15 Profitable eCommerce Business Tips to Consider
As the eCommerce industry continues to rapidly grow, now is the time to consider starting an eCommerce business of your own. We spoke with several entrepreneurs in the eCommerce space to gather their tips for building a profitable business.
The eCommerce sector has seen some of the most significant growth and change since the start of the COVID-19 pandemic relative to growth in other sectors and sales channels. With much of the population locked down at the start of the Great Pause, and subsequent quarantines leaving almost no business or industry segment unaffected. As industries track significant shifts in consumer online shopping behaviors and their growing demand for online access to services, there has been a concurrent shift towards eCommerce platforms by businesses that have previously not offered their business online.
Entrepreneurs interested in structuring and launching an eCommerce site should understand that it isn’t a simple matter of installing a few plugins to your WordPress site and launching your online store. There’s meticulous planning and marketing that must be part of your lead-up, and your site design should be informed by modern SEO tactics. We’re not all experts in the technology and tactics of eCommerce success here at UpCity, but we know a good number of professionals in the field who are. We reached out to our B2B service community for their best practices and tips for missteps to avoid. We’ve broken their feedback down by subject.
Top Tips from the Expert Community for Building a Successful eCommerce Business
Below are four tips from the community you should consider in your site construction and ramp-up, as well as another six warnings of pitfalls to be aware of that these seasoned professionals have navigated themselves successfully. We’ve also included five pieces of advice we gathered from around the web in order to flesh out the list and provide a more in-depth insight into how to properly launch and maintain an online store.
Best Practices in Starting an eCommerce Business
There’s no better guidance than that from business owners and operations specialists who are already successfully operating a successful eCommerce platform in the wild.
1. Do Your Market Research and Identify Your Ideal Target Persona
One of the most important components in building a new eCommerce site is to ensure you’ve matched your business plan to the proper audience. You don’t want to launch and then have to pivot your marketing and services according to traffic if there is any traffic from the outset. Rather, you want to ensure that there is in fact traffic, but first guarantee you’re offering services or products in a niche where there is a demand. Identify tools and platforms you can use to understand the market demand in general before finalizing your business model.
“Before settling on how you’ll structure your business, you’ll have to do a massive amount of market research ahead of time to find out what your potential target persona is looking for. One of the best ways of validating any concerns is to use a tool like PickFu.com. What PickFu does is provide business owners with the ability to make extremely targeted queries of potential North America consumers across customized combinations of demographics and traits.” —William Chin, Business & Web Consultant, YourDigitalAid
2. Understand the Competitive Landscape
You’ll get nowhere without tools like Google Analytics to help you navigate the various business niches you’re considering targeting with your eCommerce model. Using the performance of your competition, you can build a more realistic projection of how your store will perform relative to other online businesses.
“Study the market and look for a sweet spot that you’re interested in. And you can’t believe that because your mum or best friend likes the idea, it’s a viable business concept. You need to look at the wider market, research competitors, and see if this is something that can attract customers across the web.” —Victoria Samways, Marketing & Brand Manager, Major Tom
“The number one thing you should do before deciding what type of e-commerce business you should start is to research your niche and understand your competition better than they understand themselves.” —Miguel Cairo, CEO, Unique Web Designer
3. Build Your Business Around Your Existing Passion or Skill Set
Understanding your target audience and the competition isn’t enough to keep your business growing and evolving. There are significant challenges to overcome and diverse resources that will be tapped in building and maintaining an online eCommerce storefront. To make the process sustainable and successful, you’ll need to have a passion for the product and the community you’re looking to service.
“Start with something you are already good at, love to do, or possibly already do as a hobby. If none of those fit, then think of something you’ve always wanted to start as a hobby or would love doing and know you can dedicate time to it. Once that’s decided, see what others who are working in this niche are doing. Look at their online real estate to see what their websites and social media look like. How are they selling their products? That way you get a better idea of what that type of business looks like, the work it will take to make it competitive, and the tools you will need to successfully turn your idea into an eCommerce business.” —Alexandra Van Doren, Co-Founder & Senior Dynamic Social and Content Integrator, Agency onethree LLC
4. Operating an eCommerce Site Requires Business Savvy and Acumen
Opening a business or expanding your service or product lines to an eCommerce platform is a business decision, and requires you to understand all of the metrics and KPIs involved in making that business pivot a reality. These metrics include but are no means limited to pricing, profit, revenue targets and projections, and associated supply costs.
