12 Tips to Running a Profitable eCommerce Business

10/13/2016 05:50 am ET Updated Oct 13, 2016
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Statistics for eCommerce business growth are huge right now, as online shopping is predicted to increase by 45% in 2016 in the United States. A projection by Forrester Research Inc. postulates that online shoppers in the US will spend $327 billion in 2016, up 45% from $226 billion this year and 62% from $202 billion in 2011.

But, the barriers to entry are kinda low. So, you have a situation where every Tom, Dick and Harry has an online store. But, that is no indication for success. Like with any other business, stuff can go wrong. And, online stores do fail. But, you can make your venture a success by learning what works and what doesn't. Get your eCommerce business off to a good start by reading this piece.

1) Target a Small Niche

You're better off targeting a small niche if you don't have the kind of resources that Amazon and eBay have. They serve a general audience for 2 reasons; they are pioneers and have garnered trust over the years. You don't have those qualities. You're just starting. So, target a small niche of people who are willing to buy. Afterall, you don't have a business until money starts rolling in.

In this Entrepreneur article, Dave Huckabay, who sells industrial and scientific equipment, says small niches are on the edges. And that if he were to sell pet supplies online, he wouldn’t sell general supplies but focus on a sub-division not seen anywhere else, like safety tools or special toys.

He suggests getting as specific as possible, to cater to enthusiasts and hobbyists with specific product knowledge and expertise. For instance, a site selling hang gliding equipment could concentrate just on harnesses.

E-commerce entrepreneur and educator Ezra Firestone agrees with him. He says enthusiasts go beyond the surface, they go really deep, and that a store like Amazon is not going to be able to satisfy a hobbyist like that.

The more specific you get, the more money you can potentially make. Most retailers have an avowed fear for this though. They feel it's going to restrict their market. But, there is nothing to fear. It's the way to go.

Target a small niche and dominate it. You want a situation where your business will become the Facebook of social media sites, the Google of search engines, the Amazon of online stores, etc. Catch my drift?

Example website: Hungarian Wine Society sells strictly Hungarian wines, be it red, white, sweet or mixed cases. Nothing more, nothing less.

2) High-Quality Images

When you have a physical store, people can hold your products and feel it. In other words, they can experience it. That is why car sellers offer prospects the opportunity to drive a car before buying. They exploit the emotional connection such a gesture brings to sell more.

But, it's a different kettle of fish when you're selling online. That physical connection is not there. You can still get some sort of connection though. How? By publishing high-quality product images on your website.

A picture, they say, is worth a thousand words and getting the images on your website right is crucial to making sales. After all, a picture is what prospects first see. Before they even read the text! Taking high-quality product photos should be a high priority for any online store, yours inclusive.

Example website: Yarose: this online store uses images that make their footwear desirable. You just would love to have one of those!

3) Unique Product Descriptions

Aside images, you've got to get your product descriptions right. Since there's no physical interaction with the product, you've got to publish information that will make prospects understand your product. The description should contain both the features and benefits. You want a prospect to gain a deep connection with your product by telling him what he needs to know in a concise manner.

Aside that, having the right descriptions helps your SEO efforts as the search engines know exactly what to rank your pages for.

Take this example description from online store Criquet, which uses bullet points, brief paragraphs, photo text, video and product photo carousels to inform the shopper on just about everything they may need to know before they click the buy button.

BigCommerce.com

4) Leverage on SEO

We now live in a world where content rules. People are likely to believe in your product or brand more when they find it through the search engines. The belief is, 'if Google or any other search engine brought this website up, I can do business with them.' But, your website won't show up in search engine results without an SEO strategy.

It's a long-term tactic but it works if you get your act together. It works like forever. Long after you've stopped placing those PPC ads. Long after you've stopped posting on social media. It works and faithfully brings you paying customers. It's more like having a virtual salesman.

How then do you leverage on SEO? Create a blog and publish information that helps customers and intending ones. If you sell baby gear, you can start a blog featuring pregnancy tips, baby care info as well as parenting techniques. Simply solve the pain points for your customers and they will be loyal to your brand. When a business shows it cares, it earns the loyalty of patrons.

