Observation on successful ecommerce businesses shows hundreds other ecommerce initiative lying behind and failing to reach even the break even point. Plus staying in the business requires having a holistic understanding of where your business stands today and where you want to take it to. For that, you need to be able to monitor patterns and trends which can cause lethal drops in traffic and even the revenue in your business. Thus, with lack of experience, negligence, fraud, and blunders; there are a handful of other reasons why an ecommerce business can fail or might not see the light of success. In this blog, I will be pointing out some more reasons and what could be the possible solutions for an ecommerce business to stand out. Along with that, we will share a startup business plan template to help you to make your ecommerce business work.
Though product/market fit is the term used for the startup world to designate a startup which is creating a value proposition that will meet or create a market demand for the business. Nonetheless, we figured out, instead of focusing on a single or handful of product lines and services, eCommerce businesses should choose the luxury of being able to test the waters for a wide variety of different products no matter if it’s a new business or an existing one thriving to sustain and to get bigger. Also to understand the market demand, understanding the consumer mindset is also very important which demands a good research manuscript before starting a new business or to add a new product line to an existing ecommerce.
The statistics behind the customer retention topic are astounding like it says:
- For a new customer, it costs five times more than retaining an existing customer.
- Approximately a 5% jump in customer retention rates increases profits up to 25-95%.
- And you are between 40% to 65% more likely to sell to an existing customer than a new prospect.
Thus, if you can not keep your customers interested in coming back to your business then you are easily letting your hard work on the front-end go to waste. Therefore it’s important to maintain a balance to retain and gain new customers and need to set a marketing strategy accordingly.
There is no sugar coating to the words, that if your website sucks, you can kiss your ecommerce business sales goodbye. Because your website plays the key role in your ecommerce business and without a well thought out, secure, easy-to-use site you will fail to reach your target audience and it just won’t work for your business to reach its goal at all. With so many platforms, for example, Magento, nopCommerce to Shopify and easy to use apps (native apps also) available to us these days, there is really a little reason why you can’t afford to make sure your web store is top-notch. And to give your customers a better shopping experience you need to ensure that the language you are using, the appearance that your site is having, the loading speed and the checkout process is very easy and user-friendly. Make your online store become a successful one with a better responsive website. A good site does not only create a unique product line but also is able to display the proper impression which helps to attract the right targeted audience.
It is very important to monitor the analytics, because successful ecommerce merchants not only monitor their internal analytics but, also, keep their fingers on the pulse of industry and marketing trends, which helps them to recognize the pattern for their businesses so that they can adjust and carry a successful outcome from the business. From customer preferences to search engine algorithm updates, the number of observable patterns can be overwhelming, at first. Merchants with large enough amounts of traffic and scrupulous analytics monitoring habits are thus even able to become news and can prepare to adjust course to not only survive but to thrive in the market.
Diversified marketing strategy is needed as it aims to maximize return by investing in different areas. Additionally, it would react differently for the same area as it wouldn’t make you uneasy for the traffic generation which used to be in the past as 100% of the traffic used to come from a single source. Marketing diversity will also allow you to target traffic from different angles and we’ve seen previously that 80% of consumers online search for products on multiple different platforms is quite common. Most investment professionals also agree on the point that, although it does not guarantee against loss, diversification is the most important component of reaching long-range financial goals while minimizing risk for your business.
If somebody asks me what is the most crucial part in a business to focus onto to ensure the success? Then, I would say it’s the operational strategy which is the most important area for any business or organization. Because, when an organization or a business operates properly through a more managed way, the functions of all other departments automatically run smoothly. If it does not then all other departments have to suffer for it. And in ecommerce business operation holds the largest part and thus needs much hold to reach success in the business.
Finally, on the other side of patience there is this ability to redirect course when you will be able to get the tangible proof that a strategy isn’t working, and probably it would very likely not work in the future as well. Additionally, there is no such thing as autopilot, in the ecommerce world, and even in the moments of tranquility, you should revolve around A/B testing about how to increase your business’s performance better than your present condition.
