If you've decided to start on online business, I'd say its one of your best decision in the right time. The eCommerce sales graph is rising year by year and the amount of money spent through these eCommerce websites shows no signs of decline . Studies shows that eCommerce business are achieving a growth rate of 145% annually. According to the recent studies by Ernst and Young, the total revenues of the online consumer and retail products for the calendar year just completed were around $25-30 billion. In this eCommerce era, where many offline businesses are beaten by online businesses, its not at all a bad idea to get online.
So, before starting your eCommerce business, you do have to depict a clear business plan. In this blog post I'll help you to develop a complete eCommerce business plan. We'll this business plan is completely in the perspective of your ecommerce store only, I havent covered the other financial/tax aspects of your ecommerce store. I have written everything you need to plan about your ecommerce store.
The whole 45 plans are segmented into 5 sectors,
- Market Study.
- Website(Ecommerce Store and technology).
- Sourcing(Inventory) and Shipping Plans.
- Marketing and Brand Building Plans.
- Financial Plans.
- Monetizing Plans.
1. Market Study
As like any other business, market study is very important for your online business. You cannot simply start one store in a niche, you need to analyse the market,customers,competition and future of the online business. A proper market study can save you plenty of money. Market study plays a pivotal role in the success of any ecommerce store.
Customer is your god, you need to do a deep analysis about your customers. This will help you to identify the trends and to achieve a good conversion rate.
#Plan 1 - Identify the customer gender.
If you are selling some female apparels , then you need to market your products on behalf of female customers.You can use female dominating social networks like Pinterest(80% of the pinterest audience are females).Gender oriented marketing is very effective, analyse which gender dominates your product and write down a marketing plan for them.
#Plan 2 - Identify the customer age.
Analyzing the customer age is really important for the success of your ecommerce portal. For instance, if your product is some kind of teenage tshirts, you need to reach out to the teenagers. Market the product through the social networks/media used by teenagers.
#Plan 3 - Identify the customer Location.
You need to analyze the customer locations, some products might be on great demand in some specific locations. And it certainly depends on numerous factors, for example a a christian statue might not be sold in a Muslim state, a Spanish book is less probable to be sold in an English state. Identify the right location and reach out the right customers.
Does your product has a demand? Even though it do have great demand in the offline market, it may not be same when it comes to online. You need to validate your product idea before launching your store. You should have a clear cut view about your product market so that you can figure out the right way to develop your eCommerce store.
#Plan 4 - Identify the Google Trends.
No one can deny the authority of google and other search engines. Recent studies says that more than 30 percentage of the total traffic of most of the eCommerce/ websites are from Google and other search engines.
This is an example of the google trends analysis for two eCommerce keywords 1. Protein powder, 2. Dumbbells. And it is very much clear from the google trends graph that even though they were almost closer in 2006, protein powder got much greater demand in 2015. So it would be much wise if you focus on protein powder(you are prone to get more sales). Likewise you can validate your eCommerce product ideas using google trends.
#Plan 5 - Use the google adwords keyword planner tool to do product market study.
You can validate your eCommerce product idea using the adwords keyword planner tool, you can narrow down the search to your country/state of operation and check the competition and monthly search volume. High monthly search volume and low competition is the ideal case, if the search volume is high it means that the product is in high demand and if the competition is high , it means many other players/advertisers are in the same niche.
For instance, if you are starting a dumbbells eCommerce store, some of your hot keywords would be
Buy dumbbells online
Best dumbbells online
Best adjustable dumbbells online (Long tail keywords).
You should make a list of these keywords and develop products/contents in the keywords which has demand and this can bring in visitors/customers to the website.
#Plan 6 - Write down the future scopes of your product
You need to answer these questions
1. What if your product gets replaced by some other one ?
2. How are you gonna deal with this?
3. How are you going to expand your inventory to meet the sales?
4. Do you want to add another niche to your present niche?
Every business should have competitors, as well as eCommerce. You need to figure out,
- The strength and weakness of your competitors.
