Ecommerce Business Blueprint
Starting an ecommerce business is hard work with many steps and decisions that need to come together at the right time. To help, I have put together a comprehensive resource list. This list has been placed into a logical order based on how you would research, build, launch and grow a profitable ecommerce business.
Let’s dive in.
Choosing a Product
The first step to building an ecommerce business is to know what products you want to sell. This is often the most challenging part of starting a new online business.
Products that Generate Maximum Online Interest
In terms of online interest generated, Google compiled consumer search data to come up with a list of top product categories. These are:
- Electronics (34%)
- Apparel and Accessories (30%)
- Books (15%)
- Beauty and Personal Care (10%)
- Home and Furnishing (6%)
- Healthcare (3%)
- Baby Care (2%)
Products with Maximum Sales Figures
In terms of products sold online, the figures change slightly. Here is the list:
- Apparel and Accessories (84%)
- Electronics (71%)
- Beauty and Personal Care (64%)
- Books (62%)
- Household Products (61%)
The frequency of sale was also the highest for the Apparel and Accessories category (34%), followed by Beauty and Personal Care (33%). This makes these categories all the more profitable due to repeat purchases.
Try and sell something unique.
Let’s start with the obvious. There are 10,000 bags and 20,000 T-shirts already listed on marketplaces like Flipkart, Amazon, Snapdeal etc. If you start out with these products and think that your design is better than the designs of those already listed, chances are you’re wrong. It will be difficult for you to even get discovered. Find a product category that is yet untapped, and make sure your product is unique compared to other sellers’ products.
Think of a commonplace product – could be anything around you and then work on how you could make it different so that it is more valuable than other sellers reselling it. Invest in good design as it has the power to turn something that was once just practical and impersonal into something meaningful and captivating.
Research & Prepare
You’ve found your product, evaluated the potential and sourced your supplier. It’s time to research your competition thoroughly so you know exactly what you’re up against.
Gathering competitive intelligence is an often overlooked strategy for ecommerce merchants.
Sometimes the best way to take your ecommerce store to the next level is by gaining a deep understanding of how your competitors operate. If you don’t know what your competitors are doing, it’s difficult to make intelligent decisions that will keep your current customers, and entice new ones. This guide will show you how to identify your top 5 competitors and show you 8 tools that will help you gather in-depth information on your competitor’s strengths and weaknesses.
Identify Your Top 5 Competitors
You’ll want to see which competitors rank the highest in Google for keywords specific to your industry. Make a list of the top keywords that bring you traffic, and enter them into Google. If you don’t have an ecommerce store yet and are doing pre-launch research, simply search for relevant keywords. Make sure you’re browsing incognito and you’re in the appropriate regional zone (if you want US search results add &gl=us to the end of the search URL). Make note of who is ranking on the first page. You should also type “related:www.yourURL.com” in the Google search field to get a list of companies that are similar to yours.
List the Good, Bad, & Ugly
Now that you know who you’re up against, start browsing through your competitor’s online stores. Get a good feel for their site, and make a list of all the things you like, and all the things you don’t like. Ask yourself these questions:
- How do they emphasis their value proposition?
- What are their prices like compared to yours?
- What is their product photography like, and how are their product descriptions?
- What are their shipping options and prices like?
- Where are their call to actions, and how obvious are they?
- Are they trying to build an email list?
- Is their site optimized for mobile?
- What is their social media presence like; which platforms do they use; how often do they interact with customers, and how do they speak with their customers?
Now that you have a list of your top 5 competitors, and you have done basic research on how they operate, it’s time to dig deeper. Use some of the tools below (some paid, most free) to gather in-depth information on what they’re doing.
Gather Competitive Intelligence Using These Research Tools
Alexa’s been around since 1996. It will help you analyze traffic on your competitor’s ecommerce store. Type in your competitors URL and Alexa will give you their global traffic rank, number of sites linking in, search analytics, audience insight, average site load time, and a whole lot more. You can really dig deep with Alexa, but it’s important to note that there are inaccuracies with Alexa’s information, since they get their data from those who have installed their toolbar for IE and Firefox or installed their Google Chrome extension. Take the numbers with a grain of salt. They have 7 days free trial program so why not give it a try.
With this service you can easily compare page titles, meta information, and common phrases on your competitors homepages. I suggest including your URL in a search with your top 5 competitors. They also have some great free tools and free SEO course worth $7
This service will allow you to easily analyze keywords and the amount of traffic generated by those keywords. It also allows you to narrow down your search by including URLs and specific categories, such as apparel, cosmetics, or whatever. You can use Google AdWords Keyword Tool to estimate how much your competition is paying per click for their ads. Also, you should use Google Traffic Estimator to find out the number of ad clicks and current bid prices for various keywords.
