If you build it, they will come. Whether you’re interested in setting up your dream company or you’re currently running a business that needs to satisfy customers’ demands for digital options, now is the time to invest in e-commerce.
A booming market
According to the Census Bureau of the Department of Commerce, the estimate of U.S. retail e-commerce sales for the second quarter of 2021 increased 3.3% from the first quarter of the year and 9.1% from the second quarter of 2020. The Adobe Digital Economy Index analyzes over 1 trillion visits to U.S. retail sites and over 100 million product SKUs in 18 categories, and it reports that from January 2021 through August 2021, consumers have spent more than $541 billion online, 9% more than during the same period last year—and 58 percent more than 2019. According to the analysis, this year-over-year growth highlights the staying power of habits formed during the pandemic, when people were making an extra effort to stay in their homes.
Although Amazon is one of the first companies to come to mind when thinking about e-commerce, it’s not necessary to have a huge online presence and warehouses across the country to have a successful e-commerce business. Any online store where buyers connect with sellers is e-commerce. In fact, if you have a website or blog, you can also use them as a selling platform by implementing features like a social buy button. This allows visitors to purchase products without the hassle of changing platforms.
Need more evidence before taking the plunge?
Here are five reasons why now is a good time to start an e-commerce business. If you’re just starting out, reason No. 1 for starting an e-commerce business is to have more control and independence over your working life. Moving from the 9-5, day-in-day-out workforce to self-employment, however, can be a big leap, so starting with a side hustle is always an option to test out your idea or make some extra income while working toward your goals.
E-commerce businesses often require less investment capital and less time and effort to get off the ground, making them a great choice for your first venture. Owning your own business also can give you an opportunity to share what you love to do or create with the world. When considering options, don’t discount your own hobbies. An endurance athlete, fisherman, or scuba diver knows a lot about great gear, and that knowledge can contribute to a successful e-commerce business.
BOCO Gear founder Kay Martin had a background in performance apparel, which allowed her to see a niche in an underserved part of the market—stylish hats that could still perform under sweaty pressure. You’ll also get to pick the people you work with, which, as anyone who has ever worked on a team with a variety of personalities knows, can make a huge difference in your day-to-day productivity and happiness.
Reason 2 is applicable to any good business, but is directed at existing companies, particularly small operations: Improve your customers’ experience. If you are already selling products from a brick-and-mortar location, you can both expand your customer base and provide your existing customers with the ability to buy both in-store and online. Sometimes, consumers know what they want and opt for a quick and easy digital experience, other times they want to come into your store, touch and feel the products, ask questions, and get answers from knowledgeable staff.
A good example is an athletic shoe store. Some customers know their favorite brand, style, and size and just want to order their shoes quickly without making a trip to the store. Others want to come in and try on several styles of shoes, asking questions about size and fit. E-commerce sites also can expand your physical store’s inventory, with employees using tablets to showcase items that might not be in stock at the store but can be quickly and easily ordered online.
Digital transformation is the adoption of digital technology by a company to improve business processes, value for customers, and innovation. According to research from IDC, two-thirds of the CEO’s Global 2,000 companies are shifting their focus from traditional, offline strategies to more modern digital strategies to improve customer experience, with 34 percent of companies believing they’ll fully implement digital transformation within 12 months or less. The net global spending on digital transformation in 2018 was approximately $1 trillion, and that’s expected to increase to $2 trillion by 2022. (79% of companies admit that COVID-19 increased their budgets for digital transformation.)
Existing businesses should also think beyond just selling their products online. E-commerce also encompasses buying behaviors like remote orders; curbside pickup; buy online, pick up in store; virtual personal shoppers; and door-to-door delivery.
So that’s reasons one and two. The following three reasons to open up an e-commerce site today apply to both those just starting out in business and established businesses wanting to expand their customer base via e-commerce.
1. Customers are clamoring for online options.
From health care to shopping, the COVID-19 pandemic has accelerated the move to digital. Consumers have adjusted to the ease of online purchasing and scheduling, and this trend is showing no signs of slowing down. In fact, according to data from PYMNTS, 92 percent of all consumers have placed online orders for products. Research from McKinsey & Company indicates that although physical distancing and stay-at-home orders forced consumers to shop differently, these shopping habits “seem like they’re going to stick even after the COVID-19 crisis.
Categories, where expected growth in online shoppers exceeds 35 percent, include essentials such as over-the-counter medicine, groceries, household supplies, and personal care products. Even discretionary categories such as skincare and makeup, apparel, and jewelry and accessories show expected customer growth of more than 15 percent.” In addition, the global economy continues to improve as countries slowly emerge from the pandemic and there is a lot of pent-up demand from consumers.