“Understand the Revenue Formula before you begin, and also determine the average conversion rates and order values if you can on competitive products sold through other eCommerce sites. You can start to build out models for how much you can, and should, spend to get traffic and also start to get an idea of the necessary margin you’ll need in order to be profitable.” —Thomas McMillan, CEO & Founder, Triple Digits Group
Pitfalls and Mistakes to Avoid in Building an eCommerce Business
There are as many pitfalls and challenges to business owners in the competitive online marketplace of eCommerce as there are for brick-and-mortar stores. Getting the advice of professionals who have successfully navigated these waters may not keep you from having to maneuver around the same challenges, but armed with that advice you’ll be able to do so with more agility and less negative impact on your bottom line.
5. Don’t Target an Oversaturated Niche
You might have been inspired by the success of other products or services in your industry to open your own eCommerce site. Or you might be looking to take your first steps in business with an Internet-based endeavor. In either case, you have to match your passions or skill set to a business segment in which you can both succeed and still have room to be competitive.
“Don’t make the mistake of being too generic. Stick to what you are passionate about, but remember, not everyone can be the next Walmart.” —Anita Schott, Marketing Strategist, G3 Group Agency LLC
6. Understand How to Leverage Storytelling in Marketing
Shifting consumer demands and behavior means that marketers have had to change their approach as well to reach the widest possible audience effectively. Rather than overtly selling to customers, marketing has shifted to storytelling, allowing consumers to better connect with a brand and find overall value in the customer experience.
“Don’t believe that you’ll simply sell products because you have a large social media following. If you build it, they will not come. Instead, you need to tell a convincing story throughout your marketing. If you’re not sure of your own story, your customers definitely won’t be following along.” —Flynn Zaiger, CEO, Online Optimism
Hear From Industry Experts
Read the latest tips, research, best practices, and insights from our community of expert B2B service providers.
7. Don’t Leave SEO Out of Your Marketing Planning
Paid advertising is only one component of an effective marketing strategy. Pay-per-click ads, Google advertising, and other forms of marketing designed to capture potential consumers’ attention cannot be as effective if your eCommerce website hasn’t been properly configured for search engines to properly index and include in search engine result pages (SERPs).
“You can’t afford to underestimate the power of strategic content marketing and social media marketing and SEO strategies for your product. Not investing in a marketing-focused approach in designing your eCommerce platform will keep it from being engaging and user-friendly, both elements necessary to build trust with the customer. You want to build a site that focuses on functionality and a customer experience in-line with your marketing goals so that once a visitor is on your site, they will be more likely to become loyal customers. Integrating effective SEO tactics ensures you reach the right audience, as a properly structured SEO strategy for your eCommerce site helps your site perform better relative to the competition in search engine results and generate traffic from people who are interested in what you offer.” —Hamoun Ani, eCommerce Specialist, Brand Vision Marketing
8. Don’t Neglect Marketing in Your Budgeting Cycle
We spoke above about the need to have a solid business acumen to open and operate an eCommerce platform. It’s important to call budgeting practices out especially, as many operations that fail haven’t properly invested in a full-fledged marketing strategy that includes on-page and off-page SEO strategies or in the technical SEO design of the site.
“Don’t undershoot when budgeting for your marketing costs. A general best practice is to set it to at least 30% from product price—this is generally due to the gradually increasing Google and Facebook advertising costs. If you don’t properly anticipate your marketing costs and set an appropriate budget, you run the risk that your beautiful product will not be found and purchased.” —Alex Levashov, Director, Magenable
9. Create a Full-Spectrum Marketing Plan That Also Incorporates Paid Ads
It’s crucial that when building your marketing strategy, that you do not put all of your effort and resources into a single marketing channel. Just as often as eCommerce platforms fail due to poor optimization, online retail platforms are failing due to poor paid ad practices. A well-rounded approach that balances each channel will give your eCommerce site more traffic in the long term.