Example website: Tips on Life and Love by Simon & Schuster. To drive more sales to their books, the blog publishes life and marriage advice from best selling books and authors. The blog also publishes guest posts from their favorite lifestyle bloggers.

Yet another example is the Buffer Blog. Buffer is a social media tool that allows you to space out your social media status updates and the blog drives SEO efforts by publishing thoughts on social media and online marketing.

5) Use Social Media to Drive Credibility

Gaining trust is essential for eCommerce websites. Who wants to spend money on a website they don't trust? No one. To drive initial credibility, you might have to engage with people through social media. Because we have a plethora of channels, you're better off streamlining your activities to avoid overwhelm. At least, start with one platform, gain some follower-ship and engagement. And then move to the next platform until you have a strong showing on most platforms.

That is not to say your business has to be on all the platforms. Look at the market you're targeting and where they hang out. If you're targeting a strictly female audience, you know Pinterest is a good one to start with.

I am saying this because having your social media handles show you've got no followers on your home page could be killing your sales. It's a clear red flag.

Here's a list of eCommerce websites that are doing social media right.

6) Strong Positioning

The fact that you sell quality products does not mean customers will beat a path to your storefront. You've got to have a strong unique selling proposition.

You need to provide a reason for people to buy just from you and by offering a one-of-a-kind product or serving needs that go unmet from other marketplaces can give you an edge.

"Positioning", Ian Daniel, says, "is about perception and how you want your e-commerce site and business as a whole to be perceived by your prospects and customers. Remember, prospects are potential customers. So ask yourself, do your target customers feel that this is the website they would like to buy from? Position your e-commerce website to match your prospects' ideals. Get inside your customers' minds and be them. See, think and feel what they do when buying your product."

In his book on getting e-commerce right, he says “you need to position and present your website in a way that your potential customers see an immediate benefit for them, so they will be eager to buy and experience the positive result and emotions you are promising. What is your product going to give them? What will they get from using and owning your product? These are critically important things to think about because that is what your customer will be thinking, feeling and asking.”

Have a strong brand story that your market can buy into. It could range from starting the business because you couldn't find another business providing the service or something else. Just tell a believable story to get attention to your brand.

Brand stories can make your online store sell more. Don't be another 'Me To' website. Work hard at standing out.

Example website: Doddle Bags was started because the founder, Nadine had a need for them. Having just had a baby, she needed a pouch with a nozzle on it that she could easily fill. She couldn't find a pouch that she liked. She proceeded to making one. Several tries after, a business is born.

Strong story, strong positioning which other women and mothers can relate with. It brings an instant emotional connection which can be leveraged upon.

7) Simple Checkout Processes

Your customers appreciate an easy check out process. When it's complicated, they are most likely to abandon the basket. Don't force people to create an account before checking out. You can offer that option (for those who want to) and also allow people to purchase anonymously. Make your terms and conditions clear. If you don't offer free shipping, make that clear to your website visitors. You don't want a situation where a customer feels cheated because he or she wasn't told the conditions of purchase.

A lot has been said and written about the mysterious 'one-page checkout' and how it can magically increase conversion. While the one-page checkout is effective (to a certain extent), I'll say the focus should be on a smooth and easy checkout process. A one-page checkout that still asks for too much information is a sure recipe for cart abandonment.

8) Have an Email Marketing Strategy

When you run an online business, the most profitable way to constantly be in the minds of prospects is to collect their email and follow up with them.

Okay, I know what you're thinking. What of social media? It can definitely help to keep your brand fresh in the minds of people but it's not an asset over which you have 100% control. You build business with assets you can control. You can control your email list. You may not have full control over your social media pages.

Have a form to collect email addresses on your website and follow up with them regularly. Your strategy might include sending latest blog posts, giveaways, useful tips, season's greetings, etc.

It's vital to build a customer list as well as prospect list. The former will have emails of people who've purchased while the latter will contain emails of intending customers.

Cultivate a relationship with both groups as it leads to an increase in profits. A business profits when it acquires new customers and gets existing customers to buy more. Want more information? Read this ultimate guide to eCommerce email marketing.

Here's a list of fashion eCommerce email marketing examples.

