Did you know that over 1.8 billion global digital buyers have bought something online? In 2019 eCommerce sales made up 14.1% of ALL retail sales, and it is still growing. Selling products or services online represents a tremendous opportunity for businesses of any size. It is a fantastic way to increase sales for local or regional companies by going outside of their regular market. It is also a powerful way to boost your brand and build new markets. Many companies and entrepreneurs alike wonder what the secret formula for online success is. Many want to know if there is a “formula” for online success, something that can be replicated again and again by different industries.
Who Is Your Target Market?
The most basic question you need to start with before engaging in eCommerce is, who is your target market and do, they usually buy products like yours online? Way back in the dark ages before the Internet reaching specific target markets wasn’t possible because there was no way to advertise to them and aggregate them together into a buying force. Today with PPC, social media, online communities, and search, we can easily reach profitable markets that were simply impossible before. For every market you are thinking of selling to, you should have a customer avatar worked up for them.
Also, don’t forget logical extensions of your product to new markets with no real changes to the product itself, but instead merely reaching out to them. For example, I have a client that sells a plastic ramp system that was originally designed for skateboard enthusiasts. With some simple research, we discovered these same ramps would be ideal for people that love RC Cars, snowboarding, scooters, and BMX bikes. Using a variety of content marketing and social media, we worked up customer avatars for each of these buying groups and ways to reach them.
The 4 Ps of Marketing in eCommerce
Selling online should be approached as any marketing project would. Let’s start with the 4 “Ps” of marketing, yes, I know this seems very 1980s, but stay with me here.
You must have a product that will sell online. The ideal product is one that is both unique and difficult to copy by a competitor. If you have a product that doesn’t contain both of these elements, then you could face some real stiff competition online. The reason why is because if your product isn’t unique, then you must compete on other factors like price, quality, etc. which is certainly possible, but more complicated. Uniqueness is the best way to go for many small businesses to start. Software or a source of information (sold as an ebook, audio download, online course, or video) that only you can provide would be examples of good products.
For example, I have a client that sells decorative garden and interior art in the form of plaques and small sculptures. The designs are unique and designed by my client. These sell well online because they are difficult to get anywhere else. I have another client that has a unique piece of door hardware that doesn’t exist anywhere else in the market and also a good candidate for online sales due to the unique nature of the product.
The product should also have a big enough market, one that shops online, which makes selling it online profitable. The exciting thing about the Internet is that it has aggregated and created markets that, before the Internet, would have been very difficult or expensive to reach. Today, small and even micro-markets can be reached with PPC (Pay per Click) advertising. Finally, the product should be a product that is easy and cost-effective to ship.
Selling online broadens your potential target market, but it also increases the number of competitors you have as well. If your price point is too high, your competitor is only a click away. Can you sell your product for a price that is competitive? What makes your product or service unique what is your USP (Unique Selling Proposition)? Having a unique product or a combination of other factors that are unique to your business or product will help you from competing strictly on price.
While the Internet has made it possible to aggregate and reach markets that might not have otherwise been profitable in the past, it also reduces many products to a commodity where the lowest price wins. With services like Froogle (Google Shopping) and other natural search methods, finding the lowest price for anything is far too easy for customers.
Therefore, to sell successfully online, you either need a price advantage, or you can sell it in a way either through your supply chain or because of uniqueness that your competitors can’t match.
How is your product delivered to your target market? Can they download it like software, or is it online like a Saas (software as a service) program, do you have to ship it to them physically? If you must send it to them, can the product be quickly packaged and shipped cost-effectively? Ideally, the product is one that can be sold and downloaded with no human intervention. The next best case would be a product that is drop shipped from your supplier directly to the customer, and you are merely responsible for the marketing component of the transaction.
Don’t overlook the shipping component of your product. I have a client that makes large plastic ramps for a variety of markets. The product isn’t heavy, but it is large and costs a fortune to ship. Shipping costs are only increasing, and larger companies like Amazon, Wal-Mart, etc. can realize more significant economies of scale on shipping that is difficult for small and medium-sized companies to compete effectively.
Once the first three “P’s” are covered, this is the key to determining online success. You have two primary issues you need to include in promotion. First, how do you get people into your online store? The primary traffic used by many businesses is PPC (Pay per Click) advertising. You can and should also utilize SEO (search engine optimization), email marketing, affiliate programs, or social media. Social media marketing such as Facebook, Twitter, Instagram, etc. can also be advertising platforms. Finally, online community building is a time-consuming, but very effective way to build your audience or tribe.
No matter what methods you choose you need to understand them and have the correct marketing mix as well as a plan and budget to be effective. Also, don’t forget how you are branding yourself as you select and implement online promotion techniques.
Branding is often given very little consideration to eCommerce sites, but it is a critical component to long term success. Powerful brands bring customers back for repeat business, bring referrals from satisfied customers, and help you defend higher prices and hence better profits. Online branding is a broad topic with a lot of components and outside the scope of this article, but one that should carefully be planned out in advance and reinforced with your advertising and marketing efforts.
Running an eCommerce Business
After you have answered the basic marketing questions of using online sales in your business, then you must turn your attention to the online store itself. Building a useful store requires intuitive navigation on the site, compelling sales copy, proper color, and an easy check out process.
Building an eCommerce site is relatively easy, but running an eCommerce business is a different animal altogether. You must consider logistics such as order processing, inventory management, shipping logistics, and other components of any business.
In addition, you need to answer questions about privacy, returns, loyalty programs, and customer service. In many cases, these processes and procedures can be worked into your existing operations with some training and new management structures put into place, but don’t make that assumption before you have started planning it out.
For example, if you have a warehouse staff that fulfills existing orders to a dealer network, for example, don’t simply assume they can add single order fulfillment to their daily tasks without additional infrastructure. The same goes for order fulfillment and customer service.
Doing the right planning and work in each of these areas will be the keys to building a successful online business. If you decide selling online is the right choice for your business, then begin by developing a marketing plan and working with an experienced e-Business consultant.
In future articles, we will break out individual components of eCommerce that we could only mention in this article.