Do you need to launch an ultra practical online business? It all starts with a pre-meditated ecommerce business plan. At first glance, this feels like a superficial blueprint for most starters.
But here's the deal.
You need an executive summary of everything you're about to do in order to convert your objectives into actual results. From the onset, you must put your thoughts on paper. It doesn't matter how smart you are. I'm pretty sure that Jeff Bezos of the retail giant, Amazon, sat down to sketch his master plan at some point during the initial stages.
What does this imply?
If you sort all the salient pointers for your online business accordingly, this will undoubtedly, funnel your future goals towards the right direction.
Goes without saying that any ecommerce business ought to have an online store that matches its precise niche. As long as you have a product to sell, drafting a roadmap to your ecommerce store's success isn't that much of a hassle.
So let's cut the chase.
Is An Ecommerce Business Plan Worthwhile?
Let me persuade you further. Any business startup, no matter small or big, needs some sort of manifesto, for lack of a better phrase. In actual sense, a sound ecommerce business plan helps you mitigate any future shortcomings. You should think of it as a pacesetter. It provides you with the most appropriate pointers on how to run a successful online enterprise.
A well-articulated ecommerce blueprint is a practical idea if you don't have adequate funding to start off your business. Still not convinced?
Let me explain how.
Provided that your business plan is distinctive and logical, you can pitch it to financiers or make arrangements for crowdfunding if the idea requires an immense capital input. If making your prospective ecommerce startup your full-time job is within the bounds of possibility, then a sensibly analyzed business plan is a must-have for any newbie.
More often than not, an online business operates in the same fashion as brick and mortar stores. The only disparity is it may not need a physical location. Bear in mind, the fact that the merchant needs to do some extra logistics planning and marketing as well. So there's absolutely no excuse for not having a manageable business plan in check.
So what needs to be done?
This guide is fine-tuned to illustrate all the qualities of a money minting ecommerce business masterplan.
👉 To give an executive summary, here's a painstaking breakdown of the rightful pointers we'll shortly look at:
- Carrying out a scrupulous market research
- Marketing your business
- Financial Planning
- Choosing the right sales channel
- Identifying the appropriate business model
Let's take a look.
Do a Product Market Research
To get things started on the right foot, you need to plan ahead before spending a penny on whatever demands that your online business has. With the prevalence of brilliant research tools, a merchant can now do an intensive market analysis without any constraints. How else would you know your suitable target audience?
Let's face it.
Whether you're a small business or an enterprise-level setup, the need to identify the most accurate demographics is pretty inevitable. Above all, the acute competition in the ecommerce industry is never easy. As stiff as it tends to be, there are techniques to help you cut all corners. In fact, in a competent, or rather, proficient manner.
No matter the kind of niche you want to hang on, there are salients tools you ought to upskill yourself with. As a matter of fact, that's a rule of thumb while structuring your business plan. So here are some of the elementary hacks to use for your market analysis;
Use Google Trends
To put it into context, Google Trends is, unquestionably, a feature-rich tool that hooks you up with the winning keywords. It calculates the popularity which a particular key phrase has garnered over time. Google Trends generates this graphical data in real-time and filters the same information as per the preset demographics.
So that begs the pertinent question.
How exactly do I make best out of this exceptional tool? As a merchant looking forward to starting a new ecommerce business, this is a means to fetch potential customers.
Please allow me to illustrate.
Suppose you want to sell some type of ‘sportswear ‘on your online store, this tool allows you to view its interset by a value between 0-100. It has options that help you filter data according to the region and duration of time, respectively.
The logic here is that Google Trends uses search queries to sort the trending products and services. That aside, there's a comparison feature that contrasts several search phrases. With such data-driven information at hand, a merchant gets to make well-informed decisions while creating SEO focused content to market their products or services.
Google Trends feeds you with industry-focused reports that abundantly, help you out with marketing campaigns. So long as you catch sight of most applicable keywords, boosting your ads engagement is absolutely a no-brainer.
