Let me guess, you want to make extra money, and you’ve seen all those obnoxious commercials about this rich guy and that rich guy who built his E-Commerce empire in twenty seconds. So, you want it.



E-commerce is great; there’s no question about that. The problem there are so many people out there encouraging it and selling their courses because they are “experts.” Where do you start?



The real experts give away information for free just to help people but also to gain authority for paying clients.



5 Types of E-commerce

Some might say there are 6 but we will get to that. Before we get to the meat of this article, it would be helpful to give a quick definition of each to help your business literacy if you weren’t already sure.

B2B (Business to Business) has to do with things like outsourcing shipping, manufacturing, bookkeeping, and things of that nature.

B2C (Business to Consumer) is like paying and using Netflix at home.

C2C (Consumer to Consumer) is where people sell their things on eBay, Craigslist, or even Amazon.

C2B (Consumer to Business) is pretty much like freelancing. A single individual sells his or her services to a business.

G2C/B is Government to Consumer/Business. This one can potentially be split up, but for simplicity, I put them together. This has to do with all the services the government offers online. (You’re right, this one isn’t as much fun as the rest. Thank you Big Government for all these charges so I can pay you).

For more on the business types and business models check out this other great post.

Statistics — The Good and the Bad

Good

The U.S. retail e-commerce sales are expected to surpass 735 billion by 2023. The U.K. Is even more and is estimated to spend one-third of their income online. That’s a lot of money. If e-Commerce is the way of the future, what are you waiting for?

Did you know, 42% of U.S. consumers have searched and purchased products or services online. That is a huge chunk of the market. Even Tesla is planning to sell its cars online and convert their dealerships into showrooms.

Online or offline, there are only two options, and now it seems like they are becoming equally important.

48% of all e-commerce transactions are from repeat customers. That’s huge! Where do you see that kind of brand loyalty? With the almost infinite number of vendors for literally everything, what would you do to keep your customers?

What if you said, “Thanks for coming. Tell a friend about us” and then it really worked? Users who click on product recommendations lead to a conversion rate that is 5.5 times higher than nonclicking users.

79% of customers order online via a mobile device, which means how you format and focus your e-commerce website display is super important. Selling products on cell phones can no longer be ignored.

For more statistics that will encourage as well as help you focus your marketing efforts check out this link HERE.

Bad

Since about 2016 studies have shown a failure rate of 80% to 98% failure rate for e-commerce businesses. Restaurants are notoriously risky to start because of their high failure rate. How is it that e-commerce is even higher?



People shopping online can be finicky. 69.89% of online shoppers abandon their cart. It is so easy to walk away when there is little external pressure to buy. Have you ever bought something just because you didn’t want to tell the clerk to put it back?

Don’t let the statistic about people abanding their shopping carts scare you. It happens all the time at stores, but the physical stores don’t have any way to track it or analyze why it happened.

To better understand why e-commerce startups are failing, I went to Failory’s Startup Cemetery. There I changed the category filter to show only e-commerce businesses and got about a dozen results. There, it very clearly lists each business along with a start date, end date, number of founders, funding information, the final result of the company as well as a brief summary about how it failed.

After analyzing about a dozen e-commerce startups, a few things stand out consistently. Funding is not an issue. Don’t misunderstand me; funding is important, but none of them failed for lack of funding. Some companies acquired thousands in funding, but most were able to raise millions.

The most consistent issue was business management. Looking over numerous failed e-commerce businesses (and other types), management is the make or break of any company.

Poor management, wasteful spending, lack of experience, bad business plan(s), and even competition or other excuses that negate responsibility can be lumped together with poor business management skills.

The fact is, you need someone who is going to be level headed and single-minded. Don’t get distracted when you have money to spend. Don’t get distracted when things are going well. Don’t get distracted or panic when things haven’t quite picked up because you know that it takes time. Stay on target, and grow.

Do This

Check out this quick video of 13 steps to starting an online store or business.

