Getting into an online business seems like one of the easiest ways to make money nowadays. With new online businesses popping up every minute, it’s easy to see why. Online businesses are easier to track because all records are digitised, easier to set up because of low overhead costs and can be done from the comfort of your own home. However, before you start your own online business, there are some things that you should consider first. Here are some helpful tips that will provide you with the tools to create your own basic online business framework.
Tip 1: Deciding what to sell
This is the intuitive first step in starting your online business, but there are some things that you should think about before diving right in.
You can sell physical products. For example, if you choose to sell clothes, it will need to be shipped to customers. This means that there are extra costs and risks associated with getting the product to the customer. Products may be damaged, customers may not receive them promptly or they may simply get lost in the mail. This means that you will need to have contingency plans for all of these possible outcomes. Will you provide a money back guarantee? Will you get customers to ship it back? Will there be a strict no refunds policy? It is important to think about these things if you are looking to sell physical products. In addition to this, it is also important to note that there are plenty of third-party companies that can assist with the shipping logistics that you should investigate if you want to remove some of the shipping-related stress from yourself.
Now, the products your business will sell don’t need to be physical. You can sell digital items too such as Ebooks or Apps. This takes care of the shipping issues, but it also creates problems in terms of piracy and file sharing. This means that you will need to be on the lookout for people trying to torrent your material. If you plan to write an Ebook, ask yourself – “what do I have the expertise in to write about?” If you want your Ebook to sell, you need to be able to give your customers something unique and interesting. The same goes for Apps.
So spend some time really thinking about what your online business will sell. Assess the market and determine what gap your business could possibly fill.
Tip 2: Deciding where and how to sell
Once you’ve decided what your business is going to sell, the next thing that needs to be determined is how you plan to sell it. Simply put, there are two ways to go about this. You can either create your own website as a marketplace for shoppers or you can connect to an already developed selling site such as Ebay. There are benefits and downsides associated with each.
1) Creating your own site:
- Full control of the layout and content of the site. For example, you can direct attention by putting deals or special offers on the homepage at your own discretion.
- Looks more professional. If you have your own site and it looks really good, then the quality of your product instantly looks better to the customer.
- More time and effort to create. When you are starting a business, you want to keep your start-up costs pretty low, so investing time and money into creating your own site may be money that you simply don’t have to begin with.
- Hard to get noticed. There is a lot of competition online, so it can be difficult to get on the radar of your customers. This means that more money needs to be spent on marketing your site in order to build a sufficient customer base.
2) Using a Developed site:
- There is already a huge community. This is probably the number one benefit of using a pre-established site. Ebay and Amazon already have large customer bases and many online business owners make plenty of money on these sites alone.
- Quick and easy to use. These sites have been optimized for everyday sellers/buyers to begin using within minutes after registering. Very little time and effort is required to get started.
- More competition on the site itself. Your product may look great and appealing on the site, but chances are that there are 30 other versions of what you are trying to sell only 2 clicks away. This can be hard when competing with other business owners who have very strong buying power.
- They take a percentage of your earnings. This is pretty self-explanatory. No one likes less money!
Tip 3: Record your progress
When running an online business, you aren’t going to be dealing with customers face-to-face like a real store. This means that your data is the only metric you have to assess how your business is going.
Here are some statistics you should be tracking regularly:
Conversion Rate (%) – The percentage of people who visit your store who actually end up purchasing something. You want this percentage to be as high as possible.
Traffic Sources – This tells you where your visitors are coming from e.g. they may be referred to your business by blogs, online ads etc
Bounce Rate (%) – This is the percentage of people who visit your site and then leave from the page that they entered. You want this percentage to be as low as possible.
Map Overlay – Countries/States that are visiting a site.
Product Performance – This tracks the most and least popular products.
Tracking your progress is crucial to the growth of your business and gives you a great starting point for decision-making.
If you choose to start an online business (or any business for that matter) there are going to be advantages and disadvantages associated with any business decision you make. This is unavoidable and should not be feared, but embraced. The real challenge is to find out what is best for you and your business for your ongoing success.
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