- How they built a brand ?
- Are they successful ?
- How can you beat them ?
Well, no competitors? Good for you! But make sure your product does have a market.
#Plan 7 - Make a list of competitors
Any business has competitors, and the success is all about winning the competition. You need to make a list of your competitors , analyze the strength and weakness and chart down a plan to beat them.
Lots of awesome competitor analysis tools are available online, these are some of my favorites.
Google your keyword, and you can get a list of competitors. For example if you are selling Christmas Tree, Google for
"Buy Christmas Tree online"
"Best Christmas trees"
"Buy Xmas trees"
If you are from Australia, google
"Buy Christmas Tree Australia"
write down your competitors.
Semrush allows you to search for a keyword, and it shows the volume of searches as well as the top leading competitors for the keyword(selling this particular product).
Buzzsumo allows you to research the top shared(check the social media shares in the below image) and popular contents for a particular keyword, use buzzsumo for your eCommerce niche keyword to see your competitors.
After using these tools and finding out who all are your competitors, group and write down all your competitors into a list.
#Plan 8 - Identify the pros and cons(strength) of your competitors.
After making the list, we need to analyse the strength and weakness of your competitors. You need to figure out an answer to this question.
Is your competitor a success? If so why was it successful? If not why it was a failure?
To get the answer to this question, you need to do a research in your competitor website.
Here are some tools which help you in achieving this.
Open Site Explorer shows the popularity and authority of your competitor website. Just enter the url of your competitor and it'll bring the results. It also shows the inbound links of your competitor.
Alexa has a traffic rank system and it shows up the approximate traffic stats of a website. Even though not accurate, you can get an approximate traffic stats of a website through alexa. You can see the top keywords for which the website is ranking and also the traffic growth.
Generally sites having a global alexa rank less than 100K is expected to have good traffic.
This is another great tool to analyse the difference between you and your competitor, it clearly list out how your competitor differ from your sites(regarding the basic seo stuffs and other things).
Quicksprout helps you identify your competitors seo tags, social shares,backlinks,loading speed and website performance. Just enter your competitors url and see the results.
Analyze how your product will stand out from other e-commerce competitor.
#Plan 9 - Analyze the Price Competition.
So what are the two most important factors for the success of your ecommerce store? I'd say Quality and Price. Make sure your price competes with other players. Low pricing can attract customers to your store, so its always a good idea to price low in the beginning. You need to figure out a way to source your product at the least possible price.
#Plan 10 - Market Saturation check
Any business will touch a saturation point after some period. Do you think you can launch a store to beat amazon ?
Check whether your product is in a saturated market and your product(or store) does have a space in the eCommerce market. As you may know market saturation is the point where there is no more space for another business to occupy the market.
The best example would be mobile phones, its really hard for another mobile phone ecommerce portal to survive. Also you need to check the opposite scenario , whether your product is introduced early in the eCommerce market(the case where there is no/less buyers).
2. Website(ecommerce store) and technology
Building up a great ecommerce portal is the most important factor of the ecommerce business, it should be good looking,functional,fast loading,communicative and interactive.
Have a look at some important plans which you need to have before working on your ecommerce website.
#Plan 11 - Get an awesome design
First impression is the best impression. You need to get this right , or else you'll loose your impression. Your store won't work before the customers if your design is bad (even if your store has bulk of functionalities). In real world, no one enters inside or buy products from a dirty untidy shop ; right?
Likewise, you need to land an apt and beautiful design for your ecommerce portal. Hire a kickass designer to get a perfect design suiting your niche, for example it would be wise to use pink color if you are launching some fancy products for ladies.
If you are intending to save some money or looking for some awesome ecommerce themes go check Themeforest Woocommerce themes
#Plan 12 - Pick an ideal hosting provider
Its really important where you are going to host your website. Hosting affects the speed,security and performance of your website. Bluehost, Wiredtreee or A2hosting would be the ideal hosting suggestions.
