How to create an e-commerce business plan
During the coronavirus pandemic, the value of e-commerce became abundantly clear. Consumers couldn’t visit physical stores to get what they needed, so they started poking around the internet to find it. Currently, 65% of people in the EU aged 16-74 have shopped online in the past year.
But even if COVID-19 made the e-commerce trend more visible, it is a growing sector in its own right. The e-commerce market has grown by almost 95 billion euros over the past two years, and is expected to continue growing steadily. By 2023, e-commerce is expected to account for 23% of global retail sales.
The biggest growth in e-commerce has been in the UK and Germany. Almost 9 out of 10 people in the UK make purchases online, and Germany is not far behind. Southern European countries like Italy and Spain are expected to reach about 40 million e-commerce customers each by 2024.
The number of users and revenue generated are not the only reasons e-commerce is an attractive sector to enter. Online businesses are much cheaper than brick-and-mortar businesses to open and maintain. All you need is three things:
Your computer
A domain name, which is available for as little as £10
A website builder or someone to design a website for you (depending which path you decide is more appropriate for your business)
Also, there aren’t maintenance costs the way there are for a physical business. In a physical location, you need to pay the rent, make sure the lights stay on, and fix the plumbing when it breaks. The most you’ll need to do to fix an online store is debug here and there.
When you run an online business, you have no business hours. There’s no such thing as closing time for a website, which means you can sell to customers 24 hours of the day. And you can sell from anywhere, since all customers need to access your store is an internet connection.
Doing business online is a growing trend with lots of benefits that are unique to the model. We’ve outlined why you should go online – now take a look at the steps needed to start your business.
Find your niche
Your niche means the products you’ll offer and the audience you target. Figuring out who you’re targeting means answering a few critical questions:
What problems do your potential customers face and how will your products address them?
How much are customers willing to pay for your solution?
Does your solution have a unique spin unavailable elsewhere?
The way to answer all these questions is by doing market research. Market research means looking up demographic information like what age your customers are, their income, levels of education, where they are located, browsing and social media habits, and reading customer reviews to find out what they value.
You can easily find data on customers using platforms like Facebook’s Business Manager, which let you narrow down your audience by giving you options for targeting specific demographics like education level, age, race, location and many others and combinations thereof. You can also scout out which pages and brands your audience likes to get an idea of their preferences.
When figuring out how to market your product to customers, pay attention to popular keywords. You want to look up every possible term and combination of terms associated with your product, from the general to the very specific, so you can see what returns the highest volume of results, as well as what produces results most relevant to what was searched.
An easy way to do this is with keyword search tools like Google Trends or Google Keyword Planner, both of which are free.
You should do market research on your competition just as you do your audience. You want to find out:
Who are the other businesses in your niche?
How much are they charging for similar products?
What are the strengths and weaknesses of their products?
Which problems are competitors trying to solve for their customers?
What demographics are they serving?
Understanding how your competition does things will allow you to differentiate yourself and come up with a more persuasive argument as to why customers should choose you over them. And looking at competitors can help you figure out logistical things like how much you will charge for your products, how wide a range of products you’ll offer, and if it makes sense to offer subscriptions to your products.
Make it official
Just because your business is online, doesn’t mean anyone can make a website and call it a business. There are rules, regulations, and business licences that potential entrepreneurs need to follow and obtain just as with physical businesses.
The EU’s general regulations for e-commerce businesses can be found here, although depending on which country you‘re in, you’ll have other criteria to adhere to.
To obtain a business licence in general, even as a sole trader, the EU has some general recommendations and standard practices that it encourages all member states to follow. In addition, it collects all the information about which authority to contact per country for help setting up your business, so you don’t have to hunt down all the forms yourself.
The EU even points business owners towards potential areas for funding. Several EU funds exist to help entrepreneurs and startup businesses get funding, and several sites exist where you can easily connect with potential investors, both domestic and international.
Build your online store
Now that you know what you’re selling and who you’re selling it to – and launching your business is legal – it’s time to build your store. There are a few roads you could take to accomplish this. You could:
Use an e-commerce platform, of which there are hundreds available
Hire a developer to build the website for you
Build the site yourself
There are different reasons all of these options might be right for you. Building your online store yourself would be the ideal solution in terms of affording yourself absolute freedom to make it look exactly the way you want, from the colour scheme, to the font choice, to the product layout. But, of course, then you have to know web design and if you don’t, the time investment required just to make one website probably isn’t worth it.
A second option is to hire a developer. This way you can communicate your vision as clearly as possible and get everything you imagined for the website without having to know any web design yourself. The downside is that every developer codes differently, and if there is a problem with the website down the line, you can’t count on every developer to find the solution.
The final option, and the option most people pick, is to go with an e-commerce platform. These platforms are easy to use, intuitive, and come with enough features and options to ensure you’re always in control.
Several of the most popular e-commerce platforms are available either for free or for a relatively affordable subscription.
However you go about it, every online store should have a few basic things:
Accessibility: Visitors don’t want to work too hard to find what they’re looking for when they come to your site. A plain white background and black font works best for this, or nothing weird like cursive script. A linear layout also helps customers scroll through your store naturally instead of having to constantly move from side to side to see little bits at a time
Intuitiveness: It should be simple and quick for customers to find your products, make their selection, check out, or find information like your contact page
Products: It should go without saying that the focus of your online store is products or services. Give detailed information to your customers about pricing, shipping methods and the uses and merits of your products. Your product descriptions should speak to customer concerns and clarify how your products will solve their issues.
Once your store is live, check that it’s working the way it should. Pages should display properly on every platform, buttons should all redirect to the proper locations, and the store should have cross-browser support.
Spread the word
There’s no point having an online store that no one knows about. Remember all those customers you did market research on? It’s time to tell them you’re here. First you should tell all your current customers, if you have any, that you’re online now.
If you go on social media, you can find new customers by checking what people follow and targeting advertisements toward them. Both Facebook and Instagram let you make targeted ads based on where your customers spend their time.
You can use the Facebook Business Manager to figure out how best to structure and target your advertising, and Instagram lets you use stories and IG Live to get creative and do product demos, so your customers can see and picture themselves using your products.
Even though Facebook and Instagram are the two biggest platforms for advertising your store, it’s a good idea to spread out advertising across all the prominent media platforms. Twitter is the other big one as far as social media goes. On Twitter, try to get all the followers you can by following accounts relevant to your business and joining every discussion you can to increase visibility.
Don’t underestimate the power of email marketing. You can build an email list by collecting the email addresses of visitors to your site, using a subscribe button, and then create an email newsletter telling customers about deals, offer discounts, or targeting customers personally. Email marketing is a low-cost, simple way to improve customer retention.
Now that you know the steps to start a successful online store, what’s stopping you? Getting online has never been easier, whether you’re supplementing your physical store or running a business completely from your computer. Get the most out of going online today.
Want to create a free online store with SumUp? Create a profile now to get started.
