|When you start working for yourself as an e-commerce entrepreneur, it can be hard to get a proper perspective on what you’re doing. Errors and mistakes can easily creep. Here are the top six mistakes people make when they are starting out; its good to learn the do’s and don’ts from others.|
1. Sloppy financial management
It’s easy to jump into the world of online selling with enthusiasm, forgetting that business skills are learnt through trial and error.
|• You’ll need to manage your startup, maintenance, supplier and promotional costs to keep track of it all.|
• Budgeting can be boring, but it really is useful to conquer and be in control. Keep track of budgets and sales forecasts and get a bookkeeper in if you need a little extra help. These days, there are loads of affordable financial services out there (including online bookkeepers and budgeting software). Saving on financial management is definitely a false economy.
• Don’t get caught out up the SaaS (software as a service) model. You will find that you are paying for multiple services on a monthly basis and all these ‘small’ payments can add up. If you are paying in dollars, currency fluctuations can also affect the amount you pay.
• Keep a record of everything you subscribe to and only keep the essential ones. Try to vary the days of the month that you are billed on so that you aren’t being hit by multiple bills at the end of every month.
• Don’t spend unnecessarily. It’s possible to offset a lot of expensive start-up costs by adopting a DIY attitude:
• Over purchasing and bad stock management are crippling for young e-commerce businesses. It’s imperative to learn how to use inventory management software properly.
2. Lack of planning & forecasting
Planning and forecasting are needed to run an efficient e-commerce venture. They will help you decide in which direction to grow.
|• Be clear on what your current and future overheads are (warehouse, marketplace fees such as Amazon, server, staff etc.) to have an accurate picture of profits.|
• Have you planned for all the costs of expansion? Are you going to be selling abroad? Be mindful of VAT tariffs and other export costs (For guidance, here’s what UK retailers need to know about selling to Germany) and of course, SimplyVAT.com can help with all your EU VAT needs.
• Don’t obsess overgrowth – keep things manageable at first.
• Conduct thorough market research to understand local markets – identify your main competitors and sites you aspire to.
3. Not utilising the offline world
Don’t get too wrapped up in the digital world that you miss opportunities in the world around you. Even a brilliant online business needs the offline world to be successful.
|• Promotional tactics like guerrilla marketing can be an effective way of driving traffic and social shares. Use the promotional opportunities of the world outside to drive online interest.|
• Crafts fairs and seasonal markets are a fantastic way to get your products in front of people. Don’t overstretch yourself – but surely there’s always time for a pop up shop or two?
• Festivals are a great way to launch products and services. Think about how strategic sponsorship might help you get your business off the ground.
• Networking is also important for e-commerce businesses. Join the local business community; it’s a great way to make connections and relationships for the future.
4. A piecemeal approach to SEO
Entrepreneurs are usually comfortable with the idea of SEO, and they are able to start doing keyword research, but things start to fall apart when it comes to implementation.
|• The main issue with keyword research is that people give up too soon. They don’t go to the end with their research like they should. You need to keep digging with keywords and get granular with your product categories.|
• Part of the reason why people don’t invest enough in keyword research is that store owners don’t realise the real value of using keywords. Users rule the roost when it comes to the language that they use – if you want to sell to them, you must use it.
• A lot of the technical SEO fixes such as: de-indexing duplicate content, fixing bad URLs and redirecting 404s, turn people off. You can’t get lazy with technical SEO: you need to follow things to the end and create a good experience for people and search engines in order to get the right traffic.
5. Forgetting the human element
It’s absolutely imperative to remember the human element of e-commerce. A more humanised attitude towards e-commerce will help you not only sell better, but also enable you to have better relationships with the community around you (who will be able to promote you).
|• Nurture customer relationships with deals, offers, incentives and email marketing.|
• You oversee a very precious commodity – people’s time. Give it the respect it deserves and always add value instead of blindly selling.
• Working with bloggers and the promotional community will be much easier if you are on friendly terms. Build relationships and you will find placing content and asking for reviews to be so much easier and you’ll receive better returns.
6. Not taking ownership
There is no way to just fully automate everything and sit back. Yes, there is a lot of software and automation tools that you can use, but they can’t do everything for you.
|• Don’t leave your customer service in the hand of technology, especially in the beginning. Add your own personality and passion to the store.|
• Educate yourself so that you can scout suppliers better.
• Take ownership of your own e-commerce journey and the lessons that you are learning and share them with others.
Everyone makes mistakes and we all have our blind spots. Running an ecommerce store is difficult, but it’s also very rewarding if you keep these six things in mind and keep striving for better customer experiences.
Our guest blog is from Patrick Foster, ecommerce entrepreneur, coach & writer.