“Failure is not to be feared. It is from failure that most growth comes.”, Dee Hock.
Starting any business can be a daunting prospect. Even if you do muster the courage and decide to take up the task, you may find yourself facing seemingly impossible challenges. More often than not, start-up capital is the biggest obstacle.
However, in the age of the internet, anyone can start a business, even without any money. With the right combination of skills, marketing know-how, work ethic, patience, and discipline, you can succeed in the e-commerce business world.
What Is E-Commerce Business?
E-commerce, a shortened version of the phrase “electronic commerce,” refers to the buying and selling of goods and services or transmitting funds or data via the internet. E-commerce became a possibility in 1991, just about when the internet became available for commercial use.
In the ’90s, the rise of e-commerce giants like Alibaba and Amazon revolutionized the retail industry, creating competition for retail giants like Walmart and prompting a decline in sales for many brick-and-mortar businesses. Unfortunately, the dot-com collapse in 2000 resulted in the disappearance of many e-commerce companies.
Electronic commerce trend 2020
However, e-commerce had already generated insight into how powerful global internet penetration and the digitalization of the financial systems would be for the future of business. So many brick-and-mortar businesses latched on to the new trend and introduced e-commerce capabilities to their websites. Today, virtually every brick-and-mortar store has made the transition to e-commerce business or implemented e-commerce capabilities in their business model.
In 2019, retail e-commerce sales accounted for about 14.1% of the total global retail sales. Industry experts predict that retail e-commerce sales will reach $4.13 trillion in 2020, $4.88 trillion in 2021 and that mobile commerce will take a market share of e-commerce of 72.9% by 2021. It’s expected that more than 95% of all purchases will take place via e-commerce by 2040.
This is especially encouraging for anyone who may not be sure if this is the right time to start an e-commerce business or feels like the industry may be too saturated. Let’s take a look at how you can start your e-commerce business.
Starting an E-Commerce Business
Before you start your business, the planning process is essential. Planning allows you to set objectives, and it will enhance your ability to make more effective business decisions. You will also need to focus on understanding what will be the focus of your business. This will require taking note of what you are good at and modeling your business around that.
How to Starting an E-Commerce Business with dropshipping
Marketing, sales, content writing, and data analysis skills will come in handy in the e-commerce industry. From digital marketing, face masks, dash cams, selfie drones, fashion/jewelry products, the list of viable, profitable business ideas to try in 2020 is virtually inexhaustible.
You may ask yourself, “How do I start an e-commerce business without any money?” Believe it or not, thanks to advancements in technology, you can start an online business, sell products to buyers without ever actually stocking the items yourself, and spending any money;this is called dropshipping. Sounds too good to be true, right? Well, it’s not. Let’s delve deeper into how you can start your online business without any money.
How Does Dropshipping Work
Dropshipping is a method of product sourcing that eliminates the burden of stocking merchandise. An e-commerce website that uses a dropshipping model will purchase the items it sells from a third-party supplier or manufacturer, who then fulfills the order. This way, the seller doesn’t have to deal with inventory, packaging, or fulfillment.
A customer will purchase an item from your store at the retail price. You will then forward the order to your supplier and pay the wholesale price. The supplier then ships the item directly to the customer under your business name while you gain the profit margin. This practice allows you to focus on other aspects of your business, like your store’s daily functions, marketing, and customer support.
There is zero upfront cost in starting an online business using dropshipping because there is no initial investment in inventory. However, if you want your business to succeed, you will need to put in an immense amount of hard work.
Setting Up Your Dropshipping Business
Many entrepreneurs are flocking to dropshipping because of the minimal setup costs. Still, just like any brick-and-mortar business, there is a process that you must follow to ensure a successful start.
Settling on a niche
The first step is to choose your niche. A niche is a targeted portion of a broader market focused on a specific product. The rising popularity of dropshipping has made it harder to find niches that aren’t already saturated.
Establishing a niche market will help your businesses gain a competitive advantage. You will be able to cater to a specific consumer instead of targeting a broad audience like some of your competitors.
You can capitalize on a niche market by finding a market segment with an accessible consumer base, room for growth, and no dominant competition. The crucial key to deciding on your niche is striking a balance between your interests and passions, and profit. Running a business is much easier if you’re genuinely passionate about what you’re selling because you’re going to have unique knowledge of the products and trends in those markets.
However, you also need to find a niche that makes business sense. Working on a product that you’re passionate about is great, but it’s a lot easier to be passionate when you’re making money. So finding that balance is uniquely valuable, which is why market research is necessary.
