There are a number of things that must fall into to get your ecommerce business off to a head start. The best way to make sure you have covered every critical aspect of starting a successful ecommerce business is to approach your ecommerce business like any other formal business and draw up a comprehensive, well thought out and thoroughly researched business plan. Your ecommerce business plan must outlines: a description of your business, market analysis for your niche, the organisation and management of your business entity, detailed description of your product or service line, pricing strategy, marketing sales strategy, financial projections, funding requirements (if applicable), operational plan, technology and infrastructure (such as Shopify ecommerce platform), risk analysis, compliance and legal considerations.
Drawing up a comprehensive business plan for your ecommerce business is a great way of putting everything into perspective and also establishing a framework you will continually use to monitor, evaluate and adapt your business thrust and goals.
Essentials for Starting an Ecommerce Business
Market Research and Planning
This is the foundational step you need to take before you do anything. Market research and planning involve a number components that we delve into below:
Target Market Identification
This involves defining your target market and determining specifics such as demographics (age, gender, location). You also need to scope the psychographics of your target market such as the interests, values as well as behaviour of your target market.
All this is crucial for your business strategy. The aim of target market identification is to map out the specific needs and pain points of your target market that you seek to address through your ecommerce business.
Industry Overview
This part is focused on researching the broader industry where your ecommerce business will be operating. This will give you an understanding of the industry trends, growth patterns, as well as potential challenges.
The main objective here is to identify key players, both large and small (nichey), in the sector.
Competitor Analysis
eCommerce is a typical cut throat business sector – largely because in most cases the business model requires minimal investment to get started.
To be successful in ecommerce you need to identify what you can categorise as your direct and indirect competitors in the space you are getting into.
Explore and assess the strengths, weaknesses, opportunities, and threats (SWOT analysis) of your competitors. The main thing here is to evaluate the product offerings of your competitors and also figure out their pricing strategies and how they engage their customers.
Product or Service Analysis
In this exercise you need to scope what your product or service (core business) is. Provide comprehensive details about your ecommerce products or services. You need to ensure that you have an intimate grasp of the product or service that you want to deal in.
Consider this comprehensive post on ecommerce product and service analysis: What Can I Sell Online As A Business
Underscore what your unique selling point (USPs) is going to be as this is crucial for differentiating your offerings from those of your competitors.
The other important aspect here is to evaluate how your products will meet your target customers’ needs and preferences – at satisfactory levels.
Market Size and Growth Potential
It is important to get a sense of the size of your target market. Gather information you need to project the size of your target market.
Also determine the growth potential of your target market. Key considerations to be made here are factors like emerging trends, implications of technological advancements as well as evolving consumer behaviour.
Customer Behaviour and Preferences
Your business planning process should also include an analysis of ecommerce customer purchase patterns. The aim of this exercise is to understand the preferences of the consumers such as the most used payment methods, preferred shipping methods, options as well as product features.
Regulatory and Legal Considerations
Considering the regulatory and legal requirements that govern e-commerce generally, and the product or service you plan to sell particularly is a critically important exercise. Understanding the regulatory landscape is the first step towards ensuring compliance with instruments that govern data protection, consumer rights as well as other relevant regulations.
Supplier Analysis
Running an ecommerce requires a consistent supply of products – either through manufacturing your own or sourcing from reliable and reputable suppliers.
This component of your business planning involves evaluating potential suppliers for your ecommerce business.
Due diligence in these aspects involves considering factors such as product quality, reliability of supplies, and pricing. The pricing must be reasonable enough to enable you to put up a profitable markup and still be competitive.
The main objective of supplier analysis is to determine the availability of, and identify (shortlist) reliable and cost effective suppliers.
Distribution Channels
Diligently explore various distribution channels that are suited for your products.
Determine whether you will do well to use online marketplaces, or you need to build your own ecommerce website, or perhaps a hybrid approach which is a combination of both. Evaluate the pros and cons of each distribution strategy and option you have on the table.
Leveraging a solid ecommerce platform like Shopify to establish your own ecommerce website and brand has many benefits such as complete control of your branding, complete control of the ecommerce workflow, engagement with customers, inventory management and entire ecommerce workflow.
Utilizing such platforms as Shopify instead of creating a custom ecommerce website from scratch has the advantage of reducing the substantial technical complexities involved in your work, giving you more time and peace of mind to focus on business development.
Economic and Market Trends
The purpose of economic and market trends analysis is to get a sense of the broader economic dynamics that have a bearing on consumer spending, and therefore have an impact on your business.
Monitoring market trends such as the introduction and adoption of new technologies, shifts in consumer behaviour and preferences, as well as changes in buying behaviour – is crucial for optimising and streamlining your business strategy.
SWOT Analysis
SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is focused on mapping out the strengths, weaknesses, opportunities and threats that your prospective ecommerce business faces.
