E-Commerce has been rapidly growing and continues to do so as a market and as an opportunity. Covid-19 temporarily accelerated what was already a trend for the past decade.
In Canada ecommerce sales grew from $21.9 billion in 2017 to $32.4 billion in 2021. Retail e-commerce sales more than doubled year-over-year with a 110% increase.
In the US e-commerce sales in 2020 grew 32.4% year over year reaching $791 billion.
It’s highly competitive and rapidly evolving, without an exact formula or path that will work for everyone and every product. There are many variables at play. There are many ways to do it. Shopify and WooCommerce Websites, FBA (Fullfilled by Amazon) Sell on Amazon model, EBay, Dropshipping, Digital Goods and Memberships, etc.
Having built many e-commerce websites, as well as being part of the digital marketing and operational efforts behind several brands for the past few years, I’ve identified 7 key elements to building a profitable ecommerce website and business.
1. E-Commerce Product
The product or service you offer, and the target audience must be researched thoroughly.
Is there demand for your product? Who are your customers? Who are your competitors? What are the price ranges for these products? How much can you charge and be profitable?
Google is a great resource at figuring all of this out – from searching competitors and industry leaders, checking out Google Keyword Planner, and Google Trends.
Branding is often the separator, more so than the product. It’s not just a logo or a name. Companies that build a brand around their products become recognized authorities and leaders in their industries over a period of time, earning loyal customers and ultimately boosting sales and profitability.
The brand needs to look good, and it needs to be consistent across the board. From your logo, to your product packaging, to your website, to your ads, and social media assets, colors, fonts – everything has to be consistent with your brand, which should be aligned with your ideal customer.
Brand consistency across all channels increases revenue by 23%. 91% of consumers prefer buying from an authentic brand. 82% of investors expect the companies they invest in to have a strong brand. Check out these 80+ statistics about branding.
3. E-Commerce Website, Other Platforms
An ecommerce website becomes the exclusive online store of your business. WooCommerce and Shopify are the most common e-commerce web design platforms used and offer customization and complete control over branding and user experience.
Developing a great e-commerce website requires time and skill or some up-front cost but offers the most powerful solution. With new e-commerce websites being launched every minute, great quality, properly designed and developed websites, mobile responsive, with great user experience are necessary to stand out and succeed.
At Grandway Marketing, we’ve built many e-commerce websites, some of which generate millions in sales annually. In a later blog post, I will address top tips for ecommerce websites.
There are other platforms/marketplaces that you can sell products online, such as Amazon (FBA Fullfilled by Amazon), EBay, etc. There are many more industry specific and niche marketplaces like Etsy (arts & crafts), Udemy (online courses), that may apply to your product and industry. The benefit of these platforms is that they already have traffic, but it’s their branding, their website, and you’re a seller subject to their policies.
4. Promote & Advertise your E-Commerce business
This isn’t one of those if-you-build-it-they-will-come type of things.
Once you have the product, the brand, and an excellent website you have to generate traffic. By any means necessary. Because no traffic means no sales. So you have to promote and advertise. Depending on your product or your industry, you will get better results from different marketing efforts.
Google Ads – Pay Per Click Advertising
SEO Search Engine Optimization – Organic Search Ranking
Social Media Marketing – Organic Content & Engagement
Social Media Advertising – Facebook Ads, Google Ads, etc.
Other Marketing Strategies
If your product/industry has repeat customers you can also use loyalty programs, referral programs, email marketing, coupon codes, and more to generate traffic.
I’ve seen situations where SEO is working way better than social media and given a limited budget, SEO gets the priority. I’ve also seen situations where the ad spend stays constant across multiple marketing strategies, for example SEO, Google Ads, Facebook Ads and Email Marketing, yet the results fluctuate. One month SEO could generate most sales, and then next month it’s Facebook Ads, so you gotta keep pushing on all fronts.
The key starting off on a budget is to research and pick the best strategy for your product and industry to generate a return on ad spend as quickly as possible.
5. Excellent Execution
Excellent execution is necessary for long term growth and longevity. Once you’re getting sales you must ensure that what you offer delivered or fulfilled as expected or better – from quality to delivery/shipping and beyond. Happy customers means positive reviews, repeat customers, and referrals.
6. Analytics & Feedback
It’s important to set up your data analytics and track important metrics as well as conversions to determine what’s working and what is not. Without analytics you won’t know what’s working well and what needs improvement, and where potential opportunities are. Google Analytics is a powerful tool.
Also, your customers will let you know what you’re doing right or wrong if you facilitate their input. This will help adjust as necessary to enhance those areas that you’re doing right and improve the areas that are weakest.
That being said, it’s important to note that perfection is not achievable, the thing to aim for is constant improvement and adapting to changes.
Getting reviews and showcasing them creates social proof and has a powerful effect on consumers, because reviews come from other customers and not you, the seller of the product. Positive star ratings and reviews on a homepage influence 86% of customers to make a purchase, and reviews on a product page influence 85% of customers.
8. Innovation & Processes. Scaling E-Commerce
Once you have all the above taken care of and your e-commerce sales are picking up, new challenges will arise and it’s important to create processes and innovate to avoid bottlenecks and allow for sustainable growth.
On top of the top bottlenecks for e-commerce growth, changes in the marketplace externally or internally within your operation will also throw challenges your way and provide room for improvement. Whether it’s simplifying the buying process on your ecommerce website, addressing return rates, or shipping issues, setting up integrations and automations.
Growing your ecommerce business means solving problems and levelling up to new problems.
In conclusion, there are 7 key elements to a profitable e-commerce business:
Product/service has to be well researched and well represented.
Branding has to be memorable and speak to your ideal customer.
Your e-commerce website must look great, work great, and offer customers a great experience. Additionally, you can sell your products on Amazon, Ebay, Etsy, and other niche and industry e-commerce marketplaces.
You have to promote and advertise to drive traffic to your e-commerce website or product pages, whether it’s SEO, email marketing, social media content, social media ads, google ads, guerilla marketing, any way possible.
Once sales come in, executing the fulfillment of orders as flawlessly as possible to ensure customers are ridiculously happy is important for longevity and growth.
Tracking data analytics and facilitating customer feedback is crucial in determining results, understanding what is working and what is not and making informed decisions.
Reviews are key to increasing your traffic to sales conversion rate. In 2022, customers expect reviews and are skeptical about products that do not have reviews or have lots of bad reviews.
Innovating, creating and implementing processes are important to address bottlenecks that arise as you grow and scale your e-commerce business to new levels.
Within each of these 8 areas, there are many concepts, factors, and variables, but from a macro level, these areas require your attention and effort in order to maximize your chances of building a profitable and successful ecommerce business.
Any other tips for a profitable e-commerce business in 2022?
If you’ve built a successful e-commerce business or ecommerce website, and know of an area or specific tip I may have missed, please add it in the comments section!
As a recognized e-commerce development company, we have built many e-commerce websites, some of which generate millions in sales annually. If you are looking for a quote, consultation, or some tips specific regarding your existing e-commerce website, please visit our e-commerce page on our website to see our work, client reviews, pricing, faq, and request a free review or consultation.