Have you been feeling unfulfilled with your day job? Does the idea of creative entrepreneurship sound appealing to you? Do you have an interest or a hobby that you'd like to turn into a paying activity? Are you contemplating exploring eCommerce for additional revenue generation?
The eCommerce landscape looks promising, indeed—in the US, total sales from online stores reached $209.5 billion in the third quarter of 2020.
Most people turn to eCommerce as the perks are attractive, and the risk is relatively low compared to a brick-and-mortar business. eCommerce, like any other entrepreneurial venture, allows you to work from your space. You can be your own boss, set your targets, work hours of your choosing, take up as much work as you like, and make all the crucial decisions. Running a venture offers a learning curve like no other! It is definitely worth some serious consideration.
Unsure whether you can replace your income from your full-time job with that of your business? eCommerce doesn't require a huge commitment—financially or time-wise. You can start slow and pursue it on the side while keeping your full-time job. As your revenue increases, you can decide whether you want to treat it as an alternative income stream or make it your primary source of livelihood.
Still undecided? Learning how to build your own eCommerce store in 2021 might help you take the leap!
Where to Start
People looking to start an eCommerce business have three options. To ensure you're off to a great start, it would be best to study the pros and cons of each. Find out what works best for you based on your existing skill-set and what you're willing to learn.
1. Your Website
Aside from establishing your brand and displaying your products, a website can be the perfect low-cost start to your venture. With the right platform and add-ons, it can function as an online store where customers can browse through your products, ask questions, directly place orders, and process payments.
WordPress, for instance, offers plug-ins like WooCommerce and tools that support financial transactions as well as inventory management. Many of these are free or available at minimal fees.
Feeling intimidated? Don't worry. If you'd rather not handle this aspect of setting up an eCommerce business, you can hire the services of a third-party provider of eCommerce solutions, such as POS (point of sale) and customer engagement systems.
2. eCommerce Platform
If you decide that building your website is not something that interests you, try an eCommerce platform instead.
There are two types of websites:
Subscription-based platforms provide an online store's complete structure, including product, order, and inventory management systems. All you need to do is fill in your account information on the backend and add product descriptions and images on the frontend. The two most widely used platforms of this type are Magento and Shopify.
Another alternative is the use of eCommerce software, like BigCommerce, that you can install on a web server.
3. Online Marketplaces
If you've ever ordered from Amazon or eBay, then you already have an idea of how these platforms operate. As a third-party seller, you can list your products on their website by creating an account and uploading the respective product descriptions and images.
Among all online retail marketplaces, Amazon carries a distinct advantage. For a minimal fee, it provides storage, packaging, shipping, processing of returns and replacements, and customer service to sellers through Fulfillment by Amazon (FBA).
Which Business Model to Choose?
There is more than one way to run and manage an online store. Your choice will depend on what you're willing to do and how much time you can spare. Let's explore your options!
If you think physically managing your inventory will be challenging due to a lack of storage space or time to fulfill orders, then dropshipping is the perfect solution for you.
Dropshipping is an order fulfillment business model that allows you to run an online store, accept orders, and process payments. You will then pass on your customers' orders to a third-party supplier who will handle shipping responsibilities. Not managing inventory is the biggest advantage of dropshipping.
However, it's also its most significant downside. Profits are low since most of your income from sales goes to your supplier. To avoid this, you must carefully calculate your expenses and ensure that you do more than break even.
In terms of hours spent, you must factor in customer service and the processing of refunds, returns, and replacements as these are not handled by the supplier.
2. Online Arbitrage
This business model revolves around buying and reselling for profit. The process involves sourcing items at low or bulk prices from an online retailer like Walmart or Target and reselling them at higher rates on a different online marketplace, such as Amazon.
Online arbitrage is a good option when you don't want to shell out significant capital or can't afford the risk of incurring losses while you're learning the ropes. It also saves time on product development, and you can easily switch between niches or categories.
If you choose to sell on marketplaces that don't provide storage and fulfillment services, you must be prepared to stock inventory either in your garage or in a rented warehouse. Be prepared for responsibilities like packing and shipping your products.