You need to identify potential internal and external factors that may significantly affect your business’s success- either in the negative direction or in the positive one.
The purpose of this exercise is that with insights from your SWOT, you can plan and act proactively to tap your strengths and opportunities to grow your business as well as put measures in place to curtail threats and alleviate the weaknesses of your business.
Customer Feedback and Reviews
Gather as much feedback from your potential customers and existing customers of your competitors.
You can do this by making use of survey tools like SurveyMonkey to get real time feedback, also consider setting up focus groups if you can and take time to analyse customer reviews on competitor websites and get a real world sense of what customers really like and what their pain points are.
Check review sites like TrustPilot.com to see how your competitors are received by the market and what reviews they are getting. The idea is to be proactive about positioning your business offerings to plug the holes and excel where your competitors are faltering.
Price Sensitivity and Competitor Pricing
Business planning involves evaluating the price sensitivity of your target market. In this aspect you need to analyse competitor pricing strategies so that you can arrive at workable and appropriate price margins for your products.
Social and Cultural Factors
A comprehensive business plan includes a consideration for social and cultural factors that may influence consumer behaviour. To succeed in ecommerce you need a good understanding of cultural nuances that drive and impact consumer behaviour, product preferences as well as purchasing decisions.
Technology and Innovation
Technology and innovation are the enablers and drivers of ecommerce, social commerce and mobile commerce. As an entrepreneur venturing into this space- you need to keep tabs on emerging innovations and stay abreast with technological advancements in the ecommerce industry. Think about how emerging technologies, such as AR/VR or AI, are likely to impact your business and shift the trajectory of ecommerce.
Remember that market research is not a once off event, but an ongoing process. Staying informed on industry and consumer trends and changes is essential for the sustained business strategy of your ecommerce business.
Getting Your Product and Service offering Right
In essence: Success in ecommerce requires you get the two main aspects right: the product/service offering and ecommerce platform.
1) Product and Service offering
Your product/service offering must have the following attributes:
Market Fit: Addresses a clear and specific problem or pain point in a specific market.
Differentiation: The offering must have unique features or positioning as the basis for a compelling value proposition.
Quality: Maintains high standards while ensuring customer satisfaction as a basis for loyalty.
User-Friendly: It must provide a seamless, navigable and enjoyable customer experience without any hassles.
Competitive Pricing: This requires balancing value for customers with the bottom line (profitability) of the business.
Scalability: Your product/service must be ready for future growth, higher demands and shifts in market trends.
For more on getting the right product or service for an ecommerce business check out this article: What Can I Sell Online As A Business?
Getting the Right eCommerce Platform
A good ecommerce platform covers about 80-90% of what it takes to be successful in ecommerce from a technological infrastructure point of view. Such a platform must have the following attributes.
Ease of Use: A good ecommerce platform has an intuitive interface for effortless digital store setup, configuring and management.
Ready-to-Use Templates: It must also offer free and premium Pre-designed templates for putting together quick and visually appealing storefronts.
Scalability: It must have the flexibility to grow with your ecommerce business without steep learning curves and the need to migrate to other platforms amid operations.
Integrated Payments: It must have seamless integration with various payment gateways and shipping partners to render a convenient and seamless online shopping experience
24/7 Support: The platform must have an accessible and responsive customer support service for timeous issue resolution. Ideally, the support desk must be available via email, telephone and live chat.
For more on choosing the best ecommerce platform for your online store please check out this article: What Does An Ecommerce Website Need?
The Shopify Edge
Shopify is a leading premium ecommerce platform with a lion’s share of the ecommerce technological market globally. Shopify boasts a user-Friendly and intuitive online store builder interface created with beginners in mind.
The platform has an extensive app store where merchants can install various third party apps and plugins and integrations to enhance the features and functions of their online stores.
Shopify is also secure, reliable and mobile optimised. The platform has in-built marketing and SEO tools and flexible pricing packages allowing beginners to start small and grow within the platform.
Overall, Shopify has a proven track record as it is trusted by millions of merchants globally making it the best ecommerce platform overall.
Final Thoughts
In conclusion, starting and launching a successful ecommerce business demands a thorough and strategic approach. You need to start with a meticulous market research process and then move into selecting the right commerce platform.
Also plan your legal considerations carefully to ensure a seamless customer experience.
A solid platform like Shopify will take care of a great part of what you need to run a successful ecommerce business – from a technological point of view. Remember that businesses are not sustained by once off and static business plans – but rather by continuous business planning.
You will need to consistently research, observe, adapt to maintain customer-centricity, and a keen eye on your traffic and sales reports/ analytics as well as industry trends will be your critical allies.
Now, with these insights you’re good to get started with the groundwork. It’s time to turn your entrepreneurial dreams into a thriving reality. Happy selling!
