Learn What Makes E-commerce Businesses Successful
Different e-commerce businesses face different challenges. Quick-fix advice for success in e-commerce only scratches the surface of what separates successful businesses from struggling ones. However, e-commerce businesses with long-term success do tend to have some common characteristics. By breaking down these characteristics, newcomers can enter the e-commerce world with a handy toolkit of tricks and tips on how to thrive in this digital marketplace.
Differentiate Your Business
Why should a customer visit you? Do you sell exclusive merchandise? Do you offer the lowest price? Does your customer service set you apart?
Answers to these "soul searching" business questions will lead you to develop your USP, or "unique selling proposition." Every business needs to differentiate itself. As an e-commerce business, you cannot hope to sell everything to everybody.
At this point, you may be shaking your head and pointing to Amazon.com. It sells everything from used books to fresh shrimp. And sure, if you think you think you can become the next Amazon, then go for it. But before you do, ask yourself how many other business examples you can think of that serve a similarly wide-ranging purpose. Chances are, your business will depend on its ability to stand for something specific in the minds of consumers.
One way to differentiate your business is to solve at least one problem that customers face—especially a problem that no one else is solving.
Get Your Technology Right
With the kind of robust e-commerce software and hosting available these days, there is no excuse for e-commerce websites that don't work. Getting the technology right is not just about having a bug-free website. It is also about using technology to achieve business ends.
For example, there was a time when it was popular for e-commerce businesses to set up a blog on their website. Today, many of those blogs seem like neglected graveyards. Those sites would benefit from either committing to maintaining a compelling, current blog or deleting it altogether. Similarly, there is more than one e-commerce business that treats SEO (Search Engine Optimization) as the solution to all its problems. That is a case of the tail wagging the dog—SEO is an important tool, but performing better on search engines won't help if the site's landing page is full of bugs or outdated information.
Don't Make Customers Run Around in Circles
Common sense dictates that a business should make purchases convenient. Surprisingly, some e-commerce websites complicate the purchase. Instead of simplifying the process, they make first-time visitors fill out a registration form, verify the registration via an email link, log into the site using the registration credentials, then click through a series of up-sell attempts before actually arriving at the purchase page.
Even successful e-commerce businesses may find that half their customers (or more!) abandon their shopping carts before paying. When an e-commerce business isn't customer-friendly, that conversion rate plummets even further. The message is loud and clear: many customers refuse to run around in circles.
Secure Your Supply Chain
Order fulfillment takes place behind the scenes, but when a part of the supply chain breaks down, the customers will feel it. Incorrect, damaged, delayed, or missing merchandise can ensure that the customer never returns to you.
Supply chain management predates e-commerce, so there's no shortage of reliable service providers who can oversee sourcing, fulfillment, and other aspects of supply. All e-commerce businesses outsource some part of their supply chain, but you can't outsource your responsibility to the customer. Every outsourcing partnership needs to be a strategic choice—when something goes wrong the customer will blame your business, not the supply chain.
Be Cost Effective
In an attempt to increase sales, e-commerce businesses are tempted to cut gross margins to single-digits. This is not sustainable. All e-commerce businesses feel the pressure to cut prices. The history of e-commerce is filled with price wars, some of which led to the demise of big players.
Some businesses choose to price high, while others offer deep discounts. But when it comes to cost management, there cannot be divergent views. Only e-commerce businesses with effective cost control processes will survive. Know your product, know your customer, and set prices based on a detailed business plan. Don't let your desire for sales volume drive your decisions.