As lockdowns have become the new normal, companies and consumers have gradually gone digital, providing and buying more goods and services on the internet, thus increasing the share of e-commerce in the global retail trade from 14% in 2019 to almost 17% in 2020.
Starting an e-commerce business is a challenging task mostly due to the fierce market competition and the ever-changing needs of consumers, and too many e-commerce companies struggle to get traction. Here’s what you need to do to launch and grow a successful e-commerce business.
Research Business Models
There is no versatile business model that could fit every e-commerce project. Thus, it’s reasonable to analyze various business structures and choose the one that aligns best with your demands.
The four major e-commerce business models include B2C, B2B, C2B, and C2C.
- B2C or Business-To-Consumer model implies that a retailer sells products or services directly to the consumer without intermediaries.
- B2B or Business-to-Business model is related to online cooperation between businesses or service providers, for example, between a wholesaler and a retailer.
- C2B or Consumer-to-Business model lets individuals sell goods or services to businesses. This model is often associated with affiliated marketing services, for example, when bloggers or influencers write promotional texts or add links to their blogs.
- C2C or Consumer-to-Consumer model is a marketplace that allows consumers to exchange goods and services.
Start Niche Research
One of the crucial steps to open your e-commerce business project and stay competitive in the market is to find your niche. At this stage, you have to keep in mind several things:
- Find your focus. Make sure to analyze customer interest. You will never create a profitable business without getting into a niche that takes into account buyers’ needs. You can attract an audience that is willing to pay only if you can solve client problems with your products.
- Look for the moderately competitive niche. Try to avoid both overcrowded niches and the ones with no competition. The absence of competitors may also mean the absence of consumers.
- Stay specific. If the niche you have chosen has many competitors and is dominated by famous brands, try to narrow down your search by choosing more specific products and services.
- Conduct research. Find out how many people are looking for the products and services in your niche. Pay attention to the niche popularity on social media.
Validate Target Market And Product Ideas
The next important step after choosing your business model and niche is defining your target customers. While creating buyer personas, answer the following question:
- What are your ideal customers?
- What do they need?
- How do they buy products or services?
- What shopping experience are they looking for?
Once you have evaluated your target audience it’s time to validate your product idea. Some of the numerous techniques include but are not limited to:
- Competitive analysis. When using this method, it’s necessary to draw attention to:
- pricing to understand what profit this idea can bring to you;
- unique features to make sure that your idea stands out from the competitor’s one.
- Tools like Google Trends. They provide you with a market overview and seasonal changes related to your product idea.
- Social media research. Social media is a huge source of information nowadays. To validate your product idea using various social networks, you need to search for the posts with hashtags related to your product and analyze the user comments.
Setting Up Your Business
There are some essential steps you need to take before setting up the business.
Name Your Business
You need to choose the name for your business and domain. They don’t necessarily have to be the same, yet, it’s recommended to stick to consistency. Don’t put off this step until later and make sure that the name you have chosen aligns well with the niche you have decided to work in.
Register Your Business
Not only do you need to register the business but also remember some other legal procedures. To open a bank account you will need an Employer Identification Number. Moreover, although your business will be conducted online, make sure you have the necessary business licenses and permits.
Make Up A Business Plan
At this stage, you need to decide on the business strategy, positioning and marketing of your product or service, how you are going to develop your brand, the resources needed for it, and the budget you are going to allocate. You need to establish it in compliance with your business goals and project requirements. However, don’t forget that it should be realistic and include not only costs for the initial implementation of the e-commerce project but also expenses for future maintenance and some extra costs such as licensing, fees, etc.
How to Develop an E-Commerce Platform
There are several options to choose from: take an off-the-shelf solution or develop a custom platform from scratch. Among the solutions available on the market the following are worth mentioning: Shopify, Wix, BigCommerce, WooCommerce, Square, Ecwid, and others.
If none of the ready-made solutions fit your requirements, you can turn to an experienced vendor that can offer you custom ecommerce development services. There are a large number of providers with an excellent reputation and considerable experience so they can advise how to make your e-commerce project more engaging, consistent, and secure.
Once you have chosen the business model, conducted the niche research, validated your target audience and product idea, registered your business, and planned the budget, you are ready to launch your project.
Not everything will go ahead as planned in the beginning. However, by monitoring the e-commerce process flow you will be able to optimize your project according to your customers’ needs to win their loyalty and get high margins as a result.