Do a Small Physical Survey
There are lots of bricks and clicks stores selling a wide range of products in the market. By Bricks and Clicks, I mean those that do have both physical and online stores. There's so much to learn from such retail setups.
In a resourceful way, this strategy gives you a smooth learning curve while inventing your ecommerce business plan. That way, you get to bank on sharp insights that help you make realistic prospects for your future online business. Doing a survey is as easy as walking in a storefront that owns an online store and asking the requisite questions.
👉 Practically speaking, here's what should be on your checklist:
- How often does a specific product get returning customers?
- Which are the best selling products in their online store?
- Find out the worst-selling products as well.
- What's the average order value for this category of products?
Make the perfect use of Google Analytics
Yet another instrumental tool that you need to incorporate while figuring out what your ecommerce business plan ought to entail.
So what's the deal with Google Analytics?
Well, there's so much to bargain on. This tool keeps you conscious of where exactly to keep more focus on. Once you set up your online marketing campaigns, this tool feeds you with exclusive data as regards to how each ad performs. Otherwise stated, Google Analitycs allows you to find out which audience reacts to your campaigns. It integrates with your sales channel (Shopify, Volusion, WooCommerce, and others) via a Google ID.
This tool shows you the stats in reference to where exactly your online store gets its traffic from. Along the same line, you get to discern between those ads which convert as well as those that don't. The Keyword planner, on the other side, gives you a projection report of high ranking keyphrases.
The Keyword planner helps you make good strides for your B2C website. In particular, you get to boost your sites SEO via your blog.
👉 In other words, Google Analytics is, without fault, the most idealistic tool that helps you with:
- Calculating the total number of new visits to your online store
- Shows the average session time. This is the duration which a visitor spends on your ecommerce site.
- Allows the user to view the location where most visits come from. You get to push your campaigns to the right demographics(target audience).
Know who your competitors are
Needless to say that this part is quite inevitable in any kind of online business. You're not alone in the market. That being the case, you need to what your rivals do best.
And not only that.
👉 Your quest to come up with the most accurate results need to be inclined to the following:
- Have a deep run on how your competitors sort out their product descriptions
- You need to compare their pricing techniques.
- How responsive are their product pages? Do they load quite fast?
- Consider having a snippet of the feedback from customers
Thereby, your business model operates on a great volume of descriptive information. That gives you the roadmap to fill the market gap. Making such a fundamental exercise sort of oversimplifies your strategy to beat the already existing competition.
Choose The Right Sales Channel
At the moment, there are so many avenues to count on. The list is actually endless. Indeed, this is the most fascinating part of running your online business.
Forget about the retail giants such as Amazon, eBay or even Alibaba. There are other suitable 3rd party salse channels on taking center stage.
But don't get it twisted.
Not that there's anything wrong with Amazon and the likes. Which we'll look into shortly, as a matter of fact. But just in case Amazon sounds thrilling to you, you'll have to part with $39.95 each month to get hold of an Amazon seller account. The deal is, you need to consider what your specific needs are.
👉 Choose a sales channel that allows you to:
- Import products in bulk together with their descriptions
- Connect to the most prolific and niche-oriented themes
- Run an actionable blog section
- Sell on social media platforms
- Work with real-time reports
- Do marketing campaigns
Surprisingly, there are a couple of shopping cart channels that are built to streamline such needs.
So let's briefly touch on some of these notable sales options:
As things currently stand, Shopify seems like the quintessential ecommerce platform for starters. The reason being that Shopify's pricing model works out for merchants looking to open up small online stores. It has plans starting from $9 to $299 per month. It's still a competent cart solution for retailers who deal with massive volumes of sales. The enterprise plan allows you to reach your maximum potential in a far-reaching way (have a look at our Shopify reviews).
While sketching your online store's plan, you don't want to crack your head over any sort of web development tasks. I'd recommend Shopify to a newbie who's not alive to any coding skills. Unlike other tangled solutions such as Magneto or WordPress, Shopify's user interface, is sort of plug and play.
