17Mar
By: Andrius Šlimas March 17, 2017 Topic: How to Start a Business

Over the past seven years I’ve launched six online stores, and during this time I’ve learnt a lot about ecommerce businesses. If you’re thinking about starting your own ecommerce business, I have some advice for you: knowledge is power. The more that you know about running your own ecommerce business, the more likely that you are to succeed. I’ve created this article to help those of you who are thinking about starting your own online store avoid some of the common pitfalls which ecommerce entrepreneurs encounter.

Marketing is Essential

Marketing is an essential part of running ecommerce businesses

Marketing is one of the core aspects of any business. It’s also one of the easiest things to overlook. There are plenty of ecommerce businesses which have great products and a beautiful website but ultimately fail because they can’t attract people to their store. If nobody is visiting your store, then how can you expect to make any sales?

Choosing The Right Marketing Campaigns

It’s essential that you devise marketing campaigns which will generate traffic and potential customers to your online store. There are various different channels which you can use to grow your store like PPC or email marketing. I’d recommend that you choose a marketing channel with a quick feedback loop when you’re just starting your ecommerce business.

Marketing Channels With A Quick Feedback Loop

Whilst marketing techniques like SEO are valuable to your ecommerce business in the long run, it’s essential that you can get your ecommerce business off the ground quickly. For this reason I would recommend that you don’t focus on marketing channels like SEO– it could take several weeks to yield results. Instead I’d focus on channels like PPC marketing, where you’ll be able to see how successful your campaigns are within a few days. Not only will you be able to track your results quickly, you’ll also gain insights on what you need to improve within a short amount of time.

Pick The Right Audience

To ensure that your marketing campaigns are successful, you’ll need to target your message to the right people. It can take some time to truly understand who your audience are, but you’ll likely have a pretty solid idea from the products which you’re selling.

I’ve found that it’s best to start quite broadly with your marketing campaigns until you have a better understanding of who your audience are. When you’ve gained more knowledge about your audience you can refine your campaigns to be more effective for your specific audience.


Customer Service Is King

Look after your customers and they’ll look after you.

When you provide a high level of customer service you’re setting your business up for success. Being fair and sincere with your customers will leave a lasting impression on them, and they’ll be more inclined to buy from your store again.

Not all ecommerce entrepreneurs provide great customer service, but it’s critical that you take as much pride in the way you treat your customers as you do with the way you handle your business.

Personalize Everything

Personalizing your customer service interactions will make your customers feel valued, and a customer that feels valued is more likely to order from your store again.

Templated replies are fine in small amounts as they’ll save you valuable time, but your customers will notice when you make the extra effort to personalize your interactions. When you tailor your responses to your customer’s issue they’ll know that you care about them, and that you’re working to solve their issue.

Be Open

Mistakes happen, and it’s important that both you and your customers are aware of this.

I’ve found that it’s always best to be transparent with your customers if you’ve made a mistake. Being open and honest with your customers lets them know that you’re a genuine business person. Whilst I was running my ecommerce businesses I always found that customers were understanding and appreciative when you keep them informed of any issues regarding their orders.

Lost / Late Deliveries

Thankfully, the rate of packages which are lost in transit is low. The main issue which you’ll encounter when shipping your products to customers is late deliveries. There are a multitude of reasons why a delivery could arrive later than expected, but it doesn’t matter to the customer, they just want to receive their order. I’ve found that the best way to reconcile for late deliveries is to always keep your customers in the loop– they’ll feel appreciative that you’ve reached out to them instead of angry that their delivery is late.


Fraud Is Rare For Ecommerce Businesses

Fraud is rare for ecommerce businesses

You’ll rarely encounter fraudulent activity whilst you’re running your ecommerce business.
Whilst I was running my last ecommerce business I only came across one or two cases of fraud in around 60,000 orders per year. In fact, the global average rate of fraud is only 0.8%, which means that you’ll encounter it less than once in every 100 orders. Even if your ecommerce store has made 1000 orders you’ll still only encounter it 8 times on average, so it’s only a minor problem.

Fraud rates are so low because popular ecommerce gateways do a lot to detect and prevent fraud before it can even happen. If you’re using an ecommerce solution to run your store, like Shopify, then you’ll find that they’ve implemented fraud detection systems at the checkout stage. This means that potentially fraudulent activity, like if a user has input an incorrect billing address, will be flagged and the order won’t be completed. You’ll also have a secondary layer of protection from your payment gateways, like Paypal, who run their own fraud detection systems.


Pick Your Products Wisely

Ecommerce businesses thrive when you’ve found high-quality products which you’re selling at an affordable price. You’ll need to decide on the types of products which you’re going to be selling before you start, and where you’ll be sourcing them from.

Deciding Which Products To Sell

This is one of the most frequently asked questions from ecommerce entrepreneurs. Take some time to brainstorm some of your ideas and decide on some products which you believe are solid options for your ecommerce store. Then you’ll need to check out potential competitors and see if they’re selling similar products. If they are, you know that there is a market for your products. Think about what you can do to make your product inventory better than theirs.

Sourcing Your Products

Ecommerce entrepreneurs can source products from all over the world with relative ease. Before you start your ecommerce business you should decide which countries make the most sense for you to source your products from. If you’re going to source products from China then you’ll find that they’re relatively cheap, but the delivery time may take a little while. On the other hand, if you’re sourcing products from the USA they’ll arrive faster but the price tag will also be higher.

Managing Your Inventory

This is one of the most important tasks for ecommerce businesses. Whilst your store is getting off the ground you’ll likely be able to store your products at your home, but as your store grows you’ll need to hold much more inventory. Eventually you’ll need to spend resources on a place to hold your inventory, or come up with another way to distribute your products to your customers. Choosing a dropshipping business model will mean that you’ll be able to ship your products straight from the supplier to your customers– you’ll never have to store any inventory.

Focus Your Inventory

Whilst you’re compiling your store’s inventory it’s critical that you keep your target audience in mind. Every product which you add to your store needs to be something which is appealing to your target audience.

If you want to branch out later in your ecommerce journey then it’s best to do it gradually. Switching your core products from men’s golf shoes to men’s golf hats is going to be far easier than switching to selling women’s clothing. If you decide to branch out then make sure that you know your new target audience and which products they are interested in.


Shipping Your Products

shipping your products

I’ve sold and shipped products all over the world and I’ve learnt that it’s paramount that you’re clear with your expected shipping times. It’s also important that you give your customers a realistic expectation for when they’ll receive their products. Your customers are aware that you’re running an international
, so they’ll understand that their products might take a little longer to arrive.


Test, Analyze, Learn

When you’re starting your ecommerce business it’s critical that you find out what works for you as soon as possible. I’ve found that the best way to do this is to start multiple ecommerce stores at once. You can set up your store in 30 minutes, so it won’t take you too long to create a few different online stores.

Whilst you’re starting try not to spend too much time on the design, instead focus on the core values of running an ecommerce business– sourcing high quality products and nailing your marketing strategy.

Now it’s down to you to get started on your ecommerce journey. If you have any questions before you start your ecommerce business then let me know in the comments section, I’m happy to help!

  • Austin Howard

    Andrius, thanks for sharing the knowledge. Do you have any recommendations as to where I can go to get started on setting up an ecommerce business?

  • Casey Springall

    Hey Andrius, what social media do you have and do you network with inspiring ecommerce starters?

  • Hi @disqus_JIO5tivxM6:disqus,

    Check out this free book: http://www.oberlo.com/learn It covers everything from launching your store to landing your first sale 🙂