What was once a matter of convenience is now a necessity; online shopping has proven to be just what the world needs in this era of rapid change. The e-commerce industry is thriving and although we are increasingly aware of this, setting up as an e-commerce business is not as hassle-free as it may seem.
Building an e-commerce platform from scratch is more than just choosing a catchy brand name or listing your products online. Even the best sites can experience periods of inactivity if you are not driving the right traffic to your website. Essentially, you need to have a long-term vision for building an asset that brings true value to the market. Thus, if your goal is to kickstart a successful and profitable e-commerce business, here is a step-by-step guide that might help you actualize your objectives.
Step 1: Research Your Business Model
Carrying out the right research is your first step to building a successful e-commerce brand. Any business is an investment, and you need to treat it as such. This means that you need to have a full understanding of how you will sell your products online and picking out a business model blindly is not the way to go.
The good news is, there are many different business models that you can choose from according to what your business demands. For instance, dropshipping might be your best bet if you want to make a profit without touching your product or investing too much from the start while white-labelling is a model that works well with originally manufactured products. On the other hand, you might want to look into wholesaling or warehousing if you intend to invest more or want to physically inspect the quality of your products.
Regardless of which model you choose, you still need to thoroughly understand the demands of your brand. Which model will most likely help you achieve your goal? And which will not?
Step 2: Find Your Niche
Have you ever come across an e-commerce website that just sells too many product categories at once? Those that don’t seem to have a focus on their overall product offerings are very unlikely to stay profitable in the long run because customers want to buy from a business that believes and can guarantee the quality of their products. Unless you have a massive budget, you can’t be the next Best Buy or Amazon. You have to niche down to run a profitable e-commerce store.
To start this process, you first need to look at the competitiveness of your chosen market. Be careful though, because no competition sometimes means that there is no market for that particular product/service either. We always suggest avoiding overcrowded niches as well; this means markets that are dominated by big names. If you’re having trouble with this, drill down further on what you want to do – the more specific you are, the less competition you are likely to face.
Another tip is to choose a product or service that does well in social media as this will give you an upper hand in marketing. If you can nab a few affiliate marketing opportunities, you won’t have to worry about shipping as much product, but you can still make a profit.
Step 3: Identify Your Target Market
After successfully finding your niche, you might be tempted to start finalizing the products you want to sell, but this is where you need to take a step back. Before you think about product ideas, think about personas. You can’t expect people to buy your product if you don’t know who you’re selling to.
In a document or a piece of paper write down the answers to these questions and it might help you identify your target audience:
- What does my brand represent?
- Who are my ideal customers?
- What problem am I trying to solve?
- Who is most likely to benefit from them?
It is essential for you to understand who your brand is trying to win over as this will dictate the tone of your marketing. You cannot expect to succeed if you sell luxury perfumes to a market that can’t afford them.
Step 4: Nail Down Your Product
Once you’ve identified the image you want to project and the customer you are catering to, it’s time to come up with product ideas. We suggest starting with one – you’ll invest less at the start, and if you want to offer more you can test the waters with affiliate marketing.
A good rule of thumb when deciding what product you want to sell is to ask yourself and your closest relatives if they see a need for this product. Conduct a mini-research and test out the products personally. If you find faults, do not immediately shut the idea down. Instead, think about how you can make the product/service better.
Similarly, part of validating your idea is to determine its viability. Can your suppliers meet your pricing? What happens if your supplier falls through? Is there a backup option?
Step 5: Register Your E-commerce Business
With any business set-up comes a string of procedures that you need to go through in order to legally license yourself. Operating an online store does not exclude you from needing certain business licenses and permits and it is best to consult with an e-commerce professional to nail down the requirements from the get-go.
Luckily, our partners at the Dubai Ecommercity (DCC) can help you with this step. Operating as the region’s leading e-commerce free zone, they offer full end-to-end services and tailored solutions from offices, warehouses, to turn-key ‘e-commerce in a box’ packages. With the help of the DCC team, you can rest assured that all the red tape and uncertainties of the set-up are taken care of from start to finish. Fill in our contact form below to get more information about this.
Step 6: Finalize Your Business Plan
At this point, you should already have a clear view of what your business will look like; this includes your target market, your niche, and your brand name. Once this is set, your next objective is to develop a full-proof business plan to set the tone of your business. The two most important sections of your business plan should be your financial management and your inventory management.
Figure out your break-even point, both in unit sales and duration (in months). Any real business is an investment of resources. Take your time in projecting your revenue and expenses in full detail. If you can’t figure out your profit margin, you will fail.
Similarly, ensure that you iron out logistics before building your store. Even if you are drop shipping, you will need to know where your inventory is coming from. Consider investing in inventory management software as this will help your business stay organized, especially if you are dealing with a large inventory of items.
Step 7: Create Your Website
The last and most crucial step is creating your online store. Once you’re officially an e-commerce business owner, you need to register your domain name and any redirect URLs that might be relevant.
Creating a website from scratch is not as daunting as it seems, in fact, there are many resources and solutions online that will decide your visuals for you. If you’re not proficient in website creating, we recommend hiring a website developer; one that can actively sit down with you to understand what your vision is. Sometimes, it is better to leave the bulk of the work to a professional and because your website is the first thing your customers will interact with, you need to ensure that it leaves a good first impression.
Choosing the right e-commerce software is not easy. You need to carefully evaluate things like loading speed, features, compatibility with different payment gateways, compatibility with your business structure, your web developer skills, SEO-friendly features, and more. Nonetheless, the success of your online store is heavily dependent on your marketing strategy. Along with your business strategy, having a plan on how you will communicate your brand via social channels is an important point to note down.
With all of these in mind, we hope you got a good grasp on how you can build a successful e-commerce business. If this blog still left you with a few questions, don’t worry, leave us an email below and we can get you in touch with our partners at Dubai Ecommercecity to kick-start your online selling venture.