“The number one mistake I see is really two closely related issues. #1 – failing to understand how hard it can be to drive targeted traffic to your website, and #2 – how to build a site that will sell well. The days of just putting up a catalog and magically selling are long gone. There’s just too much competition. There is a formula and lots of data out there for how to build a site that converts well. Sadly even a well-designed site won’t sell if you don’t drive interested traffic. SEO won’t do it for a new business. You’ll need to have a budget for advertising and either the knowledge to do ads well or hire someone who does know how to run profitable ad campaigns.” —Lori Appleman, Founder, Redline Minds
10. Your eCommerce Site Must Be Built Around COVID-19’s Impact on Supply Chains and Product Availability
Almost any product or niche you choose to build your eCommerce platform around will be impacted by current challenges in the supply line and inventory availability due to market disruptions, worker shortages, transportation delays, and other supply chain-related challenges. Research any product you plan to sell to determine how its availability is currently impacted and how it will be impacted if conditions continue for any amount of time.
“In researching your potential product offerings, you can’t ignore current events and challenges in product acquisition due to supply chain issues. Consider where you plan on sourcing your products from and how will the supply chain be impacted or change over the next few years? Products that felt like a ‘sure thing’ this time last year, are now delayed significantly, sometimes up to several months or more.” —Jade Pruett, SEO Specialist, HelloSEO
Tips and Tricks from Beyond the Community
Getting significant input from the community can sometimes be challenging, depending on the time of year. With the intent of creating a fully-fleshed out list of tips for businesses that desperately need to pivot and include eCommerce in their business model, we’ve scoured the web for some best practices that our expert community might not have mentioned.
11. Email Marketing Still a Leading Marketing Channel
In rounding out your marketing strategy relative to your eCommerce startup, you must start well in advance in building your community via social media and other channels, all the while gathering contacts in order to create a focused email list and then gain the permission of those on the list to engage them in future targeted email marketing campaigns.
12. Pick the Right Platform for Your eCommerce Needs
The complexity you intend to build into your eCommerce site and your current website configuration will dictate which eCommerce plugin or platform you will eventually use to deploy your online storefront. Whether you go with WordPress’s WooCommerce or the Shopify platform, a platform part of an existing eCommerce solution such as that offered by Amazon where organizations can build their own storefronts, or some other solution on the market, you’ll need to make sure it integrates easily into your existing website management workflow or provides you with an avenue towards the workflow you intend to use in the long term. Considerations should include whether the platform includes a domain name or can be attached to your existing domain, whether you can create custom and targeted landing pages, and how easy it is to manage inventory and add new products.
13. Pick the Right Add-Ons and Extensions
Many platforms come with bare-bones functionality to start. Building an eCommerce site that truly fits your small business’s needs requires integrating a wide range of extensions from the various marketplaces relevant to your core eCommerce platform. Choosing the right tools and add-ons is a complex process that might require additional research and guidance, which you can find on our expert hub.
14. How Your Store is Structured is the Driving Factor in Your Store’s Success
Take the time to study successful eCommerce sites and consult with marketing experts that specialize in the best way to build out product pages and how to structure the customer journey and checkout process around maximizing shopping cart conversions. Understanding how to best leverage templates and optimize them to your target market will eventually draw in new customers, who will over time provide you with the testimonials and positive online reviews you’ll need to gain the trust of future clients.
15. The Modern eCommerce Elephant in the Room: Is There a Case for Dropshipping?
One of the most popular trends in eCommerce at the moment is outsourcing product inventory management and fulfillment to an established third-party service provider and building online real estate and social channels focused strictly on driving traffic to the sales site. The associated cost margins can be prohibitive to building a successful online store, but if managed correctly with the right products and service provider, a business interested in folding eCommerce sales into their business model, then they can do so easily through a dropshipping model.
Success in eCommerce Comes From Professional Guidance and Partnerships
Perhaps the most powerful advice that came out of our inquiry to the expert community about establishing a successful eCommerce store came from Miguel Cairo, CEO of Unique Web Designer, who we quoted about best practices above. While his tips for understanding the competition were insightful, it was his call for caution that resonated with our overall goal in this article.
“Stay away from everyone trying to sell you their ‘secret sauce’ for success.”
Everywhere you look across the Internet, services are trying to sell potential customers a knock-off of the latest industry software or an overpriced remix of someone else’s services. The UpCity marketplace isn’t a haven for snake oil salesmen, so you can trust the business-to-business service providers you find on our site. Our members are some of the best in their fields. Visit our eCommerce development list to get connected to professionals who can help you elevate your brand.