Phil Rothwell of EcomEvolve offers eight practical insights into the essentials of setting up an e-commerce site.
#1 – Look before you leap
Part of your planning has to be learning about how to run an online business. The best way is to read about setting up an e-commerce site online (on sites like The Profit Club) or in books and chat to people who are selling online already – maybe via a forum, or by contacting the owners of sites you like (provided they are not big retailers).
Learn from your own shopping experiences too. What do you like/dislike? Attending a few small business and e-commerce exhibitions will help as well.
#2 – Find your focus
Whatever business you create, there will be competition. To succeed, your proposition needs to be better than theirs in some way. At the beginning, you won’t know the best way to differentiate your business from theirs, so there will be some trial and error.
The important thing is to make differentiation a priority. For example, if your competitors are impersonal and seem distant, offer a more personalised service. If they are corporates, make yours a family business.
The only way you will succeed in the long term is by building bonds with your customers, so they buy from you regularly. These bonds will become the essence of your brand and a brand is what you need to succeed in the long term.
#3 – Get your proposition and pricing right
Why would anyone want to buy from you? What can you offer that’s different to other sites
Beware of competing just on price. Try to add value, instead, and charge more! For example, offer related consumables (like batteries) to increase order value, suggest associated items, offer a gift-wrapping service for a small fee, or free P&P if they spend £X.
The value you offer needs to be tangible. I know a business that sells tools for testing precious metals. They calibrate their products before despatch so they can be used out of the box. Another company sells baseball and softball equipment. They only sell authentic US products and offer concessions for clubs and schools.
#4 – Use the right marketing channels
The online world is highly competitive, so you will need to promote your business. The different ways you can do this are called “channels”.
Pretty much everyone has heard of Facebook, Twitter, Instagram, and TikTok. These social media channels provide a means for businesses and individuals to develop a following.
Search engine marketing is used to describe the different methods of maximising a business’ presence on platforms such as Google, YouTube and Bing. For example, search engine optimisation (SEO) is the process of helping search engines index your website content and elevate your position on the search engine rankings.
Alternatively, you can use systems like Google Ads to shortcut this by paying Google to promote your products and services.
There are many other ways to promote your business online, like email marketing, which I won’t cover here. The challenge is that, depending on who you sell your products to, some marketing channels are more effective than others.
My experience is that Google Ads work very well for established businesses, but poorly for most start-ups. Social media is great if you sell things that look stunning, or your customers use these platforms to communicate with each other.
#5 – Test marketplaces
You should consider selling from a marketplace like Amazon, eBay, Etsy, etc, but do research carefully so you know the pros and cons. Some marketplaces give you speedy access to customers and sales, but you can’t access these customers directly. For example people buy from Amazon, not Amazon sellers. Also, when you promote your products on marketplaces, remember that you are also introducing your customers to your competitors.
#6 – Control your costs
Make sure you keep a tally of your outgoings and income on a spreadsheet or accounts package, and that you understand cash flow and profit and loss. Review these weekly, so you can spot when things are going awry.
#7 – Choose the right platform
Don’t spend lots of your start-up funds on technology; in fact save the majority for attracting visitors and converting them. There are many low-cost cloud e-commerce platforms, such as Shopify and Big Commerce, that cost tens of pounds a month to operate. Other options include open source solutions, such as Woo Commerce.
I would always recommend starting with a cloud platform, because they are easy to use and maintain. Open source solutions, offer more flexibility and enable you to customise any aspect of your store. This adds to the cost and complexity.
When you are starting out, higher cost equals higher risk.
DIY – or not:
If you decide to run your own store, then you need to decide whether to set this up yourself or to use a web designer. Most e-commerce platforms enable you to create a good-looking, fully functional site, quickly and at low cost. One that works well on desktop computers and smartphones. However, you will probably need help from a web designer to add a professional finish and enhanced features that can generate confidence and boost sales.
#8 – Make sure everything works
Make sure the finished site is easy to use for both you and your customers. Ask friends to test it (maybe watch as they do).
Your online store will be able to take orders 24/7 – but only if it is available. Depending on whether the cart is desktop or cloud-based you may need a third party to host your website. Either way, make sure that your store will be reliable. Get a personal recommendation, or ask the supplier for their availability figures.
#9 – Taking payment
You will need to take card payments. Some platforms, such as Shopify, include payment processing, which simplifies setup and reduces costs. Another popular options include Stripe and PayPal. Although originally designed for individuals selling and buying goods on eBay, PayPal now meets the needs of businesses of all sizes and is a standard feature of almost all ecommerce sites.
#10 – Measure everything
There’s is age-old joke that the marketers know that half of their marketing budget is being wasted, just not which half. Although it will always be difficult to calculate your return on investment accurately, you can use system like Google Analytics to track the number of visitors and sales you generate from many online marketing activities. These system are free to use and well worth the investment of implementing them.
E-commerce is constantly evolving
Over the last 20 years, e-commerce has continuously evolved. Most importantly, the driving force for change has come from consumer demand. Before the e-commerce era, we had to buy products from bricks-and-mortar stores. Choice was limited because it was impractical for retailers to hold wide ranges of products. Innovation was limited, because manufacturers struggled to get their products to market.
So it is no surprise that over half of traffic to retail websites is now coming via smartphones and tablets and mobile commerce now accounts for more than half of retail sales. The pandemic accelerated market growth and it is estimated that in 2021 UK retailers transacted £120bn online. In 2019, the figure was £75bn.
The instantaneous nature of online means e-commerce is fundamentally fast-moving, so staying ahead of the curve and, more importantly, ahead of your competition can be tough. Setting up an e-commerce site in 2023 is therefore all about making your business stand out from the crowd.