If you are going to start your own e-commerce business you have to do it right. You have to be serious and strategic.



Let’s start with the product. Research what you want to sell, because it is quite possible that there is no market for your product. A product with lots of competition is better than a product that nobody wants.



When you sell a product online it is “distant.” People don’t get to hold and see the physical product, so you better have the best pictures of the best angles. The odds that your product will “sell itself” are not very good if you can’t properly display.



A common mistake individuals make, as well as companies, is not investing in their online store. Businesses will spend thousands of dollars on their physical store but often very little on their online store, which has the potential for even more profit.



Having a great website is crucial. There are a lot of aspects that could go wrong; problems can be an ugly layout, it’s not user-friendly, it downloads slowly, it’s not secure, or it doesn’t format to all devices. Every piece of the puzzle has to be just right, and that is only one side of the business.

Do not forget to invest in marketing. 35% of product searches come from Google, so if you are not optimizing your website for Google you are going to miss out on traffic — no traffic equals no sales. Don’t be afraid to put out paid ads with Adwords as well as social media. Most social media ads are underpriced right now, so get them while they are cheap.



Now that you have the traffic down, have you checked your inventory? If you have website traffic where people want to buy, but you run out of inventory you are going lose out on money. If you don’t have experience ordering supplies you may want to have a reminder or an alert for inventory is low and when to order more. Different manufacturers also have different lead times for the same item. Keep track of your inventory, and adjust it to sales, holidays, and seasons.



Similarly, if you spend all your money on inventory, but you don’t allocate any of it for your other expenses you are going to have cash flow problems.



If you don’t already wear many hats (fulfill many rolls) at your current job take some time planning all the positions you might need to take on. You are shipping and receiving. You are payroll. You are quality control, logistics, accounting, etc.



Tell people what to do. Seriously, tell people to buy your product. Without a strong call to action or clear “next steps” people won’t take those next steps. Create urgency. Give people a reason to buy today with promotions and deals. Remember, 48% of sales are repeat customers, so it’s okay to give them a first-time discount to get the ball rolling.



Speaking of discounts, if the price is not right people are not going to buy. Do your research; there are a lot of competitors. You have to be the reason for buying online versus buying from an already highly trusted vendor like Amazon. Why people should buy from you. If you don’t know, your customers certainly won’t. Furthermore, if every site is basically the same but you are just cheaper, you will lose. Small companies cannot sustain price wars.



Do everything you can to keep shipping costs down. Shipping costs can kill a deal. Even if you want to give away FREE samples, but shipping costs seem too high people won’t take the free product. Be smart; factor shipping into the cost of items and offer free shipping or some kind of limit to reach to be eligible for free shipping. You could also offer free shipping for members or subscribers (of course you will make your money back with the subscription plan or a minimum amount of orders).



Lastly, make your goal to help people. Believe in your product and people will believe you. Your customer service can make the difference between a refund with a negative review and a customer that becomes a brand advocate (free personalized advertising).



If at all possible, put out content that genuinely helps people. Don’t just sell your product, inform and educate. Build trust and authority, and when people are finally ready to buy they will know where to go.

Tools and Resources

I know everyone says it, but seriously, keep learning. The world is rapidly evolving, so no one is going to know everything there is to know about e-commerce or business. Learn about things that are unrelated to your field. Your most creative and brilliant ideas will happen when you connect something to your business that is seemingly unrelated



On Instagram, search for e-commerce and business related hashtags. A few pages to follow are: Entrepreneur, Financial Teacher, Investingmentors.



Some books are Shoe Dog by Phil Knight, The Obstacle is the Way by Ryan Holiday, and The Subtle Art of Not Giving a F*uck by Mark Manson. To be honest, I have personally only read the last one, and it was way better than I expected. All three of these are also available in audiobooks.



If you can’t make the time for full books (even audio books for your daily commute), there are many blogs and magazines with very helpful information. Internet Retailer, Practical eCommerce, eCommerce Times, and eCommerce Fuel.

