The Myths and Realities of Starting a Successful e-commerce Business
Starting a new business can be exciting and stressful at the same time, filled with long hours and a lot of living on an extremely tight budget in hopes of getting your business up and running. There are a lot of misconceptions about how the business world works, but we’re here to set the record straight so you can successfully get your e-commerce business up and running.
Here’s a look at some of the most important myths and realities you should know before starting an e-commerce business.
The Myth: Build it, they will come
Back in the 1990s, when the Internet was essentially brand new, websites were popping up at rates so fast it was causing whiplash. Unfortunately, many of these fly-by-night websites didn’t do anything or offer anything by way of products and services. They were just websites, filling up space.
The Reality: Substantial Content is Essential
The biggest mistake you can make when starting an e-commerce company is assuming just because you have a clever name and lots of high resolution pictures people will magically appear and start buying from you. Ask yourself this question: “When has this ever happened in the real world?” You should quickly realize it hasn’t. It doesn’t work in the online world, either. You need to have solid substance on your site, solving a problem people have or answering their questions. Make sure you do your legwork beforehand to know what these problems and questions are and the effective ways to answer them.
The Myth: You Don’t Need any Experience
Prospective business owners are constantly told they don’t need any experience to build a successful online company. This is typically the pitch from get-rich-quick scammers who are proving to every sucker who pays them the truth of inexperience: it’s very costly.
The Reality: You Do
Would you ever consider starting a brick-and-mortar store in the real world if you had no idea what you were doing? You’d be out of business before you got started, for one simple reason: Your competitors do know what they’re doing.
Not only do you need to fully understand the type of e-commerce business you’re starting, you need to know the fundamentals of online commerce. These include things like electronic payments, shopping carts, product catalogs, social media (social commerce), networking, and commerce, social proof, marketing and advertising, and driving traffic to your website.
The Myth: Low Prices are the Most Important Thing
If all things were equal then price would be the deciding factor. In a perfect world, all things would be equal, but we live in a different kind of world, and it is the imperfections that allow for e-commerce business owners to find a competitive edge.
The Reality: Most Businesses Can’t Live on Low Prices
There is plenty of consumer research showing price is not the most important factor in a purchasing decision. To be a low-price leader a business generally has to have massive buying power. Consider Home Depot, Target, Wal-Mart, and Costco. They buy more products in a day than most companies will sell in a year. This translates directly to pricing smaller companies generally can’t get.
The edge for any business comes in the form of customer service. For e-commerce merchants this comes in the form of:
Hands-on, concierge-style service
A means for customers to rate products and leave feedback
An active social media presence on Facebook, Twitter, and YouTube at a bare minimum
Fast response to customer inquiries
Easy-to-use website and shopping cart
A willingness to meet your customers’ needs
Consider the reasons you’re willing to spend more than you have to for the products and services you purchase and you’ll discover it does come down to the little things merchants to do make your shopping experience pleasant and agreeable. Emulate the things you like from your shopping experiences into your new e-commerce business.
The Myth: No Business Plan Necessary
The big lie here is that online e-commerce businesses are somehow different than traditional brick-and-mortar businesses. Aside from the lack of physical presence in the real world, there is little difference.
The Reality: Business Plans are Essential
A business is a business whether it’s totally in the real world, totally in the virtual world, or a combination of both. A business plan is the blueprint of your business, and writing one is the first step in creating your new e-commerce business.
Business plans address aspects of your business, including:
The overall vision and mission of the company
Biographies of essential personnel
Defining your competitive edge
Financial requirements and consideration
Legal and regulatory requirements for your business
When you write a business plan you are fully familiarizing yourself with what you’re proposing to start. The process gives you a chance to finely hone the ideas that will propel your e-commerce company toward success. Also, if you don’t know everything there is to know about your new business, who does? If that person is not you then you’re on a fool’s errand and setting yourself up for failure.
The Myth: All e-commerce Products are Alike
Without a fundamental understand of shopping carts and payment platforms, it’s easy to just assume they all do the same things in the same ways.
The Reality: You Wouldn’t Want Them to Be
While the functionality of product catalogs, shopping carts, and payment platforms does follow certain fundamental aspects of commerce, no two are truly the same. If you’re a small company with a handful of products, you certainly don’t need the same e-commerce solution as Amazon.
The complexity of your e-commerce solution can directly impact the shopping experience. If you are a small shop with a small catalog, your goal is to get your customers from product page to checkout as quickly as possible. Take the time to research e-commerce solutions and choose the solution that best fits the size of your company.
The Myth: There are no Roadblocks to Online Success
A lot of scammers will have you believe there’s nothing to starting an e-commerce business and instantly being successful. This is more of that “build it, they will come” mentality, which we’ve established is wrong.
The Reality: Success Takes Hard Work
Businesses face daily roadblocks to success and it doesn’t matter whether you’re starting a brick-and-mortar business or an online shopping portal. Online businesses have their own sets of challenges, the least of which is meeting the demands of customers who prefer shopping with mobile devices.
Some of the challenges you’ll face and have to address when starting an online e-commerce company include making your site mobile-responsive, having a defined social media strategy, as well as creating and using coupons and promo codes.
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