Study the competition

Most people who are planning to launch an e-commerce based business probably think that they have come up with a completely original idea, but in truth, it is highly likely that other people have got there before them no matter what your idea is.
However, you should not necessarily view competition as a bad thing, because without competition, you would not be able to establish what works and what doesn’t. The problem with being the first into a particular market, a pioneer, is that you are the person who is going to make all mistakes. On the other hand, if there are other people already on the market, they have made the mistakes for you, so you should be
grateful for competition.
Competition also indicates that there is money being made in the business in which you are interested, and that is an extremely important consideration. While you do not want millions of competitors, because that might make entry into the market extremely difficult, if there are other people already doing what you plan to do, then you know that you are on the right lines, as there is money being made.
If you were to open a business in your local shopping mall, you would look at other competitors who are operating in the same local market, but if you want to start an online business you have to look at competition on a much wider scale. There are probably people in your business already operating all over the world, and you need to know what advantages and disadvantages each of those businesses has.
Research and analysis of what other people in your business are doing online is absolutely essential. While it might be a time-consuming process, it is necessary and time that is very well spent.
Imagine for example that you are thinking of starting a weight-loss industry business, so you want to research what other companies in the same sector are doing. You type the name of a well-known weight-loss product like ‘hoodia’ into Google to see how many web pages there are that feature this particular word:
There are 14 million web pages that feature ‘hoodia’, and while many of these will not be pages from companies who are supplying hoodia based products, many pages are. These companies represent direct competition in your market, so find those companies whose names come up most regularly, and study their websites.
Look at the product range that a potential customer can access through their site, the kind of prices they are able to offer, what delivery terms are available and whether they are running any specific promotions.
Take the domain name URL of the top rated companies in your market and search to see what other information is available about those companies. This might help you to find out how they operate, who their target audience is, whether people are happy about dealing with them and the like.
Remember that the internet is a largely democratic place where people can say (or write) pretty much what they want about other net users, so you will find other people commenting and reviewing your competitors, highlighting both the good and the bad.
From this research, you should be able to establish one very important thing.
You already know that if there are competitors in the market, there is money being made, but your research should highlight the weaknesses of many of your potential competitors.
This is crucial because what you should be looking for is a point of advantage or a unique selling point that you can use to differentiate your business from the competition.
As a newcomer to the market, you have to be able to demonstrate to potential customers why dealing with you is a better option than dealing with more established competitors. After all, if there are already ecommerce enabled sites in the market in which you hope to make an impression, those sites already have customers.
Your job is to convince as many of those customers as possible to switch their business to your site, but you have to give them a concrete reason for doing so. Human nature dictates that people do not change unless for a very good reason, so you have to supply that very good reason, which is why you need a unique selling point that no one else in the market is currently offering.
It could be something as simple as free delivery if no one else is already doing this, or even if your competitors are already offering free delivery within 100 km of their geographical location, you might consider extending your free delivery boundary to 200km or even more.
Perhaps you could offer bonus products to customers who spend a certain amount of money, or offer long-standing customer loyalty bonuses.
Although having competition is a good thing, you have to differentiate your business in some way in order to be successful.

Does this business idea work as an online business?

It is a fact that there are some e-commerce business ideas that are just going to work better than others, and if your idea falls into the category of ‘difficult to do profitably’, you might be better coming up with an alternative idea.

If the business is apparently not suited to the internet and e-commerce, then you’re better dropping the idea from the beginning.

Think about any artificial limitations that might be applicable to your business as well.

For example, if you are considering launching a business to supply heavy plant and machinery, that business immediately has a very limited geographical appeal because you cannot realistically deliver a crane or a dumper truck to the other side of the world at a reasonable cost.

Consequently, by choosing this business model, you have immediately removed some of the major advantages of e-commerce, namely its ability to attract customers nationally or internationally and to do so in an economically attractive way.

