Don’t Start an Online Business Unless You Know These 3 Things

When it comes to entrepreneurship in 2022, there is no question that starting an online business is as good of an idea now as it’s ever been. Running a business online can have the potential to be extremely profitable, and it’s often something that you can do on a very low budget. If you know how to build your own website – or you’re willing to learn – the costs of launching a functional e-commerce site are often negligible. In some industries, you don’t even have to manage an inventory – you can just connect your website to a drop shipper that fulfills orders for you. Sounds like an easy path to riches, right?

The truth, though, is that getting rich with an online business is rarely as easy as it seems on the surface. It’s actually far more likely that you’re going to spend weeks or months with your nose firmly pinned to the grindstone before you see anything even remotely resembling a meaningful amount of money. If you’re aware of that and are still willing to do whatever is necessary to make yourself a success, you’ve already completed the first step in determining whether you’re ready to become an online entrepreneur.

Deciding that you want to start an online business, however, is only the beginning. If you want to be successful in e-commerce, you need to have a plan. Don’t start an online business until you know the answers to these questions.

What Products Will You Sell?

Before you can start an online business, the first thing you need to know is what you’re going to sell. If you’re a professional in a particular field, you might like to use a website to market your services. It’s far more likely, though, that you’ll sell physical products – and in that case, it’s a very good idea to conduct some competitive research before you settle on a niche. Are you considering entering a field that already has plenty of successful and well-established companies? If you’re thinking about selling vaping products, for instance, it’s going to be a long time before you’re on the same level as companies like V2 Cigs UK

Once you’ve seen what the competitive landscape looks like for a potential niche, it’s time to make a decision. Unless you’ve managed to invent something completely new, you’re going to have competition in any field. So, how difficult is it going to be to overcome that competition? If you search online for a variety of keywords related to a particular niche – and every page of results is filled from top to bottom with famous companies whose names you know, you’ll have to make a decision. You’re either going to have to prepare for a lengthy financial struggle or choose a different niche. 

It’s a very good idea to make keyword research a major part of your niche selection process. Think of the search keywords that someone might use when looking for the types of products you’re thinking about selling. It’s a good idea to use a keyword tool for help with your research, because the tool might offer keyword suggestions that you wouldn’t have come up with yourself. Ideally, you want to choose a niche that doesn’t have a great deal of competition but does have a wide variety of related keywords that receive plenty of search volume. As you can probably imagine, that’s much easier said than done. 

How Will You Differentiate Your Brand?

As we mentioned in the previous section, there’s no way to escape the fact that your online business is going to have competition regardless of the industry in which you operate. With that in mind, you need to have a concrete idea of how you’re going to differentiate your business before you even get started. When people visit your website or see it on a search results page, you’ll only have a few minutes – seconds, perhaps – to convince them to buy from you instead of going elsewhere. How are you going to do that? 

Brand differentiation is something that you can do a variety of different ways. One way is by ensuring that your website doesn’t look the same as your competitors’ sites. It’s usually a bad idea, for instance, for an e-commerce site to use a free Shopify or WooCommerce theme because websites that use free themes all end up looking the same to consumers. It’s worthwhile to spend a bit of your startup money on hiring a good website developer. 

The appearance of your website can play a major role in differentiating your brand, but you should also spend some time thinking about how your website works. Can you think of a way to make the shopping process easy and fun in a way that your competitors aren’t? For example, maybe you can think of a unique angle for an exciting and engaging customer loyalty program. If you’re planning to carry a wide variety of products, perhaps you can come up with system for product navigation and discovery that sets your website apart.

What’s Your Potential for Profit?

The last thing that you should do before launching an online business is analyze what your potential earnings are from a critical point of view. At this point, you should have already done extensive keyword research, so you have an approximate idea of how many people are searching each month for the products you’re considering selling. From looking at your competitors, you should also know how much you can reasonably charge for your products. Now, let’s suppose that you manage to snag the top spot on Google for your industry’s number-one keyword. Being in the number one spot means that you’ll receive about half of that search traffic. Imagine that 2 percent of those visitors ultimately buy products. What would your gross monthly earnings be in that case? 

Now, think about the costs you’ll incur in getting to that point. You’ll need to develop a website. Unless you’re using a drop shipper, you’ll need to source your product inventory. You’ll have expenses relating to order packaging and shipping. You’ll have marketing costs. It may even be necessary for you to hire help. Once you’ve subtracted those expenses from the best-case-scenario gross income outlined above, will you be left with a healthy profit that’s worth pursuing? If the answer to that question is “yes,” you’ve probably found a perfect niche. If not, it’s time to go back to the drawing board.

TIME BUSINESS NEWS

TBN Editor

Time Business News Editor Team