If you can work on these key points there is no way that your ecommerce business would still lag behind than your competitors. The pain points will get solved easily by taking the proper steps and by making the right choice to improve on every aspect on a regular basis.
Now, let’s look into a draft plan for your ecommerce startup you are probably thinking of currently or struggling for a success in it so that it can help you to head start.
Startup e-commerce business plan template
The key components of a business plan include the following. Find out how defining each element can help your business to success.
- Executive Summary – While it’s the last thing you need to write, it’s the first part of the plan that everyone is interested about as the part summarizes the main highlights of the rest of the sections.
- Company Description – Shows a high-level overview of your company, products or services, consumer types, and competitive advantages. More likely, the short brief that you would tell someone in an elevator ride about your business if you wanted them to invest in it. Which is also known as the extended elevator pitch.
- Market Analysis – This portion shows the part of your research about your industry and your target market. So, If you haven’t yet defined your target customer, this will help you to do so.
- Operational Plan – Covers the day to day operations of your business, from location and hours to inventory and accounting. As you go through this section, you can make sure and have a glance of each of your vital processes in your business are running as smoothly and efficiently as you wanted.
- Organization & Management – The overall structure tells people about the main players in your business – who owns it, who manages it, etc. It will also help you to define all parties involved with the foundation of your business so everyone has a clear understanding of where they fit and who does what.
- Products & Services – Is where you describe the products and services offered by your business. You should think thoroughly about them from your customer’s perspective. It will not only help you to better sell your products and services but also once you’ve defined them using this approach they will ensure a sustainable future of your business.
- Marketing & Sales – Do you have the list of the items crucial enough to help you layout how you will reach your target market, identify prospects, and sell your products and services. While composing this section, creative marketing and sales strategies will help you emerge in the already existing or even in a new market.
- Financial Projections – In this portion, you really dig deep and decide how much you want your business to make for the next five years. If you are already established in the market, you will include historical data and will make your predictions based on that. If you are a new player still you will be able to predict after analyzing the current trend. Coming up with these numbers is a huge motivation boost which will keep you working towards your specific goal and will also show you a path to success ahead.
- Funding Request – The last part of the strategy involves you to define your outside funding needs and requirements and exactly how you plan on using those funds as well as paying them back. Even if you are investing your own money into your business, this area can help you really focus on your spending. Therefore, it needs to be allocated and documented properly.
So you can see now, creating a business plan even if it’s not that professional yet can be a huge eye-opener for your business, no matter what stage you’re at.
Now if I share some research of mine you will be able to see why the established ecommerce could sustain in the market while others fail.
In case of Chaldal, the online grocery space in Dhaka evolved as a company of 5 people to a 300 people within three years span was after technology which gave them the sustainability to emerge in the market. They have several software like wastage monitor, software to predict how many vegetables we will sell the next day, software to mark things that are delivered and so on. And they also say if anyone wants to build a scalable business, then the software is the way to do that. Talking about another business Priyoshop, they started with a 3-member team in a 600 sq. ft. the office which today has grown to a 30-member team in a 7,000 sq.ft. office space. While many of their contemporary businesses shut the door, they are still sustaining and triumphing in the market is one of the earliest players. Also, they share the same story of being tech-friendly to sustain in the market.
So, it can be said that without proper investment in the technology (which includes the website, mobile app, ERP system) and without a proper thought out plan to start an ecommerce business would be a huge risk, as the failure rate is 70% according to a statistics. Therefore, to scale up and to sustain in the market it is important to go through all the viable strategies to move forward the business. Our, strategy is an outcome of well-research current market status inside Bangladesh mentioned above.We guarantee you the success you were chasing for years and not too far to reach if those are followed. We are here to boost your growth alongside with our custom developed e-commerce solutions made just right for your business.