#Plan 13 - Picking up the right eCommerce platform.
This is really important, I don't recommend you wasting your money building a custom shopping cart. You can use hosted or self hosted shopping carts.
In hosted shopping carts like shopify,bigcommerce etc, they host everything for you and you just need to pay them monthly.
In self hosted shopping carts like magento,woocommerce,prestashop, you need host the shopping cart software in your server and install it. The ideal platform might vary based on your requirements. For example, if you are looking for more functionalities, magento would be great and if speed is your prioity then yo8u should go for something light like woocommerce or prestashop.
#Plan 14 - Whether your ecommerce portal is speed optimized.
When it comes in 2015, speed is the biggest factor in success of an eCommerce business. Did you know that a 100 milli second of latency resulted in 1 % reduction in sales for amazon, and you can imagine how much million dollar is that . According to the recent studies, a 1 second delay in page results in 7% loss in conversions and 16% decrease in customer satisfaction.
You should also be wise in selecting the right eCommerce platform, for instance, Magento , even though very efficient, is very notorious for slow loading speed.
#Plan 15 - Check your eCommerce platform has offers section.
Offers are the most important section in any eCommerce platforms. If you check the most popular eCommerce platforms, you can see that offers are highlighted with great importance. I've listed my products in snapdeal and amazon, and offer column is an essential field while we submit products in these market place. Its one basic consumer psychology to buy things with offers, products highlighted with offers are prone to get more sales.
#Plan 16 - Check for report generation functionality.
Your shopping cart should have a detailed report section. You need to track the orders and its details and plot graphs based on it. This data shows you the progress of your store, and that's how your store can grow.
#Plan 17 - Reviews and Ratings.
Product reviews and ratings are something inevitable for an eCommerce website. People do buy products checking its reviews and ratings, and moreover its like a habit now. Make sure your eCommerce portal has these functionalities.
#Plan 18 - Product Recommendations.
You can increase the sales by recommending products(or like combo products) in your product page or checkout page. Assume that you are about to checkout a pair of shoes, recommending a pair of socks would be ideal right? So , you can get additional sales through product recommendation feature.
#Plan 19 - Add to cart /Checkout.
Most basic feature, rather than inventing a new method for online shopping, use this globally familiar Add to cart > Checkout shopping experience. Also make sure your checkout form is very simple and pleasing for the user. Surveys denotes that very long checkout forms prompts the buyer to bounce off from the site abandoning the checkout. Its recommended to use a one page checkout, which is super popular now.
#Plan 20 - Ensure the use of a secure and efficient Payment Gateway
Its wise choosing the most popular payment gateways, customers might not hesitate using a well known payment gateway. And moreover its the matter of money, and its better not to use sub standard stuffs.
#Plan 21 - Invoice/Shipping/Other features
Make sure your shopping cart has the invoice generation, shipping functionality and other required order processing features. You can save lots of time if the shopping cart software has its own invoice generation functionality(so that you just need to print it out and put inside the packing).
#Plan 22 - Customer support functionality
Customer support is the most essential sector in any eCommerce website. Customers will bounce off from the portal if proper support is not given. Make sure you give awesome customer support.
#Plan 23 - Live Chat Functionality.
Live chat functionality ensures and gives customers confidence to buy product from your website. Moreover its a great method to clear the queries of the customer and motivate him to buy the product. I'd recommend the Free Zopim Live Chat for your portal.
#Plan 24 - Proper method to handle returns.
Your ecommerce portal should have a proper product return functionality. Customer should have a proper method to return the product in case of damage/dislike or something like that. Most of the popular eCommerce websites have product return feature(Based on a specific return policy) like exchange or replacement or refund.
#Plan 25 - Building a mobile app.
Many super popular ecommerce websites have fully switched into mobile applications alone. At present, once we enter the web portal, we will be prompted to download the mobile application. This denotes a changing trend. Its highly recommended to launch a mobile application for your eCommerce store, so that the customer can shop through the app(a better an easy shopping experience). Even if you didn't launch an app in the early stage , keep in mind about launching it later on.
