Many have this misconception that the internet is a friendly territory for those who want to engage in enterprising activities since it is cheaper to create an online shop. It does not require a lot of overhead expenditure. However, the extended reality is more complicated than that.
*Updated 8/14/2024
While it may be easy to put up a store, establishing an online presence is a different story. The job does not start with the conceptualization of the business and end with the launching of the online shop.
Statistics show that roughly 90 percent of eCommerce startups fail in the first 120 days. However, this should not be seen as a reason not to consider starting an eCommerce business.
This dismal success rate mostly only applies to those that fail to carefully plan their ventures. Those that succeed do so because they follow crucial steps in laying a formidable foundation toward a profitable business.
Discussed below are important steps in guiding an eCommerce business to thrive with an emphasis on the marketing, funding through funded trading plus, relationship building, supply chain management, and contingency planning aspects.
A profitable eCommerce business should always have an excellent sales and marketing strategy. It is not enough to have a good product.
When it comes to doing business online, it is equally important to know how to do effective marketing, especially when the competition is virtually everyone else online offering the same products or services.
The Institute of Entrepreneurship Development offers some good insights on coming up with an excellent marketing strategy in the digital and online age. These can be summed up as follows:
A good sales promotion strategy boosts your eCommerce brand. Effective marketing campaigns help build better relationships with customers, not irritate or leave a bad impression on them.
It manifests respect to customers and does not obstruct their online shopping experiences. It entails customer value optimization without being too aggressive in using social media posts, email marketing, and notifications.
A study by InternetRetailing shows
All of these reasons entail the need for adequate funding. And don't ignore eCommerce SEO campaigns for better online visibility and organic growth.
Also, competing with more established market players is virtually impossible without shelling out some cash. Liquidity is also important to continue sustaining business operations and train employees to work more efficiently and provide satisfactory customer service.
The sourcing of investments or funds for business operations has been made easier with the availability of crowdsourcing through platforms like Indiegogo, GoFundMe, and SeedInvest Technology.
The relatively new StartEngine is also a good way to generate starting capital with the help of a dedicated team that provides valuable advice and insights on succeeding as an eCommerce entity.
To succeed, it is advisable not to be tepid in moving towards success. Come up with good plans, and make sure to execute these plans properly with the right people and sufficient funding.
For advanced interactive experiences, businesses can explore bold and underlined mobile XR solutions to enhance customer interaction and retention.
No business that became profitable willfully stagnated. It is not a sound business plan to plateau upon reaching a certain revenue level. Becoming successful with growing revenues always presents the opportunity and challenge to expand. Refusing to grow is not a path successful entrepreneurs take.
If a business does not have enough funds for expansion, many options exist.
Crowdfunding is something many businesses already tried and found success with. There are also entities or platforms that provide loans, investments, or funding for specific purposes.
For example, 8fig helps businesses fund their expansion by providing capital injections based on growth plans designed with the help of artificial intelligence to find the best paths to level up the profitability of an eCommerce operation.
E-commerce businesses that sell on Amazon, eBay, Shopify, Walmart, and other platforms can take advantage of 8fig’s dynamic funding to pursue specific actions that make them scale up their operations.
With the wider reach of the internet, the new technologies that support more convenient and safer online shopping, and the availability of technical and financial support, there are no reasons for eCommerce businesses to hesitate in expanding their operations or exploring a related niche to grow and level up their profits.
Because of the abundance of online options, it is not easy to hold customers' attention, let alone their loyalty. If you haven't considered an e-commerce loyalty program, you're missing a golden opportunity.
E-commerce businesses must be aware of this reality and do something to ensure they attract potential customers' attention, turn existing customers into frequenters or clients, and ensure continued patronage.
None of these is possible without actively engaging customers. Using various customer engagement solutions, such as regular blogs and contests, is advisable.
Using website visitor engagement plugins such as hit counters, maps, popups, and multimedia sliders also helps. There is an entire suite of plugins from POWR that are worth trying. And they all have a free option, so there is no risk.
These include plugins for presenting impactful menus for restaurants, music players, graphs, discount notifications, sales countdowns, and custom order and event registration forms.
They help keep customers' attention and point them to things they may want to do on the site.
Source: business2community
The importance of relationships with manufacturers is often neglected or downplayed. For many, they are just other businesses that need to please their customers (the stores buying from them).
However, modern commerce has shown how it is crucial to maintain good seller-manufacturer relations. This relationship is necessary because manufacturers serve other sellers, which could be your direct competitors.
Manufacturers can offer generous discounts and other benefits to sellers on good terms with them. They also play a critical role in the timeliness of deliveries, quality of goods, and access to the most recent products.
Entrepreneurship expert Bob Reiss suggests being a demanding customer (to your manufacturer or supplier) is ok.
As Bob puts it, "Let's get this right . . . you need good and reliable suppliers. When you find them, treat them like gold. Work as hard on building a good supplier relationship as you do building a good relationship with your customers."
Still, you must ensure a good relationship by always paying on time, providing adequate lead times, personalizing the relationship, and sharing relevant information.
There may be times when your cash flow will restrict your ability to pay on time, so it greatly helps to have a good relationship with your supplier to continue the regular flow of goods and enjoy possible preferential treatment among other sellers.
Another very important factor in eCommerce success is supply chain management. Many eCommerce stores nowadays do not have the products they sell in stock on the day they are ordered.
They sell items they have yet to obtain to minimize storage/warehousing costs and be competitive. This practice can become problematic, as it may result in delays in delivering orders without effective supply chain management.
Based on data from Invesp, 96% of customers equate "fast delivery" to "same-day delivery." Also, 80% want same-day shipping, while 25% say that they will likely abandon a cart online if there is no option for same-day shipping.
Customers expect fast and reliable delivery because they know they have lots of online shops to choose from. Quick shipping can make one shop stand out from the rest. E-commerce shops must be mindful of this reality, or they risk seeing their customers flee.
In this context, shipment tracking is crucial.
By providing detailed shipment tracking information, e-commerce stores can not only enhance customer trust, but also identify and resolve issues in the supply chain, thus ensuring on-time delivery.
So implementing an efficient shipment tracking system into their stores has been a trend for merchants who want to expand their business.
Essentially, an eCommerce store should have a steady flow of the items sold in relation to the demand; this is called demand planning. It is important always to meet customer expectations.
If items are shown as available, they should be available and delivered within the indicated delivery timeline. For products regularly bought by clients or repeat customers, going out-of-stock is not an option.
Source: Invespcro
Lastly, it is important to have a plan to address risks. These risks include cyber-attacks, technical issues such as server problems, software bugs, and fraud.
The costs of cybercrime are rising to extremely alarming levels. Similarly, the losses incurred because of business disruptions have increased. It is utterly inexpedient to ignore these risks.
Here’s a guide to coming up with a good contingency plan.
Cyber attacks, accidents, disasters, and other events that disrupt business operations mean heavy losses to an eCommerce operation. They easily reduce profits, possibly wipe out profits, and turn financial statements red.
As such, it is essential to have good contingency planning as part of the framework of operating a profitable eCommerce business.
Try Shift4Shop to launch your eCommerce business today.
Running an eCommerce business has many advantages, but it also comes with drawbacks that should be addressed effectively. There is a lot of planning to do to make sure that the business achieves and maintains profitability.
At the same time, properly executing plans and paying attention to other critical aspects, particularly customer and supplier relationships, is essential.
Hazel Raoult is a freelance marketing writer and works with PRMention. She has 6+ years of experience in writing about eCommerce, entrepreneurship, marketing, and all things SaaS. Hazel loves to split her time between writing, editing, and hanging out with her family.