Online arbitrage carries some risks as well. You'll need to check the legal restrictions if you plan on Amazon to eBay arbitrage. Issues can also crop up if you source from brands that have authorized resellers or if you accidentally purchase counterfeit products. Insufficient product research or not using available research (product volume and sales history) from marketplaces (like Amazon) could lead you to invest in products that won't earn you much profit.
How to Find Profitable Niche and Products
Once you've selected a platform for your online store and identified the business model that suits your requirements, it's time to look for products to sell.
1. Use Google Trends
To understand buyers' pulse, find the most searched keywords on Google Trends. This website offers a free data explorer tool that you can utilize to search for a particular niche or category. You can further tighten your search by applying filters like dates covered, specific areas (anywhere in the world), and related topics.
2. Follow Trends on Online Marketplaces
Companies like Statista regularly research sales, revenue, traffic, and people's buying behavior. However, their results aren't published in real-time like Google Trends.
Amazon is a better and more accurate resource for analyzing buyers' preferences. Not only is it the largest online marketplace, but it also has a strong global foothold. You can check the Amazon Best Sellers List and study the Amazon Trends Report for greater insight.
Alternatively, you can use niche and product research tools applicable to Amazon, such as the AMZScout Product Database. This user-friendly resource only requires you to open the database, select your criteria, filter the products, and harvest the results of the current most popular products.
Optimize Your Product Pages
Optimization means designing your product pages or listings so that they become a magnet towards which your target market gravitates.
1. Create Clean and Attractive Images
Regardless of the platform you select for your eCommerce store, having professional-looking images on your listings or product pages is necessary.
Studies show that online buyers attach credibility to clear and crisp pictures of a product. Thoughtfully taken clear images will ensure greater sales. You don't need to hire an expert to take photos, just use a phone that can render high-resolution pictures and shoot your products from different angles. Commissioning a graphic designer to produce lifestyle images based on those shots is highly recommended.
2. Include Product Suggestions
Another way to entice potential buyers to click the buy button is to illustrate how to use your product. You can do this either through images or by adding information to the product description.
Carrying related products is also a creative method of cross-promotion. For example, include your dog brush in the images of your dog shampoo. Or mention in the product description that your baking pan can maintain its original condition when your pan-safe spatula is used.
3. Craft a Catchy Call-to-Action
Always end your product description with an invitation to buy your product. Never assume that each visitor to your online store knows how to do it. Direct them to the right button to click. Remember to include any promotional discounts that you might be offering as well. Customers find it hard to resist a discount or sales offer.
4. Feature Product Reviews
Humans are a herd species by nature. That's the reason why trends exist. The more approvals, ratings, and rave reviews your product receives, the more likely it is to be purchased by new customers.
So, make sure to highlight your excellent reviews and downplay the not-so-good ones. If possible, reach out to influencers or individuals respected in your niche. Offer them free products in exchange for their honest feedback.
Promote Your Products
"If you build it, they will come," Kevin Costner famously declared in the film Field of Dreams. Unfortunately, that doesn't happen in eCommerce. You need to tell everyone that your products exist if you are to expect decent sales.
Know your potential customers well by drawing up a profile of their demographics based on the goods you're selling. And where they spend most of their time, there too shall you make your presence felt.
1. Social Media
By far, Facebook ads appear to be the most cost-effective method of promoting on social media. And it's not just because of the platform's reasonable fees. It also allows you to aim your ads at your target audience.
However, this shouldn't stop you from marketing your products on Twitter, Pinterest, and Instagram, especially if your buyers are known to be actively engaged there. Just make sure that all your social media ads include a button that redirects them to your online store.
2. Search Engines
Explore Google and YouTube ads. Even retail giants advertise on these search engines, which only shows they are a highly effective avenue to promote your products.
3. On Your Platform
Wherever your online store is built, make sure you are visible there, too. Amazon ads are especially worthy of your budget because competition on this platform is stiff.
Even though online shopping has been around for over a decade, the year 2020 saw a meteoric rise in eCommerce as people had no choice but to buy both essentials and non-essentials on the internet.
Just the same, eCommerce is expected to stay and continue on an upward trend of profitability, pandemic or not. If you've been considering eCommerce for a while, there is no better time to join than now, considering the shift in purchase patterns and preferences.
- AMZScout team