Starting an E-Commerce Business? Here's What You Need to Know

Starting an E-Commerce Business? Here's What You Need to Know
Photo by Andrea Piacquadio from Pexels

E-commerce is thriving. Even before the pandemic, the industry was growing at an unprecedented rate, and since lockdowns forced the closure of many traditional shops, the sector has exploded. Global sales of online items increased by over 25% in 2020 alone, and it is estimated that 2 billion people bought something digitally in the last year. It is no surprise, therefore, that the e-commerce sector has received a large amount of interest from prospective entrepreneurs. However, the e-retail giants, most notably Amazon, account for such a dominant share of the market, that it is nigh-on impossible to compete with them in a traditional sense. This is because their market share allows them to substantially undercut their competitors. Yet, it is still possible to develop a powerful niche, if you approach it smarty. Here are the main areas you’ll need to know about when starting an e-commerce business.

Choosing Your Product

As much as e-commerce differs from previous retail, the popularity of your company will still likely depend on the quality of the products you are selling. Ample thought should therefore first go into your products. Developing a novel type of product will give you a distinct niche, as you will necessarily be the only business selling it. However, developing such an item can be highly costly, in terms of R&D, testing, and manufacturing expenses. You should therefore be confident that this product is filling an existing gap in the market. Selling a version of an existing product, such as by starting a new fashion brand, is much easier and more cost-effective. But, as alluded to earlier, it is unlikely you will be able to compete on price. You should therefore conduct sufficient research to identify a receptive demographic, or add a notable USP to the product.

Minimise Your Shipping Costs

Logistics constitute an underdiscussed but significant part of e-commerce, as estimates suggest shipping fees account for roughly 10% of an e-retail company’s revenue. In addition, the boom in e-commerce sales has caused customers to anticipate quick and cheap shipping. You should therefore make sure your shipping operations are as cost-effective and well-managed as possible, prior to launching. You can minimise shipping costs by buying as much packaging materials in bulk as possible. If you’ll often be sending packages of a similar weight, you can also pay for pre-paid shipping, which entitles you to a discount of up to 20%. Minimising your delivery costs will also allow you to pass those savings onto your customers. Premium shipping carrier services like Reliable Couriers also offer specialised services, if your goods are particularly sensitive.

If you’re going to need to transport sensitive goods as part of your business, you should also try to use a specialist carrier like Reliable Couriers, who will reduce the risk that your package will be damaged in transit.

Driving Traffic

Your product and shipping operations may both be high-quality, but if you are not effectively marketing your website, it will not matter. From an early stage, you may benefit from establishing a social media presence, and optimising your keywords for SEO. A range of digital marketing options are also now available to easily purchase, that are cheaper and more cost-effective than traditional means. You should also utilise data analytics for your website, to monitor and improve the strengths and weaknesses of your business.