Is it a good time to start a new e-commerce business?
On the surface it wouldn’t seem like it.
The major barriers to entry include Amazon, Walmart, eBay and the other big companies in the e-commerce world. Those companies seem to offer everything under the sun.
How can the small companies and startups compete?
A new study found that big players like Amazon don’t have everything consumers want.
There is an opportunity to succeed as an e-commerce company today. If you know where to look you can find opportunity.
Here are some tips for finding the opportunity for your e-commerce site.
Build Strategic Partnerships
An overlooked area for business growth is strategic partnerships.
A strategic partnership is a situation where two organizations work together to make each other better. It’s the old saying that two heads are better than one.
And when you’re competing against the biggest companies in the e-commerce world it’s good to join forces with other small businesses to gain an advantage.
The first way to form a strategic partnership is to look for complementary businesses offering items that will pair well with the items you offer. A basic example would be an apparel store partnering with a jewelry store.
To build the partnership look to market the products in tandem through the normal channels like email, social media and others. You could even add the items to the sites as recommendations (if you liked this item pair it with this item from our partner store).
Let’s say your company and the other company are on even ground. If you partner you’ll likely share some customers already, but for the most part you’ll be doubling your potential customer base including email subscribers and social media followers.
It takes time to build partners. When reaching out don’t think only of your own benefit. Pitch the partnership as a win-win with thought out benefits for each partner.
Niche To A Higher Price Point
It often seems like major retailers get into a race for the bottom. They look to provide items for the most possible people and that usually means bringing in items of relatively low quality and low price points.
This presents an opportunity for smaller e-commerce stores by finding niches in the higher price points.
In just about every economic setting there are high-end customers. They are positioned to survive even downturns and that can be a good position for the companies that provide the items this group of people covet.
If you look to get in a race to the bottom with large retailers you’ll lose. They have efficiencies at all levels of business that make it impossible to compete on price points.
But you can jump ahead of the big companies by looking for opportunities at higher price points.
Invest Mostly In Merchandising And R&D
To build on the last item is the important point that you’ll need to spend a lot of time finding the best possible items to purchase.
The best businesses have rules that limit them from certain things. In the e-commerce world this can mean limiting the items you bring into your store.
The limits could be certain aspects or features of the items you sell. It could be that the items have to meet certain profit requirements. It could be that a specific number of items need to be available or any number of things.
But those rules make it challenging for the merchandising person on your team to select items. But when you find the items that fit within your rules you know with a relatively high certainly that they’ll do well for you and that you’ll succeed.
But you need to invest your time, effort and money into finding the best merchandise. It’s even possible to find items that will be “hot” with consumers in the future before the large companies are able too. The big companies may jump on board later, but you can build a loyal following of first-adopters.
Build Multiple Traffic Sources
Every source of traffic should be on the table for small e-commerce sites.
All the basics need to be built including organic search, paid search, affiliates, display advertising and social media.
But also look for other traffic sources. Look for funky sites that can send traffic your way. It might be an obscure forum where your target customers are discussing their interests. If you can build a presence on a site like that it can lead to a steady (even if small) stream of traffic and customers.
Those relationships can be built with partnership, sponsorships or more organic methods. It often takes effort to find these sources of traffic, but it’s something the big companies aren’t often willing to do. They rely more on immediate sources that are usually paid.
An array of traffic sources is important for any website, but is especially important for small e-commerce sites because if one source dries up you’ll have a good mix of others to maintain what you have while giving you time to adapt.
And traffic can dry up. It often happens when Google makes changes to organic search or if PPC prices go up or if Facebook makes a change to its feed.
Join Them
You can use the big e-commerce companies to your advantage to grow your own brand. It can be tricky and you have to be careful about all the rules, but many small e-commerce companies have been able to build healthy businesses by partnering with large e-commerce sites.
Perhaps the most common is getting your items sold on Amazon. They have a lot of rules and often require you to step up your pricing game (cutting into your margin) and especially your shipping game, which is also costly.
Another item to watch for is to make sure you don’t get too dependent on the revenue from a source like Amazon. The e-commerce companies can make changes to their rules and overnight you could lose your listing and all the revenue that comes from the channel.
That can be a hard situation for a small business, but if you find the right situations you can really grow your business by partnering with the big e-commerce sites while growing your business in the other ways mentioned above.
Beat Them With Content & Personality
Some large e-commerce sites are getting more involved in content, but for many they don’t have the patience to wait for the payoff that comes with content.
Content can be done in different ways. For example, you can invest in more and better content for your product pages. The large brands have many products and it can take an army to write content for all the product pages. So the big brands often skim through it without much thought.
That’s an opportunity for you to really focus on your content because you don’t have as many products to account for (at least right now).
You can also invest in other content marketing efforts. That could include regular blog posts, video and more both on and off your site. A good and basic strategy for content marketing is to focus on the questions your target customers are asking in relation to your general industry and to answer those questions with the content.
And do your best to inject your personality and story into the content. This is something that people really want from companies. They know they’re doing business with companies, but they want to know about the people behind the business. That’s where companies like Zappos have been able to stand out even as they’ve grown because people feel the company is different from a personality standpoint than all the other footwear retailers.
It doesn’t happen overnight, but if you invest in that effort it’s something that doesn’t go away overnight either.
Conclusion
It’s a great time to be in the e-commerce industry. More people throughout the world are going online to do their shopping. That’s a growth opportunity for every e-commerce store including the small stores and upstart stores.
There are still challenges, however, with the big one being the competition you face from the major players. The key is to find ways to do things that the large companies are unable or unwilling to do and to focus your efforts there. That way you can build success in ways the big companies can’t easily replicate.
Follow the advice above and good luck with your e-commerce store in the future!