What strikes me most is its integration prowess. Shopify's marketplace makes you want to sit back and wait for your financial projections to mature up in an automated manner.
If you have vested interests in dropshipping, for instance, this is the way to go. In fact, there are lots of Shopify dropshipping apps that will let you make a decent ROI. The Oberlo app, for example, allows you to sync products together with their descriptions and variants to your Shopify store. Oberlo allows you to import products from the popular AliExpress. (read our complete Oberlo review).
If you've used or at least, heard of WordPress, then probably WooCommerce shouldn't sound strange to you. Technically, it's a WordPress plugin that is e-commerce oriented. Since it syncs with the WordPress CMS system, this gives you full autonomy over your online store.
That's the bright side part of it.
However, WooCommerce requires some extra skills while dealing with hosting, domain, theme adjustments, and the likes. (read our full WooCommerce Review)
Aside from the basics, this sales channel allows you to;
- set shipping rates
- import products in bulk via a CSV file
- Integrate with payment processors like Stripe
I'd recommend this channel if you really want to boot up your SEO. The reason is pretty simple. WordPress is a champ at it. For B2C setups, you can never go wrong with it's blogging functionality.
Weebly is a pretty solid alternative to work with more precisely if you want to run a simple online store. Well, it's not as versatile as Shopify or Magneto, but it's a good starter pack if you're working on a low budget.
This website builder has drag and drop tools that are quite easy to learn for a beginner. Weebly's pricing is notably budget-friendly and has plans that meet various types of demands. The price for the plans starts from $5 – $38 per month if paid annually.
Other well-built 3rd party sales channels include;
- BigCommerce (full review)
- 3dcart ( complete review)
- PrestaShop (review)
- Volusion (review)
- Big Cartel
Streamline Your Order Fulfillment Process
This is what builds or breaks your ecommerce business. If you don't deliver ordered items to your customers on time, the aftermath could be sickening. You don't want to deal with chargebacks and derailing reviews from frustrated clients.
The ingredient to always have to customers return to your checkout button is having a sensible order fulfillment criteria in place. The good part about it is that there are well-founded companies to help you deal with that. While picking the most reliable sales channel, it's thrifty and forehanded to pick one which integrates with remarkable carrier companies.
Let's presume that you're dropshipping products from AliExpress, which is, as you may know, based in China. In this case, you may want to work with reliable carrier services. Moreover, the shipping speed is of great essence here. You need to bank on big carriers such as;
- China Post
Alternatively, you can try out predominant 3rd party order fulfillment services such as ShipBob (read our ShipBob review), ShipWire, or ShipMonk, just to name a few verified solutions. Besides that, here's another tried and tested approach to a successful order fulfillment process;
This is a robust channel that a merchant can use to potentially make revenue that is up to the mark. With over 6 million 3rd party sellers, there's definitely more to decipher about these numbers. This guide will actually teach you everything from scratch. Needless to say that it's one of the most pressed on fulfillment services in the world.
The Amazon FBA which stands for ‘Fulfillment By Amazon' is an option you can put to test. Basically, this model is designed to process all customers' orders on the retailer's behalf. For this to happen promptly, you need to send your products to Amazon's warehouses, or if you like, fulfillment centers. Thereafter, Amazon picks, packs, and sends the ordered items to your customers.
What makes Amazon FBA a choice for most serious merchants, is the convenience it sets forth whenever one needs to scale their business. Amazon has multiple warehouses which makes it feasible to ship ordered items globally. That's a huge plus for your business and future revenue prospects.
Shape Up Your Marketing Campaigns
In order to beat your competitors, you need to boost your store's visibility. But that just doesn't happen by doing the bare minimum. A merchant needs to do a conclusive analysis and figure out which marketing options draw more attention to the target audience.
A marketing campaign is one of the most purposeful and resolute technique to drive immense traffic towards your online business. And not just ordinary traffic. The end goal is to have insightful traffic that translates to fulfilling conversions.
