Your couch: home to spare change, misplaced remotes, forgotten chip crumbs, and now, just about anything you’d ever want to buy.
More than ever, consumers are shopping from the comfort of their own computer. A recent study reveals nearly half of all consumer shopping took place online last year, a record-breaking percentage for the study’s five-year span. This trend in retail illustrates e-commerce’s boom — and highlights the fact that now is the perfect time to build an e-commerce business.
With marketplaces like Amazon, eBay, and Etsy and powerful shopping cart solutions like Shopify and Magento, it’s never been easier to get your product in front of a huge audience. Entrepreneurs can easily step into this world of online transactions and cash in on the trend.
But that’s only if they’re doing it right. Here are the top four things you need to know to ensure your e-commerce business starts off on the right foot:
1. Know what makes a good product
To know you want to make a good product is a no-brainer. To know how to make a good product isn’t as simple. Pay attention to that product’s category and which audience you’re targeting. Play around with how you can set yourself apart from competitors by adopting a new angle on an existing item or finding a narrower niche. When you offer a product that’s different or more specific than products already on the market, you limit the competition.
A great example of this is Enterprise Rent-A-Car. At its start, the company was not necessarily “better” than its established competition, Hertz. It was, however, different. Enterprise changed the game by expanding car rentals beyond airline terminals and into the suburbs, tweaking what Hertz had already built. It’s now the largest car rental company in the United States.
2. Know that your product isn’t enough
Young entrepreneurs often believe it’s solely their products that their customers are drawn to. It isn’t. The stories and experiences behind those products truly drive sales and long-term growth — stories that play to emotions. Again, revisit your target audience. This time, however, think about what their personal goals are beyond a cold transaction, and consider how your product fits into those goals. For instance, people aren’t spending more on organic kale chips than they would on kettle-cooked potato chips because they taste better, but because the idea of a healthier, happier self is something they can feel good about.
3. Know where to put your dollars when you’re starting out
It’s a good idea to keep inventory commitments and purchases small at the beginning — weighing yourself down with too much inventory (before you even have a loyal consumer base) and not focusing on a core group of products while you’re launching will be a huge burden on your cash flow and inhibit investments in other key areas.
Instead, put your dollars to use by outsourcing anything outside your area of expertise. It might seem expensive to outsource when your business is in its early stages, but poorly doing things you’re unfamiliar with — like content creation or back-end website management — can doom your business before it has a chance to thrive.
4. Know where to spend your time as you grow
The larger you grow, the more you need to focus on big-picture issues. You can’t afford to spend time on every detail. Consider recruiting outside help at this point, too. Think about outsourcing projects like fulfillment and logistics once you notice you’re spending more than 90 minutes per day fulfilling orders — those 90 minutes often take up crucial time slots, diluting your ability to focus on areas that will directly contribute to the growth of your business.
Today, products are available at the touch of a mouse, and e-commerce has made its way to the forefront of many businesses — a trend entrepreneurs can and should capitalize on when crafting their products. By developing your story, exploring new angles, and investing in all the right places, entrepreneurs can successfully build, launch, and grow an e-commerce business that provides something new to the world of online shopping.