Understanding the key principles listed below will help you quickly get up to speed with your ecommerce business. Understanding ecommerce challenges and how to fix them is a solid foundation to building your web store. Ecommerce can be complex with may moving parts, read on to gain an advantage to your competitors.
Understand your steps to long-term sustainable growth
Choosing your niche
There’s a lot to be said for sticking with what you know. Understanding the products you sell, the customers that buy them and how to marketing them will save a lot of time.
Other considerations
- Is your product range ultra niche or mass market – competing on mass market products against larger retailers is no easy task, don’t be drawn in by the latest trends if the market is already saturated. However, if you can spot a rising trend and get in early then ride the wave. Having a foothold in a rising market is a great place to be.
- Review other retailers in the sector and see what they stock and service they offer
- Consider what your average order value (AOV) will be? Are your chosen products low value but high turnover, or high value but less frequent. Understanding these key points will help drive your success.
Product Selection
Reviewing and approaching brands, selecting products you think will sell well is the foundation of ecommerce. This step should not be underestimated – ecommerce is a product business and your business will live or die on product selection. The good news is that a retailer has flexibility in product choice and can pivot easily between brands and product ranges to maximise sales. Take your time to understand your market and the products you intend to sell.
Your value proposition
Understanding the value you can bring to a customer is often overlooked but where savvy ecommerce business differentiate themselves from the competition. Even when focussing on a specific niche you are likely to be selling similar products to similar retailers in similar ways, this is what makes ecommerce ultra-competitive but there lies your opportunity to find you unique value proposition.
Sales and marketing
Nothing happens without sales! Find the sales and marketing mix that fuel revenue, if you’re new to retail then look at competitors and mirror what they are doing until you gather traction. Beware, don’t try to do everything at once when starting out – do some market research, find a channel that your intended customer base buy your products and work it until you have some momentum. Then and only then pivot onto other channels. It’s widely know that ppc product listing ads are the quickest to get sales going. Start small and build it up as you learn what works for your business.
Margin Analysis
Understanding the margin on products is vital to your success! You need to understand product margins from 2 perspectives – some products will have tight margins of 20 to 30%, others can have profit margins of 40 to 70%. But here’s what can be overlooked – what is the actual profit amount regardless of percentage. Selling 1000 items at £10 with 70% margin is nothing like selling 20 items at £2000 with 30% margin. The profit figure is £7,000 versus £12,000.
Lower value consumable items tend to be easier to sell and can be a great starting point for any business to build up sales revenue. But selling lots of low value items in volume can be a hard way to earn your money. Contrast this scenario with higher ticket items that will be a more considered purchase, these will require competitive pricing. But selling less items for lower margins can be easier in the long run.,
Strategy
Take time to review your chosen market and seek out opportunities to better your competition.
Strategy ideas
- If your competitors stock a limited selection in a specific product group – then offer more variety and shout about it
- Look at reviews of your competitors – if there’s any regular grips then position your brand to fix them
- Sales channels can be competitive – particularly Google product listing ads so trying platforms such as Bing may be an option to build your business away from ultra competitive marketplaces.
- Price – large established retailers will guard there margins, particularly if they have a bloated overhead costs
- In ecommerce you only need 2 things to happen – traffic and conversions! If you have good traffic but low sales volume, find out why and improve your conversion rates. Alternatively, if you convert your low traffic levels the find new way to increase your traffic (your digital footfall)
Build trust
First impressions are everything right – your website must clearly display links to customer reviews, delivery times and returns procedures ON EVERY PAGE! There is an art in having this information freely available to you customers without overloading the page with text.
Customer reviews can be a chicken and egg situation but treat the customers well and secure as many feedback comments as possible. Look at popular review engines such as Review.io or Trustpilot
Shopping experience
Make your best effort to smooth out your shopping experience for the customer. Most ecommerce platforms now have this out the box but you should regularly place test orders on your own site to checkout various customer journeys and troubleshoot any bottlenecks. Try multiple journeys such as:
- Guest checkout
- Make an account a checkout as a logged in user
- Purchase single items and multiple items
- Test discount codes
- Use e-vouchers
- Use the mini-cart or bypass the mini-cart to the checkout
- Test your site on different devices and or browsers
The above should give a good overview of each path to the checkout
Maximise your conversions
Understand what makes your customers tick – usually a website with many high definition images and detailed products descriptions will attract customers time and time again. Price is a defining factor and should be monitored closely – if you have a large inventory then investing in price monitoring software will give you accessible price data across your industry on like for like products. Look at Prisync!
Keep customers coming back
Acquiring customers is costly and once you convert them once doesn’t necessarily mean they’ll shop with you again. However, keeping in touch with them by email can be a great way to encourage repeat sales – focus on email sign ups to your mail group and give previous customers offers and reminders regularly to encourage more sales. Gaining customers through the product listing carousels can be the fastest way to attract more sales but at the highest cost – following up with these customers with regular engaging email content should be one of your most profitable channels long term. Our recommendation for an email platform is Klaviyo.
Our ecommerce advisor service can help with your strategy and specific requirements – contact us