8 tips to build a successful eCommerce business
With the increase in the ease of digital connectivity worldwide; the eCommerce market is growing at a rampant pace. Hence, many business enthusiasts consider it a lucrative tool to start and scale up the business. Thus, competition is supertight in the digital world. However, an entrepreneur must not waver and with a positive intention use this amazing eCommerce tool to serve the customer on a wider scale.
Thus, here are seven tips that you must know to build a successful eCommerce business:
1. Start with focus, and pamper the early adopters
eCommerce is commerce leveraging the digital medium. The digital world has specially made platform business and platform economics at the core of business models primarily because of its reach.
During the early stages, one must remember to focus on one thing or aspect that their platform is extremely good at and make it the strongest. This focus will help bring monopolistic power to the platform, and as is widely known, ‘Winner-Take-All’ is the secret behind platform business success.
The second most important focus area is unit economics. No matter what happens without positive unit economics, the platform will only burn money and more money. Any black swan event such as the COVID19 pandemic will severely affect the runway and sustainability of the business.
Therefore, in the early stages, when you have the first 100 consumers, who are also called ‘early adopters or critical mass,’ always make sure that it is with a strong community focus that they come together on the platform. Also that these consumers are equally enthusiastic about the platform as you are.
2. Don’t startup because you want to build a unicorn today
Today’s world is about a rat race. Each one wants to become a unicorn today itself with huge valuations and funding. But if we learn from age-old businesses, fundamental growth is most important for sustainable business.
Therefore, don’t startup because you want to build a unicorn today. Startup because you want to build a platform that solves problems for the world. Success and unicorn status will surely follow.
3. Strong founding team and steady cash flow makes all the difference
The co-founding team is a key asset to any startup. In fact, most funding in the venture capital world happens not because of the idea; but because of a strong founding team.
Also, I believe funds, money, and runway are aspects, which can make or break a crucial conversation in the early stages. You can have the best team and ideas, but if you don’t have the money, then you may not be able to achieve your goals.
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4. eCommerce is a ‘Go to model’ at the early stages
It’s not that platform businesses are new to this world. The digital world has only enabled it in the e-mode, and therefore eCommerce exists. Let me explain the advantages of eCommerce over brick and mortar stores through examples.
You start a small physical shop and only sell through the shop. Your reach will be limited to the people walking into the store. It is highly unlikely that people from far away land will especially come to your shop to buy what you’re selling.
However, with eCommerce, people worldwide can see your shop and buy from it. From your locality to the world, that is the beauty of eCommerce! Depending on what model of inventory you’re using, for example, if you have a drop-ship model, then you don’t even need a physical space. Your model will be extremely asset and CAPEX light. This ease enables anyone to set up an eCommerce business easily. Because a lot more people engage with your products, this enables understanding consumer behaviour, improving the products, and the services become easier.
Even for the high involvement segments such as beauty, if one can create unique experiences online substituting try and buy – touch and feel, eCommerce becomes a winner over brick and mortar.
But, if you look at the more mature eCommerce companies their strategies are moving towards ‘Bricks and Clicks’. In the early stages, eCommerce is efficient and helpful; but eventually, the physical infrastructure enables massive growth; since it reduces dependencies.
5. ‘Experiences and communities.’ can make a store special.
‘Experiences and communities.’ These words sound simple, but in my experience, these are what makes a store specializing in the eCommerce world. And therefore, we can see the big boom in interactive commerce and social commerce businesses online.
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6. Don’t fall prey to the discount trap for mindless growth.
The path of least resistance to acquire customers is to discount. However, this will never lead to sustainable long time customer value or retention. Cost differentiation strategy is well thought through strategy and should not be mistaken for a customer acquisition strategy.
What decides repurchase for an eCommerce store is the overall experience the store offers to the customer. Therefore, focus on NPS (Net Promoter Score) and customer experience, don’t fall for the discount trap for mindless growth.
If you deliver value that consumers can have a tangible or intangible experience, they will always stick with you. The best part would be if you’re into high involvement segment and deliver the best experience; customer loyalties will be very high.
To be able to create loyalty, your platform must be self-selecting and individually correcting for the intended target segment.
7. Interaction is the key to promote your eCommerce Store on social media
At the heart of social media marketing lies interactions. The overlap of entertainment, recommendation, and community lie in ‘Interaction’, and the union of the three is the value created. In each content, creative, or ad that is run on social media if one remembers this simple mix, their campaigns will be most effective.
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8. Best work on their dreams, while rest keep thinking
In the end, no matter what one may say, ‘there are no wrong answers in this world.’ If you have a firm conviction and intuition about something, just do it. We all have great ideas every day; what differentiates the best from the rest is that the best work on it, and the rest only keep thinking about it.
Are you working on your own eCommerce business? If yes, do share your experience below.
Barun Singh, is a co-founder & Partner at Gorg.co.in, India’s 1st and only ‘Brand to Consumer’ platform for personal care and beauty products. He is a fellow of prestigious institutions like IIM-A, and Harvard university, and has been selected for highly selective Bootcamp on entrepreneurship & innovation at MIT. Also, he gets regularly featured on platforms like Economic Times, YourStory, and ThriveGlobal.
