While brick and mortar stores decline, the ecommerce industry is booming. Statista predicts that over $460 million in revenue will be generated from ecommerce sales in the United States this year; that number is up 13 percent from 2017. Amazon is valued at roughly $675 billion, and its share price is up 24 percent this month alone.
But ecommerce success isn’t limited to brand name organizations with thousands of employees. Entrepreneurs are also finding success with the ecommerce business model. If you’ve been considering launching an ecommerce side business, but want to ensure you can achieve a healthy profit, here are a few tips for success:
1. Keep overhead as low as possible
As a “solopreneur,” it’s important to reduce overhead as much as possible. A side hustle shouldn’t require significant upfront investment to produce meaningful results.
One way to operate a cost-effective ecommerce business is by dropshipping products instead of warehousing them. Oberlo makes it easy for ecommerce business owners to find products which wholesalers are willing to warehouse and ship directly to the customer on your behalf. As a result, ecommerce business owners avoid paying for inventory or warehouse space, since orders are only fulfilled when a customer makes a purchase.
Another way to keep overhead low is by using an ecommerce hosting platform rather than paying to build a site from scratch. According to AtlanticBT, it costs roughly $10,000 to build a custom ecommerce site, with prices even reaching the $100,000 mark for work-intensive designs.
Instead, side hustlers should opt for a site hosted by a platform like Shopify or Bigcommerce. These platforms offer a variety of templates and include helpful integrations with marketing, accounting, and analytics.
Lastly, founders should avoid the temptation of hiring full-time employees. If you need an extra pair of hands, turn to a freelancing platform to find talented, cost-effective workers. For example, Upwork offers entrepreneurs access to tens of thousands of skilled freelancers who can help with everything from graphic design and marketing to software development and coding.
2. Optimize website performance on an ongoing basis
Multivariate and A/B tests are used by some of the world’s most successful websites in order to optimize visitor experience. Using tools like Google Optimize or VWO, marketers test webpage copy and design changes to determine which version works best to motivate a particular outcome.
These tests are particularly important for smaller ecommerce sites, since generating customers can be challenging at first. It’s important to develop a site that makes it as easy as possible to convert visitors to customers. Testing product and checkout page variations is a good first step in developing an efficient ecommerce website.
Another way to optimize an ecommerce site is to ensure it works well on mobile devices. A study conducted by Google found that 53 percent of mobile website visitors will wait up to three seconds for a page to load. After that, visitors surfing on mobile will leave the page in droves. To check if your website is fully optimized for mobile devices, use Google’s free mobile page testing tool.
Of course, speed isn’t only important to mobile users. Those browsing on a desktop computer also care about page speed. Since ecommerce sites often require users to load multiple pages before making a purchase, page speed is particularly important for ecommerce vendors.
In addition to a mobile testing tool, Google also developed a free tool to help website owners to build better performing pages overall. Their page speed tool analyzes a website and makes recommendations related to design and page structure.
3. Test product performance with digital ads
Even if you plan to launch an ecommerce store that dropships all products, it is still a good idea to see how products resonate with members of your target audience before investing time and money into launching them on your site.
A cost-effective way to test how products will perform is by investing in digital ads. Facebook offers a wide variety of advertising options that can help ecommerce entrepreneurs test how products will be received.
For example, Facebook lookalike ads use machine learning algorithms to find users who are most like your current customers. This is a good solution for business owners who already have a few hundred existing customers that can be uploaded to the Facebook advertising platform for analysis. As an alternative, Facebook also features retargeting ads, which use a tracking pixel embedded within your website to display ads to visitors who go to particular pages on your site.
Lastly, a custom audience ad allows marketers to target specific audience members. Simply upload a list of contacts to the Facebook advertising platform and members of the list will begin seeing your ad.
There’s a reason Facebook generated over $4.7 billion in revenue in Q3 of 2017; it’s because advertisers know the platform is an effective channel for reaching prospective customers.
Ambitious business people have a golden opportunity to launch an ecommerce website today, since a variety of technologies have made it easier than ever to develop a successful online business. To be successful, founders must control overhead, optimize website performance, and test market sentiment through targeted advertising.
Are you planning to start an ecommerce business? What steps are you taking to ensure your success? Share your strategies in the comments.