In recent years there has been an ongoing growth of ecommerce retail, to the point of shocking brick and mortar stores and their future. 2017 has seen the decline of brick and mortar retailers with Sears falling apart for not having a solid retail business plan, while ecommerce grew more than 17%. Nonetheless, for those interested in setting up an online retail business, keep in mind it’s not a piece of cake. As a matter of fact, just like any business it requires planning and attention. That’s why you need know how to create a solid ecommerce business plan.
Starting your Ecommerce Business Plan
The way to start molding your ecommerce business plan is to start from its core: what are you going to sell? Now, how do you decide that and why?
Start by what you’re passionate about. Whether it’s science or sports, a particular hobby, these are all good options as you might be considered an “expert” in the matter by dealing with it daily. From there, you must think what can you make or sell that’s different to the rest, innovative in some aspect. Remember, there is already infinity of products out there, a lot of tough competition, but as statistics show, there is growth and there is opportunity. Whether it’s a B2B a product, an everyday item, or even a service such as an online course, it can be sold on an ecommerce store.
Nevertheless, you have to find a product that either brings something new to the table, an innovative feature, or you must stand out somehow, maybe by having a more in depth knowledge than anyone else, allowing you to provide a better customer service or better marketing.
Normally experts advise to choose a niche for your product. This means, that if you don’t want to compete against Amazon, Hayneedle, or other major ecommerce retailers, you must choose a very specific niche and stick with it. Let’s say you choose construction ladders as a niche, make sure you create your retail business plan around the niche so that you’re the best out there, to the point that people will prefer to order from your online store than from another major online retailer.
How? You start by having the widest range of ladders possible, more models, styles or sizes. You have an excellent customer service, in which either you or your employees are trained to answer any question regarding the matter. You might have videos on how to set up each and every ladder, or you make up a grading system to rate specific characteristics of the ladders. Another great way is to create a thorough buyer’s guide that answers every question before it’s even asked. That’s how customers will come to you, because you’re not an impersonal giant retailer, but a careful and comprehensive one, you become the familiar and expert face.
Then, define the goals and objectives of your ecommerce business, for example, where do you want to be in six months? Do you plan to have the widest range of your niche’s products? Is your goal to offer out of this world customer service? Do you want to be the cheapest retailer, or a more upper-class retailer? These goals will define your path. Obviously, depending on your product some goals become sort of predefined, for example, if each of niche’s items cost over $500, you’re not targeting all the social classes, and you’ll need good warranties and customer service. If you sell cheaper products, people from all social backgrounds can afford them, and also they won’t care as much about the quality, which means fewer questions.
Once you choose your goals and have a better idea of what your ecommerce business plan is looking like, you must choose your sales channels. Are you going to sell through eBay, through Amazon, or do you want to build you own ecommerce store? If you choose the latter, then it’s time to dig even further, are you going to drop ship, have your own storage or even manufacture your own products? Once you have decided, or have a better idea, it’s time to check for competition.
Analyze the competition
There are many ways of doing this, but the easiest and fastest one is Google Shopping. Search the product you chose, such as ladders, and then go onto Google Shopping to know which are all the other retailers selling your same product. Check their stores, analyze their strategies, see who their suppliers are, and overall map the competition to see where exactly you want to position yourself.
Once you have seen all your competitors and determined your window of opportunity to enter the market, you’re ready to either find the suppliers for your products, or find who will manufacture your own. Luckily, there are tons of online manufacturers all around the world, who will build any product for cheap costs; you buy bulk and ship to your country. Otherwise, find suppliers online in your country to buy from, and then ship to your warehouse or directly to customers.
No matter which strategy you’ve chosen, keep in mind that another key factor of an online business plan is to have a purpose and communicate it to your audience or potential customers. Therefore, create a mission statement, a goal your business will have. Maybe it’s selling only sustainable products, or donating something after each purchase, or simply having an outstanding customer service. Whatever you pick, you must grow in the direction of that statement, never letting it go or forgetting it. You must hold it by the hand and walk with it, that’s the way you establish yourself with credibility.
Let’s use ladders as an example. What can be your purpose? Well, an easy answer would be “to supply the best quality ladders to all the customers out there”. Now, that’s not exactly what you want, that’s extremely broad and it goes against the niche idea. When you’re choosing a purpose, a mission statement, you must go back to basics and niche again, since that’s what’s going to make you stand out from the crowd. So, going back to the point, if you sell ladders, choose an audience to whom you’d like to sell to, then if your business grows so can your audience.
If you were to pick electricians, then you know that yes, you can offer all the ladders in the world, but you might want to specialize on fiber glass ladders so there is less risk of electrocuting the users, offer add-ons or other supplies that go in line with what electricians use, such as item-belts or tools. Have stable ladders and easy to carry, since electricians have to move around so much they want lightweight.
With this in mind you can alter your purpose without having to exclude anyone, and your mission statement becomes something along the lines of: “we aim to provide safe and stable ladders, which decrease electric hazards, and are easy to carry on any construction site or working area”. Better isn’t it? You now specifically target electricians, and so will your descriptions and buyer’s guide, but you don’t exclude casual customers who need a ladder, or construction companies that need to buy bulk for a new site.
