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Making money from your Ecommerce website – planning and suppliers

boxes from around the world showing worldwide commerce

This is the second in a series of articles providing advice on Ecommerce websites. In the previous article we covered ideas and testing. Now you’ve got your idea and tested it the work really begins to source suppliers, write a business plan, figure out your business model and so on. This all needs to happen before you even think about your brand design and Ecommerce website development.

Business plan

No, it shouldn’t be just a few notes on a scrap of paper! You need to create a sound business plan that identifies your market, strengths, weaknesses, threats, budget and so on! If you’re not comfortable doing this get some expert help. Above all, make sure you address the following;

1. Identify exactly who you are selling online to and understand the market inside out. Understand what motivates your audience, excites and learn to think like they do.

2. Know what problem your product is solving and have knowledge of how it does it. Knowledge is key to selling, make sure you fully test and understand your product inside out. You can then offer features such as online chat or a support forum.

3. List your online competitors and identify their strengths and weakness. Can you cash in on their weaknesses? For example, larger Ecommerce companies rarely offer out of office hours support, if you’re a sole trader you can.

4. Know your finance! Address the basics – what can I buy/make for, what can I sell for, what products yield the most profit. Research into competitors and make sure you’re prices are the lowest, remember the internet makes it easy for consumers to compare prices through comparison websites. Identify your budget for website development, Search Engine Optimisation, Google Adwords, Banners Ads and other forms of marketing. You may need to speak to a few web developers and design agencies to get a better idea on cost. You’ll need a start up cost, and a budget for ongoing development and marketing.

5. Unique selling point’s (Usp’s) – ‘Cheap’ is not a usp, nor is selling online, or having terms and conditions. You’ll need to dig deep and make sure your usp’s are in fact usp’s. Ask yourself, what makes my service different? For example, if you’re selling mountain bikes can offer to ship a demo bike for people to test. Equally, what makes your product different? If you’re selling covers for tablets or phones, do you sell the lightest case on the market? or, can you manufacture it in any fabric the customer chooses?

Manufacturing and Suppliers

Unless you’re making your own product, or you’re a reseller, there’s a good chance you’ll be looking for someone to manufacture your products.

Sourcing suppliers in places like China is very cheap and provides a healthy profit margin, despite shipping costs. Not only that but you can source pretty much any product you like through websites such as alibaba.com. There are some draw backs though, consider language barriers and cultural differences in how people do business first.

When you’re sourcing products for your Ecommerce website you need to be mindful of the following;

1. Quality – Make sure you get samples and keep a close eye on quality. Regardless of where your supplier is it’s worth visiting their premises, even if it’s in another country.

2. Timescales – Is there a service level agreement? Your customer will not tolerate waiting for items to come into stock, check the lead time on deliveries. Customer expect items fast when ordering online.

3. Minimum order – Be prepared for this, most suppliers will insist on a minimum order. This is where your research kicks in, you’ll need to know which products will sell quickly and order accordingly, you don’t want lots of items in stock and you can’t afford to let customer down with slow delivery.

4. Exclusivity – Ideally you want some exclusivity over the manufacture of your products. If nothing else make sure any supplier you meet signs a confidentiality agreement – protect your product design at all costs! Even the best have been caught out by this.

Hopefully your relationship with your supplier will be long and profitable. You need to get a sense of whether they’re on you side from the outset. Ask lots of questions and make sure you’re fully confident with the response.

 

 

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