As a result of my work online I always get super excited anytime I get to know of a business idea that will help me live a more fulfilled, prosperous lifestyle. Because of this studying different business models have become a nerdy passion of mine. Frankly!
This is why, of late, I have been overly interested in the ecommerce business model. In the past few months I have done a lot of research and study on how to create and profit with your own ecommerce store and I have invested a small amount of money in testing the waters!
I must confess however that while there is so much information out there on how to start an ecommerce business much of it is really confusing. The first problem I can pin-point right of the bat is that nearly all of the training courses I have tried out are mostly taught from the perspective of the individual instructor.
While this have its advantages the drawback is that when you learn from only one person, you can’t possibly get a well-rounded education on just that persons experience and knowledge. This is because no one is an expert in all facets of running a successful business!
I’m sure you will agree with me on this if you have taken any online business course. In fact, I can categorically say that is the BIGGEST reason why most beginners find things confusing when it comes to building an online business.
But you don’t have to be discouraged.
Fact is, you don’t have to study all the ins and outs and the subtle nuances of setting up an ecommerce store before you get a slice of the ecommerce boom for yourself. If you do that you could spend years perfecting your craft and go broke along the way!
My aim in this post therefore is to share with you some of the insights I have gleamed so far about the eCommerce business model. You can easily leverage this knowledge and design your own step-by-step game plan that will help you win in the market.
Who Is The Post For?
I must say this post is not for everyone who reads this blog. If you’re only interested in making money blogging, this post is not for you. You can just as well close the page and move on to the next appealing thing or, if you care about your fans and friends, share it with them on social media. Use any of the social buttons on the post to share it!
However, if you have been somehow interested in building an ecommerce store and have been asking yourself, how do I start an ecommerce business?
Or, if you desire to create your own online store but you’re not sure which models or ecommerce niche to focus on…
Or, if you’ve been struggling to understand the ecommerce business model generally and because of this you have somehow just decided to let it go…
Then this is for you!
Now, I must say that I don’t claim to be some authority in this area. I have only started researching this business model in the last few months. What I will be sharing in this post is what I have learned and I’m putting into action right now. One thing I can assure you however is that I will try as much as possible to make things easy to understand for you.
Is eCommerce A Good Business for You?
Let’s get started by first answering this question, is ecommerce a business you should get into?
With the buzz about ecommerce amongst internet marketers in recent times one of the first questions that I struggled with was, is this something I should really invest my time in?
So, if you are also struggling with this question, then you will want to check out these facts about ecommerce:
i. Global retail ecommerce sales, according to cumulative data from Statista.com, will reach $4.5 Trillion by 2021 from $1.3 trillion in 2014. This a 246.15% increase! (Source)
ii. 71% of shoppers believe they will get a better deal online than in stores
iii. Roughly eight-in-ten Americans are now online shoppers: 79% have made an online purchase of any type, up from only 22% back in 2002. (Source)
Mind-boggling figures, right?
Alright, now watch this video…
5 Reasons Why Ecommerce is Growing
So, is this something you’d want to ignore?
Now, I know there is so much out there that tries to make you believe that ecommerce is the fastest route to the online millionaires’ club. On the contrary, nearly every successful online seller I asked all agreed that this will not give you overnight wealth. Just like every other online business there is so much to master if you truly want to get the best out of it.
So, don’t fall for hyped up product or training that tries to impress it on you that you can simply rake in the money when you set up your online shop.
That notwithstanding, ecommerce is definitely one of the highly sought after online business models in recent times. Ecommerce connects billions of people worldwide – making it easier to gain buyers and profits. This is confirmed by the stats above.
So, if you’re truly interested in making money online and you are willing to put in the work and effort to market and promote your ecommerce store with the right strategies, then you’d want to get involved now. All you need is the right guidance and education.
Your 6 Point eCommerce Business Checklist
There are some essential elements you should focus on when starting an ecommerce business. As expected you will find these elements listed differently depending on whom you’re listening to. But after reviewing different training courses I’ve distilled them into the following 6 point checklist:
1. Choosing your niche
2. Creating your own brand
3. Looking for supplier and designer
4. Setting up your online store
5. eCommerce Model: Print On Demand (POD)
6. eCommerce model: Dropshipping
So, let’s take them one after the other.
1. Choosing Your Niche
Firstly, you need to choose a niche for your ecommerce store. A product niche helps establish a solid ground to your business. You can’t just change from one business to another and expect your trustworthy buyers to keep up.
