Everyone seems to be asking how to launch a successful online store.
Maybe because of many recent online stores success stories, specially during the 2013 holiday season which broke many new records.
“By 2022, brick and mortar retail spaces will be little more than showrooms.”
— Eddie Machaalani & Mitchell Harper, CO-CEOs of BigCommerce
Having been around the early days of the internet, when Amazon sprang to life, and having worked with many e-Commerce projects in the past, I’ve come to learn some tips for online stores success.
Below, I’ll share with you the tips I’ve learned over the past years for launching a successful online store:
Research your target market
Is it too saturated? If so, is there room for variety or competition?
Or could you end up investing in an empty market, with nobody to buy your product?
Even then, there are some opportunities to be found.
You could create your own demand.
“We’re moving into the more exciting phase of e-commerce, emotional products — the things that people really cherish, the products that really excite consumers, and make them say, ‘Wow, I want to buy it online.'”
-Jason Goldberg, founder and Chief Executive Officer, Fab
Or you can look for a stable niche where a steady income can be made, or find a niche with some room for growth.
It’s hard, granted, but it’s not impossible.
Take your time to map out your market niche thoroughly.
This is vital for your future growth, and will help you make sound decisions in the long run.
Even with the best of ideas, an online store can fail due to technicalities or implementation mistakes.
Start small, then scale
“You can sell before you buy. I call it reverse e-commerce. You take a picture, you list it for sale, you sell it, you collect the revenue, then you go buy it and send it to the customer.”
-Marc Ostrofsky, author of Get Rich Click! The Ultimate Guide to Making Money on the Internet
A successful online store will not go with all guns blazing.
You better start small, then upgrade.
Don’t buy, rent.
Don’t hire, outsource.
Don’t opt for the top plan, start with the basic one.
Don’t develop your own shopping cart solution, test your idea first, and when online sales keep coming, then and only then can you expand.
Don’t mistake passion for confidence
While you may be very passionate about your idea of a successful online store, that does not guarantee future success.
With such extreme passion, it is easy to overestimate your expected online sales, which eventually leads to excess inventory and dead stock.
When products stop moving, for quite some time, it’s a sign of imminent losses and failure.
A profitable successful online store is the one that neither over-stocks, nor under-stocks.
Reaching the right stocking formula is crucial and time-consuming, but once there, you start racking more sales.
Calculate true demand and spend accordingly
Get genuine market insight.
Face the numbers.
Act based on real-life facts.
Be realistic, all while leaving some room for passion.
Create a down-to-earth budget with enough resources for advertising and a good website design.
Don’t spend all your capital money on one product alone.
Diversify your product mix. Think of bundles, up-selling, upgrades, loyalty programs, etc.
Skip out on any unnecessary peripherals you don’t and won’t need, like luxury desks or super fast PCs.
Only spend on storage if you must.
Drop-shipping is a good way to remove storage costs from the equation by letting the manufacturer ship for you from their warehouses.
Shipping is crucial
Spending wisely is not an excuse for bad shipping services.
When setting your price for every product you sell, take shipping costs into account and think about whether you’ll ship overseas or within your country.
Logistics are very much a part of your business, make sure you can keep up with demand volume and know how to deal with returns. You wouldn’t imagine how much a sloppy shipping service can hurt a company.
If your customers can’t get their product on time, they won’t spend any more money with you again.
Online business means building an online presence
Online competition is ferocious. Odds are you won’t end up on the first Google search results page easily, quickly or eventually.
Still, it is your job to make sure your online store is optimized for search engines. People need to find you in order to buy from you. Without a healthy web presence you won’t move any product.
Either read some SEO guides or hire an expert.
Read also: 8 Common Online SEO Mistakes
You need to keep a close eye on what are people searching for online, and build your online marketing strategy accordingly.
Have a set budget for all possible forms of content marketing, like: videos, social networks presence, curated content (Pinterest), QRated content (Barcodes), guest blogging, mobile apps, free digital downloads, user-generated content (Amazon’s Listmania, Nike ID), co-create content with a celebrity, newsletter/email, Google+ hangouts (webinars), and inforgraphics.
“Don’t neglect these more modern forms of content marketing.”
—Linda Bustos, Director of E-commerce Research at Elastic Path Software
Allow for A/B testing, implement strong tracking scripts, and always monitor your stats and act accordingly. Never fear to experiment and test.
Look like a Pro
When prospects do find your website, you’ll want to make sure you have a handsome looking site to show them, but most of all, a website they can trust.
Poor and sketchy looking online stores are a big turn off for customers.
Your website is the first line in ensuring confidence in your products.
If your website looks professional, then more likely customers will trust you and your brand with their hard-earned, and return back for more purchases.
More consumers are using their mobile phones and tablets to browse the internet looking for deals. By 2020, it’s expected that over two billion users will purchase items using handsets.
If the mobile-version of your online store is broken or does not offer all the services provided by the full version, expect less sales and shoppers’ lashing.
“Mobile commerce is critical to success.” —Alexandra Wilkis Wilson, Gilt co-founder, author of the New York Times Best Seller: By Invitation Only: How We Built Gilt and Changed the Way Millions Shop.
If you decide to have some sort of presence on social media networks, then make sure they are well tended and not abandoned.
Customer service, make or break
Never skimp on your customer service quality.
In the early days of your online store, you’ll most likely end up answering all your calls.
A polite attitude and a problem-solving mentality go a long way.
“We firmly believe that the right way to build a brand is by delivering a great service. If you build a great experience, customers tell each other about that. Word of mouth is very powerful.” -Jeffrey P. Bezos, Amazon.com
If customers are happy with your services and support, you’ll get good online reviews and positive recommendations, which in turn will bring more shoppers.
The road to a successful online store
“We will continue to see a convergence of the digital and physical world. Those who conquer that trend will be market leaders.”
– John Phillips, senior VP, Customer Supply Chain & Logistics, Pepsico
Invest wisely in your online store, quality products, a presentable website, and great customer services are the milestones to a successful online store.
With the ease and low cost of starting an online retail shop, the opportunity is accessible to anyone.
That means the competition will be fierce, which means you’ll have to stand out.
Most online retailers with no experience tend to fail within several months at best, and even successful ones close shop eventually.
Even if you fail, take it as a chance to learn, and get back up.
[Study] Free gifts increase online customer retention
A US survey by Harris Interactive and commissioned by IDR Marketing Partners, revealed that 2 in 5 Americans are very-to-extremely likely to purchase more often from a shopping Web site after receiving a free gift. About 40% of Americans are somewhat likely to.
The survey found that successful online stores benefit from including an unexpected offer or free gift sample with each order.
Americans are more likely to purchase regularly from the same online store, as well as share their positive experience online and offline.
The free gift serves to surprise and delight customers, fostering a closer connection between the retailer and customer, which as a result, encourages recurring engagement.
Additional survey findings support both the online and offline impact of product samples:
- Consumers Come Back for More:
Almost 90% of free gift receivers indicate that they are at least somewhat likely to buy more frequently from an online store after receiving a free gift.
- Shoppers React Favorably to Something Extra:
65% of free gift receivers say they are at least somewhat likely to share their experience with others online, about half offline.
- Online Retailers Urged to Include Free Gift:
Online retailers see value in including a free gift with customer orders, though less than half do.
- Women More Likely to Share:
Of the four out of five Americans that are at least somewhat likely to share their experience with others offline about a shopping site after receiving a free gift with purchase, women are found to be significantly more likely to share their positive experience than men.
Photo credit: Flickr / Mykl Roventine