2. It’s easy.
Being a business owner is challenging, of course. But e-commerce platforms make it easier and more cost-effective than ever before to sell your products, leveling the playing field and decreasing the cost of entering the market. These platforms want to make selling simple, with multiple design templates and secure payment gateways. They are scalable, as well, allowing you to choose new development tools as your business becomes more profitable and your budget expands. Expect to pay between $15 and $300 per month. Open-source and basic all-inclusive platforms will be the most inexpensive to start out, and more advanced solutions will require a larger expenditure
Things to look for in an e-commerce tool or site builder include storage space (enough inventory space and bandwidth to meet your needs), fraud protection and SSL encryption (so transactions are safe for you and your customers), and the ability to create a clean, clear, user-friendly design (to keep potential customers on your site, rather than clicking away in frustration).
No longer do aspiring businesses need to find a brick-and-mortar location to set up shop, paying rent, utilities, and insuring the property. And, with e-commerce, you don’t need to be physically in the store to make money. Customers can purchase at their leisure, even in the middle of the night or from countries across the ocean. New e-commerce businesses can also take advantage of the best of both worlds, with the trend of pop-up shops or “flash retailing” where merchants can meet customers in person with a tablet, a card reader, and a small selection of inventory—no storefront necessary.
3. Big is no longer better.
With e-commerce, size doesn’t matter. Small companies have the ability to reach the same potential buyers as large companies. But they have to have a digital presence. Prior to the disruption caused by the COVID-19 pandemic, many small businesses didn’t have a website that supported e-commerce. They didn’t need it. But when stay-at-home orders hit and consumers were fearful about going out, the foot traffic these businesses relied on to survive no longer existed for a period of time, a dramatic example of why e-commerce is so important in today’s marketplace.
In fact, smaller companies can sometimes be more visible to consumers today, building relationships via social media marketing and other online strategies. An enticing Instagram advertisement or a recommendation from an influencer can connect directly with a potential customer, bringing clicks to your site. The more clicks you get, the more likely you are to make a sale. Some brick-and-mortar operations even have turned to Facebook Live with strategies like online shopping shows or peek into fitness classes in a bid to further connect with people who are already coming into the store or gym. It’s even possible to build a six-figure business on Twitter, going from zero to almost 50,000 followers in a year. Mobile commerce also allows you to capture customers in their downtime—on the bus, train, or while they’re eating, so be sure to have a mobile version of your e-commerce website, since many sites look and function differently when viewed on smartphones.
Ok, I’m ready. Now what?
Owning your own business can be a rewarding and excellent source of income. According to numbers from the U.S. Census Bureau, small businesses with no employees have an average annual revenue of $46,978. And you won’t be alone. There are over 30 million small businesses in the United States.
The first step is to decide what you’re going to sell. Products? Services? If you’re planning to sell products, you’ll need to decide what you want to sell and ensure there’s a demand for your merchandise and someone to produce it—whether that’s yourself or someone else. If you’re selling services, you’ll need the ability to schedule appointments online or set up packages, gift cards, memberships, and group classes.
There are many types of e-commerce businesses. If you’ve never seen these terms before, they can look a bit like alphabet soup, but they’re just detailing the relationship between the buyer and the seller. For example, business-to-consumer (B2C) businesses sell directly to customers. This is the model that you’re probably most familiar with, whether it’s a department store like Nordstrom or a big online retailer like Amazon. Direct-to-consumer (D2C) is an offshoot of this and is a popular e-commerce strategy with low barriers to entry. Allbirds shoes and Away luggage are examples of D2C companies. In the business-to-business (B2B) model, companies are purchasing goods and services from another company. B2B e-commerce is one of the fastest-growing segments for both new and established companies. Then, there’s consumer-to-consumer (C2C), a market that you’ve participated in if you’ve ever bought or sold on eBay or Poshmark. Finally, an emerging category of commerce is consumer-to-business (C2B), which is where a consumer provides a service to an organization, like Instagram influencers featuring a product as part of their content (and being paid to do so).
Consider whether you’ll need a business license or permit, payment processing, inventory and shipping, and marketing and advertising. Review your e-commerce site. Make sure it’s user-friendly with an easy-to-navigate interface, the helpful home page, and escorts customers through the buying process seamlessly. Studies show that one out of four users will leave a site if the page loads in four seconds and Amazon’s research estimates that just one second of extra lag time in loading could cost the company $1.6 billion in sales per year.
After you have everything up and running, it’s time to ensure customers hear about your amazing business. Decide which marketing strategies you’re going to use—Instagram or Facebook ads, Google ads, word of mouth. Also, ensure your business website is search-engine optimized. The Side Hustle Show gives some tips, including finding low-competition keywords, using a content editor, performing a site audit, and linking to relevant sources. Remember, more clicks mean more potential sales and more success for your new e-commerce venture!