Thursday, September 29 2022

With the global e-commerce market expected to reach $5.1 trillion in 2026, it’s no surprise that e-commerce product companies are one of the fastest growing sectors in the population of small businesses. companies. If you want to start an e-commerce business in 2022, here are 7 steps to get you started.

Customer research

Before you do anything else, figure out what you want to sell and who you want to sell it to too. Customer research is absolutely crucial when it comes to starting a successful business.

Many people start product businesses because they want to create or curate products they love. Being passionate about what you sell is absolutely vital, but so is having a market for your products.

Talk to as many people as possible about your ideas. If you’re not sure where to start collecting feedback, take a look at The Mom Test book. Most people don’t spend enough time on this step, but it can be absolutely invaluable in helping you avoid costly mistakes.

The advantage of e-commerce is that you can reach customers across a wide geographic area, so keep that in mind when doing your research. Why not contact your ideal customer online, wherever they are, and talk to as many people as possible?

Decide on your product line

Armed with researching your ideal customers, you can start building the actual range you want to sell. Don’t get sucked into the idea that you have to start everything. Having a small range, or even a single item, can be a great way to start and help you learn as you go. That’s the beauty of e-commerce, there’s no workshop to fill out, so don’t be afraid to keep it highly edited.

Postage and packing costs

Not the most exciting topic, but essential nonetheless. Before you start shipping your products to customers, you need to figure out how you’re going to package and ship them.

Make sure your packaging is strong and fit for purpose – nothing puts off customers faster than a damaged item. When the item is in its packaging, try shaking it. If you hear it moving, consider whether you need to add something to protect what’s inside. Mail an item to yourself as a test to check the condition it arrives in.

Know that many customers will appreciate recyclable and plastic-free packaging. Keep a close eye on the costs of packaging materials as well as postage. Try to resist the lure of branded packaging which can drive prices much higher than standard options. If you want to create this bespoke look, consider other elements such as stickers to personalize your packages at a lower cost.

Check your pricing

Once you have determined the items you want to sell and the packaging and display options, you can calculate your profit margin. It is very important that you calculate your profit margin for each item you plan to sell.

The profit margin is the price of the item, minus taxes, then the cost of the products. It is generally expressed as a percentage of the selling price excluding tax. In other words, a $10 item that costs you $3 would generate a profit of $7, or a profit margin of 70%.

Remember to include all the costs involved, from the cost of the item itself to the cost of packaging and even the cost of shipping the items. If you are making the item yourself, remember to calculate the cost of your time.

In an ideal world, you would have a profit margin of 60-70%, especially if you intended to sell your products to other retailers at a later date. However, many businesses, especially those that are resellers or sell products they have purchased from other businesses, will have a profit margin of around 50% or even less.

While it’s possible to grow a business with a profit margin of 50% or less, it will definitely make things more difficult for you, so keep an eye on that margin and keep looking for ways to increase it. All other business costs must be paid for by the profits generated by each sale, so keeping this at a reasonable level must be a priority.

keep it lean

Much like your product selection, you want to keep your inventory levels and other business expenses as low as possible when starting out. Unless you have a huge budget to start your business, you’ll be in a much better position if you keep your start-up costs and inventory levels low as you begin to discover what people really want. your customer and who you are as a business. .

Choose your route to market

In many ways, having an e-commerce business is all about having products, internet access, and a way to accept payments. Some skinny startups start with an Instagram account, taking PayPal

PYPL
payments via DM. Often the best thing to do is to just start.

You can also choose to start on a marketplace like Etsy, Amazon, or EBay, but pretty soon most businesses will need their own website. For e-commerce, it’s hard to beat Shopify for an easy, do-it-yourself solution to building a website that sells.

Decide on a marketing strategy

Once you’ve decided what you want to sell and how to sell it, it’s time to think about how you’re going to attract people to your business.

To start, focus on one key marketing channel. Where do your ideal customers spend their time online? If you have done your research properly, you can easily answer this question. Start with their most popular platform and keep popping up. Think about what types of information and messages would interest them the most, then start experimenting with different ways of communicating. Especially in the beginning, there’s an element of trial and error to find the types of posts that really resonate with your ideal audience.

It may seem overwhelming at first, but stay focused on what your customer wants, identify the products they will love, check that the numbers make sense, and then get started! Make 2022 the year you bring your eCommerce business idea to life.

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