Start selling something that you have at least a slight interest in. This is so you can get through the days of low sales and technical issues better than usual.
There are 3 ways to decide upon a niche.
First, you can look up on the newest trend. This method serves only as a short term business model that can earn you a quick extra dollar. Some of the tools that will help you do this are Google Trends or Terrapeak.com.
Before now selfie sticks were in vogue. Nearly everyone was fascinated by the idea. When this was the case those who managed to keep up with the trend made their killing – selling only selfie sticks.
Use the above sites and this post on eCommerce trends for 2018 to get ideas on the latest fad in the market.
Another tool you will want to use is the “Best Seller List” on ecommerce websites like Amazon.
What you need to focus on is the products that received good reviews but without many sellers. This will grant you less competitors; which means better sales.
Make a spreadsheet of trending items for the past 3 or 6 months to observe the demands of the market.
Now, the last method that has been proven to work great when choosing a niche is NOT to rely on any online tools. Instead, you can pick a niche using these criteria:
i. Select a niche that you can add value. Adding value to your niche will set you apart from most competitors.
ii. Choose a niche that has passionate and desperate buyers. Here, you are looking at demands; where there’s demand there’s buyers. Where there’s a problem, you will be there to solve it with your products.
iii. Products that is hard to find locally. This is going to be a unique feature for your business. It will be easier for customers to look you up because of your products.
iv. Products that is disposable or consumable. This is to ensure that you will get repeatable customers.
v. Finally, products that requires a lot of accessories, or in other words, add-ons. Any products that require back-end items are worth selling.
You don’t necessarily need to choose a niche that is 100% based on these criteria. Mix and match them and see which ones work out the best for you and your business.
2. Creating Your Brand
When you have decided on the ecommerce niche you’d want to focus on the next thing you should turn your attention to is creating your own brand.
A brand is like an identity for you and your business. Not only will it give you the sense of ownership, but a good brand will be able to connect with your prospects and buyers at an emotional level.
Do you remember the last time you managed to buy your favorite watch from your favorite brand? When you finally bought it, you felt good about yourself. You were happy, and you have strong feeling of fulfillment, right?
That is the goal you need to achieve when establishing a brand to connect to your customers.
When you have your own brand, you will be labeled as unique and interesting.
One of the distinctive advantages to having a brand is how you can add value to everything you are selling. This is how you secure your customers’ loyalty.
What’s more, it is easier for buyers to make your products viral because it is perceived as unique.
Here are some of the ways to get your brand going.
First, capture your own unique photos. This is to ensure that it won’t have similarities to other stock photos. Any items you think resonates with your brand are unique on its own.
Next thing you can do is to hire a photographer for a more professional picture. If you want to have a high-quality photo of your brand, this is one way to do it.
Thirdly, you can design your own logo that reflects your products and company.
From the color schemes, to the objects used to symbolize your brand, you are free to choose whatever that you want.
You can visit sites like logomakr.com or even canva.com. Both sites excelled at providing users the power to create their own logo.
Then, you can put your missions and values to your site. The purpose of your business is important to your buyers.
If what you are trying to achieve is not within their interest, they won’t be so keen on buying anything from you. That is why it is best to clarify your purpose.
Another way to brand your business is through the color of your website. Your website should have its own distinctive design. The purpose of this is to give your online store a ‘color identity’.
See how most of us remembers McDonalds because of its big yellow M? Or maybe the black and white stripes of Sephora?
Finally, you can give out free stuff or vouchers to your customers. Customers are prone to buy something back from you if you allow an appreciation reward to them.
You can give them free stuff once they’ve purchased their 5th items, or spent $100 on a single receipt or others.
3. Looking For Suppliers And Designers
To keep your ecommerce store going you need suppliers or designers depending on the type of goods you have decided to deal on.
In looking for products, you need to be on the lookout for any white label products.
White label products are items manufactured by a single company and is being rebranded by another company to make it look like their own. There are many giant companies that practice this method.
Some of the white labeled products out there consist from make-up brand all the way to your t-shirts.
Once you’ve found your supplier, you need to ensure that the companies are willing to drop ship. Most of them will let you pre-purchase units if you want to keep some of them at your home office.
But they will still keep your products in their warehouse and fulfill the orders for you.
There are many suppliers out there that can provide this service for you. Of the many that I have researched my personal favorites which I’m focusing on right now are Gearbubble.com and Powermerch.com. Both companies will assist you on supplying and even designing your own products.
