The success of e-commerce all around the world has caught the attention of entrepreneurs who are keen on creating their own online businesses. But an e-commerce business model is not the proverbial “bed of roses”, it does take a fair bit of planning and sharp execution to become established as a solid e-commerce brand.
Every year there are numerous online businesses launched but only a few of them managed to break even and sustain themselves in the long run. What separates successful businesses is their foresight in seeing the challenges that lie ahead. They are able to anticipate challenges well-before their contemporaries and set an example for others to follow.
This blog is an attempt to interest potential entrepreneurs on what they could do right at the onset of an online business that can improve their chances of success and possibly propel business growth. We are going to delve into three-pointers that can be instrumental in ensuring your online business initiatives translates into success. Now let’s turn our attention to these four crucial and essential points, which are:
Anticipating Demand: Before beginning any online business, it becomes imperative for the entrepreneur to understand whether there is a demand for the product. If there is demand, one has to identify the specific markets meaning the location where there is substantial demand for this product. One can get a fair idea of this demand through research with tools on Google and Amazon. Both these platforms are formidable players in the online shopping space.
Google Trends happens to be a free tool made available by the search engine that can provide accurate estimates of the popularity of products based on keywords. These are the same keywords users type-in when searching for a product or service, Google makes available this data for anyone who is keen on understanding the market. Another free tool, Keyword Tool Dominator (KTB) is specifically created to anticipate the demand for a product on Amazon country wise. Both these tools can come in handy for doing market research about the market well before taking a decision on the possible product that is going to be sold.
Competitor Analysis: According to estimates, around 37% of online businesses fail due to their inability to analyze the competition. Analyzing the competition is one of those steps, which can give you clear ideas on the amount of effort that would be required to erect a sustainable online business. Now, you may ask how to get hold of the competition? Simple, type in your product or service in Google Search, and the companies that figure on the first page of Google is the competition you need to comprehend with.
Once this is done, you need to closely study the number of visitors received by these websites, how they are managing to attract traffic, which keywords are getting them visitors, what is their marketing strategy. Now, this is a kind of information companies are secretive about but the online nature of business has ensured that even this information is easily available online with the usage of the right tools.
Ubersuggest is one such freemium tool that allows the user to get information on the most popular keywords and most visited pages on the competitor’s website. Another tool that can further provide deeper insights about the competition is called SimilarWeb, it can provide information on the sources of traffic and even details on paid keywords used by the competition. Apart from this, there are paid tools like SEMRush that can dig deeper and provide you with information that can enable you to devise a fool-proof strategy against the competition.
Financial Feasibility: While starting an online business, the most crucial recurring investment happens to be digital marketing. It is extremely critical that the right amount of investment is done to get the best ROI. According to the latest data available, 35% of online businesses fail due to the lack of online visibility, this has a direct correlation to the lack of attention to digital marketing.
Investment in digital marketing is driven by two criteria namely – the red and blue ocean strategy. In a read ocean scenario, the online business is faced with a highly crowded and competitive market. While the blue ocean represents a market with less competition with a lot of potential for growth.
Navigating a red ocean market space requires deep pockets and substantial investment in marketing, this is not the case with the blue ocean where there is relatively less marketing required. Having said that, there have been cases of entrepreneurs, who transformed their position in the red ocean into a blue ocean by transforming the focus of the business to a niche segment that others were not targeting.
Conclusion:
Having understood the three crucial pointers to develop an online business, an entrepreneur now must focus on creating a feasible business model, which needs to include – capital investment, operating cost, projected sales (next 3 years), margins, revenue, ROI, tax implications, gross & net profit, and break even sales. When an entrepreneur is equipped with all this information, he is potentially ready to take on the competition and launch his/ her business in a market where there is demand and good growth prospects. Overall, as they say, “Well Begun is Half-Done.”
You can start by partnering with an e-commerce business consulting or online business consultant like YRC who has expertise, knowledge, and experience in providing e-commerce consulting services for a variety of online businesses in different niches.