For that to happen, you need to ask yourself the right questions. This should be on your checklist;
- Where do most of my customers come from? (location)
- What's their age demographics
- Do they prefer online shopping over a storefront?
- How much are they willing to spend on my products?
Such kind of information allows you to tweak your marketing techniques. As you may know, a merchant can custom-make their target customer base. Hence, you end up with potential visitors who are most likely going to make a purchase.
Without further ado, let's have a look at some of the conventional marketing techniques;
I wouldn't term it at the most reinforced marketing option per se, but email marketing still scores fairly well in the world of advertisement. Email marketing is now an automated method you can try out to keep customers in your pockets.
Choosing the best service for your email campaigns can turn out to be a bit daunting. Before jumping into any emailing tool, you need to have these specifications in your mind;
- Choose one that automates your customers' subscription notifications.
- Has a dashboard with email editing features.
- Comes with flexible plans that allow scalability.
- Has professional reporting and analytics tools.
- Gives you access to incredible CRM (Customer Relationship Management) tools.
For this to happen, I'd recommend that you choose any of these tools;
Please read this guide to get an overview of the newfangled email marketing services.
The gladdening part about Google Ads is that it allows you to set your own budget. This tool creates visibility for your business. Customers who search for related keywords get to see what your online store has to offer.
For as low as $150 per month, this solution allows you to reach out to relevant customers. You get to choose a specific period which you want your targeted ads to run. Just like other marketing campaign tools, Google Ads allows you to customize how you want the ads to appear.
Instagram & Facebook Advertising
I must say that there's so much potential from these two ends. However, be careful not to spend up to the last coin only to end up with sluggish results.
These two social channels are good with marketing no matter how small your brand is. Thankfully, you can create shoppable posts at the convenience of your sales channel.
There are two avenues that you can explore here. You can either opt to go with paid ads or work with influencers. Choose an influencer who's crafty enough to tap into your audiences' emotions. Potential shoppers need to get the impression of how your product solves their problems.
These two channels allow you to run an array of ads ranging from photos, videos, stories, and much more. If you don't know how to go about these options, then your bait will certainly miss the fish. If you can spare some time to make some eye-catching videos and post them on your store's accounts.
As another option, a merchant can choose to run organic posts on the site's official page. This alternative is absolutely free. You only need active internet for that.
Customer Loyalty Program
This is one of the most common ways to maintain repeated customers. You can decide to create promo codes, do retargeting ads, offer discounts if customers refer their friends to make a purchase, and so on. A stable customer loyalty program can help your business be operational for decades.
This is an easy strategy to start off with if you feel like paid ads are somewhat expensive. It's as simple as branding merchandise with your brand's logo and using creative promotional inserts.
This method doesn't need you to invest so much to achieve any projected outcome. You can run a blog and produce SEO focused content to reach your target audience. Although this might take so much of your time, it equally boosts your conversions in a far-reaching way.
To run a successful blog, you don't just need an ordinary CMS (Content Management System). It must be one with essential tools to help you strikingly rank high on the search engine. An all-inclusive software like WordPress is a perfect example in such a scenario.
What does a blog have to do with my online store?
You might ask yourself.
Well, running a blog is one of the most promising channels a merchant can use to introduce a ‘call to action'. It's an easy peasy way to persuade readers to buy your products.
Practically, you can put ‘buy buttons' in your articles to direct customers to your online store. You need to create good content to convince your readers. That comes to fruition only if you know how to engage your audience with what they can actually relate to.
I'm pretty sure that you must be alive to the fact that WordPress is free to use and also an open-source platform. This means that you can actually joyride a couple of its functionalities. To improve your site's SEO, you can set noticeable meta descriptions, insert backlinks, and set appropriate keyphrases.
If you intend to target a population from the younger demographics, you ought to run a marketing strategy which they're more affiliated with. In this case, Instagram tends to be more associated with Millenials.
Create A Sound Financial Plan
I don't necessarily need to emphasize the fact that you need to work with a budget. If this is left unattended to, your business is more likely going to crumble in the near future. A merchant ought to be sharp about the start-up costs and any extras that they might have to incur in the long run.
