Should you start an E-commerce business?

By Gloria Martinez

Special to the Financial Independence Hub

Do you want a job where you can work from home, set your own hours, and earn a virtually limitless amount of money? If you answered “yes” and you’re decently tech-savvy, e-commerce could be the perfect fit for you. E-commerce can be any type of online business transaction, but most of the time, it refers to online shopping.

Why e-commerce?

Skyrocketing rents and a shift toward online shopping has brought about the demise of many brick-and-mortar businesses. Unable to compete with the low prices of big-box retailers, mom-and-pop shops are shuttering their doors. Even big-box brands are suffering as their limited inventory fails to keep up with ecommerce giants like Amazon.

With e-commerce, entrepreneurs can avoid these small-business pitfalls. It’s no mystery that hosting a website is far cheaper than maintaining a brick-and-mortar store, and the rise of dropshipping has rendered the need for massive warehouse space obsolete.

Is e-commerce profitable?

E-commerce isn’t a guaranteed path to success by any means. Countless online stores open and close without registering a blip on consumers’ radar. However, stores that do well do very well. An analysis from RJMetrics found a typical ecommerce store generates $63,000 in monthly revenue by its third month. By year three, that number jumps to $352,000 a month.

How to make money in e-commerce

Setting up a successful e-commerce site requires three things:

1.) An in-demand product

Every e-commerce store needs a niche, but it can’t be just anything. Your niche needs to be something shoppers actually want to buy. However, it shouldn’t be the hottest thing on the market either or it will impossible to stand out.

Complete keyword research to find what consumers are searching for, then narrow down your search until you find a micro-niche with a profitable market. Make sure it’s a product you’re genuinely interested in. If you’re selling something you know nothing about, you’ll have a hard time making a compelling pitch to potential customers.

Once you’ve found your niche, have a plan to keep your inventory fresh. If your store has limited offerings, shoppers won’t keep coming back for more. Rotate your inventory on a schedule that makes sense. If you’re dropshipping wholesale clothing, change your inventory with the seasons. If you’re selling video games, make sure your site reflects the newest releases. Remember: It’s much easier to sell more stuff to an existing customer than it is to find new ones.

2.) A great website

Nothing kills an e-commerce site faster than a website that’s not user-friendly. Resist the urge to DIY your site to save money. A clunky website will lose you far more money than it saves. A good e-commerce site instills trust in shoppers, makes products incredibly easy to find, and executes an effective sales funnel. Web Designer Depot gives an excellent rundown of what goes into creating a high-quality ecommerce site.

Make sure you build customer service into your site. Customer service can make or break your business. And you won’t just lose the one customer: Shoppers who have a bad experience without customer service to rectify it are more likely to take to social media to complain.

3.) Fast or free shipping

Ideally, customers want shipping that’s both fast and free. But if they have to choose, most shoppers will choose free over fast. However, there’s a limit to how long customers will wait.

Delivery within five to seven days is unlikely to turn buyers away, but if your products take weeks to show up on customers’ doorsteps, they’ll go elsewhere. So, while it’s tempting to save money by dropshipping products from China, you’ll have better success if you can guarantee your products arrive in a week or less. If your shipping will take longer, be honest and let customers know what to expect.

Are you convinced that e-commerce is for you? There’s a ton of resources online to help you get started in ecommerce. With an eye for design, a commitment to customer service, and a strong grasp on market demands, you could turn ecommerce into your path to financial freedom.

Gloria Martinez loves sharing her business expertise and hopes to inspire other women to start their own businesses. Her brainchild is Womenled.org. Gloria’s vision is to help all women advance in the workplace and celebrate their achievements.