With social distancing protocols and shelter-in-place orders due to COVID-19, many brick and mortar stores are closing. As a result, people are relying on e-commerce businesses instead.
More people are now buying online to keep themselves and their loved ones safe. Globally, online sales rose by 71% during the second quarter of 2020. Considering this number, now might be the right time to launch your own online business. But you might not be the only one thinking of doing that. Competition is high in the e-commerce space.
Before you start an online business, there are a few things you need to iron out first. Let’s look at them one by one.
Determine Your Products/Services
You need to identify the products or services you will offer. You can take advantage of the current situation and sell essential items, like cleaning products and personal protection items.
You can also try selling things for personal entertainment to help people ease their boredom while stuck at home. These items can include board games and gaming gadgets. Fitness gadgets and equipment may also be considered essential, especially now that more people are conscious of their health.
If you don’t want to sell items, you can offer services instead. If you’re into design, you can offer graphic design services like making logos and infographics. You can also offer writing services.
Define Your Target Market
Next, you need to identify and research your target market. You will want to be as specific as you can. This way, you can create marketing and communication strategies tailored to your business.
First, what group of people will be the target of your business? For instance, are you targeting parents, young adults, teens, etc.? What are their characteristics? What are their likes and dislikes?
For example, an eco-friendly e-commerce startup that offers biodegradable everyday products might consider millennials as their target market. Most people in this age group are employed, so they have spending power. This age group also mostly advocates for sustainable living and want to make environmentally conscious purchase decisions. This interest aligns with the products of this startup.
Get to Know Your Competitors
As mentioned earlier, there is a lot of competition in the e-commerce space since more people are starting online businesses. Some business owners have also migrated their physical stores to online stores. So you need to make sure to research your competitors.
Find out which businesses will become your rivals when you enter the e-commerce industry. What are the products or services offered by these companies? How similar are these products/services to yours? What marketing strategies seem to work well for them? What are their strengths and weaknesses?
Analyzing your competitors will help you plan your business more effectively. For instance, if you see that your competitor is not offering a product that your target market needs and wants, you can prioritize that product and include it in your first launch. This process can also help you calibrate your pricing to ensure that you’re not too expensive for your target market.
Determine Which E-Commerce Platform Is Right for You
You must also consider where you will house your online business. There are many platforms from which you can choose. The most popular ones are Amazon, eBay, and Shopify.
The first two are online marketplace giants with an established user base. For example, in 2019, Amazon had 150.6 million active mobile users. However, the downside is that there are so many product listings in them, making competition even higher.
Shopify, on the other hand, is an e-commerce platform that does have several users but significantly lesser than Amazon and eBay users. But the good thing about using Shopify is that you can build your own online store. You can customize its user interface, rather than just putting product listings in an online marketplace.
Whether a business is only at its very beginning or has been operating for a long time, it needs to implement risk identification and management to ensure smooth operations. Corporate business and small and medium enterprises use business risk assessment software, and new online businesses can do the same.
Some risks that might occur in your online business include data errors, hacking, and credit card fraud. You might also encounter fraudulent buyers. You must identify possible risks so that you can prepare for them early on or prevent them from happening.
If you’re starting an online business, make sure that you clearly define your products or services and your target market, research about your competitors, and identify business risks. These small steps will help you launch your business successfully, even during the pandemic.