Online sellers tend to be successful because they were passionate about something and was able to turn it into a business with ecommerce business tips to get started. The challenge is that if you are an amazing crafty person who can make awesome necklaces, or a designer that can make high demanded fashion or even just a collector who loves the challenge of growing your collection none of this translates to running a small business. Ecommerce sellers tend to be successful because they are good at marketing and selling product or in many cases making the product and can translate that into a business but the reality is you need to have ecommerce business tips to listen to so as you translate your real skills into growing a business you can do it like a professional.
What does it mean to have run like a pro? Let’s start with 4 basic ecommerce business tips you should always keep in mind.
- Capital is king – Every business that gets started follows the same rule which is capital is king. What does this mean? Well as a new ecommerce business that is getting started you need to understand how much capital you are investing into your business. You have operational expenses such as LLC, Taxes, Computers, Software platforms and other normal things you might use to run the business, you have expenses to acquire products and for ecommerce, you need deeper pockets to get enough products to make a go at this, you then have expenses to launch onto marketplaces or your launching your own brand on a shopping cart platform. At the end of the day you need to treat launching your own ecommerce business as a startup and understand all of your expenses to get started and upfront investments to ensure you will be successful. Make a business plan!
- Find your path to profitability – Again an ecommerce startup is like any other startup. You need to understand your costs, you need to define your revenue path to break even and project out your growth plans so you can see 6 months, one year, two year and even three years out where you want to be as a business. You need to see what your potential profit will be in year three based on your planned expenses and what revenue numbers you would need to hit to get there. This creates the basis that you need to understand for how many products you need to get, how many marketplaces and sellers you need to be in front of to hit your revenue numbers to grow as you planned. Don’t just jump in and hope it works out but put the time in to come up with an actual business model as an ecommerce business tip this one is simple – make sure you know think about how you will become profitable and decide if it is worth it to continue.
- Know what your goals are – For many people getting into ecommerce they are only looking for a side hustle to make some extra cash and plan to continue to work a normal full time job. Others want to make a go at ecommerce to eventually become a full time operation. You need to be honest with yourself where you want to go with your ecommerce business plan so that you create a vision to support it. If you plan to keep it to a side hustle, maybe a second bedroom is enough for a warehouse with yourself doing all of the product sourcing, listing, shipping and marketing as a one person army. If you want to scale and grow beyond a side hustle you need to have plans around growing into a warehouse, getting access to product lines from suppliers and hiring employees to scale your business. Again, there is no right or wrong way to do it but you need to be honest with yourself about your goals and then create a business plan to support it.
- Understand seasonality – Ecommerce and retail in general in most niches are tied to seasons where you see peaks and valleys when it comes to sales. You need to understand as a result, your revenue is not consistent and will go up at certain times of the year and drop flat during other times of the year. You need to account for seasonality when it comes to how you manage your money, expenses and planned revenue. This will also impact how you stock up on products and when you need to have your listings created to make sure you maximize your peak seasons but do not overcommit during slow times. Seasonality can hurt many business owners that are used to steady income all year with a full time job and learning that they will really only make money in certain months and run very lean on others is a different mind shift to how they manage their capital to ensure they save the money from the good months to cover the bills in those slow days.
I hope these ecommerce business tips help in getting started in the space. Just keep in mid that an ecommerce business is like any other business in that you want to have a fully baked out business plan to be successful and enough cash to give yourself a runway to be successful. Always know what your exit strategy or goals are with the business so you can set yourself up for success and know if you are growing as you want to grow. Ecommerce is an exciting space which can help you give you a small or large income stream but really depends on what you want to get out of it and of course how much you plan to put into it.