Something as simple as searching for trending products or services on social media platforms like Facebook and Instagram can give you an idea of what consumers are interested in.
Google Trends is also a great way to know whether a niche is on an upward or downward trajectory. To assess if your product will generate profits, you can visit sites like AliExpress and search for your product.
The market research also allows you to assess if the niche you’re interested in is over-saturated or whether the competition is easy to beat through better pricing and marketing strategies. Another critical aspect to consider is to ensure that shipping costs are low before settling on a product. You may not be the one who’s doing the shipping and fulfillment, but if the shipping costs are too high, it will be a customer repellant.
Securing a supplier
Most dropshipping suppliers are located overseas, so it’s very easy to partner with the wrong supplier. A good dropship supplier should have the experience, quality products, and product photos, excellent customer service, and fast shipping.
Alibaba is one of the best resources to identify and communicate with potential manufacturers and suppliers. AliExpress, SaleHoo, Doba, Wholesale2B, and WorldWide Brands are among the most popular dropshipping suppliers.
Building your e-commerce website
Dropshipping businesses run primarily online, so you need to find a suitable e-commerce platform for your store. There are so many easy to use options available today, so this is the most straightforward part of the entire process.
Since we are looking at the free options, the easiest way to launch a website that supports a dropshipping business model is to use a comprehensive e-commerce platform such as Shopify.
Shopify offers a free 14-day trial for anyone looking to use their services to build an online store. You don’t need a tech background to get started. With new features, tools, resources, and apps being added regularly, you’ll find it easy to run a business with Shopify.
It’s also easy to install apps like Oberlo dropshipping, which allows you to find products online that you can sell the same day.
Basically, after creating your Shopify account, you can customize it using the free themes, connect your e-commerce site to a dropshipping platform, start adding products, set up your catalog, and add pages and navigation. You can do all this for free!
Marketing Your Dropshipping Business
Having a hot product and a website is great, but without customers to generate sales, you don’t have a business. At this point, a customer acquisition strategy is critical. You can think of customer acquisition as the art of persuasion. Here’s how you can attract potential customers.
This is the slow path to gaining new customers, but it can also be quite effective depending on how vigorously you market your business. Content marketing, usually in the form of a YouTube channel, a blog on your website, or an intriguing Instagram and Twitter post can go a long way in building an audience that you can then convert into customers.
You can also use blog and forum marketing to actively participate in discussions related to your products or niche. This method can also generate traffic to your website if you throw around your link in those discussions. Additionally, sharing great content on your social media platforms can create organic traffic to your site.
Creating an organic reach is becoming harder to achieve because of the paid, faster options, so you have to get creative to generate traffic for yourself. You can also try email marketing by setting up automated email sequences that offer discounts and special offers if you’re thinking long-term.
Let’s say you happen to have some money to invest in your business, use $100 to start your E-Commerce Business. Using the dropshipping business model and Shopify to start your business and invest that money into customer acquisition would be wise.
You could also opt to hire a web developer to create an e-commerce website or use WordPress, but these will cost you significantly more than using a website builder like Shopify.
Facebook is the world’s largest social media platform, so it’s a great place to advertise your products and tap into a vast audience. This allows you to generate sales and revenue right from the beginning of the marketing process. The average cost per click (CPC) for Facebook ads across all industries is $1.72. Facebook is highly effective because it can help you increase brand awareness – it can target highly specific demographics and yield fast results.
Another useful marketing tool for e-commerce is Google Ads. Ideally, if you have an online store, you would want it to rank on the first page of Google’s search results. You can buy ads for your store to appear at the top of the page when someone searches for the keywords you want to rank for, or this can happen organically. Google Ads also target highly specific demographics and can generate significant exposure in search results.
You can also try using social media influencer marketing. Over the years, this has become one of the trendier ways of marketing. However, this can be quite costly unless you use a revenue-sharing model where you share the profits with the influencer only after you make sales.
Now that you know you can start your e-commerce business with absolutely zero start-up capital, you should feel more comfortable about giving it a try. Why? You have nothing to lose. Dropshipping can allow you to build an online empire of your own with minimal investment. However, keep in mind that it’s not a get-rich-quick-scheme.
You may experience low-profit margins, a highly competitive environment, and you might find it challenging to build your brand. However, if you choose the right niche, find and maintain a good relationship with a competent dropshipper supplier, update your website, work on your SEO, and consistently create high-quality content to bring in traffic, you’ll get through the challenges with ease.