Starting an online business - Part 1 - Pre Launch
Why do so many online businesses fail? There are multiple reasons for it. So many that it is not possible to include all possible scenarios and reasons in one blog.
But then, is there something an online business can do to avoid closing down and survive longer in the cut-throat competition e-commerce has?
Yes, there is. Businesses need to plan better, implement better and keep improving continuously. Easier said than done, isn’t it?
To make lives easier for people who want to launch a new online business or are already selling online but struggling, we have created this piece of content.
In this 4 part series, we take a look at the most important steps a business needs to follow to launch a successful e-commerce business –
A. Market research & competitor analysis -
Once you have decided to enter the e-commerce market i.e. you want to sell online, the first thing you need to do is to study the market and the competition.
You need to find out, for your product category and industry, in the e-commerce market –
- What brands are selling?
- What are their product offerings – product and price as one
- Where are they selling – start with platforms – e-commerce marketplaces
- What brands are selling?
- How are they presenting their product – brand name, product name, branding and packaging
- How much information are they sharing with the buyers through packaging / product listing images?
- How much of that information do you reckon is actually correct?
- How are they promoting their product – paid ads on the platform you
- Digital presence other than e-commerce platforms – their own website and social media handles
B. The Product + Price Combination -
Unarguably this is the most important part of the ecommerce business. And this is what most businesses get wrong.
Doing a good competitive analysis will help you understand what type of product works best in the ecommerce marketplace that you wish to sell on.
If you already are in the product business and have a short listed product range for e-commerce – you can use this information to improve your current range of products that you wish to offer and the price.
If you are in the product business but have not shortlisted on a product range yet, the information that you can gather from this exercise will help you find the gaps in the market. If you can launch a product that fits in this gap at the right price, the chances of its success increase considerably.
Another thing you might have to rework is the pack sizes and selling prices.
E-commerce Marketplaces will take some part of your revenues as commission charges. Make sure you factor these in while setting your MRPs and SPs.
Logistics charges apply as per the dry weight or volumetric weight of the package that will be dispatched.
Product Returns Courier Returns that you will face in some phase of your e-commerce business.
There are e-commerce service providers like Amidora Infotech which help businesses in all these phases.
C. Brand Name & Colors
Good branding and packaging can do wonders. Remember, that in the online selling space, your prospective buyers first would only be able to see your product. Not see and feel it together, like it happens in a store or modern retail. Whether the prospect will become an actual buyer or not is dependent on the following factors –
What is your brand name and product name – does it convey / assure quality or uniqueness or value or aspiration or style or some other proposition that you can also claim to be unique to your brand
What language have you chosen to name the product – How does your brand or product look like – in the images – what do the colors and the font convey – does the logo tell a story or is it just an abbreviation of the brand name.
All of this put together will help you create the positioning you want.
The first challenge that businesses face is to decide whether to go with the existing brand name or create a new brand name for the online launch. To be honest, there is no right or wrong way to do this – all of it depends on what you wish to do with this business.
Here is a simple set of rules you can follow –
If your current business and online business will follow the same revenue strategy – go with the same brand name or an extension of it.
If the revenue strategy would be different – you might have to select a new brand name –
What does that mean? Call us to know.
C. Deciding the Platforms for Launch
Once you have studied your competition and have clarity on your product brand name, packaging and price the next thing you need to decide as a part of your pre-launch phase is where you wish to sell – online marketplaces or your website or both.
If you decide to sell on marketplaces only, you also need to select the marketplaces you wish to be available on. While most businesses think being available on as many marketplaces would be better for the business, reality is not that. Trying to be on multiple marketplaces only puts additional pressure on the team and other resources.
On top of it, if the team is not well versed with managing the operations of online marketplaces, this situation tends to get out of hand very quickly.
To summarize -
Starting an online business is not an easy task – it is a dynamic market governed by fast evolving rules and regulations. There are so many changes every month and quarter that is would not be possible for someone without a dedicated team to manage.
Whether you have an existing that you are planning to take online or you plan to enter the online business as a new venture – taking professional help is the best thing you can do.
It will ensure a smooth start and operations of your online business while you can focus on the other aspects of the business like procurement, manufacturing, branding, labeling, packaging, pricing, man power management etc.
There is a lot more to be done where your expertise would be better utilized, isn’t it?