November 7, 2022
Whether you’re a bricks and mortar retailer looking to get online or you’re starting a brand new online only retail venture, the temptation to dive right in with web design just launch is real.
But before you go ahead and put that website together, there are 5 things you need to know. Let’s take a look.
The article emphasises the importance of thorough research and planning in various aspects of launching an ecommerce business, from understanding the online demand for your product to financial planning, delivery logistics, handling returns, and identifying the right marketing channels.
Almost everyone is buying something online. But are your products bought online? According to recent ecommerce statistics, just about 90% of the public buys at least something online. And that same study highlights what the most popular items bought online are (hint: clothing, food, electronics, beauty products).
If people are not already buying the product you want to sell online, why not?
Perhaps there’s an opportunity to turn something difficult to buy online into something simpler to buy online and in this case there’s a big chance for you to have a unique offering.
But equally, is there an argument that some items are seen in person before being bought? Like cars, for example?
So you need to research whether people are buying that specific product type online.
Without a physical store, an ecommerce business can be started with lower overheads than an online shop.
But don’t underestimate your running costs. Almost two thirds of start ups fail in the first 5 years. And a common reason for it is underestimating costs or failing to accurately forecast cash flow.
There’s more than just building a website and buying products to consider:
Take advice from experts when it comes to forecasting revenues and cash. And do so conservatively.
You can get absolutely everything right with your product. It could be the best quality product in the world at the most wonderful price point and you could package it perfectly. But if your courier or delivery service lets you down and it arrives late or damaged, then your customer is going to have a bad experience. Whether it’s fair or not, this can often reflect on the retailer.
So, don’t just dive in with the first delivery company you come across. Properly research reviews, look into flexible delivery options and do this before launch.
Trying to fix broken delivery when you’re already in the midst of handling sales is harder than just setting it up better to begin with.
Consider couriers who offer things like click and collect, parcel locker drop off and so on.
It can also be worth offering faster delivery for a higher fee but lower cost or free delivery for those happy to wait a little longer.
Far too many ecommerce startups overlook returns early on. You will need to be familiar (assuming you’re selling to consumers and not businesses) with consumer rights on returns and exchanges where you’re based and trading.
Some countries require you to foot the bill for return delivery while others don’t. So familiarise yourself with what is required and factor returns into your forecasting and projections.
One thing to bear in mind is that you don’t fully know what you return rate will be until you begin trading. But you can get an idea through research of typical return rates and even try to reach out to businesses in other countries (so not directly competing with you) to see what return rates are like on products like yours.
But even then, lots of things can influence return rates such as delivery efficiency (if it’s a gift that arrived too late it may be returned), the quality of your specific product and how well packaged it is (items damaged in transit will be returned).
Where are your potential customers hanging out online? Are they active social media users? Are people searching in Google for your products?
Knowing how people research and food your products is imperative to planning your marketing. There’s no point spending on a Tiktok ad campaign if your demographic isn’t on it.
So before diving in, figure out how you are going to reach the people you want to sell to.
Competitive, for sure. But ecommerce is an exciting area to work in. So best of luck and enjoy the ride.
