Opening any type of business requires a business plan and failing to do a plan will most often see the demise of the business before it gets started. The same principle applies to starting an ecommerce business, where the most overlooked process is planning.
The success of your ecommerce business can be defined in terms of proper planning, target setting and market research. Unfortunately many online e-commerce businesses, eager to get going without any real thought or consideration fail to deliver and end up on the refuse heap. When stepping into the arena of e-commerce there are many pitfalls awaiting the uninitiated. It is often a two edged sword.
A beautiful website can fail as a sales tool if the business side is neglected. No matter how dynamic technically an ecommerce website is, if not designed in tandem with sound business principles, it will flounder. The risk of a virtual loss as opposed to a bricks and mortar loss may be more tolerable but no one starts a business with the premise that it will fail. If you have a niche product that is competitively priced why would it not sell? Failing to answer this question suggests that they do not have the basics of business planning. Without understanding the challenge of e-commerce business you cannot plan for the predictable let alone the unpredictable ahead.
To plan for an ecommerce business you must start with the end in mind. You need to set acceptable profit targets based realistically on what is possible. Establish a competitive selling price for your products. Converting visits to your site to sales depends a lot on how the customer gets to your site. If the search terms on which your site rankings are based, are closely connected to the products or services being sold, your conversion rate will likely be higher. In creating a conversion rate keep to a conservatively low number so you can work out how many visits are needed on your site to meet revenue targets. Your task is how to achieve the required number of visitors to use your products or services in order to meet your planned revenue targets. You are now planning to succeed rather than fail – you have to implement the required measures on your website to attract the requisite footfall and transactions for a profitable outcome.
It is also necessary to budget for an on-going search engine optimisation plan. Without an effective SEO campaign your website development spend will probably be in vain. If you build SEO into the marketing plan of your ecommerce site your online business should be profitable and predictable.