Not currently using email marketing? These statistics might make you rethink your strategy.

9) Leverage on Mobile Traffic

Loads of transactions are taking place on mobile devices. Internet Retailer confirms m-commerce (mobile commerce) is now almost 30% of all the U.S. e-commerce sales.

Interestingly, it is only around 1% of a total retail spending in the U.S. Fact is, mobile commerce is growing rapidly. But, is it heading to overtake e-commerce? Only time will tell.

But, Goldman attempts a forecast. It predicts that in 2018, m-commerce will reach the value of e-commerce from 2013, which was $626 billion.

You may be reeling from the numbers but the most important thing is to ensure your website is mobile-responsive. This means it will still look good and be easy to navigate when on a smaller screen—like that of a smartphone or tablet.

10) Excellent Customer Service

Focus on this and you'll get repeat sales as well as referrals. Happy customers are your best source of word-of-mouth referrals (and even social media referrals). Ensure to meet the expectations of customers by checking up with them, before, during and even after purchase.

Basically, you want to position your business as a caring venture, that protects the interest of customers and prospects.

This could be through live chat, email or phone (provided they drop their details). Don't let your relationship with customers end at the point of purchase. Follow up with them. Create an experience they will never forget. Create a bond and engagement you can always leverage upon. Don’t just sell a product or service, create an experience. That's what Starbucks does. That's why the business is hugely successful.

“The Starbucks sensation is driven not just by the quality of its products but by the entire atmosphere surrounding the purchase of coffee.” – Corporate Design Foundation

Example Websites: Amazon and Zappos.

11) Have a Marketing Plan

If you fail to plan, you plan to fail. We've all heard this maxim at one point or the other. It's even more important when you have an eCommerce business as a 'build it they'll come' mentality isn't gonna work.

You've got to have a strategic plan for bringing people to your website. Not just any kind of person though. They should be prospects; people who're interested in what you've got to offer. With billions of websites on the Internet, it is just as important to ensure that people can find your website.

It could involve using paid ads, content marketing, cold pitching, whatever. Just ensure to have a strategy from the get-go. Also know that every marketing channel has a cost in terms of money, time and energy. You have to find the right balance to grow your online store. Basically, your marketing plan should focus on bringing in new customers and getting existing ones to make repeat purchases.

Know your market well enough to know where your prospects hang out. Then, develop a strategy to get their attention and interest. It doesn't have to be grandiose. A simple but workable plan is all you need.

When Buffer started, their marketing plan involved digital marketing. This further involved guest blogging. Through guest blogging, the business acquired around 100,000 users within the first 9 months, as this interview with Leo Widrich, co-founder of BufferApp, confirms.

Eventually, the company went up to 5 million users and continues to grow. All through the power of guest blogging!

The takeaway here? Focus. Focus. Focus. Find one traffic channel that works and scale it up. It's not about doing a 1001 things. It's all about doing one thing and doing it well.

As Bruce Lee says: “I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.”

12) Track Important Metrics

Don't just throw up a website and wait for magic to occur. There's something to be said for testing and tracking. This enables you to tweak for better results.

In his book, Boost E-commerce Sales and Make More Money: Three Hundred Tips to Increase Conversion Rates and Generate Leads, Alex Harris underscores the importance of doing this.

According to him, “having easy-to-review quantitative data is the foundation of measuring growth for your e-commerce website. Tools like Google Analytics and KISSmetrics are great for tracking what is going on with your website. Using these tools will give you visitor data, conversion tracking, and referral information. This way, you can make better decisions using analytics.”

Specifically, Ben Feldman, a writer, says ecommerce website owners should focus on measuring the following metrics, which he rightfully called the 5 most important metrics for ecommerce success:

Conversion Rate: this refers to the percentage of your website visitors who make a purchase

Average Order Value (AOV): this refers to the average amount a customer spends when they place an order on your site

Repeat Customer Rate (RCR): this refers to the percentage of customers who return to make a second purchase on your site.

Website Traffic: this refers to the total number of people who visit your website.

Customer Lifetime Value (CLTV): this refers to the value of an average customer during their entire relationship with your company.

Over to You

Now that you know, which of these tips are you going to implement first? The ball is in your court!

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