Are you ready to take the plunge and launch an online business? Wondering where to start to position yourself for success? Throughout this guide, we will be giving you the information you need to setup your online business with a foundation that will position you for scalable future growth and success.
How to Start an Online Business
Table of Contents
- Fill a Hole in the Market
- Choose and Secure your online Business Name
- Focus on Building an Online Business System
- Which eCommerce Channels to Sell On?
- Choosing an eCommerce Platform
- Customer Aquisition
- Customer Retention
- Measuring Success
- Additional Resources
A key factor to your online business’s future success is your ability to carve out a profitable niche. It is important to take the time to find a hole in the market where you can carve out a niche for your online business to thrive. This is the first step in launching your business and it is important that you don’t have blinders on based on only personal interests. As you research for potential holes in the market it is best to first look at industries rather than just specific products. Once you identify industries with potential, you can take a more in-depth approach to reviewing potential products within that industry. Ultimately, you need to make it your business to sell what people want, rather than what you want to sell.
When picking your eCommerce niche, it is important to choose a niche where you can add value to the marketplace. You don’t want to enter the market as another ‘me-too’ product/company that doesn’t meet an unmet need. In addition to adding value to the online marketplace, you need to focus on picking the right types of products to sell. It is important to choose products that have good margins so that you can become profitable while having the funds to spend on customer acquisition. Typically products do really well in the $75 – $250 price point, although success has been found across all price points online. Selling products online that are hard to find locally helps you to limit your competition to only online businesses. Ideally, you would want to sell items online that are small in size. This gives you a great advantage by simplifying the shipping process. This simplifies the receiving of your goods from suppliers and also your ability to fulfill orders at an affordable cost. Another thing to keep in mind as you are uncovering your online niche business is to focus on products that require a lot of accessories. Accessories are easy to sell, help you build repeat business, are perfect for online marketing automations, and typically have very high margins.
Now that you have done research on different online niches, learned what people want to buy online, and identified the hole in the market that you intend to exploit, it is time to choose a name for your budding online business empire. The first step to choosing a business name is to brainstorm a list of ideas that are relevant to the market you are going after. Once you have your list, you can start googling your potential ideas to make sure that your name is unique, relevant, and not infringing on anyone else’s business. Once you have settled on a business name that is memorable and relevant, you need to find a domain name to represent your business online. A domain name is the key to both people and search engines finding you online. When choosing a domain name focus on matching the name to your business name, while keeping it short and memorable. Keep in mind that you don’t want to build your business on another companies subdomain such as yoursite.wordpress.com or yoursite.bigcartel.com. In those instances, you are simply building on someone else’s property rather than own property. When building your online business, you want to have your own property (domain) to build on rather than using space on someone else’s domain. This will build trust with your customers while also allowing you to build up a property that you fully control online.
When starting your online business, you will be well-served to build a systematic process for running your business. Building your business based on a set repeatable processes will allow you to focus on growing business rather than putting out fires taking on an unrealistic workload. You will save yourself a lot of headaches, time, and issues in the future if you focus on building your system from day one. This means that you start off with a strategic objective for your business. You also need to be honest with yourself about what you want to gain from the business. From that point on, you need to create standard operating procedures (SOPs) for all of the tasks related to running your online business. This will allow you to easily offload repeatable tasks onto employees/virtual assistants, allowing you to focus on optimization of procedures rather than spending hours upon hours doing mundane tasks that are an inefficient use of your time and energy. If you truly want to start an online business and position yourself for rapid growth and success, you absolutely need to implement a systematic approach. Doing this from day 1 will only make your life easier going forward, while simultaneously increase the value of your e-commerce business. If you would like to learn more about taking a systematic approach with your online business, the following books are a great place to begin:
- The E-Myth by Michael Gerber
- Work the System by Sam Carpenter
- Built to Sell by John Warrillow
Now that you have found your online market, chosen and secured your online business name, and begun building your online business in a systematic approach it is time to decide which channels to sell on. There are many channels that you may choose to sell your products through and it is in your best interest to do your research. It is best to choose your channels wisely and test in a methodical fashion. This is in contrast to a shotgun approach, where you try to sell your products/services through all available channels. It is in your best interest to pick a few to focus on and test your hypothesis. This will allow you to have data to know where to focus your efforts. You can always choose to widen your net later on based on your results. Some examples of online business channels to consider are:
- Your own eCommerce Website
- Amazon – Selling on Amazon gives your product or service immediate visibility and access to a large customer base that knows and trusts the platform. You also have the ability to leverage Amazon’s website presence and vast distribution and fulfillment network.