Internet Archive has been crawling the internet and taking snapshots of webpages since 1996. Using their free Wayback Machine you can see what a website looked like throughout the years. By looking at the history of your competitors websites you can plot trends in design and pricing changes. Do they dress their homepage up for Diwali every year? How has their positioning changed – could they be moving to address your market? Sometimes you can learn a lot from the subtle changes your competitors make on their site.
Type your competitors URL in Whois and you’ll receive a comprehensive record of that domain, including: date registered, contact info, server stats, links in/out, and other domains the registrant owns.
This is a paid service ($49/month) that lets you spy on your competitor’s AdWords and keywords. SpyFu really lets you dig deep. You’ll be able to see what worked and what didn’t work for your competitors AdWords campaigns. When you can trace the steps of your competition, you can avoid the mistakes they made.. it’s like they’re doing market testing for you.
This service has a limited free plan and a paid service that is $99/month. Here you can compare your online store with up to four competitors on page authority, domain authority, linking root domains, total links, and with the pro version, you can also compare social stats. I like using Open Site Explorer to quickly see who is linking to my website and what kind of impact it may have on my SEO. You can search your competitors ecommerce store and see not only who is linking to them, but what authority they have.
With this free service from Google, you can receive email updates of the latest relevant Google results (web, news, etc.) based on your queries. You should already have Google Alerts set up for your online store name, but it’s important to set up alerts for your competition as well. I would also suggest you get alerts for key industry terms, so you can easily monitor the broader market for new developments that could affect your ecommerce business.
Now that you have assessed your competitor’s sites, you’ll want to start analyzing your own ecommerce store. Try and objectively look at your online store and see how it can be improved. Use all the tactics you used on your competition and be as critical as possible. It’s also important to bring an unbiased set of eyes in to give their opinion.
So now that you have all this information, what should you do? Use your learnings to optimize your ecommerce store. Try and take advantage of your competitors weaknesses. If they’re clearly beating you in some areas, pull up your socks and become more competitive. Remember, to remain competitive it’s important to operate with flexibility and be able to pivot your direction. But that’s not to say you should simply try and please everybody. You don’t want to bite off more than you can chew, and you certainly don’t want to lose whatever it is that makes you unique.
Building Your Store
Once you’ve made the decision to start your own eCommerce business, the process of launching it can be confusing and overwhelming. There are a lot of decisions to make, and focusing your efforts in the wrong areas can lead to months of wasted effort.
Fortunately, you don’t have to blindly guess at the best approach. Based on my successes and failures working on numerous eCommerce stores for my clients, these guidelines will help make your own eCommerce launch a successful one.
Preparing To Launch – Launch as Quickly as Possible
It’s time to kill your perfectionist tendencies! Launching your store quickly is one of the best things you can do for your fledgling business.
If you’re new to your niche, you likely have no idea who your customers are or what they need. Oh, you may think you know, but you don’t. So trying to invest in creating the perfect store to address your customers’ needs, wants and problems is almost certainly a waste of time. Instead, get a basic store online as quickly as possible to start interacting with your customers to learn more about them.
Once you have a better idea about your niche, then you can improve your website based on your new knowledge. And while you’ve been collecting all this information, you’ve almost certainly rung up a few sales, too.
Another reason to launch quickly is because it takes a lot of time and effort to market your store. The sooner you have a storefront up and online — even a basic one — the faster you can start telling the world about your business, building links and marketing.
Countdown To Launching Your Ecommerce Business
Things are getting exciting. You’ve carefully evaluated your product idea and finally found a product to sell online. After searching high and low you’ve found your supplier, ordered samples, and discovered that they’re better than you could have expected. Finally, you’ve placed an order for your initial inventory and are just waiting for it to come in. What now?
Well, you’ve still got a lot of work to do because you’re in the pre-launch phase. It’s a critical time for every online store as it will set the tone for your business going forward. Welcome to the grind.
Launching your business without being prepared can be a recipe for disaster, that’s why I’ve put together this 8-point launch countdown to prepare your business for its launch to the world.
There’s a lot of work to do, so let’s get started.
8. Prepare Your Social Networks
For many businesses, social media is the lifeblood that brings a consistent flow of traffic and customers. It’s an audience of people interested in your products and your brand.
There are a few important things every online business should do to prepare their social channels for launch.
Claim Your Name
As a general rule of thumb and regardless of your niche, you’ll likely want to cover your bases with the two largest social networks, Facebook and Twitter. Even if you don’t plan to use they heavily, you should claim your name on both to manage your brand and prevent others from taking them.