There are some businesses like running sports clubs or bowling alleys, amusement parks and the like that are never going to work online.

While you could take bookings and sell sports and bowling equipment 10 and clothing from an e-commerce web site, the basic idea of running something like this does not work online.

Think about your local electricity company.

Although they can accept bill payments online, most of them already have perfectly acceptable home delivery systems in place, so there is no scope for expanding their business via the internet at the moment.

You need to adopt a practical approach to your ideas from the beginning.

If whatever you want to do is unlikely to be successful, drop it before you waste any more time and effort.

Planning and research e-commerce site

Whether you are setting up a small business in the real world or doing so online, it is absolutely essential that you start off with a plan.
As the saying has it, ‘if you fail to plan, you plan to fail’, which is definitely a saying that accurately applies to starting your own business.
If you are a starting a business online you have a significant advantage in that all of the information you could ever need is available on the internet, and most of what you need to know is available at no cost.
As you would expect in the planning stage, you need to look at every aspect of your proposed business with a very critical eye because this is certainly no time for ‘rose tinted spectacles’.
However much you might love to set up a business that panders to your passions, there is little point in doing so if that business has a very limited chance of achieving success even before you launch it.
While you might have a passion for Mongolian nose flute playing, you are (unfortunately for you) in a very small, select group of people who are interested in the same topic, and it is extremely unlikely that you would be able to build a viable business around such a narrowly defined interest.
These are therefore the questions that you must ask as a way of establishing the initial viability of your idea.

What do you need to launch a successful ecommerce site?

One thing that you do not need in order to launch an e-commerce based business is a great deal of start-up capital. Depending upon the particular type of business that you want to own, it is feasible that a couple of hundred dollars would be enough to get your business off the ground.
However, what you do need to get started is a business idea, and an absolute determination to make sure that your business is a success. In order to be successful, you must be passionate about what you want to do (or indeed, about what you are already doing), and it is absolutely essential that you bring a ‘can do’ attitude to your business.
It is also important to understand that starting an e-commerce enabled website is a long term commitment in exactly the same way that opening a high street store would represent a long-term commitment.
If you are operating online, you are not paying a monthly rent or employing staff (at least in the beginning), but you must understand from the start that running an e-commerce enabled website is a real business, not something to play with. It is something that you could be doing for many years to come, the basis of a global business empire (yes, really!) and it is therefore something has to be taken extremely seriously from the start.
Hence, commitment and passion is all about finding something that you really want to do, working with something that you will still be happy to work with in 10, 20 or even 50 years.
Ask yourself this before you embark on any particular business venture – is the business that you are thinking about establishing one that you will be happy to pass on to your children in a few years time?
If not, then I suggest that you do not have complete confidence in or commitment to the business that you’re thinking about entering. On the other hand, if you would be happy – even proud – to hand your business to the next generation, you are probably heading in the right direction.
What kind of business are you going to establish? There are as many different e-commerce enabled websites out there as there are different stores in your local high street or shopping mall, so what is it you are going to do?
One option may be to build a business around something that has always fascinated you or been a passion of your life. For example, if you 8 have always been a remote control model fanatic, is there potential for an e-commerce enabled online business based on this? For instance, are people going to be willing to buy RC model parts online, and if so, what is the present market place like?
You might consider setting up a business that is based on what you do at the moment, your current experience and skills. As an example of this option, if you currently work as a nurse and want to set up your own e-commerce site, it might make sense to consider dealing in medical supplies. You probably have connections with suppliers and potential customers already, so it might make sense to leverage what
you already know and the experience you possess.
Have you ever been in the situation where you have tried to buy some kind of product online, but have not been able to find a suitable supplier? If so, then there may be a ‘gap’ in the market that is just waiting to be filled by someone like you.
Assuming that you already believe that you have the personal characteristics to make a new e-commerce based business a success story, the next essential is to come up with a business idea, or a list of potential ideas. With that done, the next stage is to start planning and researching the market.