If there’s one thing we learned in business during 2020, is that it pays to be lean and nimble. If you are going to survive and thrive , you must minimize your overhead, keep your expenses under control and focus on keeping your customers happy. If you were lucky enough to get a PPP loan under the CARES Act for your business, that was only a short-term, stop gap measure to help you make payroll, pay the rent, and service any debt that you may have on the books. You just bought some time.
Even in the best of times, 90% of startup businesses fail. They fall victim to cash flow problems, can’t make payroll and can’t pay rent. Many people consider starting eCommerce businesses because the barriers to entry and upfront costs are far lower than when you open a traditional offline business with a brick and mortar store.
Does an eCommerce business solve the cash flow problem? Not completely. But, it does give you a much longer runway to succeed because your expenses and overhead commitments are generally far lower. That said, you have to remember that you still will have many expenses and investments to make in the first year while you are launching. Otherwise, you may not make it past your first year, either.
To help you prepare, here are a few of the key expenses and investments you must plan for in starting an eCommerce business:
Site Audits – This is perhaps one of the least talked about expenses when running an online business. You’ll need to pay somebody to do periodic audits to understand if you are operating your site properly. An eCommerce UX audit is important to understanding if your customers are getting the most out of the site and that you are not losing customers due to a poor user experience. This will put you in the best position to assure that you are getting the highest online conversion rate.
Online Reviews – Here are a few facts about online reviews that you need to know:
- 67% of online shoppers only feel confident about making a purchase after reading six or more positive reviews.
- 80% of consumers change their minds about a purchase decision after seeing a negative review.
- 75% of positive comments related to a product or a service make consumers comfortable about what they intend to buy.
- 79% of online shoppers see online reviews as equal to personal recommendations.
- 57% of consumers searched for brands with four-star or higher ratings in 2019, rising even higher in 2020.
- Online shoppers trust online reviews 12 times more than they trust manufacturer descriptions.
It’s clear that online shoppers’ buying choices are closely aligned with reviews. Unfortunately, online reviews are hard to come by in the beginning of your eCommerce business and people are hesitant to buy from a new business with few reviews. It’s the classic “chicken or egg” dilemma. You’ll have to pay for some online reviews by either giving your product away for free in exchange for a positive review, actually pay people to submit reviews. This can have you running at a loss on each product for quite a while until people are buying your product organically and the ball starts rolling.
Marketing Playbook – eCommerce leaders don’t lead by chance. They activate the 3S’s of Marketing by:
- Telling a simple, emotive Story,
- Formulating a clear, compelling Strategy,
- Aligning Systems to execute with ruthless consistency.
You could have an amazing product that is going to take the world by storm with how useful and valuable it is. Yet, if people don’t know about it, then sales are not going to happen. Furthermore, if you don’t have a simple and clear brand story about the product, why are people going to care or even listen? You have to develop a strategic playbook for how you will give your customers a reason to listen, a reason to care, a reason to engage, and most importantly, a reason to buy. Once you get your first marketing campaign launched, you can start to think about how you engage influencers on Youtube, Instagram or TikTok to help you share your brand story. Furthermore, Shopping Ads for Google, can be a great way to help get your product on the first page of search results.
If you’re looking for more tips on formulating your eCommerce strategy, transformational marketing, or digital campaigns, subscribe to the TopRight blog! Or connect with me on Twitter and on LinkedIn. If you’re still on a quest for more marketing insight, pick up copies of our latest books: Strategic Analytics and Marketing, Interrupted.