Assuming that you're going to run your online business alone, setting a budget that fits your wallet shouldn't be a demanding exercise. You need to maintain a streamlined cash flow in your business dealings. To keep off from discrepancies, it's doubtless that you need a high-standard accounting tool. Most of this software charge a few bucks for its services. Not much, that I can give you some sort of guarantee.
As a matter of fact, the likes of Intuit Quickbooks and Xero are ideal for bookkeeping and any other accounting needs. By use of such tools, you get to stay ahead of your priorities by maintaining a sound financial plan.
So let's see what you should put into deep consideration;
This gives you a sneak peek of the amount of revenue you should anticipate. But you just can't take a wild guess to know exactly how much you'll generate over time. Since you're the CEO of your e-commerce business, you need to be a wise bookkeeper. Act like you have 10 years experience as a professional accountant, even though you're not close to being one. But if you are, that's a huge plus.
Figuring out what your gross revenue amounts to isn't enough. There's more work to be done in order to narrow down to accurate projections. Once you do the math and come up with the total sales, it's pretty obvious that you need to deduct all expenses. Finally, you get to know the actual profit yield.
And that's how a viable financial projection works.
To make a more intelligible projection, you can use business planning software to remove all forms of complexities. Small businesses can use apps like LivePlan, Bizplan or Enloop to account for their business forecasts.
If you're going to depend on 3rd party SaaS services to run your business, then it's patent that you need to pay for the monthly plans. An online business owner must factor in what the sales channel charges on a periodic basis. Shopify, for instance, charges $29 each month for its Basic plan.
But that's not all.
There are extra plugins which integrate with your store to boost its overall perfomance. Some of these extensions have premium plans. That aside, you'll have to set a budget for your marketing campaigns as discussed earlier on. Besides, a merchant whose business is at an enterprise level requires elite-level services from the marketing tools.
Paid advertising, in particular, is often a recurring expense that needs to appear in your financial books of accounts.
You don't expect to thrive over your rivals by clinging on a free trial plan. With the acute competition in the ecommerce setups, there's more to making huge revenue than merely putting basic efforts to your online store.
If you want to run a winning online business, you better use a theme that's sort of intertwined to your niche. Furthermore, you need to brace yourself with some extra bucks so as to access a fully functional theme. Realistically, a professional WordPress theme would roughly cost you about $200 or even more.
Magneto, on the other hand, is a sales channel that needs some tender care. It has a knotty learning curve since it's designed to run ecommerce businesses that have scaled to an industrial level. In order to make adjustments on Magneto's functionality, you might have to spend on web development experts.
Since you'll be running an online business, thus handling payments from customers, you need to work with a cloud-based POS system. One which integrates with processors such as Stripe, PayPal, Square, just to mention a few notable ones. A merchant service provider like Shopify has its own POS app which works perfectly well for all their retail needs.
This solution uses a tiered technique on each of its plans to calculate the processing fees. The pricier the plan, the lesser the processing fees.
To further illustrate, Shopify's Basic plan charges 2.9% + 30 cents per sale transaction. Its counterpart WooCommerce charges the same amount for all the credit card transactions.
No matter how old this phrase is, here's the moral of the story.
To get your business into good financial shape, you need to be mindful of the processing fees. Be keen to choose an ecommerce platform which has multichannel functionality yet with low processing fees. This allows you to greatly maximize your profit on each sale transaction.
As noted earlier, there are a couple of ways to go about this process. If you want to offer free shipping to your customers, pick a solution that rewards you the most. Most drop shippers tend to include the shipping costs in the selling price. If that's the case, choose reliable carrier services to avoid future chargeback claims.
Also, go with one that has an efficient management team. Amazon's FBA can serve as a pretty solid order fulfillment service. The same goes for services such as ShipWire or ShipMonk.
If you decide to do premium shipping, then you'll have to elevate your pricing index formula. Contrastingly, if your products are somewhat expensive, customers might shy off from making a purchase.
