If you’ve been thinking about starting your own online store, you’re not alone. With so many new products on the market that make it easier than ever to open a store without programming knowledge or deep pockets, no wonder more and more people are delving into e-commerce.
Of course, a lot of people still feel like they can’t set up their own store, because they think it’s too difficult or too costly.
But new tools have made it easier than ever, and less expensive than ever, to get started in e-commerce. Here are some facts about e-commerce that might surprise you:
* Retail e-commerce sales will reach $4.5 trillion globally by 2021
* About 40% of worldwide internet users have purchased something online
All this information comes from comes from reputable sources such as Statista and Harvard Business Review, and you can see just how huge e-commerce has become.
If you’ve ever been curious about what it would be like to start your own shop, and whether or not it’s really easy enough for you to do it, keep reading. Below are a few tips for getting started!
Niche selection is one of the most critical elements of setting up a profitable business, whether it’s online or a traditional brick-and-mortar store.
If you think about it, even Sam Walton selected a niche and filled it when he started Walmart all those years ago. He wanted to provide inexpensive merchandise to the average individual. He saw a market and gave them what they wanted. And it worked in a very big way.
But not everyone is going to explode into a multi-billion dollar mega-corporation in just a few decades in a relatively broad market like Walmart.
Most people need to choose a tighter niche, and the tighter, the better.
Selecting a niche is crucial. You need to choose a market that has a large number of people who are interested in the niche, but ideally not that much competition.
Although competition isn’t such a huge factor, because there are ways to set yourself out from the competition, it’s always a good idea to choose a niche with the lowest amount of competition you can find, because it will make your job a bit easier.
Demand is more important. It’s critical to find a niche with a good sized market and plenty of hungry buyers.
What’s even more important is choosing a niche you’re interested in. Unless you are just passionate about business in general, you’re going to get bored and frustrated quickly if you choose a niche that doesn’t interest you.
To avoid burnout, choose a niche that excited you if you can. Almost everyone has a few hobbies and interests that are in a profitable market.
So what makes a profitable market?
In order to be profitable, a niche must have:
This is another reason you want to choose a niche with less competition.
Competition lowers prices, which reduces profitability. The more sellers there are in a market, the lower prices are likely to be, which is a lose-lose proposition for everyone except buyers.
We’ve already talked about the importance of niche selection, and about a few of the basics, but now we’re going to get into the actual process of finding a profitable niche.
The first thing you should do is make a list of your own hobbies, interests, and needs. This list will be the starting point for your research, because if you have an interest in the niche, it will not only make it easier for you to work on your site every day, but it will also make it easier to source the best products and market the site.
Once you have a list of maybe 10-20 possible niches, it’s time to start researching their potential.
There are a few main things you need to find out before you choose a niche for your store:
You can find out the answer to many of these questions at Amazon.com or any other major online retailer.
Simply search Amazon for products in the niche, check their category bestseller ranking to be sure they are getting a decent number of sales, and look at the price ranges. Then search various wholesalers and drop shippers to see if you can source the products cheaply enough to sell at a competitive price.
Note: You do NOT have to have the lowest price! Although low prices DO help sales, you can still sell at higher prices and make great money if you have a really great USP.
A USP is your Unique Selling Point, also known as Unique Selling Proposition.
This is something that sets you apart from your competition, and can be factors such as:
* Low prices
* Free shipping
* Tight specialty niche
* Free bonus products
* Exceptional customer service
But even if you have one or more of these factors, you MUST find products that you can sell at prices that aren’t TOO much above the general market prices.
For a quick idea of prices, check AliExpress.com. They don’t have the widest selection of merchandise (and quality comes into question), but they often sell at or near wholesale prices, so you can get an idea of how much you might expect to pay.
There are dozens of popular e-commerce platforms out there, and it can be tricky to choose between them. With so many out there, which one is the right one?
Well, there are only two major options for most people:
Yes, there are LOTS of other platforms out there, and you are free to choose another one if you prefer, but the two listed above have the most support, which will make it easier to find the right theme and plugins to meet your needs.
So which one should you use?
If you are a beginner, I would suggest Shopify. The platform does not require you to have a separate hosting account, or install any scripts, or do any kind of major admin. Also, the app integrations makes it super simple to optimize, market and advertise your store.
It also has some interesting plugins that let you source products from AliExpress and other dropshipping platform, which can make it very simple to set up a shop with dropshipping, so you won’t have to have warehouse space or worry about packing and shipping.
There are also tons of themes available. Many are free, but most require an additional one-time payment to use, because they are made by individual creators, not Shopify itself.
The biggest drawback of Shopify is that it costs a minimum of $29 per month for their basic version. They have a lite version, too, but it is mainly for selling on your blog, Facebook or other social platforms, NOT for creating your own website.
This cost makes it prohibitive for many beginners.
