According to research the Internet accounts for £1 in every £7 spent in the UK and globally e-commerce is expected to grow by around 16% a year until 2011. In short there's money in them their wires!
So, you've had a brainwave and found a product to sell on-line. As Delboy would say, "this time next year Rodney, we'll be millionaires". I've spoken before about piss poor zero effort websites but in this article I'm going to offer some observations on things to avoid when setting up your on-line empire.
Observation #1 - Planning Prevents Piss Poor Performance!
Before you do anything develop an understand of your market using keyword research. Traditionally embryonic businesses carried out or commissioned market research. Market research played a significant part in a any new businesses plans. Understanding the likelihood of selling your products and the potential volume of sales isn't something you can skip over. If you were approaching a bank to fund your enterprise you'd need these numbers, just because you are spending your own savings doesn't mean you can avoid doing it.
Traditional market research wasn't altogether straightforward and was (is) expensive. As you are planning on selling on-line you have a huge advantage - use it! There are plenty of free keyword research tools that will provide you with a real understanding of your market.
All this research should be carried out BEFORE you move forward with your business and well before you invest in a website.
Observation #2 - Don't Pick a Fight You Can't Win!
I'm all for the underdog, but whatever you do don't expect to beat big budget websites without a massive all consuming effort. One of the problems people face when setting up on-line is coming across well funded, well organised, well planned competition. Sadly they often discover this after they've spent all their money setting up a website and are unable to launch a counter offensive.
Unless you are lucky enough to discover a niche that's not being exploited you are going to have competition. Get to know your competition. Depending on what you are planning to sell your competition is either local, national or international. Be realistic and don't kid yourself. Price comparing is a breeze on-line and people will almost always find your competition when researching products you sell.
Of course your chosen market may not have one dominant player and this may lull you into a false sense of security. A good example is the dearth of on-line sex shops. These shops have often been set-up by people who find a good drop shipping company and like the idea of sitting in the middle counting the cash. Entering a crowded market will be as tough or tougher than entering a market dominated by big players and you could easily become a busy fool.
Again, develop a comprehensive understanding of your competition BEFORE you invest in a website.
Observation #3 - Consumers Know the Price of Everything and the Value of Nothing
Price isn't the only thing that matters to consumers but it's a key component of the decision to buy. You could kid yourself that people will buy from you because you are a nice person but on-line it's hard to show people who you are. Getting your pricing right is going to make or break you, especially in the current economic climate.
Understand the real cost of running your business and your break even points and make sure you are competitive with your prices. Again do all these calculations BEFORE you invest in a website.
Observation #4 - Mirror Mirror on the Wall
If you run your great idea past your parents, partner, brothers and sisters etc the chances are they will be supportive and tell you they think it's a winner. It might be but do yourself a favour and talk to people who are not so sure you are onto a winner.
No matter how great your idea there will always be someone who will think it sucks. If you watch Dragons' Den you'll know that even successful business people argue about whether an idea is good or not. Find people who don't like your idea and be prepared to answer their concerns. If you can't find someone who thinks you're mad ask your best friend to play devils advocate.
The web is littered with abandoned websites and with them people's shattered dreams and lost savings. Once again a robust analysis and defence of your great idea should be done BEFORE you invest in a website.
Observation #5 - Will Your Site be a Lonely?
If you've worked through #1 & #2 above and decided there's a market for your products and you can compete with the existing players, assuming there are other players, you need to establish if you will be able to attract traffic. Attracting free traffic from the search engines usually takes months and for competitive search terms longer! Business forums are full of wannabe on-line shop owners desperately looking for the magic solution that's going to propel their website to the top of Google, it doesn't exist.
The only way to secure search engine traffic quickly is to buy it. Pay Per Click advertising such as Google AdWords can drive traffic to your site from day one, but this comes at a price. Google's free keyword tool will let you estimate the cost of attracting traffic to your site but as with everything we've looked at so far this should be done BEFORE you invest in a website. Building a site, not getting any traffic and then realising you need a decent budget to drive potential visitors to your site isn't the way to go.
Observation #6 - DIY Can Be Fun But Be Realistic
If you've never designed so much as a jumble sale flyer and programming the microwave is a challenge, don't assume you can create a technically sound on-line shop. Modern software tools are amazing and you'll almost certainly want to manage the shop once it's live but seek advice before investing in a system or attempting to build your own site.
Even the fully automated subscription based on-line shop solutions should be evaluated against your needs by someone who knows what they are doing. Many e-commerce solutions and free packages such as OSCommerce are far from search engine friendly out of the box and you can grow old making your site work in the search engines.
Get the advice of an independent expert by either paying or using a business forum BEFORE you invest in a website. Don't base your decision on the company trying to sell you the solution!
Observation #7 - You Get One Chance to Make a First Impression
In #6 I alluded to design. The look and feel of your site will build trust with your visitors - visitors you may have paid for with PPC - and it should also make your site easy to use. The bible on this subject in my opinion is 'Don't Make Me Think' by Steve Krug.
There are thousands of on-line shops offering masterclasses in piss poor design. Do yourself a favour, hire a designer and create a site that can stand shoulder to shoulder with the best. In the off-line world it's hard to compete with the steel and glass of the big brands but on-line you can.
Observation #8 - Add Value and Your Visitors Will Become Your Sales Force
Is Amazon simply a website that sells stuff? No, Amazon adds value with things like reviews and personalised recommendations - love 'em or hate 'em. Look for ways to add value to your users and they will tell others about your site and help you to grow.
Treat users with contempt, hiding shipping costs, making them create an account when all they want to do is buy etc and you will create no loyalty and you won't benefit from referral business.
There are many other things I could write about and no doubt I will in future articles. The things I've mentioned in this article are common problems, things I see day in and day out. Do yourself a favour and avoid these costly mistakes as you embark on your odyssey.