By: Mahima Sharma
Indeed! No one would ever miss a word of thought from Amazon’s exemplary success. Isn’t it?
In a highly-competitive industry, you must be aware what it takes to scale up your brand and give your customers an awesome shopping experience. To help you with this, we have chalked out the must haves for your ecommerce business plan.
Strategy: 3 eCommerce business models you can leverage upon
Every business strategy includes a business model to monetize upon. That forms the very basis of any venture. For your ecommerce business plan, there exist 3 typical business models which define & drive your strategy and the choices you should make to turn your ecommerce venture into a success:
1. Drop-shipping
This is one of the most popular models in the eCommerce ecosystem today. Under this model, you create a marketplace and enable the sales of products that are manufactured as well as shipped by a third person/party. Largely, these are products which are largely standard in nature and consumer is already educated about them before he/she makes a purchase. E.g. Large online retailers like Amazon offer multiple products in drop-shipping arrangement with 3rd party vendors.
How do you benefit?
Investments are low as compared to other business models since you are not holding any inventory.
What should be your core focus on?
2. Wholesaling and warehousing
These days, this model is generally followed in B2B niches. You need to have either of the 2 characteristics to follow this model:-
a) Price competitiveness resulting from bulk purchasing and selling
b) Niche product categories that can still command higher margins despite bulk purchase discounts
Businesses like AliExpress fall under this category.
How do you benefit?
This type of model typically generates higher profit margins than any other B2C ecommerce business because of higher stock turnarounds.
What should be your core focus on?
While marketing, technology and customer support still pay a huge role in this type of ecommerce business model, the primary factor of your success happens to be your pricing, so focus more on maintaining that cost advantage.
3. White-labelling
White-labelling is when you hold a licensed contract of labelling a product under your name even if it has been manufactured by any other 3rd party. Just think about Dollar Shave Club and you will understand where we are going.
How do you benefit?
You tend to command higher margins not just because of bulk buying of products but also the niche you are able to create. Moreover, you have more control on the overall supply chain and can deliver better customer experience.
What should be your core focus on?
More than the product, you are selling a concept and an idea in this model. As a result, marketing and customer engagement need to take precedence here. However, that doesn’t mean technology, customer support and supply chain don’t need any investment.
Is your ecommerce strategy following any of these 3 models? Here are some of the resources you should look forward to for detailed concepts:
1. Drop Shipping: The Easiest Way to Sell Online
2. Sell Wholesale to Other Retailers
3. Why A White Label Solution Is Easier Than Building Your Own
Research: 4 tips on how to start with your market research
As you get clarity on the ecommerce business model you want to pursue, your research should also start by this time. The next step should be to dive deeper into the research and perform a thorough SWOT analysis. By the end of this analysis, you will be confident of the experience and the bottlenecks you might face once you start, and how to overcome them.
The most important information to include in your ecommerce business blueprint – Your competitors!
Yes, you can’t afford to miss it. Know your competitors even more than yourself. And in order to get started with the competitor research, start with the following data:
1. Competitor Names
2. Traffic Acquisition Methodologies
3. Product Niche & Pricing
4. Demographics
5. Business Model
6. Brand Value
7. Success Stories
8. Performance Benchmarks
9. Conversion & Bounce Rates
10. Shipping Stats
11. Failure Stories (Even more important!)
12. Web and Mobile Design Experience
13. User Ratings and Reviews
14. Sales and Marketing Tactics
15. Customer Loyalty & Services
Understand what makes you different from them
1. Discover your USP
Leverage your selling proposition by highlighting how your customers will benefit from the uniqueness of your product.
Selling your product to customers who have dozens of other options to buy from is only possible if your business answers a very simple question – Why should they buy from you? What’s that extra you are offering to them?
2. Learn from your competitor stories
Keep yourself aware of the business strategies and decisions your competitors take and what consequences they face. This way, you will always make sure that you learn from their mistakes. It will also be a good primer for you to understand the challenges faced in ecommerce industry, and think about the possible stop-gap solutions in your business model.
3. Distinguish your brand
Create a consistent experience across channels so that no one will forget. Show off with an amazing product video or compelling images that define your product and differentiate your service.
4. Add the personal touch
Create a buzz in the market with a customer centric landing page or a brand story to share with your prospects. Sharing the finest of the details about your product/service will offer a personalized consumer experience.
Once you understand your USP and the areas where your ecommerce business intends to make the biggest impact, it’s time that you start investing in the nuts and bolts of your business. A suggested approach can be to start your research on the tech platforms and mapping your business needs to the available technology offerings (if time is critical, ecommerce software development companies like Kays Harbor can help you in not just making such choices but implement them too).
Read More at: https://kaysharbor.com/blog/ecommerce/your-ecommerce-business-plan-roundup
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