- eBay – eBay is great for selling both auction and fixed price items. When selling on eBay, you will need to figure out fulfillment on your own or via a 3rd party fulfillment center.
- Social Media – Social media can be an effective channel for acquiring customers, but has many limitations when actually trying to sell. The best path to selling via social media is to funnel your followers to other channels in order to complete purchases (such as you website, Amazon, or eBay).
If you have decided to create your own eCommerce website for your online business, you need to decide which Content Management Systems (CMS) to use. Like everything else in life, there are tradeoffs between the different eCommerce content management systems. Key things to keep in mind are features, integrations, pricing, and ease of use. Some of the most popular CMS platforms for online business include:
- Big Cartel
- WooCommerce (WordPress)
When building out your businesses website it is important that the user experience be optimized for both mobile devices and desktop computers. While desktop computers are still prevalent at home and at work in the United States, mobile internet usage continues to grow at a staggering rate both in the USA and Worldwide. It is important that your business’s website not lose sales because of something as simple as not making your site mobile-friendly.
Now that you have found your niche, established your business using a systems methodology, chosen which channels to sell your products on, and built out an eCommerce website on the platform of your choice, you need to get customers to your website. While figuring out your customer aquisition strategy, there is a long game and short game. The long game includes building quality content and a website that is search engine friendly, ultimately leading to website traffic via organic traffic. These search engine optimization (SEO) efforts will provide tremendous return on investment (ROI) in the long run, but unfortunately won’t generate much traffic for your new online business in the short term. In order to aquire customers more quickly, you need to focus on the short game to customer aquisition. The short game includes:
- Affiliate Marketing
- Amazon Ads
- Display Advertising
- Google Shopping Ads
- Influencer Marketing
- Pay Per Click (PPC) Advertising
- Social Media Advertising
The harsh reality is that not everyone that visits your website is going to purchase during their first visit. This is especially important to consider when you are running advertising campaigns and shelling our your hard earned dollars for each visitor that clicks on your website. What happens if they visit your website and leave empty handed? Also, how are you going to leverage previous customers and turn them into repeat business? These are potential customers that are familiar with your online business (some may have even purchased before), but the challenge becomes how to reach them in the future. Luckily, there are many effective tools for capturing your visitors while on your website and then reaching them later in order to drive them back to your online business to hopefully complete an initial purchase or become a repeat customer. The following customer retention strategies provide a tremendous ROI opportunity for your e-commerce business.
- Email Marketing
Knowing where your online business stands is key to future growth and success. What are your goals? What is your system for tracking your progress and measuring success? There are a bevy of tools online to help you track your results and measure the success of your online business, including:
For most businesses that are online, Google Analytics is the best solution for gaining valuable insights into your website traffic. Google Analytics is free, easy to install on your website, and gives you a window into how effective your website and tactics are. In order to setup Google Analytics, you need to setup a Google account for your business. This account will come in handy in the future as your business grows and you begin establishing your online presence on other Google services such as YouTube, Google My Business, etc. It is important to put your business’s analytics account under your own Google account, rather than your developer’s account. If your developer were to add your website domain under their account, you would need to start over from scratch should you ever decide to stop working with them. The easy solution is to put your domain under your own account and then simply grant your developer access to your analytics account. Now they have the access they need and you can be sure that you will maintain and control the valuable historical data that Google Analytics provides.
Conversion Tracking for PPC ads, Social Media Ads, Retargeting Ads, etc.
Please stay tuned as we will be building out this section in order to provide you with a comprehensive list of resources that you can use to help start and grow your online business.