There are many ways for you to hire a designer.
But if you have the skills to design your own t-shirts, caps or even bags, you can do so yourself. All you need is good software like Photoshop or Illustrator and you are all set.
However, should you prefer to outsource the job to someone else, then hiring others to do the artwork for you would be your best solution.
You can decide to look for designers at Upwork.com, Fiverr.com and even Behance.com. Any freelancing website should have freelancers who are skilled in designing clothing artwork or any others.
Simply post a job under the niche of your product. Make sure to post a precise and concise job scope to your freelancer.
Some sites even allow you to post a job to a specific freelancer. If you found the freelancer of your choice, you can invite him to do the job for you.
Otherwise, you can just post the job to anyone with designing skills.
4. Setting Up Your Online Store
The next thing you’d need to strike out of your checklist is creating your ecommerce site.
You need a suitable platform to sell your products from. Your site is the main medium between you and your prospects. They are going to review your items and place their orders here.
Which platforms is the right kind of platform for your business?
Based on my research and analytics, if you want to use third party platforms, the best you can use to build your website right now is Shopify, Facebook and Instagram. A platform like Shopify already has an established customer base and a plethora of out-of-the-box features and tools to help you grow your business.
There are also some free ecommerce solutions like Prestashop or WooCommerce. To use WooCommerce for example, you’d need to install WordPress. It comes with a number of plugins that will help you create a highly functional online store.
So, let’s start with Shopify.
Even for beginners, this site is the most convenient option there is.
Shopify is one of the best site to help you run your online business. It provides a variety of tools to help you – from showcasing your products to processing your payments, Shopify will make your online business work best for you.
Here are some of the important key features of Shopify that will help your online business:
i. Shopify has their own payment provider – It accepts credit cards and even PayPal payments. The flexibility in accepting different payment methods will make it easier for your customers during check-out.
ii. Shopify’s online sales channels – Shopify support several different online sales channels where you can sell your products. By connecting each sales channel to Shopify, you can keep track of your products, orders and customers in one place; no matter where you are selling your products from.
Some of the sites that supports Shopify’s online sales channel are, Facebook, Messenger, Pinterest and even Amazon. It also supports a ‘Buy Button’ channel where you can connect to your very own website or blog; Tumblr or even WordPress.
iii. Shopify eases your tracking, shipping and ordering list – From deciding your shipping method to automatically recording orders you’ve made.
Facebook and Instagram
While Shopify is one of the best ecommerce website hubs for your online store, Facebook and Instagram on the other hand are some of the best places to drive traffic and engagements.
Both social media platforms are often used by those who are making their first step in ecommerce. Most business owners use both accounts to post their offers alongside with some of their product information.
Even if creating a page or group is easy to set up using both Facebook and Instagram, it is unfortunately inconvenient for buyers to place their orders. This is because social network platforms are not designed for online trade, placing orders, making payments and tracking your orders.
Driving traffic to your website is what they do best.
However, here’s a unique system for setting up eCommerce stores within Facebook Messenger. With this system you can sell your products live to the over 1.2 billion active of Facebook.
WooCommerce and WordPress
Most experienced ecommerce and online marketers would rather build their own online stores using this platform not just because of the flexibility the platform offers but also for the reason that it offers them more control.
So, if you’re this type of person who will want to feel that they are in control of what they do with their online store, then using the WordPress platform is your best bet. Good thing is that you can actually connect your WordPress store to any of the above platforms for ease of doing business online.
In order to set up your ecommerce site using WordPress, you need a domain name and webhosting. My top recommendations for registering your domain name is NameCheap.com while for webhosting is Hostgator.com. Both of these companies have been in this business for a long time now and their customer service is top notch.
Models of Ecommerce Business
5. Print-On-Demand Model
The first type of ecommerce business that you can do is Print-On-Demand or POD.
An on-demand delivery is the immediate or scheduled delivery of your product to your customer. It is being initiated immediately right after they make their order.
Many of the largest retailers in the world have taken a note of POD business and realize that they can assist in getting products to customers quicker.
Retailers like Amazon, Target and even Walmart can help you ship your products faster than a direct delivery from your manufacturer.
If you are interested in getting your products delivered faster, then looking up for retailer would suit your business.
