by Kevin North, CEO and President of Terapeak
Today’s generation of ecommerce entrepreneurs is changing the way consumers shop by allowing them to access a world beyond the geographic and physical boundaries of bricks-and-mortar retail. Ecommerce platforms like eBay make the cost of starting a small online business with a global reach affordable, and the entrepreneurs who find the right product mix and sales strategy will also find success.
So how do you make sure you get your new ecommerce venture off to a running start? Here are five tips that can help you create and implement a winning strategy:
1. Keep it small at first.
Some ecommerce entrepreneurs think that they need to be everything to everyone to build a loyal following, but the truth is, carrying a wide range of products is risky, especially at the start. A leaner organization is more manageable, and if your inventory is small, you won’t be on the hook for items that are difficult to move.
After you’ve established a customer base and created and managed long-term relationships with suppliers, it’s easier to gauge demand and get favorable pricing. Consider starting small so you can grow into your new role.
2. Make sure you – and your customers – love your products.
With millions of people selling online these days, you need a way to stand out in the crowd. There are two approaches you can use to differentiate yourself from the competition: Sell products that you personally are passionate and knowledgeable about, and keep up with industry trends to gauge demand.
You’ll definitely find running your ecommerce business more personally satisfying if you’re passionate about your products. If you’re a gamer, consider selling products related to the gamer lifestyle. If you’re passionate about cars, sell automotive products. And use seller tools like Terapeak to analyze demand and get valuable insights into your customer base. The reason for the latter: regardless of your enthusiasm, there’s no sense selling something in a saturated environment unless you have some other differentiator.
3. Profitability begins at the sourcing process.
The primary factor that drives ecommerce success can be summed up in one word: sourcing. If you want to succeed, it is absolutely critical that you understand the value of the products you sell and are able to identify whether or not a buying opportunity will turn into a profitable sale.
The large eBayer sellers have put in considerable time and resources establishing supply chains (often global) and developing sourcing networks that offer products at reasonable prices. As the seller grows, they’re able to get volume discounts, which gives them an advantage right from the start.
Another piece of the puzzle is finding sourcing tools for your business. For example, Terapeak’s mobile app gives you the power to recognize bargains on the go, giving you real-time product info while attending auctions, estate sales, or garage sales.
4. Study your competitors.
Basic business intelligence is important, so it’s critical to know what products competitors are selling and at what price point. But to be a really savvy ecommerce entrepreneur, take it a step further and analyze what your competitors are selling that you aren’t, and see if you’re missing out on an opportunity.
With the right digital eBay seller solution, you can get a 10,000-foot view of how your competitors are doing and then zoom in and do a product-by-product analysis. This gives you valuable insight into your competitor’s performance and helps you spot new opportunities.
5. Make sure customers can find you.
Just like a traditional brick-and-mortar business, an ecommerce venture can’t succeed unless customers know you’re there. Once they do, you’re halfway home. Use eBay sellers tools from Terapeak to analyze visitor traffic and keywords and understand how buyers are searching for products online.
And don’t forget to ask your customers how they found you: Ask what keywords they used when they began their search and specifically what terms led them to your online store.
So there you have it – five simple tips that can help you launch your ecommerce venture and make it a big success. The ecommerce space is definitely more crowded now than it was even a few years ago, but there are also millions more customers buying online, so opportunities abound. If you create a smart strategy, stick with what you know and use technology tools that can help you keep a handle on trends and prices, you can succeed.
Kevin North is the CEO and President of Terapeak, a leader in commerce market analytics, dedicated to helping online merchants grow their business and become more profitable.