In social media, there’s nothing worse than having different usernames on each network. Use a service like NameChk or KnowEm to search for consistent name availability across hundreds of social networks before choosing the name you want to go with.
Note: On Facebook, you’ll need to seed your page with 25 fans before you will be allowed you to change your page’s URL from a random string of characters to www.facebook.com/YourBrand. You can do this by either by inviting friends and family to your page, or by using a service like Fiverr to purchase fans.
Warning: Using Fiverr to buy hundreds or thousands of followers is counterproductive as your posts will only be shown to five to ten percent of your fans. Therefore, if you buy hundreds or thousands of followers, you may never reach your real audience, ever. Buying fans is also against Facebook’s terms of service, so buyer beware.
Choose Your Social Networks Wisely
Beyond the staples of Facebook and Twitter, you’ll likely want to join other key social networks. Some social networks will work better for your business than others. You will need to discover over time what works best for your brand.
If you have a very visual array of products or a brand that celebrates a certain lifestyle, visual and photo-centric networks like Instagram and Pinterest might be great options for you. If you plan to produce video content, you’ll want to make sure you claim your name on YouTube.
Remember though, social networks require time and commitment to cultivate so only choose networks you can and plan to properly manage.
Set Up Your Profile and Cover Photos
Next you’ll want to set your profile and cover photos, as well as seed the social networks with some posts so new fans and followers will have something to look at and wont feel like they’re the first people to the party.
For a list of all social network photo dimensions, go here.
Build A Following and Start Connecting
Now comes the most difficult and time-intensive part of preparing your social networks for launch, building a following. Truth be told, your first few hundred fans/followers will be the most difficult to obtain, therefore you’ll want to dedicate some time everyday to building your following and connecting with your fans and followers.
7. Get Your Email Marketing Ready
Now that you have your social accounts lined up, you need to get what will be one of your most important communication channel ready. Email marketing has been proven time and time again to be one of the most effective marketing channels, providing consistently higher return on investment.
Choose Your Email Provider
There are many options on the market for managing your email marketing, however, you’ll want to choose the best one for your business. A great start point is to consider which ecommerce platform you will be using and to look at which email providers integrate with that platform.
Some email marketing options include:
Setting Up Your Templates and Launch Campaign
Once you have decided on your email marketing software, you need to spend a few hours getting your hands dirty. Since email marketing can be the most effective form of marketing, you should make sure you get things ready by setting up your templates, crafting a welcome email, preparing your email marketing campaigns and setting up your shopping cart abandonment emails.
6. Launch Your Landing Page
Your next step is to build a landing page. A landing page is essential for a few reasons. It will be your brand’s temporary home until you launch with your full website. Your landing page will begin to showcase your brand and teases your pre-launch audience as to what’s to come. Most importantly, it’s a place to start building your email list of people that are interested in what you have to say and to learn more about your launch.
There are a few tools you can use to build your landing page that are really quick and inexpensive to use:
5. Install Google Analytics
Analytics are important to set up from day one. Analytics will give you valuable insight into your visitors and customers. In a physical store, you see your customer and you can easily chat with them. However, online, you’re essentially blind without analytics.
There are four steps to fully put in place Google Analytics for your online store:
- Create Your Google Analytics Account
- Connecting Your Google Analytics To Your Store
- Activating Ecommerce Tracking
- Setting Up Funnels and Goals
4. Decide On Your KPI’s
Before you launch, you’ll want to define a few key performance indicators (KPI’s) to monitor going forward. Defining the metrics that are important to you and your business early will help keep you on track and focused.
Selecting KPIs begins with clearly stating goals and understanding what areas of business impact those goals. Of course, KPIs can and should differ for each of an online retailer’s goals, whether those are related to boosting sales, streamlining marketing, or improving customer service.
Here are a few examples of goals and associated KPIs:
- GOAL 1 — Boost sales 10% in the next quarter. KPIs include daily sales, conversion rate, site traffic.
- GOAL 2 — Increase conversion rate 2% in the next year. KPIs include conversion rate, shopping cart abandonment rate, associated shipping rate trends, competitive price trends.
- GOAL 3 — Grow site traffic 20 percent in the next year. KPIs include site traffic, traffic sources, promotional click-through rates, social shares, bounce rates.
- GOAL 4 — Reduce customer service calls by half in the next 6 months. KPIs include service call classification, identify of page visited immediately before the call, event that lead to the call.
