There is no fast track to success in ecommerce, or any other type of business.
I owned and operated a successful ecommerce company for 10 years. We sold that business, and I now work for an ecommerce solutions provider. Along the way, I’ve observed lessons that are important to the success of many entrepreneurs.
First, successful entrepreneurs own and operate a business for a reason. It’s far beyond merely having a job, typically. Their business solves a problem, fills a need, or addresses a passion of the entrepreneur. I addressed all of these motivations last fall, in “For Success in Ecommerce, Answer ‘Why?’.”
Next, successful entrepreneurs decide what type of ecommerce model will best fit their products and services. Unlike, say, 15 years ago, today there are many options: a pure-play ecommerce site, online marketplaces, direct to consumers (for manufacturers), brick-and-mortar — or a combination of all of those. I addressed that, too, in “For Success in Ecommerce, Figure Out the ‘What?’.”
In this article, I’ll focus on the variables that determine ecommerce success, in my experience.
10 Ingredients for Ecommerce Success
What determines a successful business? It depends on one’s objectives and measurement criteria — profits, passion, exit strategy, and so forth. These are generally aligned with the reasons for starting the business in the first place. Regardless, how does an entrepreneur chart a course for success and mitigate the inevitable speed bumps along the way?
Here are 10 key elements.
Know your target customer. What products or services do your target customers want and need? How do they search for products? How do they select a vendor? What types of support do they need after the purchase?
Select the right products. Your products must be wanted by consumers. The products also must be differentiated from your competitors in some way. Variables include quality, price, availability, and presentation, as well as content about the products, such as user reviews and social commentary. Don’t offer products that are available at a lower price on Amazon. You will likely lose the sale.
Make it easy for find your products. This can be challenging for a new ecommerce business. Earning search engine rankings takes time and perseverance. Search ads are expensive, but almost mandatory today. Social marketing is important, but it only gets you so far. Affiliate marketing is now essential for most ecommerce businesses. Activate all of these channels, align your content to be consistent across those channels, and constantly refine your approach based on your analytics.
Differentiate your offer. Differentiate your products and your business from competitors. Define your value proposition and reflect that throughout the customer’s experience on your site and all marketing channels. Create campaigns and promotions that have value to your customer, not just a 20-percent-off sale or free shipping. Consider bundles of complementary products for added value. Offer expert advice. Provide good comparison tools and content. Present compelling offers at critical points in the path to purchase. Re-market to abandoned-cart users.
Understand your business model. I’m not a proponent of a 50-page business plan. But it’s essential to understand the economics of your business. What are your expected revenue, costs, required investment, gross margins, and overall profitability? What are your risks? Plan for the bad things: chargebacks, returns, lost shipments, product delays, supply chain failures, and price increases. All will likely occur.
Find the right help. Whether you are a solo entrepreneur or one with 20 employees, make sure you have experience and knowledge helping you. Hire smart, innovative people with digital marketing and ecommerce experience. Or, contract with experts who can advise you. Know your strengths and weaknesses. Don’t assume you can quickly learn complicated ecommerce skills.
Use off-the-shelf platforms and tools. Ecommerce platforms are now almost all SaaS-based. If you sell to consumers, save much time and money and choose a leading SaaS platform. There are dozens of them. (Search on Google for “saas ecommerce platforms” or similar keywords.) Choose standard templates. Focus on your value-added content, not on building new designs or custom features, at least initially. Use Google Analytics and choose a leading email tool for newsletters and promotions. By all means, avoid custom development at the outset. It’s an option down the road as you learn more.
Launch, learn, and improve. You will never launch a “perfect” site. There will always be room for improvement. Get your storefront going. Start engaging with your target customers. Monitor your analytics and key performance indicators — every day. Most ecommerce entrepreneurs start small, add inventory that sells, and discontinue inventory that doesn’t.
Have more cash than you think you need. Having available cash on hand to take advantage of new opportunities is critical. Moreover, you don’t know what you don’t know. There will be unexpected expenses as you scale your business.
Be prepared to pivot. For every great ecommerce idea, there are probably four failures. Change course if your initial approach is not working.