10 Essential Tips for Starting an Online Store
Opening an online store is a hugely exciting, if totally daunting experience. While the ‘get rich quick’ bloggers out there might tell you there’s easy money to be made selling online the truth is the days of a fast buck from an online store are well and truly over. Yes there’s still money to be made but in 2012 its going to take time and graft to break into any market. In this post I share my top 10 tips for starting an ecommerce store, learned the hard way through a failed one of my own (and a successful one) as well as consulting on the design and build of plenty of others.
1. Researching the market
The first tip is probably the most important but also the one which a lot of new store owners skip in their excitement at getting started selling online. You need to properly research the product area you’re looking to go into and understand how big and how competitive the market is. Think about where you want to be financially in 6 months, 1 year, 3 years, 5 years and decide on whether its realistic to achieve the level of growth required to hit those goals.
2. Getting into a niche
For 99% of new market entrants into the ecommerce arena it won’t be realistic to compete with the big established players like Amazon, Ebay and highstreet stores. But that doesn’t mean its impossible to make inroads into their market share. When you’re starting up the more niche you can be with your product selection the greater your chances of owning that product online. At a niche level you have the opportunity to become the go-to people, the specialists who can be relied on to provide advice as well as great prices.
Don’t be put off by selling a product that Amazon also stock, but think about how you can add value and gain brand loyalty from customers of the product. If you’re selling a product which is highly price driven be aware this will be more difficult.
3. Build a great brand (and secure relevant domain names)
When you’re planning your store one of the first things you’ll need to do is decide on your brand name and, off the back of this brand, you’ll need to register appropriate domain names and think about your brand identity with things like logo design.
If you’ve properly identified your niche your brand name may come quite naturally, but if you’re selling a wide range of products or products in multiple categories you may need to be a bit more creative and abstract in your thinking – a brand like Amazon would be a good example of this. The best type of brand name for a new and niche online store will both give a strong indication of what you sell but also be abstract enough to be memorable. Avoid building a brand which is going to be overly restrictive when it comes to your product range. Say you’re setting up a shop selling yellow high heel shoes. You might think it would make sense to take a brand like theyellowhighheelshoeshop.com, but what if it 6 months time you decide that actually red high heel shoes or Yellow wellington boots are more profitable? Don’t choose a brand which you’ll need to change everytime you widen your product range.
As your business is going to be online your domain name is going to become a hugely valuable asset so its worth considering domain availability at the same time as brainstorming brand names.
4. Source Suppliers as Early as Possible
One of the mistakes I made with my first online store was diving into the design and build of the website without securing reliable supply channels to fulfill orders. The process of sourcing suppliers for the products you want to stock should start as early as possible, this will give you more time to shop around and negotiate the best deals. Although you probably won’t want a full warehouse of products on day one of trading make sure your supplier has the capability of scaling up quickly when the orders do start flying in!
One route to market which is becoming increasingly popular for new entrants to the ecommerce business is to launch your store with dropshipping relationships in place with suppliers. The benefit of dropshipping is you don’t need to hold any physical stock to start trading and because goods are delivered direct to your customers from your supplier you can still promise fast delivery times. Although some stores do make good money out of dropshipping, for most it will be s stepping stone to running a full ecommerce business dealing directly with wholesalers as this is invariably a more profitable way to run an ecommerce business.