Set up a budget
Then, time to create a budget. What will it cost you to manufacture your own product? What will it cost to build your own online retailer? Is it more affordable to start selling through eBay or Amazon? If you build your store, do you have all the right permits to do business? Have you registered a corporation or any form of business to do it legally in your country? Have you planned how you will reach customers? Through Google Adwords, Facebook Advertising, word of mouth or even traditional forms of advertising?
Ask yourself all of these questions, do the research and write down a budget of how much you will be spending as an initial investment and monthly. Then roughly see how much you plan to sell your products for, based on the price the market is determining at the time you plan to sell and to obviously give you a decent profit margin.
After ticking all these boxes on your business plan, it’s time to move to the e-commerce part of it. If you’ve planned to build your own website, don’t forget to have a unique logo, a neat template, checkout pages, good information about you, your product, and your mission and offer great customer service.
Online Marketing Plan for a Store
Step two of your ecommerce business plan includes an online marketing plan to attract customers. This is your most important expense. Common brick and mortar retailers spend millions on TV advertising or billboards, they have tons of employees and utilities to pay for. In your case you only have to cover the expenses for your shopping cart platform and your ads.
Google Adwords is the most common way of attracting customers, and it should be on the top of your ecommerce business plan, although SEO is also incredibly important and we’ll discuss it later. Google has over 3 billion daily searches. Not all of them are of users looking to buy something, but you could actually reach a lot of people even if they’re not searching for your specific products. That’s where Adwords comes into play.
The way it works is by you picking keywords related to what you sell, so if you sell nutritional supplements online you pick words such as “nutrition”, so that whenever someone searches for the word or a phrase containing the word, depending on how much you bid to “buy” that keyword, your site will pop-up at the top of the Google search results page.
As said before, SEO is a fundamental part of any ecommerce business. No matter which sales channel you choose, you’ll need it, and it’s also what brings organic traffic (free traffic) into your store. It’s similar to Adwords in the sense that you pick keywords. Let’s say once again ladders, so you think of words people might search for on Google, eBay or Amazon that are related to ladders such as “ladders or sale”. Your goal is to optimize your whole website, pages, images and product descriptions (that includes the heading, the description and even the URL) with the keywords you picked. Also, you have to write blog articles and link them internally to other pages in your site, or reach out to bloggers and influencers so they create external links from their blogs to your site.
It’s time consuming, but not hard and it brings great results, as with time (usually between 3 to 6 months) a Google bot will see your pages (all the pages in your website should be optimized as they rank individually) and rank them higher in every search page. If you make it to page one, you’ll be getting a lot of free traffic and your margins might improve. Hence, SEO should be just below Adwords on your ecommerce business plan, and it should be something you thoroughly do throughout the lifespan of your business.
Going down the sales funnel
Other online marketing strategies that should be a fundamental part of your ecommerce business plan are Facebook advertisements and building an email list. Facebook is a great platform to retarget leads that visited your website in the past, or even to get new leads into your funnel by having interactive ads, such as videos or great images. Facebook is different than Adwords, it’s visual, and as such, your online marketing plan should adapt to it.
Building an email list is a whole other world, but again, not that complicated. Make sure to have widgets on your store to collect emails for a newsletter where you actually send out valuable content to your leads or customers. Or build a Facebook page for your company where in exchange of valuable content, you ask your followers to give you their emails. Things like these are what distinguish ecommerce businesses from brick and mortar stores.
Why? Well, if you go to Macy’s and buy an item, they’ll offer you to get a points card or some sort of card that whenever you get to a certain amount of money spent, they’ll email you, or call you to let you know you can exchange points for products. Then you have to make your way physically to the store in order to buy the product. How about, you get a person’s email in exchange for a nice eBook giving tips on nutritional supplements, and then a month later email them about a 10% or 20% sale? Instead of driving to your store, it takes them five minutes to go online into your ecommerce retailer and actually make the purchase. That’s how ecommerce retail is gaining turf on traditional retail.
Finally, once your up and running and you have ticked all the boxes in your ecommerce business plan, it’s time for you to declare yourself an official ecommerce retailer. From there you just have to keep in mind all the important aspects of your retail business plan, such as your mission statement, what sets your store apart from others, what are your growth opportunities, keeping good profit margins, and running an effective and efficient online marketing plan on the different channels that are worth your time and money.
Just a brief recap
Your ecommerce business plan needs to start from picking a product, usually one from an area you’re either passionate about or you know well just to make it easy to start off. Then define the niche, define your goals, and set up a budget, and from there which sales channel suits you better. After that, define your mission and build your store based on it, and shape your marketing targets. With those boxes ticked, carefully pick your marketing channels, choose your keywords and start working on Adwords and SEO to begin with. If your retailer takes of, you can start battling on all fronts with a bigger store and mission, more sales and marketing channels, and you can call your ecommerce business plan a success.
What do you think?
Does an ecommerce business plan sound challenging? Is there any part you think more important than the others? Share your thoughts in the comments.