5 things you need to know before starting an ecommerce business
Before starting an ecommerce business, you need to do some market research which will eventually help you to understand your customer’s needs and your competitors’ growth. Not only market research is important but there are more factors you need to study on before getting into the online business.
5 things to do before starting an ecommerce business
Before starting an ecommerce business, there are few things that need to be kept in mind in order to ensure success.
1. Market Research
Analyzing the market is one of the most important things to do before starting an eCommerce or an online business. This helps to analyse the growth of your competition, market reach, and targeted user base. Ecommerce sector, in particular, has seen a rapid growth of several startups catering to niche areas. This is why an initial research offers proper insight using which one can tweak your business model. It helps you to correctly position your business and to know who your customers are and what they need. Once you understand your customer’s need, it will help you to determine your market size and what triggers them to buy your product.
Carrying out market research helps you to gain more knowledge about your competitors.
You will get to know the strong points and weak points of your competitor where you can find loopholes and take advantage of that. Market research will help you to find out the approach you should take when marketing the product.
2. Contact Sellers
After market research, you must reach out to sellers and garner their support. This would help you avoid the situation where you have a marketplace but no seller to sell on your site. Therefore, even before launching your ecommerce business, you must take a few sellers into confidence that they would support your website and start selling on it once it launches. You should also create a list of sellers who show interest and arrange their contact info for further contact, this will help you align your business.
You can reach out to the vendors on some existing platforms like facebook groups or online forums, where individuals having similar interests assemble. These online platforms encourage discussions that enable potential providers to promote their items and find the sellers.
3. Right Pricing Strategy
Creating a right pricing strategy for your ecommerce business is essential, but it certainly isn’t simple. It takes time to decide the “right” price for your products. It depends on how much experience you have as an entrepreneur. But, when it’s your first time launching an online business, coming up with a pricing strategy can be tricky. You need to factor in all of the costs that you’ll incur when you’re selling your products (including marketing campaigns) and come up with prices that your customers will agree and allow you to maximize your profit margins. And when you consider that price, it is the most important factor that helps shoppers decide where they’re going to shop, you’re going to want to nail your pricing strategy.
You need to first figure out which strategy you want to use. You can select from cost-based pricing, competition-based pricing and value-based pricing strategies.
Cost-based pricing is very simple and it’s a good option for beginner entrepreneurs.
You need to do a deep research on cost-based pricing, and once you’ve got a good idea of what the average price is for the products in your niche also you need to compare it against the cost that it takes you to make a sale and then the difference between those two figures is your wiggle room.
Competition-based pricing is a strategy that consists of using competitors’ prices to set one’s own but It’s a pricing strategy that requires time and effort to implement.
Value-based pricing is a strategy based on the value consumers perceive a service or goods.
4. Store Setup
Once you finalize the platform the next step is to just set up the store.
You need to decide the product you want to sell on your ecommerce site. You need to design your online store so that it is convenient for the consumers to use. There should be a proper payment method. The return policies should be mentioned clearly.
Your website should contain details about your saleable products and services such as images, descriptions, prices, users’ comments, ratings should all be included in your web page for guiding prospective buyers.
5. Promotion of your Ecommerce Business
There are various online platforms on which you can promote and market your business.
Social media plays a very important role in promoting ecommerce businesses as the major population across the globe uses social media platforms.
Social media platforms have special features in which you can place your products to shop.
Promotion on search engines like Google is an effective way of marketing your business through Google ads whereas SEO helps you to optimize your online business and rank it on top so that it is more visible to the people who search for the products which match yours.
Running paid ad campaigns and targeting the right audience will encourage your business to grow as it is an effective way to showcase your store and make the audience realize what they want and where they will get it but you need to ensure your budget as it is a paid promotion.