So you have a great idea and a burning ambition to become the next Amazon. Your initial digging around online has revealed there is a gap in the market for a product and Google predicts searches in this niche are high. Right now, your juices are flowing and you are convinced this baby is a winner!
But is it really so easy? Sadly, no, it isn’t. Most e-commerce entrepreneurs make hundreds of mistakes before they find success. Some fall by the wayside in the early days and others try and try again until they hit the mark. In truth, there is a lot that can go wrong with an e-commerce venture, but the following mistakes are the most common.
Not Doing the Maths
You don’t need an MBA from Harvard to tell a business can’t possibly be a success if costs exceed sales. Nevertheless, people go into e-commerce with unrealistic expectations of how much profit they can make from their venture.
If you are bootstrapping a small online store, you can keep the costs low, but you still need to figure out whether your niche is profitable. There are basically two types of online business: you can either sell a high volume of cheap products or a low volume of high-end products. Both will work, but only if you have a decent profit margin.
Do the maths and work out (in detail) how profitable your business can be in the niche you are targeting. If profit expectations are low, go back to the drawing board.
Not Targeting the Right Customers
Do you have a target customer in mind? For example, if you decide to start selling green skincare products, your target customer would probably be someone who is interested in the environment and wellness. They might do yoga in their spare time or practice a vegan diet. Of course, I am making a number of assumptions here, but you get the idea.
Figure out who your target customer is and create a marketing campaign around them.
Not Devising a Marketing Plan
Once you have a target customer in mind, you need a marketing plan. Unless you market your online store, most people won’t find it. There are many ways to market an e-store, including content marketing, social media, PPC, and email marketing campaigns.
Cover all bases in the early days, at least until you figure out what works. No two businesses are the same so what works for one niche might not work for another.
Spreading Yourself Too Thin
Bootstrapping a business means doing everything yourself. However, trying to do everything is often a recipe for disaster. It isn’t cost effective to do tasks you have no experience in, so outsource when possible. For example, hire a company to provide Magento support so you don’t need to worry about your Magento-based online store going offline during a peak trading period.
There is a lot to think about when starting an online store, but as long as you avoid making the above mistakes, you will eventually end up with a business that runs like clockwork.
I have to think some of the reason people start online stores is because those who have been successful make it look so easy. But then reality sets in and they realize what they don’t know (which is a lot). As a blogger, I also know how easy it is to spread yourself far too thin. Especially when you’re first getting started and haven’t yet earned enough to hire someone to help. Great post and food for thought!
Great post, will definitely use some of these tips. I was planning on starting an online business, but it is not as easy as it looks haha