The pandemic has changed all the market equations. Business models that were looking very promising by the beginning of 2020, are struggling to find any takers. As the retail market comes to stand still and the uncertainty about its future prospects looms large, people who can’t afford to wait any longer are resorting to online business.
Nowadays, both big and small brands are focusing on online sales. Having a traditional brick-and-mortar store can be very expensive. If you also consider that web shops provide global exposure, it becomes clear which option is better.
Although starting an online business can be intimidating, you can do many things to jumpstart the endeavor. For example, you can buy the right domain from Saw.com. Or you can hire a marketing specialist to oversee the development of the brand.
So, how to start an online business? Read this article to find out!
Benefits of running an online business
There are a few good reasons why everyone is transferring their businesses online. Running a website is simpler than having dozens of regular stores. Although you still have to invest to make a profit, you can focus your efforts while doing so.
Here are the main advantages of having an online company:
- Minimal initial investment
Savvy online marketers have dozens of online shops that sell various products and services. Dropshipping is a concept that has become very popular in the last few years as it allows you to run a business without having an inventory. Besides the fact you’ll need a PC, your only costs are domain and site building, both of which can be done for less than 100$.
- Global reach
As long as you know how to promote an online business, you can gain an enormous amount of traffic. Not only can you sell products and services in the home country, but you can also take this concept globally. To put it in a different perspective, your online shop has unlimited growth potential.
- Fewer expenses
Besides the fact that the initial investment is often negligible, you won’t have the same expenditures as with brick-and-mortar stores. Utility, rent, staff salaries quickly ramp up. What’s worse, you have to deal with these expenses every month. On the other hand, once you set up a website, the only thing you’ll have to pay for is marketing.
Building a successful online business ?
Building an online brand has some similarities to building a regular company. The biggest difference is the digital aspect. Furthermore, online marketing channels are very different from traditional marketing channels.
- Research the market
Untill 2020, this was the most neglected aspect while setting up an online business. However, the impact of Covid has forced people and industry to setup new norms for doing business online. Hence, market research to identify the opportunity size and level of competition in post-covid era has become essential for the success of any business.
Analyzing a particular web market is relatively simple due to various Google tools. The search engine collects all the user data so you can easily check the popularity of certain keywords.
First off, you need to find all the keywords that are relevant to the industry. Then, you should compare their frequency of use (keyword volume) and compare it with market saturation (keyword difficulty). Your task is to find industries, products, and services that have high volume and low difficulty.
In other words, you are more likely to penetrate these markets and make a profit out of them.
Besides this rudimentary analysis, you should also make a price and revenue breakdown. If you’re a dropshipper, check how much you’ll have to pay for a unit of product and for how much you would be able to resell it.
- Website as the focal point
Although I’ve mentioned that you don’t need a lot of money to create a website, that doesn’t mean that such a site will provide good results.
In the online world, your website is your business card. That being said, having a bad design can dissuade people from working with you. It needs to ooze authority, to be clean, and customer-friendly. At the same time, you cannot overdo it with graphic elements as this will have a negative impact on optimization.
The basis of almost any good online store is white background with 1 or 2 simple fonts. If you decide to use intricate graphic, video, or audio solutions, make sure they increase site conversion. Furthermore, you need to have intuitive navigation so that the visitors can easily check different product pages.
- Consider payment processing
Payment processing is something that a lot of online entrepreneurs neglect. However, it can be crucial for your enterprise, especially if you’re selling on a foreign market.
When choosing a payment processor, it is very important to go with a service that is popular in a specific country. So, if you’re selling on the US market, you should probably go with PayPal. Having a well-known payment processor is important because it builds credibility.
Among others, you should also consider the processor with the lowest fees. Keep in mind that some companies do not like working with dropshippers due to their high refund rates. The same can be said for certain gray industries.
If you wish to expand to other markets, check if this payment processor can be used in the targeted countries.
- Find an optimal marketing channel
There are numerous ways of promoting an online brand. You can go with search engine optimization, social media marketing, pay-per-click, influencer and affiliate marketing, email promotions, banners, and the combination of these methods.
People usually choose a marketing channel they are accustomed to. Alternatively, they can go with a promotional strategy that is optimal for a particular industry or product.
No matter what you choose, you need to make sure it fits your long-term strategy. In some industries, you might have limited options for advertising. For example, cannabis companies cannot utilize pay-per-click and have limited access to social media.
If you’re not sure what to go with, you can try different approaches and perform A/B testing.
- Upselling and retention
To continuously build your brand, you need to focus on customer retention and upselling. That would provide somewhat of a financial cushion.
According to studies, 36% of people who buy online will revisit the store in the future. There are a few methods you can utilize to increase the lifetime value of a client.
For example, you can offer them items that would work well with the product they’ve already bought. Coupons and loyalty programs are great ways to stimulate second and third purchases. Lastly, you can always use newsletters to inform them about the new products and the latest offers.