There are over 1.3 million e-commerce businesses in North America alone. These include a mix of online retailers (e-tailers), e-commerce websites and marketplaces. The digital landscape of today is much more competitive than it used to be. It doesn’t matter if you’re reselling Spectrum packages or fidget spinners. There is bound to be fierce competition in the market you want to enter. If you can’t handle the competition, you’ll not be able to build a sustainable business. This is a fact in both traditional and online businesses. This poses another question. How do you build a sustainable online business?
Steps To Build A Sustainable Online Business
If you’re planning on jumping into the e-commerce world, there are some things to keep in mind. There is no surefire route to e-commerce success. It takes patience, hard work, determination, and skill. If you already have those, then here are 6 steps that can help you build a sustainable online business:
- Choose your niche
- Analyze the competition
- Find the right suppliers
- Develop your e-commerce store
- Plan how to acquire customers
- Track your performance
Following below are more details on each step to help bring you closer to e-commerce success.
Choose Your Niche
This is the first step on your road to building a successful online business. You need to carefully select the niche you want to operate in. It helps to narrow it down as precisely as possible. You need to build a business that targets a specific market. So the products you sell should focus on this market. You need to be passionate about this niche otherwise setbacks will discourage you. Here are a few points to consider when selecting your niche:
- Select a niche that has higher-priced products and healthy margins
- Select a niche that has low shipping costs to keep the price of your product range competitive
- Your product range should be appealing to impulse buyers and people with disposable income
- Your product should be one that is actively searched online
- Try adopting reselling strategies under your own brand
- Your products should not have readily available substitutes
Analyze The Competition
So you’ve selected your niche. Should you jump right in? No, you should first do your homework on the competition. After all, online competition is stiff. You’ll be competing with e-commerce sellers from drop shippers to mammoth companies like Amazon. A good rule to follow is, if there is little to no competition for a product, its demand is low. Uncompetitive products can:
- Have higher shipping costs
- Supply chain problems
- Thinner margins
On the other hand, competitive products mean there is a high demand. There’s also evidence that the product is sustainable since many businesses are selling it. Always go for products that have a high degree of competition.
Find The Right Suppliers
So you’ve selected a competitive product with a high demand. What’s the next step? You need to find the right supplier for that product. This is usually easier said than done. The wrong supplier can destroy your business, especially in the initial stages. You need to do your due diligence before you choose your supplier. You need to focus on:
- How easy it is to communicate with the supplier?
- How quickly does the supplier respond?
- What are the supplier’s production capabilities?
- How competitive is the price offered?
- How much does shipping cost?
You need to ask a lot of hard questions when looking for your supplier. But this due diligence can help you avoid supply chain disasters in the future.
Develop Your E-commerce Store
So, you have identified your niche. You have thoroughly researched competitors. You have found the right suppliers. The next step is developing your e-commerce website or store. If you have the resources to hire a team of developers to build it from scratch, that’s great. But if not, you can launch a website that supports e-commerce platforms like Shopify. You don’t even need to be a web developer or coder to build a Shopify based website. There are tons of apps and tools to support a Shopify website as well. Plug-and-play options like Shopify are much less expensive than development services. This should be a key consideration when developing your E-commerce website.
Plan How To Acquire Customers
Let’s say you have a great product and a great website to sell it on. But without people who are buying, the entire exercise is pointless. There are many ways you can attract customers to your new e-commerce website. One of these is the use of social media, especially Facebook. Running targeted Facebook ads is a great way to start generating sales. One reason to use Facebook is that it lets you target segmented markets. Meaning you can clearly define the type of audience you want to reach out to. Since Facebook ad campaigns are cost-effective, you are on an even footing with larger competitors as well. SEO and SEM tactics should also be a core consideration. You need a multi-touch approach. Which means you want to target people using as many mediums as possible. From Facebook ads to Pay-per-Click campaigns, there are many options to choose from.
Track your performance
These days, digital businesses are all about performance metrics. This is one area you can’t afford to ignore. You need to be tracking your performance through all available metrics and data. Google Analytics is a very useful tool to help you with this. You can track every conversion on your website. This means to know what path the customer took to arrive at your website. When you know which of your channels are working, you can focus on them. At the same time, you can stop spending time and effort on the low-performing ones. Let’s say, if you’re retailing internet services, Xfinity Customer Support pages are less likely to perform as well as bundles or special offers. Make sure you are constantly tracking your performance and improving your e-commerce efforts.