Starting a business of your own feels great for sure. But it is also stressful to crunch numbers and worry about your sales, marketing strategy, market conditions, and customer’s LTV. At the bottom of all lies the product. Finding the right e-commerce products to sell can be the key to the success and growth of your company. But the journey doesn’t end here. You must also decide on the target market, set prices, and develop a marketing strategy.
In this post, we’ll discover how to start an online business step by step.
Deciding on a product line
If you’re an offline retailer and decided to pursue an omnichannel strategy or want to turn your business into an online store entirely, you have to conduct a feasibility study. Most likely, the result is a green light.
In the case of an existing company structure, online retailing won’t add much to your costs but will increase your sales revenue drastically. You would still have a lot to learn about selling online, but there are many tools to help out just like Prisync.
But when building an online store from scratch, you must start by deciding your product line.
Let’s say that you have a revolutionary idea that you think will change the game. Consumers may not be ready for it. Maybe the industry is still an infant one in which the conventional products or methods are still in demand. Or perhaps the existing technological infrastructure isn’t compatible with your groundbreaking ideas.
In the opposite case, there might be an abundance of cheaper substitutes for the products you’re planning to sell.
In either case, your sales revenue will remain much under your expectations.
When deciding on the product line, think of a problem that hasn’t been resolved by anyone in the market. You don’t have to come up with niche products, features that will differentiate your products or services from competitors’ (your unique selling proposition) are good enough.
If you can’t, there is another strategy in front of you.
The third reason why customers decide to purchase a product is its price. Offering competitive prices will help you thrive in the online retailing industry. Producing at low costs or buying from suppliers at cheap prices gives you serious leverage in the competitive landscape. In this scenario, your unique selling proposition is low prices and your product line depends on how much a product costs you.
Defining the target market
Knowing who will buy your products or services is critical. Age, gender, purchasing power, education level of your customers will shape your marketing strategy. Define your target market before stepping into the business.
Once you determine your target market, you can learn about their behavioral patterns. For example, you must find out when do they shop, which payment method they prefer most, and what are their expectations from a delivery service. There are various general and product-specific insights like these that you can reach with a simple search on Google.
After a certain point, you can identify the different segments within your target market, and work on marketing strategies for each one.
Pursuing a pricing strategy
Needless to say, you can’t set random prices to your products, or make pricing decisions based solely on your costs. Online retailers have to consider competitor prices before making pricing decisions. In an industry with a chaotic competitive landscape, setting prices high above or much below the industry average will result in a business failure.
Even in the absence of direct competition, meaning, there is no one selling identical products, companies have to monitor the prices of indirect competition.
Suppose you sell chairs with unique designs and trust the quality of your products. For these reasons, you’ve decided to sell them $150 above the market average. Some people will be interested but do you actually want to leave out all the price-sensitive customers? Rather you can lower your gain from the sale of a single product and increase your revenue in general by selling more.
Of course, cheap prices don’t usually work for premium products. Luxury products naturally have expensive price tags. But even when pursuing a pricing strategy for luxury goods, businesses have to monitor how competitors price their products. Setting prices too low will damage the brand image of a luxury brand.
Developing a comprehensive marketing strategy
All of what we’ve talked about are components of a marketing strategy.
Knowing your company’s strengths and weaknesses, the trends in the market, characteristics of competitors’, competition and the target market, and the pricing strategy that suits your business are all crucial in developing a marketing strategy.
But your job doesn’t end here. You’ll advertise on multiple channels, especially on social media. Facebook has a huge advertising audience. Most of the SMBs can’t afford TV ads but social media ads are affordable.
However, paid traffic can increase sales up to a certain level. You need to generate creative content to increase your organic traffic and build a loyal relationship with customers. After creating content, you’ll need a clever plan to distribute it from multiple channels.
Social media presence is another important factor in organic traffic. On average, online stores that have social media presence sell 32% more than stores that don’t.
At the initial phase of building an e-commerce business, there are a lot of important decisions to make. The decisions you’ll make at that point will have a significant impact on your company’s future. That’s why we’ve shared our knowledge on:
- Deciding on a product line that will give you a head start
- Defining the target market and conducting a target market analysis before deciding on a sales strategy
- Pursuing a competitive pricing strategy
- Developing a marketing strategy addressing paid traffic, organic traffic, and social media presence
Hopefully, our insights will be beneficial for your business.