Other Operational Costs
Just like a brick and mortar store, you'll definitely incur some extra expenses while running your online business in a bid to boost productivity. If you're running a large online store, it's prudent to have some technical assistance. That costs money. Depending on the size of your ecommerce business, you might incur some accounting expenses and business taxes too.
Not to mention hosting services if you go with a sales channel that isn't self-hosted. Besides that, there are premium integrations which come with monthly recurring costs.
Identify Your Business Model
The earlier you realize which category your ecommerce business plan falls into, the better for your future projections. The trendsetting business models are not the same as those that used to reign a couple of years ago. Many thanks to the cumulative progression in technology and shopping trends.
For an online merchant, this brings on board, diverse ways of doing business across borders.
The end result?
Your online business setup generates more revenue like never before. With such kind of innovation in the realm of running an ecommerce business, numerous opportunities are created. It's no wonder that there is an uncountable number of niches which potential online store owners can venture into.
Before we even delve further into these ecommerce oriented business models, let's have a recap of the long-established, or put differently, the traditional ones;
B2C setups are those which sell products and services, or both, to the end buyer. That simple. It's one of the most prevalent methods in the sphere of ecommerce. Most merchants use this method to sell products to consumers since it requires fewer efforts than B2B(Business-to-Business).
The Business-to-Consumer approach is highly preferable for products that have a lower market value. Under ordinary circumstances, it's easier for buyers to make up their minds on a pair of shoes over an accounting software. At least, owing to the fact that the latter is a recurring expense, which they have to incur periodically.
The B2C model is mobile-friendly and helps you optimize your online store's perfomance.
Unlike B2C, B2B transactions occur between two businesses entities. In other instances, the buyer is usually the end-user. But most-predominantly, the buyer makes the purchase and later on resells the products to the consumer at a retail price.
This framework is now more focused on ecommerce businesses which are well versant with niche markets.
This structure allows individuals to sell products and services to companies. In ecommerce, a business buys such a product or service so as to aggressively compete in the market.
Let's use a typical illustration. Consumers who let's say own blogs can allow companies to advertise products in their sites. Of course, this comes with a price.
Moreover, there are Business models that focus on ecommerce setups.
If you want to cut the middleman, this is the right model to use for your ecommerce business. It's a tried and tested technique that connects businesses to customers in an unconventional manner.
In e-commerce, this is the kind of business that offers a type of service to consumers. Examples include; online magazines, streaming services, online classes, gym and club memberships, the list is endless. In return, the merchant collects recurring payments on a periodic basis and at a preset date from the consumer.
As the name suggests, the wholesaler sells products to a retailer in bulk. A perfect marketplace to source wholesalers is Alibaba. The same goes for AliExpress, which is its subsidiary retail site. The latter is compatible with both the B2B and B2C model since consumers can make a direct purchase from AliExpress. A merchant can also opt to open a seller account here.
This model is on the mainstream in the e-commerce industry. A merchant, otherwise known as a drop shipper, markets a product that is later fulfilled to the customer by a 3rd party supplier. The drop shipper, who is more of a middleman, virtually displays the products via a sales channel and adjusts the pricing to make a small profit on each sale.
Everything considered it's rightful to say that coming up with a detailed e-commerce plan isn't baffling whatsoever. The catch is, a merchant needs to make some sort of fusion between their business needs and the above-discussed blueprint. So long as you have an idea of what products to sell online, the initial stages of launching your business should be a no brainer.
Also, you don't want to go a little overboard with your startup costs. As you may know, that might slow down the launching process. To kick off with bargain-priced e-commerce sales channels, you can try out plans from solutions such as Shopify, WooCommerce, or even BigCommerce.
In a nutshell, having a full-proof e-commerce business plan sort of guarantees you systematic progress towards your future goals. This guide gives you a comprehensive analysis of what you need to have in your bucket list. If you feel unbalanced while sketching your plan, don't feel shy to drop a query in the comment box below.
Featured image credits: Shutterstock