The KEY to Ecommerce🔑
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Welcome to Everything You Need to Know Before Starting an Ecommerce Business.
Maybe you've already started an e-commerce business but you have some questions, or you haven't gotten started at all, you're in the right place because what we're going over today are the 5 essentials that every single e-commerce business needs to have in order to be functioning. So no matter what you sell, how big or small you want your business to be, no matter where you sell, every e-commerce business needs to have these five essential things.
I'm Grace I have built and sold multiple e-commerce businesses. I've sold on every platform from Etsy, and Amazon, to Shopify. I have sold in person, in stores, pretty much I’ve sold physical products everywhere you can imagine. I also have a business degree in retail so I have a lot of experience and I understand what it takes to build a functioning and a profitable e-commerce business.
The foundation of every e-commerce business starts with these five pillars there at the 5 P's of e-commerce. Essentially they are the Marketing Mix you may have heard that term before. But when you understand what the 5 P's are, it allows you to work on your business more effectively it's more structured, you understand what part of your business you're working on and why it matters, and how it all works together. And if there's a problem in your business that you're trying to solve knowing the 5 P's will help you troubleshoot because you'll know which area you actually need to be working on to fix the problem.
When I work with business owners who are struggling or feeling stuck in their ecommerce business and they schedule a strategy call with me the first thing I do is to uncover and define which area of the business is actually the problem. Usually when there's a problem they think it's in one area but the problem is actually rooted somewhere else. So once we can define which P is causing the problem then we can fix it. So let's jump right in.
The first P is product. The product you choose to sell will make or break your business because if you decide to sell a product the market isn't interested in, no one wants to buy. It it's going to be impossible to build and grow a business off of that product no one wants. Also if you choose a product that you're not really that interested in where it's just not something you're excited about or it's just a product that isn't right for you to sell, it's going to be very difficult to build and sustain a business around a product you don't really care about. There's those two factors that are crucial when deciding what to sell we need to make sure that the market wants to buy it and that you're the right person to sell it.
One product I sold was Turkish towels. There were other companies selling Turkish towels I didn't invent Turkish towels but other companies were focused on really bright bold colors more for the beach and I felt that there wasn't really an option for more neutral, subdued colors that were designed for the bathroom. So I decided to sell Turkish towels that came in neutral colors. I knew that there was a market for Turkish towels because there were other companies selling them successfully. I also knew that there was a gap in the market because I couldn't find what I was looking for and I also knew that I was the right person to sell this product because I really did love them. I used them myself and I was excited to sell them.
Before deciding to sell a new product I run it through a litmus test in this helps me understand if this product is worth pursuing first I want to make sure that there's no limit on production I want to make sure that I can get enough product to sell enough to make a profit if there is a limit on production I want to make sure that the retail price is high enough to sustain a healthy business
I also want to make sure there isn't already a major brand in that space so I won't be competing against a huge company and if there is already a major brand I want to make sure that I would be the alternative to that.
I also want to make sure that this product a lines with my values and my integrity. Would I feel good selling this product every single day?
Then I make sure that there would be a specific target market for this product and then I understand and can find and defined these customers easily. Lastly I want to make sure that the benefits are understood and desired by this target market. Essentially I want to make sure that people want to buy this product.
If you want more help picking a product that's right for you to sell I have a mini workshop called Know What to Sell and you can find it here: https://www.lovewhatyousell.com/workshop.
So that was the first P, products. Now we're moving on to person. Person is essentially your branding who are you selling your product to and every business needs to have well-defined branding. And we know that branding is not your logo. It's not your colors. It's much deeper than that. It's who are you selling this product to who is this business for and how are you creating that lifestyle, that feeling, that vibe, that lets them know that yeah this is the product for me. The person dictates all of the assets of your business. Your photography, your product descriptions, your copy writing, the way that you show up on social media, where you show up on social media. All of these are determined by who you're selling to. When you're branding aligns with the person that you're selling to that's going to attract the right customers. It's going to build trustworthiness and authenticity in your business.
The only time you don't need to really go deep on branding or understand your person is if you are selling on a marketplace like Etsy or Amazon. And that's because marketplaces have already established their own branding. They're already attracting a certain type of customer and you can lean on their assets, their customer base, to supplement the branding for your business.