For your POD to work, you must first have your:
i. Product niche – It can either be clothing, appliances, bags or anything that you find interesting and demanding.
ii. Product brand – Remember to give your business a brand to help customers identify your service easily.
iii. Supplier and designer – List them down so you won’t have to be in constant search of another suppliers and designers.
iv. Online store – A Shopify online store, Facebook or Instagram accounts and possibly your own WordPress website.
For example, if you are running a POD business on books, your book files must be prepared in a print-ready format or PDF.
It is best to do a test print-out before printing it for your customers.
The next thing you need to have in place is to ensure that you specify your distribution terms with a capable POD supplier or manufacturer.
Ensure that your digital files are prepared and formatted to fit the cover, content, back cover and even the spine. Then, send the digital files to your book production team.
Then you can list your books to your website. Boost the views by announcing it to your multiple social media platform. Always prepare a different marketing plan to reach out to a bigger audience.
When a customer browses through your website and finds your book, if it appears interesting to them, they will order your book.
After this, Shopify or your website, will send a message to your POD book manufacturer. It will automatically order the same amount your customer wants.
Once they’ve received the order, they are going to print, bind and package the item into a book. You can easily track the status of your book production in your Shopify account.
When your book is ready, they are going to ship the book to you first or directly to your customer. This depends on your agreement with the manufacturer.
You will then pay the POD book manufacturer a percentage of the book’s selling price. That’s all about print-on-demand. It’s really a simple ecommerce business model that anyone can run online.
6. Dropshipping Model
The final ecommerce business model I will want to talk about here is dropshipping.
Unlike POD, running a dropshipping business means you sell the products that you don’t own to your customers.
When you receive orders, your chosen supplier ships the product directly to your customers.
Your profit is simply the difference between the cost of your own purchase and the money that you asked from your customers. All you need to have is:
i. Product niches – Every successful business must have their own niche.
ii. Choosing your supplier – Prepare a list of your chosen suppliers.
iii. Sign up for your dropshipping store using one of the most popular dropshipping hubs – Alidropship.com.
Create an account on Alidropship.com to personalize your own dropshipping webstore.
Alidropship provides all the technical conveniences. You won’t be having troubles communicating with customers, handling orders, keeping track of deals and others.
Customers will be delighted to find a specially developed website that allows them to place their orders and make purchases quickly and easily.
Plus, the webstore provides analytics to shop owner. You will get to see detailed statistics on the amount of orders, revenues, visitors etc.
They can also track your store’s performance and make any changes that are necessary.
Next is the potential high income that you can earn. By selling items from your store, you will get bigger profits from other platforms.
Customers also prefer to make purchases in webstores as opposed to blogs or social media. So first, fill in your stores with the products of your niche.
Then, post them online. You can post them at your social media website or in your own dropshipping website. Post pictures and detailed description of the product from your chosen supplier.
Next, a customer or two will be interested on what you are offering. Then, they will place an order and pay for it.
You will receive a notification whenever a customer places an order. When that happens, contact the supplier who stocks up on this product. Place the same order as your customer to your supplier.
Once you received a confirmation order from your supplier, you need to inform the supplier to deliver the order to the address of your customer.
Double check the location of your customer’s address.
Then, the customer receives the order and your transaction is completed.
These are the 2 ecommerce models that you can easily set up and run profitably online starting today. The POD and dropshipping online business model have been made easier by the improvement of technology like you find at AliDropship.com.
In wrapping up I would say that you need to update your online store always and also to be consistent in your delivery timing. Customers are happier to buy items from an engaging and a responsible store owner.
Conclusion: How to Win the eCom War As A Beginner!
So, there you have it, your guide to starting a profitable ecommerce store from scratch.
I’ve tried to condense the much I have learned about this business model into this post. However, as the competition is getting stiffer by the day, one question you will want answered is, how do you win as a beginner?
While the answer to that question would be long and complicated, and may actually require another blog post, let me give the key points as follows:
- Approach starting your online store as real business which requires work
- As I have already said within the post above, know this is not a get rich quick scheme. The available eCom tech tools are great but they will only be of little help if you don’t have the right sound business fundamentals.
- Before investing in some hyped up, pricey eCommerce training, do your own diligence. I have found more free and helpful training on the Shopify blog than most highly priced training courses. And the good thing is that you can open a free trial account with Shopify and set up your online shop while learning the ropes.
And so, if the ecommerce business model is something that interest you then you should get started right away even if you have little or no experience right now. Shopify have made selling online as fast and simple as possible.