Anyone who gets into ecommerce with the expectation of an easy ride is in for a rude awakening. While it’s true to say that online retail eliminates many of the issues faced by traditional retailers, it’s by no means a walk in the park. Not only this, but there are also a fair few unique challenges ecommerce business owners must anticipate and overcome, in order to succeed.
Not that any of this is to be interpreted as a reason not to go into ecommerce. Get it right and the world of online retail can be enjoyable and lucrative in equal measures. Nevertheless, it’s important to be proactive and mindful of how things really work, rather than simply assuming it’s all a cakewalk.
Knowing Your Niche
As far as golden rules go, perhaps the most important of all is ensuring you’re already something of an authority in your niche. Or if not an authority, at least passionate about whatever it is you do. Far too many online business owners establish companies on the back of ideas and interests that aren’t their own. They see a certain product or product category as a safe bet and attempt to sell it, despite the fact that they have no interest in or knowledge about it.
Passion and expertise are of equal importance when setting up an ecommerce enterprise of any type. Worldwide, the strength and value of ecommerce in general are accelerating at their fastest ever pace. But this doesn’t mean you’ll succeed by jumping on any bandwagon you see fit. If your niche isn’t one of genuine interest to you, it’s a lost cause.
Back with the subject of challenges, there are certain obstacles it’s impossible to avoid on the road to success. As such, they need to be acknowledged, accepted and addressed strategically. The kinds of problems you can expect to face will of course be influenced significantly by the ecommerce area in which you decide to operate.
Nevertheless, there are certain common challenges every ecommerce business must overcome, which include the following 10 examples:
1. Finding the right products to sell
The interesting thing about ecommerce is how the most obvious products to sell aren’t always the right products to sell. Even when demand is enormous on a global basis, this doesn’t necessarily mean it’s the right product or category for you. With the likes of Amazon and Aliexpress selling pretty much everything to everyone these days, it’s never been trickier to choose the perfect products.
As previously mentioned, your decision should be based primarily on your own interests and areas of specialism. Selecting the perfect products means gauging demand, considering current supply and determining what you could do to provide something no one else is offering. A tricky balancing act to pull off, but one that will nonetheless represent the core of your entire business.
2. Attracting viable customers
Today’s consumer is infinitely more thoughtful when it comes to the brands and retailers they are willing to do business with. Particularly when it comes to Millennial audiences, for whom low prices and immediate availability are no longer the onlyissues of relevance. Attracting viable customers means first identifying your company’s perfect customer.
It’s a case of gradually building a picture of precisely the type of customer you intend to attract. After which, you need to research where they’re located, their browsing and shopping habits, what turns them on and what sends them in the opposite direction.
3. Generating useful traffic
The keyword here being ‘useful’, as driving all the random traffic in the world to your ecommerce portal isn’t likely to deliver a decent ROI. Useful traffic refers to the kind of traffic that’s a qualified and likely to convert. It’s better to attract just 100 visitors daily with a conversion rate of 10%, than 10,000 visitors with a conversion rate of just 0.1%.
Generating useful traffic means making the necessary investment in things like SEO, PPC, email, social, display ads, retargeting and so on. If you’re not capable of meeting this particular challenge single-handedly, you may need to outsource to an experienced digital marketing team.
4. Building a social presence
It’s no secret that success on social media typically translates to success in most other areas of business. Among younger demographics in particular, brands are considered largely null and void if they don’t maintain a strong and consistent social presence. Today’s consumer likes to interact with retailers and businesses in general via a number of social platforms – your ecommerce business needs to be prepped and ready to do so.
The key issue being that building and maintaining a strong social presence can be something of a full-time job in its own right. Hence, the importance of knowing when and where to draw the line, hiring help to tackle anything you can’t cope with alone.
5. Isolating your unique selling points
It’s impossible to launch a successful ecommerce business without first isolating its unique selling points. This is the key factor that will differentiate this particular business from all other ecommerce enterprises currently up and running. In the absence of a viable USP, you simply end up with another generic online seller with nothing of interest to offer.
Whatever your USPs happen to be, you need to identify and promote them at the earliest possible stage. You could be the cheapest in your field, the most eco-conscious, the most generous in terms of charitable contributions – whatever it takes to add value to your brand. It’s then your USPs that should be the primary focus point of your marketing campaigns – not your products and services.
6. Converting visitors into paying customers
Transforming web traffic into converting customers is never easy. Though it’s difficult to come by an accurate number, it’s estimated that the average conversion rate of ecommerce businesses worldwide is somewhere around the 2% mark. The other 98% slipping through your fingers.
The thing is, what makes an acceptable conversion rate for your business can be determined by you and you alone. Consider how much traffic you are pulling in, the average spend on each paying customer and how many conversions you need to keep your business afloat.
7. Retaining customers
There’s no point preaching any further about the importance of value of retaining customers. Nevertheless, it represents one of the biggest challenges every ecommerce business owner needs to take seriously. Successfully retaining customers long-term represents no less than the holy grail for today’s online seller. As such, pretty much anything you can do to keep customers coming back for more is something you should absolutely be doing…and doing plenty of.
8. Surviving the first year
It’s no secret that the vast majority of small businesses fail within their first two years. What’s more, it’s almost unheard of for the average business to turn a profit within the first 12 months. Hence, actually surviving in the first year represents one of the biggest challenges every ecommerce business owner must overcome.
This is precisely why the importance of forward planning cannot be overstated. Make things up as you go along and you are going to fail – it really is as simple as that. To stand any chance of getting by, you need a comprehensive and detailed business plan, accurate financial projections and the available funds to keep your business going before it begins turning a profit.
9. Choosing the right technology
Email software, inventory management systems, shopping cart solutions, payment processing systems – there’s a fair amount of technology involved in running a successful ecommerce business. The problem being that not all software suites and general ecommerce technology on the market are capable of delivering the same high-quality performance.
Most ecommerce business owner start out with absolutely no prior knowledge of or experience with ecommerce technology. It’s therefore a case of starting from ground level, carrying out the necessary research and consulting with the experts where necessary
10. Hiring the right help
Last but not least, you’ll probably realise from an early stage that you simply cannot make it happen on your own. You can try, but you’ll simply struggle and hold your business back. Every successful ecommerce enterprise is built on a strong foundation of dynamic experience and expertise. You don’t necessarily have to hire full-time employees, but hiring help is something you are going to have to do.
For example, an experienced team of web developers to handle your website. A digital marketing or SEO expert to promote your business. Maybe even an accountant to take care of your books. These are all the kinds of responsibilities that can and will take your attention away from building and operating a successful business. They may constitute expenses in their own right, but are nonetheless invaluable and inevitable investments in the success of your ecommerce brand. Attempting to go it alone is almost always a one-way ticket to catastrophe.