In 2020 alone, the eCommerce market grew by a whopping 44.0%. Consumers spent a staggering $861 billion, almost triple what they spent in 2019. Now, this jump is understandable due to the pandemic.
However, with more and more people working from home, this business is only going to thrive.
This means that starting an eCommerce business, even though there are 2.1 million of them in the US, is a good idea. Yes, the competition is incredibly stiff, and you have to bring in the big guns if you want to start an eCommerce business.
In this guide, we’ll highlight some of the most essential things you need to know about before you start an eCommerce business. There is a lot to get done, but if you do it right, your benefits will be well worth it.
Okay, let’s get down to it, shall we!
Find the Perfect Product
Before you start an eCommerce business, you must find products that are just right. Right now, you’re bound to find just about anything online, which means any niche has competition. The trick here is finding a product with high demand and one that you can actually sell.
There are two types of products that you can go for, which are niche products and customized products. Customers are craving personalization, and customized products are in high demand. They can be essential products or popular goods that absolutely everyone needs.
Niche products, on the other hand, have a specific target market or a product category. These products can be unique and one-of-a-kind, making them popular or giving them high demand. To find the perfect product, you need to solve a problem and find products with branding potential.
Understand Your Target Market
Understanding your target market is just as important as researching the product.
You must understand what your customers need, what problems you could solve for them, what kind of products they are willing to buy, and what price points they’d be willing to contend with. This process will help you come up with many eCommerce business ideas.
Gather as much information as you can by creating customer profiles as well as market segments. Start with demographics and define their age, gender, income level, education level, location, ethnic background, occupation, and marital status. Go a step further and identify the hobbies, values, behaviors, attitudes, lifestyle preferences, and general interests.
All this information will help you determine how to solve the problems, what interests them, and what you can bring to the table.
This information will help you grow your business exponentially. You’ll bring in products that will offer value to your target market.
Conduct an In-depth Market Analysis
One of the most important things you have to do before starting an e-commerce business is conduct market research. Analyzing the market is important because you will figure out what market to reach. You’ll know what the competition is like, your target audience, and where to source your products.
You can start by conducting keyword research to find whether your products are in demand. From there, find trends that’ll help you put your business into perspective. Research all the market surveys and data you can find for your specific business idea so you can find market opportunities.
Take advantage of social media to understand the volume of mentions or conversations surrounding your business idea. Social media is an incredible tool that will help you understand your target market and build a loyal customer base.
When searching through social media, look for trending hashtags. Also, check what influences are sharing, and try to engage the target audience.
Conduct Competitive Analysis
With such fierce competition, conducting competitive analysis is incredibly vital, especially for eCommerce beginners. Competitive analysis will help you discover what motivates customers to pick certain products over the rest. You will understand the strength, weaknesses, opportunities, and threats you will be facing in the market.
You need to learn how to adapt to competitor campaigns in a way that will help you out to complete them or at least maintain a foothold. To ensure you start an eCommerce business the right way, you need to dive into the competitive landscape.
Start by identifying your competitors from the niche you have chosen, then capitalize on their strengths and weaknesses. Categorize your competitors in several categories. Primary competitors are direct competitors.
Secondary competitors offer a higher or lower version of your products or something similar. Tertiary competitors are businesses related to your own.
Examine your competitor’s customer experience and website, identify the market position, and check the pricing. It’s also important that you look at how they handle shipping and how they communicate their expectations. Check the customer reviews online, review their social media handles, and get as many gritty details as you can, even if you have to sign up for their newsletters to understand them.
Choose the Right eCommerce Platform
Now that you know how to start an e-commerce business, you need to pick the right platform to build your store. An e-commerce platform is an application that allows e-commerce businesses to manage their websites and operations. Now, there are numerous sites on the internet, and you can opt for SaaS.
It offers a low cost to entry, scalable framework, and doesn’t come with developmental or technical headaches. One of the most important things you have to look for is a great community. Check for a robust team and customers who are thrilled to be using the platform.
SaaS platforms remove so many complexities such as security, hosting, software updates, PCI compliance, and so many more tasks. Still, you can opt for self-hosted eCommerce platforms. However, you will have to look for hosting and deal with the installations and software updates on your own.
However, the benefit is that you will have more control, have better visibility of your data, and a better understanding of your data security. Alternatively, you can opt for cloud-hosted platforms, and they’ll manage most of this stuff for you. Learn more about eCommerce platforms.
Start an eCommerce Business the Right Way
These are the basics you need to know before you start an eCommerce business. These are just some of the few things you have to understand before you embark on a journey, but there is so much more to learn.
If you would like to know more and get more eCommerce tips, please explore our blog section.