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Is it a Business or a Hobby? How to Plan for Success With Your Ecommerce Site

It is estimated that by 2025, the ecommerce industry will reach over $7 trillion in sales across the globe. That’s a huge number. Many economists term this rightfully – if not curelly – as “grow or die.” Although many ecommerce startups want to believe that they are in it for the long-run, the reality is that there are many factors that separate a business from a hobby. Our team is in the business of helping grow ecommerce businesses around the globe, so we have seen it all. And after years of experience, we know what it takes to be successful, and what will ultimately run a business into the ground. If you are looking to build (or redraft) a business plan for your ecommerce startup, take a look at these four factors that could support your success.

Multiple Sales Channels 

When a startup comes to us for support with their ecommerce outsourcing, one of the first areas that we look at are their sales channels: where are they selling online? More likely than not, they have a website powered by Shopify or Squarespace, but they should also have multiple other sales channels. This could be anywhere from online retailers such as Amazon or Etsy to big brick and mortars like Target or Walmart. To see growth, we believe in a seven channel requirement. Yes, seven. And while it’s OK if initially you don’t have all seven channels in place, it is important to build a strategy and encompass the growth mindset that will support seven channels in the near future.

Profitable Pricing 

Many startups forget the cost of marketing and advertising when it comes to closing a sale. Sure, it may cost $7 to produce the widget, but how will people know about said widget if you are spending $0 on marketing it to your ideal audiences? And even if you have been advertising for a while, when was the last time you assessed those numbers? According to recent reports, advertising and marketing budgets across most industries have increased since 2021. What was considered standard (6.4% of revenue used towards advertising) is now closer to 9.1% of revenue in 2023. Furthermore, our team has narrowed down an even easier metric to work with: $15 per product. In our experience, for an item to be economical it should not cost less than $15. This magic number should include what it takes to create the widget as well as what it takes to advertise and ship the widget.

Strategic Sales and Marketing 

Speaking of advertising, with (seemingly) infinite ways to market to your customer, it’s important to know how to strategically use those advertising dollars in a meaningful and profitable way. After all, with as much data as we have on online users, gone are the days of throwing spaghetti against a wall to see what sticks. According to major sales and marketing platform HubSpot, two of the top five ROI-driving channels are social media and your website. These two channels alone have nuanced features that can help bring in more sales. From TikTok videos to Instagram advertising as well as leaning into SEO through consistent blogs, there are dozens of ways that you can keep your product in front of buying audiences.

Third Party Partnerships 

Finally, ask yourself if the work you are doing day in and day out us helping to increase your bottom line and build your business for the future? For example, are you hand packing each product and printing labels to go to the post office? As a business owner, this is not the best use of your time. When you are able to outsource more of the day-to-day tasks so that you are working on the business instead of in the business, you are freeing up your valuable time to develop long-term sales strategies, troubleshoot problem areas in the business and research more product ideas for your ideal customer. If you’re unsure whether it’s time to work with an outsource fulfillment partner, take our quick questionnaire to assess your current state of affairs.

With the ecommerce industry expected to surpass $7 trillion in sales by next year, now is the perfect time to ensure your business is on track to not only capture its piece of the pie, but to also set the course for long-term growth in an increasingly competitive market. When any individual can have a hobby, it’s important to remember that not any individual can have a successful business. Separate yourself from the herd and begin your business’ profitable next chapter.

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