is, you still need to do plenty of research, come up with a plan, and distinguish your brand if you hope to succeed.
Here are some truths about starting an eCommerce business nowadays.
Truth #1: Ecommerce Success Requires a Roadmap
There’s a common misconception that eCommerce is more lax than “traditional” business, basically allowing you to have an idea, source products, set up a website, and let the cash flow in. The truth is that it requires just as much planning and strategy as launching any other company, especially if you’re going to be seeking funding from investors or lenders.
Experts tend to recommend focusing on many of the same areas you’d cover in any other business plan, including:
- A concise summary (no more than a few pages) covering your mission, history, market, objectives, and major financials
- A basic description of who you are, what your business does, and what values it upholds.
- An analysis of the market you’ll be entering, including the competitors already in that market.
- Documentation to back up any financial, legal, and logistic claims.
Of course, you can update this plan as your business evolves, but you need a general and specific idea of where you’re trying to go.
Truth #2: Ecommerce Is Saturated, But Profitability Is Possible
Just like you’ll hear people evangelize eCommerce as foolproof, you may hear others write off eCommerce as oversaturated. While there are many people trying their hand at running online retail stores, niches still offer opportunities for enterprising businesses to reach a specific audience and turn a profit. The key is finding a niche before you start an ecommerce business.
Besides narrowing down what you sell and to whom, there are many things you can do to set your business apart from the competition at large. This speaks to the need for a unique selling proposition (USP) — the reason why your offering is different and better than others on the market. Another way to think about it is what comes to customers’ minds when they think of your brand? USPs can relate to products, pricing, customer service, order fulfillment, marketing, and more.
A strong USP that resonates with your target audience can put your business on the map and give people a reason to come back for more — allowing you to succeed in a saturated market.
Truth #4: Ecommerce Offers Many Opportunities to Outsource
There is only so much time in a day. It’s possible you’ll reach a point where there’s simply too much to do to upkeep your eCommerce brand, especially if it’s growing rapidly. Thankfully there are many opportunities to outsource — like SEO copywriting, packing/shipping, payroll, and many more.
Crunch the numbers on what it’s costing you to handle these functions on your own versus how much it’d cost to outsource them. There may be a compelling case for simply paying experts to handle at least one part of your workflow.
Starting an eCommerce business isn’t necessarily easy or risk-free, but it can go smoother if you stick to these truths and avoid the myths.