#Plan 26 - Maintenance and management of the portal.
You need to figure out a way to maintain your portal, like taking backups, customizations, securities and updates. It would be better if you can get a tie up with some technical team for maintenance.
3. Sourcing(Inventory) and Shipping
Sourcing and shipping is the backbone of any eCommerce business. Sourcing products for the least possible price and shipping it at the right time is a winning situation for your store. If you can source products for cheap cost, you can compromise on your price and this can attract customers. Many of the biggest eCommerce stores like Amazon,Flipkart and all focus on 24 hour shipping, which means a product will be shipped within 24 hours once an order is placed. 24 hour shipping can attract potential customers to your eCommerce portal.
#Plan 27 - External Factors affecting your product sourcing and business.
Different external factors might affect your online business. Think about PESTLE (political, economical, social, technological, legal, environmental) factors affecting your business. For example changes to tax on imports may affect your profit and you might need to increase your pricing.
#Plan 28 - Efficient packing.
You need to pack your product properly in order to ensure that there is no damage to the product. The product should arrive at the customer end safely,in most cases item damage happens because of improper packing. If you have breakable materials like crockery or glassware,wooden packing with bubble wrap or platstic air cushion will be ideal.
#Plan 29 - Fast shipping and proper logistics.
This is a supreme factor which determine the success, fast shipping is something that adds value to an ecommerce store. Customers love fast shipping. Make sure you select the right logistics partner or it will affect your ecommerce sales and the customer may bounce off from the website. Moreover fast shipping is the best method to get returning visitors.
4. Marketing and Brand Building
Assume you've launched a super sexy ecommerce store and have made all the sourcing and market study. How would the customers come to know about your store? This is where marketing and brand building becomes super important. You need to reach out to your customers, and you can achieve this through the various online marketing techniques possible now a days.
#Plan 30 - Build an Email List.
Haven't you seen many ecommerce websites showing banners on the landing page, like
"join our email list to get 20 % offer for the first purchase".
This is really important, once you get the email of a user/customer, you can notify him newsletters. For example, if a new product is launched, you can email your customers about that. Moreover, studies indicate that email marketing is the best method for you to get returning visitors to your website and returning visitors are more potential customers.
#Plan 31 - Promotion through Social Media channels.
Social media promotions are one of the most effective strategies to build traffic to your eCommerce website, its said that social media posts influence 71% of purchases for an eCommerce company.
The first thing you need to do is to start pages in the popular social media channels like,
#Plan 32 - Video Promotions.
Video promotions are a great way to market your products, and the best thing is it has great conversion rates too. When it comes to videos, nothing beats YouTube. You cannot simply promote your videos, if you are using YouTube video ads, you only have 5 seconds to grab the attention of a user or else he can skip the video.
You need to develop your own video channels and bring visitors into it and after all you can promote your products.
Slikhaar TV is a great example, they've uploaded lots of top notch hair styling tips and videos and this has attracted a channel subscribers of more than 1,101,680. They sells their products through their eCommerce store. Slikhaar Shop(They sells hair styling products). They've placed a sticky banner link to the slikhaar shop website throughout the video which drives visitors to their eCommerce store.
#Plan 33 - Developing a blog for your ecommerce.
Building readers is a great idea to develop your ecommerce portal, what you need to do is to develop great content in your blog. For example, if you are doing ecommerce for skin care products, write articles about skin care. Develop great and unique content that can attract readers, you can convert this readers into customers(by collecting emails,popup notices etc).
#Plan 34 - Getting traffic from Search Engines.
More than 30% percent of overall traffic of the eCommerce websites are driven from search engines.Optimize your ecommerce website to get more traffic from search engines, especially google. Optimize your portal with keywords(including the long tail ones). Say, if your website is about protein powders, its good to rank for "Buy protein powder online" , right? More sales!
