70% of the US population shops online. 65% of Europeans shop online. Over 52% of China shops online. That’s over 1.5 billion potential e-commerce shoppers worldwide to target. It’s no wonder many aspiring entrepreneurs want to start online businesses.
E-commerce is an attractive start up business model: Lower on-going fixed costs unlike maintaining a physical store, unlimited geographical potential, and very low start-up costs (e-commerce businesses can literally start in your garage or dorm room…fyi I started in my dorm room when I grew my business to over 4.4 million dollars in annual revenue).
Aspiring entrepreneurs may want to consider these 5 questions before executing their e-commerce idea.
- How does my product offering differ from other products online?
This is absolutely crucial to the success of your business. A decade ago when e-commerce was still in its mega-growth stage of 25% user growth annually, there was a lot less competition in the e-commerce space. There were several product categories that haven’t come online yet. SEO was a god-like concept, if you had any seo (search engine optimization) experience you could climb to the top position in search engines on generic keywords through brute force link building. In addition, the average online shopper was less savvy when it came to product search, product reviews, and researching store reputation. The online consumer is much savvier today. In conclusion, you can’t trick customers, make a genuinely differentiated product.
- How am I going to bring traffic to my website?
There are several ways to bring traffic to your website: paid advertising on search engines and social media, using social media influencers, marketplaces (amazon and ebay), affiliate marketing and the list goes on. Whatever the strategy may be make sure you have one (sounds funny…you would be surprised how many “entrepreneurs” I meet make products without this consideration). There is no point of having the greatest product in the world if no one can find it.
- Who is going to be my target customer?
Target Customers. I often hear entrepreneurs talk about how they are targeting everyone (the mass)…..horrible strategy. Having a target customer segment is important because it helps entrepreneur’s focus on how to communicate their product and brand to the public. It’s the image of what your product appears to be which is what attracts people to the concept.
- Who is my competition?
Study your competitors because your customers are. Customers are going to be smart enough to evaluate where they are going to spend their money.
- How easily can I be copied?
Many entrepreneurs when executing their idea may want to consider how quickly their idea can actually be copied. It happens all the time. As soon as you have a good idea and launch, there will be several people that are going to copy you (FACT). Especially people in CHINA. China manufactures over half the goods in the whole world. The Chinese have the production resources in their homeland and are inherently entrepreneurial. Therefore, they will copy you. So take time strategizing a defendable position: getting a patent for your product, negotiating an exclusive supplier contract, or some sort of licensing agreement in order for your product to have a longer marketable shelf life.