What You Need to Know
We recently asked a group of online sellers a simple question: What should you know about running an e-commerce business today?
We got tons of feedback, so we decided to share it in 2 parts. This article focuses on advice for newbies. Part 2 is for the pros who have the basics down, but want to take their operations to the next level.
“The more I think about it, the more I feel that sellers need to understand ‘business,'” says Donna MacMurray Klein. “I think a lot of them come at it looking for the nitty-gritty of selling stuff on a site, like where to point and click. They miss out on success factors like marketing, accounting analysis, business communication and more. A business attitude, I think, is the real key to success.”
Without addressing proper accounting, newcomers can easily mistake their sales for profits and miss out on knowing their true bottom lines. Likewise, without keeping an eye on business communications, they’re more likely to engage in a flaming incident when customer service issues inevitably arise.
Know your competition
No matter where you sell, you’ll find competitors already doing exactly what you want to do. You’ll need to bring your best business sense into play here. Study their products, policies, advertising, marketing, customer service responses and shipping features.
“I use WebMeUp to review 10-plus main competitors,” notes Daniel Brady of Heavenly Hammock. “Check your competitors’ top-selling products and up-sell strategy. Check SEMrush to see your competitors’ top Google organic keyword rankings and ads. Consider if you have forgotten to target any of these.”
No on the lowest price
Going for the lowest price is a common strategy among newcomers, but it’s doomed to fail, we were told.
“When I first started, I was always checking to ensure I was the lowest,” recalls online seller Jimmy Freeman. That was tough.
“Someone would then lower [their price],” he says. “I would follow by going 50 cents below them and so on. Before long I was losing money on the product.”
Instead, find other ways to stand out, for instance killer customer service, amazing product advice or great up-sells.
You already know tons about the products you sell, so you can easily give customers advice about care and maintenance details, useful accessories, or other ways your product can be useful, says Julie Austin, an inventor and manufacturer selling her products online.
“I ordered a hot tub, and the company helped me with valuable information on how to keep it clean and how to make it last longer,” she remembers. The result: a loyal customer who will buy again.
If your merchandise requires cases, covers, replacement parts or even batteries, make yourself the one-stop shop for customers. You’ll get an additional revenue stream based on the things you already know they’ll need.
Finally, don’t forget about scalability. You’ll need ways to efficiently—and effectively—fulfill orders, take stock of inventory, reorder supplies and keep up on accounting. Here’s where you can really feel the pressure.
Make sure your bookkeeping strategy can keep up, that you have enough storage for your inventory, and that your processes for pulling, packing and shipping are solid. Don’t put any new system into place until you can see how you will expand it as your business grows.
And think about expanding where you sell.
Besides selling on Storenvy, using sites like Amazon, Etsy or OpenSky, business owners can create “an umbrella effect,” says Nicole Bandklayer of bijouxxjewels.com. “You will expand your reach, your visibility and customer base this way because these platforms have customers already.”
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