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The following is an expanded version of an email I sent to a friend considering starting out in e-commerce. I wrote him a short email and then realized that it might be useful for anyone else wondering how to start an e-commerce store.
You have an idea for an online business. You have a product you want to sell online. What next? Where do you start, and where do you go? This is a concise guide on starting an e-commerce store.
Your first goal is to minimize your risk. You probably don't have a ton of money to sink into this. If you're going to fail, you have to fail fast and cheap, so that you can move onto something you can succeed with. Most e-commerce stores go nowhere. Of the ones that succeed, most end up selling something other than what they originally planned to sell or to an audience different from the one they originally planned to sell to...or both.
Your second goal is, obviously, to make lots of money. You can do this by either selling at a modest profit to a lot of customers, or at a high profit to a few customers. If you're really, really lucky, you can sell at a high profit to a lot of customers, but this is rare, and in the cases when this does happen, usually competition shows up and eats into your profit and customer numbers.
So, how do you get there?
First of all, who is your target audience?
Whom will you sell to? This is crucial. I recommend researching the target audience carefully before you do anything else. You need to try to get a clear idea of the following about your customers:
Make sure you have an online audience! How many of them are there?
- What do they look like, demographically?
- How old are they?
- Are they married or single?
- What do they do for a living?
- How much money do they make?
- What are their interests and hobbies?
What should you sell to them?
- What product do the people in your target audience really want?
- How many of them really want it?
- What benefits or functionality do they value about this product?
Leaving your email is a commitment. It shows that you are actually interested in
buying something, enough to risk getting spammed. So from the rate at which people who visit different signup pages leave their emails on different landing pages, you can get a rough idea of what they actually want to buy.
Talk to your potential customers
- What are they currently using?
- Where are they buying from?
- How open are they to changing?
- What are the friction points that they have with their current product/supplier?
- How much are they paying?
- How much would they be willing to pay you?
Make a decision
Now you have enough information to decide what you are going to sell, to whom and how. Focus tightly. Who needs your product the most? How many of them are there? How much will you charge? It is okay to pick a couple of segments/products to start with, but not too many. Make sure you have enough information to make an informed decision. It is okay to wait and keep researching-it might be better than jumping the gun.
Who will build it?
Before deciding on a platform, you need to decide who will develop your store. The ideal situation is one where you are comfortable enough with a technology
that you can either do it yourself or personally supervise the development process. The store needs to work for you, 100% of the time. If you do not have a grasp on a particular web development platform or technology, you have to find a developer you trust. Here, the relationship is much more important than the technology used. Whether your site is built on WordPress, Shopify, Magento, Wix or Squarespace is not nearly as important as whether you know how to run it, make minor changes, and have someone you trust on the end of the line for those times when things go wrong, or when you need to make major changes. Take your time settling on a developer, because once you do, you're basically married to each other, and divorces are painful and ugly. If it turns out that the developer you choose is not trustworthy or competent, finding someone to take over and fix his code can be quite difficult and expensive.
Which platform should you use?
I will publish a post soon comparing various e-commerce platform options in detail. In the meantime, the main thing you need to know is this: there are several major e-commerce platforms available, all of which do a good job at giving you the functionality you need to sell online. These include WooCommerce (built on WordPress,) Wix, Shopify, Magento, Weebly and Squarespace. I've linked to our installation tutorial video for each, which gives you an idea of the look and interface.
Details, details, details
As you set up your e-commerce store and start making sales, you will constantly learn more about your platform and customers, and develop your business model further. You will make decisions about payment options, fulfillment, abandoned cart management, upsales, customer list management and a ton of other details. Generally, there are either built-in features or third party apps available for 99% of the needs you will encounter. Don't sweat this stuff right now.
Finally, when building your store site, always remember that it's not a product catalog-it's a sales tool. You need to provide visitors convenient contact channels that they can use to get immediate answers to their questions and objections, otherwise they will go elsewhere and buy there. Contact also ensures that you stay in touch with your customers and their needs. Chat is a good start. Don't forget to put in some mobile-oriented contact options as well, especially if a decent chunk of your audience is coming from smartphones and tablets. Try Bontact's app, which is available on all the major e-commerce platforms with a setup time of less that three minutes.