It should be easy to see that there are many performance indicators, and the value of those indicators is directly tied to the goal progress measured. Monitoring which page someone visited before initiating a customer service call makes sense as a KPI for GOAL 4 since it could help identify areas of confusion that when corrected would reduce customer service calls, but that same performance indicator would be almost useless for GOAL 3.
With the idea that KPIs should differ based on the goal being measured, it’s possible to consider a set of common performance indicators for ecommerce. Here are 32 common ecommerce key performance indicators. Just remember that the performance indicators listed below is in no way exhaustive.
32 Key Performance Indicators
Sales Key Performance Indicators:
- Hourly, daily, weekly, monthly, quarterly, and annual sales
- Average order size (sometimes called average market basket)
- Average margin
- Conversion rate
- Shopping cart abandonment rate
- New customer orders versus returning customer sales
- Cost of goods sold
- Total available market relative to a retailer’s share of market
- Product affinity (which products are purchased together)
- Product relationship (which products are viewed consecutively)
- Inventory levels
- Competitive pricing
Marketing Key Performance Indicators:
- Site traffic
- Unique visitors versus returning visitors
- Time on site
- Page views per visit
- Traffic source
- Day part monitoring (when site visitors come)
- Newsletter subscribers
- Texting subscribers
- Chat sessions initiated
- Facebook, Twitter, or Pinterest followers or fans
- Pay-per-click traffic volume
- Blog traffic
- Number and quality of product reviews
- Brand or display advertising click-through rates
- Affiliate performance rates
Customer Service Key Performance Indicators:
- Customer service email count
- Customer service phone call count
- Customer service chat count
- Average resolution time
- Concern classification
Once you have set goals and selected KPIs, monitoring those indicators should become an everyday exercise. And most importantly: Performance should inform business decisions, and you should use KPIs to drive actions.
3. Know Your Shipping Strategy
Your shipping strategy is an integral part of your ecommerce business. Shipping profitably can be difficult and there’s lots to learn, so you’ll want to prepare carefully for it.
There are several important factors to consider including:
- Packaging Options and Materials
- Which Shipping Carriers to Use
- Shipping Time and Costs
2. Finalize Your Launch Promotion And Strategy
Finally, as you’re preparing to launch, you’ll want to consider the launch itself. How do you plan on launching your new business? Will you launch with a promotion like 20% off everything, offer free shipping?
What communication channels will you use to tell you audiences about your launch?
The goods news is that because you’ve been building an email list and an audience on social media, you have an excited audience to share your news with. You may also want to consider reaching out to relevant publications to have your new store featured for launch.
Now that you’ve completed this 8-point launch plan, it’s time to launch your online store to an excited and expecting audience. If you’ve done everything on this list, you should have a healthy following on social media and an email list of people ready to line up and purchase from your new store.
Don’t forget, building a business is hard work and a long road but hopefully with this guide you’ll be able to set the right tone for your business from the start.
Now that you’ve launched, the hard work begins. I am writing 50 point guide to getting your first sale which is a great start point and overview of a variety of marketing tactics that will help you in your first months. I am covering it in separate topic in this #beyondeCommerce series.
Most people grossly underestimate how much marketing is required to build a viable eCommerce business. Especially in the early days, it takes a LOT of effort to get your business on the map and noticed. For the first six months of any new eCommerce site, I’d recommend the following time priorities:
- Month 1: Launch a basic site
- Month 2: Improve your site
- Months 3 – 6: Market like your business depends on it … because it does!
That’s 67% of your time spent exclusively on marketing! Not A/B testing, business streamlining or crafting a strategic vision. Not improving your site design or logo. Fanatical marketing. The majority of eCommerce sites fail because they underestimate how crucial early stage marketing efforts are and don’t gain enough traction. Don’t let that be you.
You may be thinking, “Chill out with all this marketing hype! I’ll just run some advertisements.” It’s true that advertising is a great way to kick-start your eCommerce business in the beginning, when no one knows about you. And you can instantly drive traffic to your site to learn about your market by interacting with customers. But advertising, especially pay-per-click models like AdWords, is usually a poor long-term strategy for generating traffic.
The most effective advertising methods, like PPC Google ads, are expensive and will severely eat into (if not eliminate) your profits. Pursuing SEO and other organic marketing efforts will provide a much higher return on your investment, more sustainable traffic and ultimately significantly higher profits.
Building your own ecommerce business is no easy task. From choosing a product, evaluating viability and sourcing, to building, launching and growing sales. There’s a lot of puzzle pieces to put together. However, following this resource list roundup should provide you with a clear roadmap to help you build a profitable ecommerce business.
Wish you all the success with your online store.