WooCommerce, by contrast, is free. It’s slightly more complex to use, because you do need your own hosting account, and you do need to install WordPress, because WooCommerce is a plugin for WordPress. But there’s plenty of documentation to walk you step-by-step through the process.
Like Shopify, they have plenty of themes available. There are lots of free themes to choose from, as well as additional paid themes if you prefer.
They also have pretty much any plugin you could ever need for different types of functionality, but most are paid plugins.
WooCommerce will save you money in the short run, but Shopify is a bit easier to use for beginners.
If you are already well-versed in using hosting companies and WordPress, WooCommerce might be your best option. But if you are more of a beginner, Shopify is probably your best bet.
After choosing a profitable niche, sourcing products is one of the most critical elements of the potential success of your shop.
There are three main ways to source products:
1. Buying directly from the manufacturer or a wholesale middleman
2. Using a drop shipper
3. Creating your own products
Traditionally, most stores have used the first option. Companies like Walmart purchase most of their products directly from the
manufacturer at the lowest possible prices, or they go through a wholesale company that buys from the manufacturer and inflates the price a bit so they can make their own profit.
It’s always best to buy straight from the manufacturer, if possible, but they often require a lot of business documentation or huge minimum orders, so most smaller stores go through wholesalers. This is the main reason larger stores are often less expensive than smaller ones.
If you don’t have a lot of money to buy inventory upfront, or you don’t want to have to deal with packing and shipping products, you can use drop shipping as your source. With drop shipping, you don’t have to worry about keeping inventory on hand or packing and shipping, because the company does all that for you.
It’s kind of like ordering a product from Amazon and shipping it to someone else as a gift.
There are plugins you can use with Shopify and WooCommerce that integrate with various drop shippers to make it easier to handle the orders that come in. Some are even automated.
Finally, you can make your own products. This requires the purchase of materials, or finding a company to manufacture the product for you, so the cost can be prohibitive in the beginning. But it’s often the most profitable option overall.
If you want to learn more about sourcing products, I recommend checking out Ecom Smart Start.
This is a complete guide to starting your own e-commerce store from start to finish, and covers a whole lot of stuff we can’t cover in this article!
As I mentioned above, developing your own product is probably going to be the most profitable option overall.
Yes, there is substantial upfront investment required to make your own products unless you have the ability to make them yourself, but you have a better chance of making a large profit if you make your own.
For one thing, you can’t control the quality or raw materials that go into a product you buy, but you CAN when you make your own. This means you can choose the best quality materials at the lowest price in order to make your product more profitable.
Also, you can create a product that no other shop has, which will help attract more buyers to your store to buy a product that no other store is selling.
When it comes to product creation, you can either make the product yourself, or you can outsource the creation to another company. Many people are having their products manufactured in China or Mexico to save money, and there are thousands of specialty companies that manufacture products based on the specs they are given.
You can usually request a sample of the product before you place a large order, but you will have to pay an upfront cost to get the company to set up the basic manufacturing process in the beginning.
If you don’t speak another language, don’t worry. Most companies have English-speaking representatives you can work with.
You can also sell handmade products. This will help you save money in the beginning by performing most of the labor yourself, and in many markets it is a big bonus for buyers to purchase handmade products.
This is especially true in markets such as crafts, jewelry, decorative items, and skincare etc. People love to purchase handmade items.
You can always make your items by hand in the beginning, and once your store is making good money, you can send a sample of your product to a company to use as a prototype for making your product, but you may lose some of those initial buyers who were interested in handmade items..
Alright, let’s say for a moment that you already have your online store set up and ready to take orders. Ideally, you’ve already tested the ordering process to make sure your payment processors are working correctly, and that orders go through.
It’s time, of course, to market it!
There are so many ways to market an online store, and the ways you choose will depend on your specific market.
Generally, I find that social media is the clear winner when it comes to marketing most online stores. This is especially true if your market’s demographic is under the age of 40, but you can still reach people of all ages via social media.
Facebook has the widest range of demographics available. You can market for free on Facebook with a page or group, or you can use paid ads to reach even more people.
Pinterest and Instagram are both great for selling products, because they are highly visual platforms, which allows you to really show off your items in a way other platforms can’t easily match. They also have paid ads you can try.
Another arm of social media is influencer marketing, where you contact people who have a following in your niche on social media, YouTube, blogs, etc. You pay them a fee, and they create posts or videos about your store and your products.
Since these people already have a reputation in their field, they have the potential to really get you a lot of sales if you use sound marketing practices!
Don’t forget PPC advertising like Google Shopping Campaigns and Bing. They make it really simple to target by keyword, which is perfect for finding buyers. Just be sure to use words like “buy” and “price” in your keywords, and use NEGATIVE keywords like “free” to keep from spending money for traffic that won’t buy.
Be sure to check out Ecom Smart Start!
If you really want to make your online shop a success, you really should get access to this complete course.