How can I start an e-commerce business in 2022?
The global e-commerce market is expected to reach $5.1 trillion in 2026, and it is surprising that e-commerce product business is one of the fastest growing sectors among small and medium-sized enterprises. Not. If you want to start an e-commerce business in 2024, here are seven steps to help you get started.
customer survey
Before you do anything else, think about what you want to sell and who you want to sell it to. Customer research is very important for business success.
Many people start a product business because they want to create or curate products they love. Being passionate about what you sell is absolutely important, but so is having a market for your product.
Tell as many people as possible about your idea. If you don't know where to start collecting feedback, check out The Mom Test book. Most people don't spend enough time on this step, but it's invaluable in avoiding costly mistakes.
The advantage of e-commerce is the ability to reach a wide geographical range of customers, so keep that in mind when doing your research. Why not reach out to your ideal customers online and talk to as many of them as possible, no matter where they are?
Determine the product range
Decide what you will actually offer your customers
With your research from your ideal customers, you can start compiling the products you actually want to sell. Don't get caught up in the idea that you have to start everything. Having a small range, or one item, is a great way to start and will help you progress. That's the advantage of e-commerce. There is no shop floor to fill. Don't be afraid to keep it highly edited.
Shipping and packaging
Identify how products will be packaged and shipped
Not the most exciting topic, but important nonetheless. Before you start shipping your products to your customers, you should consider how you will package and ship them.
Make sure the packaging is sturdy and suitable for its purpose. Nothing makes a customer more nervous than a damaged item. Once the product is in the package, give it a shake. If you hear movement, ask yourself if you need to add anything to protect the contents. As a test run, mail the item to yourself and see how it looks when it arrives.
Please note that many customers appreciate recyclable and plastic-free packaging. Be aware of the cost of packaging materials as well as shipping costs. Resist the temptation of branded packaging, which can significantly increase the price over standard options. If you want to create a bespoke look, consider other elements such as stickers to personalize your packaging at low cost.
check price
See how much you earn on every product
Once you understand the products you want to sell and your packaging and shipping options, you can calculate your profit margin. It is very important to calculate the profit margin of every product you plan to sell.
Profit margin is the product price less taxes, less the cost of the product. It is usually expressed as a percentage of the sales price minus taxes. In other words, if a $10 item costs $3, you earn $7 in profit, or a 70% profit margin.
Be sure to include all associated costs, from the cost of the item itself to packaging costs and even the cost of shipping the item. If you create the item yourself, remember to take your time.
In an ideal world, you would have a 60-70% profit margin, especially if you plan to sell the product to other retailers at a later date. However, many companies, especially those that sell products purchased from resellers or other companies, have profit margins of about 50% or even lower.
It is possible to grow your business with a profit margin below 50%, but it will definitely make things harder, so keep an eye on this profit margin and keep looking for ways to increase it. All other costs in your business must be paid for by the profits you make from each sale, so keeping it at a reasonable level must be a priority.
Many costs are rising throughout the supply chain, from energy to packaging to raw materials and other factors, so profit margins need to be reviewed regularly.
stay lean
As with product selection, when starting a business you want to keep inventory levels and other expenses as low as possible. Unless you have a huge budget to start your business, you'll be in a much better position if you don't waste your initial costs and inventory levels as you start learning about what your customers really want and your business as a business. You will be able to stand on it. .
Choose route to market
Choose how you will actually sell your products – your own website or a marketplace?
In many ways, all you need to run an e-commerce business is a product, access to the internet, and a payment method.Some Lean Startups start with an Instagram account using PayPal
PYPL
You can choose to start with a marketplace like Etsy, Amazon, or eBay, but most businesses will soon need their own website. When it comes to e-commerce, it's hard to beat Shopify for a simple do-it-yourself solution to creating a website that sells.
Decide on your marketing strategy
How do you reach your ideal customer?
Once you've decided what you want to sell and how you'll sell it, it's time to figure out how to attract people to your business. Don't have a budget? No problem. There are many ways to promote your business for free.
First, focus on one primary marketing channel. Where does your ideal customer spend their time online? If you do your research, you should be able to answer that question easily. We'll start with the most popular platforms and keep showing them. Think about what kind of information or posts would be most interesting to them and start experimenting with different ways of communicating. There's an element of trial and error, especially at first, to find the type of message that resonates with your ideal audience.
It may feel overwhelming at first, but start by focusing on what your customers want, identifying the products that will make them happy, and making sure the numbers make sense. please. Make 2024 the year you bring your e-commerce business ideas to life.