#Plan 35 - Start an affiliate to get more sales and promotions.
Affiliates are great way to build traffic and sales to you ecommerce portal. Add an affiliate module to your shopping cart. Well I used the magestore affiliates plugin for my ecommerce store developed in magento.
#Plan 36 - Paid advertising to get more brand value and sales.
You can use paid advertising in order to get more brand value for your ecommerce portal. Some of the most popular paid advertising methods are,
Facebook ads - Facebook ads are now one of the most popular advertising methods for eCommerce websites. Even though many marketers says that the conversion rates are less, we can properly target the audience that the right thing is delivered to the right audience, which is always good. Right?
Google Ads - Google ads are much more popular than facebook ads, more potential customers can be driven through google ads.
Youtube Ads - Video ads are trending, use youtube ads to give much more clear picture of your product to the customer.
Press Release(PR) - Getting a PR can benefit you in multiple ways, PR can build a trust factor to your brand. And this trust factor can bring in more sales to your ecommerce portal.
#Plan 37 - Using Influencers in your product niche.
Influencer marketing is one of the hottest trends in the eCommerce marketing. You can contact bloggers,vloggers,social media stars and so called other INFLUENCERS in your niche and ask them to review or promote your product. You can set a deal with them, like paid reviews or commisons per sale, well, it depend on the attitute of the influencer.
#Plan 38 - Use google analytics and ecommerce tracking to monitor your growth.
Google analytics as you know is the best anlytics tool available online, and yes it is free. You need to integrate google analytics with your ecommerce portal in order to track down visits/location/language etc.
From this data you can come to know who likes your products, and can develop/market your store based on this data.
Ecommerce tracking is another wonderful feature in google analytics, where you can track and group the data once a sale happens. Even though there should be sales reports section in your eCommerce platform, integrating all(visits,sales,bounces) etc under one platform(google analytics) is much more efficient and organized.
5. Financial Plans
You need a financial plan for the store. Like, budget,taxes so and so. Proper financial planning can help you to avoid losses and other unexpected liabilities.
#Plan 39 - Budget Planning.
Set a budget for your store, divide this budget into product sourcing budget,marketing budget,employee salary and other expenses.
#Plan 40 - Break Even Analysis.
As you all know Break even analysis is where when your business covers all your expenses and losses and begins profitable. Do a break even analysis for your store.
#Plan 41 - Calculate the sales tax and other taxes.
You need to calculate and plan the overall taxes(mainly sales tax) for your store, one of the biggest constraints would be handling taxes for returned products. Think and analyse the taxes of the store.
#Plan 42 - Future funding and expansion.
You need to think about getting funds from an investor in order to expand and scale your eCommerce business. At one point, you may not be able to manage the orders with your available resource. At this point you might need more funding to take this business to the next level.
6. Monetizing Plans
Well, eCommerce is about sales and you can make money through these sales. But, do you have any other monetizing plans or do you have a plan to sell your online business in future?
#Plan 43 - What are your money making plans?
Ecommerce sites are expected to make money by selling products and taking profits. Yes I do agree. But there are also also other money making methods through your eCommerce portal like promoting other products, B2B methods, advertising and so on. If you have other plans, write it down.
#Plan 44 - Will you tie up with other players?
Tie ups always helps you to scale your business and take it to the next level. Think whether you have any plan to tie up with some other eCommerce business in order to make much more money and sales.
#Plan 45 - Do you have an exit plan?
Exit plan is very much important as the other business plans, you need to analyse the future of your eCommerce business also. Write down whether you have any plans to sell your portal to some one (investors) afters some years? You might need to exit from the business in case of unexpected losses , and in order to play safe with out suffering much losses, write down a clean exit plan for your online eCommerce business.
As we all know, eCommerce is one of the most looked after online business models. Setting up an online store is no one day business, you need to plan well and execute properly. Hope these 45 plans will help you in landing a great eCommerce business. Please share the post with the world if you liked it. And yes! I will be available in comments to clear your queries :).