We’ve been thinking a lot about how today’s e-commerce brands can win… tomorrow.
With e-commerce continuing to accelerate, it’s more important than ever to build a scalable business model. This means that it’s no longer enough to have a Shopify website and a Direct to Consumer (DTC) drop ship model. DTC brands need to be able to drive regular profitable growth through e-commerce, beginning with advertising strategy, unit economics and product/market fit.
How can I win at e-commerce as a startup founder?
E-commerce is exploding while brick and mortar stores that closed as a result of the pandemic may never open again. It’s obvious things are shifting and that online shopping, once seen as a luxury, has been pushed toward necessity.
Starting your own online business is an excellent way to generate a steady stream of income. That said, the right strategy is essential, and with the amount of (mostly wrong) information that exists out there, we know how elusive that can be.
So how to stop being confused? With most brands so used to selling through intermediaries, they often worry they won’t be able to get fulfillment right, that it’ll cost too much or get too complicated.
But what are the correct steps to take to actually succeed at e-commerce? We’ve compiled a comprehensive list below:
Research all business models: There are many different types of business models and no one-size-fits all model. It is on every company to research their options and pick the best one for them.
Yes, this means having a “focus.”
The best way to begin is to look at successful businesses in your niche. Are these businesses successful? How many are there in the space? It is best to pick a niche that is neither overcrowded nor scarce.
Know who you are: Ideally, who you are should align with who you’re selling to.
So who are you? And what need will your product (hopefully) fulfill in like minded people?
Note: Remember to register your business and name (this comes with legal protection and tax benefits.) And don’t forget your logo since a good one goes a long way.
Make a business plan: Don’t make the mistake of skipping this step; a great business plan is like a GPS system for your business. It will give you a play-by-play of what you need to do to get going and then manage your business. Think of it as a way to think through and detail all of the things you’ll need to do on your journey.
The most important aspect of a business is the financial one. We at Markacy especially think so. The fundamental business economics of e-commerce such as ad costs, customer acquisition cost, delivered product margin, returns, discounts, must be scrutinized heavily in order to perfect a sustainable business model that can yield significant shareholder and investor returns.
Create your store: We like Shopify, and so do most of our clients, but there are literally hundreds of e-commerce shopping cart platforms to consider.
You’ll need to set up your email marketing and automation before you get traffic. And don’t forget to have some type of customer support system in place ahead of time.
The best e-commerce sites invest heavily in digital marketing. Get to know the space intimately. Subscribe to digital marketing newsletters and listen to podcasts. Then, decide if you’ll use sponsored content, social media, ads (Facebook ads, Google ads, Amazon ads) or a combination of these.
Finally, plan out how you’ll meet these needs. Will you need digital marketing or search engine optimization help?
Other tips
For brands that are interested in e-commerce, online marketplaces are a great place to start. Direct to Consumer requires a mix of technology, analytics, and an agile operating model.
Tech: There are so many opportunities that new technologies have to offer; they must only be recognized and put to use.
Technology should focus on the customer experience, incorporating both testing and customer feedback.
Analytics: Acknowledging the importance of data (and investment in talent that knows how to interpret it) are some of the most important investments you can make in your business.
Agile operating model: Remember: your customer is King. If you refuse to change with today’s rapidly changing consumer preferences, you’ll end up paying the price.
And lastly, don’t forget to put your strategy alongside your customer: brands that use customer insights and invest in R&D are able to connect with their valuable customers to meet their ever-evolving needs.
