Ecommerce start-ups: Experts reveal their tips to help start your business

Statistics show that roughly 80% of eCommerce startups do not succeed, and with entrepreneurship booming in this sector, how can young people give their businesses the best chance of success?

Eager to advise budding entrepreneurs, the experts at Wix.com have compiled their best advice for starting a new digital business as a young person, including the common pitfalls, and how to stress-test your business plan.

We hope you find this release useful. If you do end up using it, we would appreciate a link to https://www.wix.com/blog/how-to-start-an-online-store, who commissioned the data.

Three common business pitfalls of eCommerce startups:

1. Lack of online visibility

If your eCommerce website lacks online visibility, this can negatively impact brand awareness and ultimately, revenue. Young entrepreneurs should aim to concentrate efforts into ensuring your website ranks high enough on mobile and browsers, and implement strong SEO techniques such as using trending keyword search tools, and optimising page titles by including these keywords to help you to do so.

2. Avoiding personal networking to grow brand awareness

Utilising personal networks is particularly important for eCommerce businesses. Using social media advertising through friends and family is an easy way to help grow awareness of your company and its product. The more people using your product and leaving reviews, the more interest you’ll receive from future customers. Many young entrepreneurs forget how useful their personal network is.

3. Poor product pricing

It can be hard to find the right balance between pricing a product low enough to attract consumers, yet high enough to cover labour costs and return a profit. You should consider the purchasing power of your consumers, so that you can enable your business to generate enough revenue.

Many start-ups opt for penetration pricing, which involves offering low prices that initially undercut competitors to win consumers, then gradually increasing prices as your market share grows. However, this does entail some risk as it could result in a financial loss whilst you are building brand awareness within the market. Be sure to conduct thorough research into your market niche, in order to analyse pricing and consumer purchasing power.

Top tips for young entrepreneurs starting a new business:

1. Identify your niche and know your target audience

Firstly, it is key to ensure you have established your niche within the beauty industry, and your aim as a startup. Once you have this, ensure you conduct market research and that you understand your target consumers. It is also key to ensure you are competing with businesses in branding as well. Develop your brand by utilising social media such as Instagram and YouTube to grow brand awareness, ensuring it stands out in the beauty market, and attracts consumers.

2. Planning and preparation is key

Planning all aspects of your beauty business is vital as a young entrepreneur. You will need to create a solid business plan which summarises your business, industry and consumer analysis, as well as an operational plan and financial estimates and projections. Competitor analysis is also an integral part of planning, which can aid you in growing your own marketing and sales strategies, in order to grow your brand awareness and push your USP.

3. Create a strong branding strategy

With consumers more open to utilising brands they haven’t yet heard of, it is key to ensure that your business stands out from the crowd, especially in the early stages whilst establishing your place among competitors. From your business name, to your typography, all aspects of your brand should relate back to the mood that you want to generate among consumers. A colour palette can be a great way to begin on this, in order to establish a theme, which along with your logo, should appeal to your customers, even if it doesn’t appeal to your personal preferences.

How to stress-test your business plan:

Stress testing is vital for ensuring that your business can withstand economic disruptions, as well as understanding the health of your business model, and identifying gaps in your plan that may threaten the longevity of your business. Here are some tips on how to do this:

1. Identify risks your business may face

These may be risks in strategy, such as market focus, financial risks, how the business finances will be managed, operational risks on how the company operates, or compliance risks which could be picked up on by government regulators.

2. Create a risk management strategy

Generating a strategy to prepare for those risks identified is key. Look to create methods and plans on how your business will manage the risks identified if they were to arise. As a young entrepreneur, it is also valuable to talk to experts within your field who can give key advice and knowledge on business strategies, as well as money and time management to help you avoid downfalls in your plan.

3. Review and update your plan

Once you have identified risks and a risk management strategy, you can utilise what you know to ensure your business plan is up to date and has the best chance of success and longevity. It is important to remember that you will need to occasionally review your stress test and strategies, to ensure they are updated in line with any new risks or changes to the financial climate.

Kim Rekhess, expert at Wix.com, provides commentary on the importance of using these tips to set up your business, as well as how to start an online store to boost brand awareness:

“Setting up your own business as a young entrepreneur is never easy. However, following these tips may help ensure that you don’t fall at the first hurdle.

“As mentioned, networking and product awareness is vital, and showcasing your business through a professional website can help you do this. Choosing a domain name which is memorable and includes keywords relevant to your business is a good first step. When it comes to designing your business website, your homepage should be eye-catching, and make it easy for viewers to understand what your business offers. Clear fonts and striking graphics can help with this.

“You should also aim to have accessible ‘about us’ and ‘contact’ pages, in order to outline your business’ values, mission, and points of contact. Consumer experience on the website should be smooth, uncomplicated, and efficient, in order to avoid loss of revenue. Product display should be effective, with adequate descriptions, to allow ease of use.

“By combining meticulous planning, financial awareness, stress-testing, and a well made website, your business can be given the best chances of making it past the initial set up stages.”