The next thing every e-commerce business needs to have is price. This is essentially your pricing strategy to make sure that your business will be profitable. There's lots of layers to your pricing strategy but it starts by making sure that your product will be profitable and you determine this by finding out your profit margin. So you can look up a profit margin calculator and all you need is the cost to have the product manufactured and shipped to you or if you're making it all of the cost for labor and materials to make one product and then your retail price and calculate. You want to have a profit margin of over 50%. I like to have my over 60% because it gives me wiggle room to offer discounts, and free shipping, and liquidate products while still making a profit.
Each of the 5 Ps are a separate pillar but they all work together. So your pricing will be determined by what you sell, and who you sell to. Your branding matters when it comes to how you can price your product. If you have a luxury brand you can sell a product for a higher price but if you have a lower-end brand, and you’re marketing as a budget-friendly option, your price needs to reflect that.
If the retail price of the product is too low it can be difficult to have a sustainable and profitable business. You'd have to sell a lot of $10 items to make any sort of substantial income. When it comes to your pricing strategy you should always be thinking about increasing your average order value (or AOV). This is the amount of money one customer will spend in one purchase on your website. It costs a lot of money to acquire a customer, it cost a lot of time and effort to ship out orders, so you're always wanting to increase that average order value. This can be done by creating bundles, adding complementary, or supplementary products.
The 4th P is place. This is essentially where you sell your product. This can be online, in store, it can be in marketplaces, it could be consignment. There's a lot of different ways that you can sell your product. And if you sell in more than one place it's called omni-channel but when you're just getting started out I recommend that you start with one place. Shopify is my favorite platform for selling on but I don't typically start a new product on Shopify right away. You need a lot of assets and work to build up a standalone Shopify store so I like to test products on marketplaces, like Etsy, or Amazon, or in person, to make sure that this product is worth pursuing and investing all of the assets into the business needed to build a standalone store.
When you're selling online, driving traffic to your store is crucial. You may have heard the term SEO, or search engine optimization. Essentially it's how do you get your store findable or Google-able by your target market. A common complaint I hear from people is “how do I get more traffic to my store” and when we do strategy calls we uncover that we're not getting enough traffic typically because we haven't focused on SEO which is a part of place.
A big part of SEO is using keywords. Keywords are things that people are using off of your website like on Google to find a product like what you're selling. So you want to have those keywords on your website to direct them from Google to your website. When I think of keywords on your website I think of them like signage in a store. it's going to help direct people to find what they're looking for.
The last and final P is promotion. so this is essentially how you’re marketing your business, how you're getting people to know that your brand exists, and how you're getting traffic to your site.
We know that all 5 pillars work together, but promotion is the last and final step and everything else needs to be in place, functioning, fully fleshed out, before promotion will work for you. A lot of people will be struggling in their e-commerce business and they think “I just need to have more traffic. I need to spend more money on paid ads. I just need more people to know about my business in order to get more sales.” When really the problem lies in one of the other 4 Ps. And that needs to be addressed before any sort of promotion at work. When everything is fully functioning in your business in the other 4 pillars, promotion becomes a little easier. It's still a lot of work to get your products and your brand out into the world, but it's a lot easier when you understand really who your brand is, who your target market is, when you have a pricing strategy that's working, promotion becomes a lot easier. Promotion is all about putting yourself out there and there's not really a shortcut to it but my favorite ways to promote my business that have been the most effective were by being featured on a podcast, or by getting featured on a blog post, or in a magazine, like a top 10 list or a gift guide, through personal connections, through collaborations, or through using influencers and their audience.
So now you understand the 5 pillars of building an e-commerce business we have product, person, price, place, and promotion. And when you understand all 5 pillars and how they work together you can build a functioning, and best of all profitable, e-commerce business.
If you're looking for more personalized support in your ecommerce business, the best way we can work together is on a Strategy Call. Strategy Calls are affordable and effective they’re a quick way to uncover any problems that are happening in your business, troubleshoot them, and create a strategy so you can move forward. You can book strategy calls here: