7 Things to Know BEFORE You Start an E-commerce Business
Summary
TLDRThis video offers seven essential tips for launching a successful e-commerce business. It emphasizes the vast opportunities in e-commerce despite the perception of saturation, highlighting the importance of marketing, targeting a niche audience, and creating a strong pre-launch strategy. The video also stresses the significance of product differentiation, crafting a compelling brand story, and prioritizing exceptional customer service. Sponsored by Alibaba.com, it provides insights on sourcing suppliers and leveraging their events for business growth.
Takeaways
- 🌐 E-commerce opportunities are vast and growing, with global retail sales continually increasing, indicating more chances for new businesses to succeed.
- 📈 Direct to consumer and private labeling are booming, allowing manufacturers and brands to bypass traditional retail and maintain higher profits.
- 🎯 Marketing is crucial for visibility and sales, with strategies needing constant adaptation due to the ever-evolving field; it's often the difference between success and failure.
- 💡 Alibaba.com is highlighted as a valuable resource for finding product suppliers, with events and challenges that can provide significant support for new e-commerce ventures.
- 🚫 Avoid creating products aimed at everyone; instead, focus on niche markets to better target and satisfy a specific customer base.
- 📢 Pre-launch strategies are essential for a successful product launch, including building an audience and marketing before the product is available.
- 🔄 When selecting a product, consider making at least one change to differentiate it from existing options, addressing a specific need or solving a problem.
- 📖 Creating a compelling brand story can enhance customer loyalty and engagement, making your brand more memorable and shareable.
- 💬 Prioritizing customer service is key to long-term success, as it builds a positive reputation and encourages repeat business and word-of-mouth referrals.
- 💪 Encouragement to take the leap into e-commerce, despite the challenges, as the potential rewards are significant and learning from the process is invaluable.
Q & A
What are the seven things you need to know before starting an ecommerce business according to the video?
-The video outlines seven key points: recognizing the vast opportunities in ecommerce, understanding that marketing is crucial, focusing on niche products, the importance of a strong pre-launch strategy, differentiating your product, creating a compelling brand story, and prioritizing excellent customer service.
Why does the video emphasize that ecommerce is not oversaturated?
-The video emphasizes that ecommerce is not oversaturated because the ecommerce share of total global retail sales has been growing strongly since 2015, indicating that there is still significant opportunity for new businesses to enter the market.
What is the significance of direct to consumer and private labeling in the growth of ecommerce?
-Direct to consumer and private labeling are significant because they allow manufacturers and brands to bypass traditional retail partners, maintain higher profits, and have more control over their brand and audience, which contributes to the growth of ecommerce.
How does the video suggest one should approach marketing for an ecommerce business?
-The video suggests that marketing should be the primary focus, even before the product development, and that it requires constant experimentation and learning to achieve the best ROI. It also highlights the importance of visibility and the need for a tailored marketing plan based on the business and product type.
What role does Alibaba.com play in the context of the video?
-Alibaba.com is highlighted as a platform that connects buyers with suppliers and offers various resources for ecommerce sellers, including their Super September annual event and the 50k Challenge 2020 campaign, which are beneficial for those starting an ecommerce business.
Why is it important to target a niche market for your ecommerce product according to the video?
-Targeting a niche market is important because it allows for more effective marketing, higher conversion rates, and the ability to create products that cater to specific needs, which can lead to a more loyal customer base.
What is the significance of having a pre-launch strategy for an ecommerce business?
-A pre-launch strategy is significant because it helps build an audience and market awareness before the product is available, which can lead to immediate sales upon launch and a more successful business start.
How does the video suggest one should differentiate their ecommerce product?
-The video suggests looking at customer reviews and pain points to identify areas of improvement, and then making at least one change to an existing product to create a differentiating factor that adds value and solves a problem.
Why is storytelling important for an ecommerce brand according to the video?
-Storytelling is important because it helps create an identity and an authentic relationship with the buyer, enhancing brand loyalty and making marketing more impactful by connecting with the audience on an emotional level.
What is the video's stance on the importance of customer service in ecommerce?
-The video emphasizes that excellent customer service is key to the success of an ecommerce business, contributing to customer loyalty and word-of-mouth referrals, which are critical for long-term business growth.
Outlines
📈 E-commerce Opportunities and Growth
The video emphasizes the vast opportunities in e-commerce, dispelling the myth of oversaturation. It highlights the importance of understanding the growth trend of e-commerce from 2015 to 2023, which shows a strong upward trajectory. The speaker shares personal insights, wishing they had known about this growth earlier to invest more in their own e-commerce ventures. The video also touches on the rise of direct-to-consumer and private labeling businesses, suggesting that these models offer significant potential for new entrepreneurs. Global e-commerce sales are expected to reach 6.5 trillion dollars by 2021, indicating a massive shift towards online retail. The speaker encourages viewers to leverage this trend to start their businesses, arguing that e-commerce is scalable and can provide a new stream of income.
🎯 The Imperative Role of Marketing in E-commerce
This section underscores the paramount importance of marketing in e-commerce, stating that visibility is crucial for product sales. The speaker shares a personal anecdote about their failed clothing business, 'Charge Athletics,' attributing the failure to a lack of marketing. They stress the need for a robust marketing plan tailored to the business and product type, which may involve trial and error. The video introduces two types of marketing: brand awareness and sales increase. It also mentions the potential benefits of having a mentor or a marketing agency, provided there are sufficient funds. The speaker advocates for a strategy where marketing investments yield high returns, enabling business scaling and success.
🌐 Alibaba.com as a Valuable E-commerce Resource
The speaker introduces Alibaba.com as a sponsor and a platform they use for finding product suppliers. They discuss two significant events hosted by Alibaba: the 'Super September' annual event, which offers deals for small and medium-sized businesses, and the '50k Challenge 2020' campaign, which gives away $50,000 for product purchases. The video explains how these events can be beneficial for aspiring e-commerce entrepreneurs, providing opportunities to connect with suppliers, explore new products, and potentially win significant financial support for their businesses. The speaker also provides a direct link to Alibaba's Facebook page for viewers to participate in the campaign.
🏷 Targeting Niche Markets for E-commerce Success
The video advises against creating products that appeal to everyone, arguing that such products often fail to resonate strongly with any specific customer group. It suggests focusing on niche products that cater to the needs of a specific subset of consumers. The speaker explains that targeting a smaller, well-defined audience can lead to a more effective marketing strategy and higher conversion rates. They also discuss the importance of understanding the 'gold buyer' demographic to develop products that meet their specific needs. The video encourages viewers to conduct market research and use feedback to improve and differentiate their products, creating value and standing out in the competitive e-commerce landscape.
🛒 The Importance of Pre-launch Strategy in E-commerce
This section highlights the significance of a strong pre-launch strategy, which includes building an audience before the product is ready for sale. The speaker advocates for personal branding and creating a social media presence or website to attract potential customers. They share their experience with their company 'Charge,' which lacked a pre-launch strategy, resulting in zero sales on the first day. The video suggests that starting to market before the product is built is crucial for a successful launch and early sales. It also touches on the idea of differentiating the product by making at least one improvement to an existing product, which can be identified through market research and customer feedback.
📚 Creating a Brand Story for Emotional Connection
The video stresses the importance of creating a compelling brand story to establish an emotional connection with customers. It argues that storytelling is vital for building brand identity and loyalty. The speaker shares their regret for not focusing on storytelling with their clothing company 'Charged,' suggesting that selling the experience and story behind the clothes would have been more effective. They encourage viewers to consider the brand's motives, slogan, and imagery to create a strong narrative that resonates with customers. The video also mentions the example of Patagonia, which excels at storytelling, creating a community around its brand. It concludes by emphasizing that a well-crafted story can enhance marketing effectiveness and lead to long-term brand success.
💬 Prioritizing Customer Service for E-commerce
The final section of the video emphasizes the critical role of customer service in e-commerce success, using Zappos as a case study. It points out that a significant portion of Zappos' sales comes from returning customers, attributed to their exceptional customer service. The speaker advises prioritizing customer satisfaction over efficiency and cost-saving in customer service. They suggest that providing excellent customer service can lead to customer loyalty and positive word-of-mouth, which are crucial for long-term business growth. The video concludes by encouraging viewers to start their e-commerce journey, learn from the process, and apply the insights shared to increase their chances of success.
Mindmap
Keywords
💡E-commerce
💡Private Labeling
💡Marketing
💡ROI (Return on Investment)
💡Alibaba.com
💡Niche Products
💡Pre-launch Strategy
💡Differentiation
💡Storytelling
💡Customer Service
Highlights
E-commerce opportunities are vast despite the perception of saturation.
E-commerce has been growing strongly since 2015, indicating more opportunities today.
Direct to consumer and private labeling is growing at an extremely fast pace.
Global e-commerce sales are projected to reach 6.5 trillion dollars by 2023.
Marketing is crucial for visibility and is the first priority in e-commerce.
The importance of understanding marketing before outsourcing it to others.
Marketing strategies should be tailored to the business and product type.
Alibaba.com is a valuable resource for finding product suppliers.
Alibaba's Super September event offers deals and connections for e-commerce sellers.
Targeting a specific customer demographic is more effective than trying to appeal to everyone.
A successful pre-launch strategy is essential for initial sales and brand awareness.
Differentiating your product by addressing customer needs or solving problems is key.
Creating a story around your brand helps build an authentic relationship with customers.
Customer service is key to long-term success and brand loyalty.
Personal branding can be a powerful way to build an audience before launching a product.
Investing in customer happiness through excellent service interactions pays off in the long run.
Transcripts
in this video i'm going over the seven
things you absolutely have to know
before starting
a successful ecommerce business that
brings great profits these are the
things i wish i knew before starting
because if i did it would have made my
life a lot easier
if you follow these tips i guarantee you
that you'll have one a better vision to
a more successful launch
and three a long lasting company that
pays you for years and years this video
is sponsored by alibaba.com so i want to
say thanks to them anyways
let's get started the first thing you
need to know about ecommerce is that the
opportunities are
vast a lot of people think that
e-commerce is oversaturated
and that it'd be impossible for them to
start up a successful business the truth
is that yes it is harder to start an
e-commerce business today than it was
maybe five years ago but there is still
so much more opportunity available and i
really want to make this point clear
because i think a lot of people are on
the edge of
starting a business but just never
follow through with it because they get
discouraged let's take a look at this
chart which shows the ecommerce share of
total global retail sales from 2015 all
the way to 2023. as you can see
e-commerce has been
growing very very strongly since 2015
with the year-to-year growth
getting higher and higher and higher
this shows that there is more
opportunity today than there was maybe
five years ago i think that if i had
known this i would have put a lot more
time and effort into my own ecommerce
ventures which i do now on the side but
they aren't my main focus
make sure to check out my 10 sources of
income at age 28 video if you want to
see what other things i do but yes
ecommerce is one of my side hustles it's
not one of my main businesses but seeing
this growth of ecommerce
absolutely makes me think hey maybe i
should spend more time
on my ecommerce businesses the fact is
that direct to consumer
and private labeling is growing at an
extremely fast pace
manufacturers and brands are realizing
that they don't need to work with these
retail partners they can bypass them
keep their profits high and be more in
control of their brand and their
audience
so that is where you come in that's
where you come in with that private
labeling there are so many different
opportunities in this field and i
suggest you guys
if you're interested in e-commerce in
any way do some more research into this
business model it's
such a great way to make money and it's
not just the us global ecommerce sales
will top 4 trillion dollars in 2020 and
reach 6.5 trillion dollars by the year
2021 every retailer is shifting more and
more towards e-commerce
investing more in their digital
footprint as well as their online
presence
even chipotle is investing heavily in
their online platform so if restaurants
are doing it then of course
retail is like 10 times more likely to
basically my point is that there is so
much opportunity for you to do well
in this space there's always going to be
way more consumers as there are creators
and sellers and there is a never-ending
and growing group of people who buy
everything online so take advantage of
this huge shift
to start your own business this first
point should really speak to you if
you've been on the fence of starting
your own e-commerce business and think
that e-commerce is something that is
one too late to get into or too too hard
to get into it's not too late people are
starting e-commerce businesses
today and a lot of them are seeing
success and two regarding the concern
that it might be too hard well yes it is
a hard business to get right but if you
are able to succeed
it's gonna change your life completely
and create a whole brand new stream of
income for you it's also extremely
scalable which is one of the most
important things i look
into before starting a business all
right next up is the fact that
marketing is king this is stuff that you
really should know yourself
before you hire it out to other people
first there are hundreds of ways to
market and get sales and it's a field
that's always evolving so you constantly
have to be
experimenting or learning in order to
get the best roi
return on your investment now why is
marketing so important
i think the main factor is visibility
without visibility
no one will buy your product because no
one will see and no one will know that
it exists it could literally be the best
product in the world but without
adequate marketing it's going to be
very hard to succeed and you know i've
learned this personally the hard way
with my first clothing business called
charge athletics this company ultimately
failed because i just did not understand
the importance
of marketing i spent so much time
building the brand
building the clothes designing them
getting them made that i didn't apply
any effort into the marketing side and
so while i think that my products were
pretty good the fact is that
not enough people knew about the brand
and i was also very stingy with my
marketing dollars i'd run one campaign
stop it after spending maybe 20 and just
be like why don't more people know about
my brand well it was because of the
lack of marketing i really wish i had
this expectations before starting my own
first e-commerce brand because you know
it affects your priorities
i always like to say that marketing is
first and your product is a close second
there's two types of marketing
the first is to raise brand awareness
and the second is to increase your sales
you want to have a marketing plan and
this marketing plan totally depends
on your type of business and product for
some instagram influencer marketing
might be the best roi
for some youtube ads google ads
sponsored posts social media
those could be a lot better it does
involve a fair degree of trial and error
so you have to enter with the
expectation that the first
few dollars that you spend on marketing
aren't going to fully work out but if
you keep trying and trying you will
stumble upon
a type of marketing strategy that works
for your brand or company a mentor will
for sure help and a marketing agency
would be great but that's only if you
have the money to spend there's gonna be
a time where
every dollar you put into your marketing
strategy is gonna generate let's say
three five even ten dollars of profit
when this does happen you can
scale this campaign and that's really
going to help you make your brand
successful all right so now let's talk
about alibaba.com who's the sponsor of
this video they're the first company
i've ever worked with to sponsor a video
and i'm super happy because i use
alibaba.com
to find all my product suppliers and
chances are 99 of you guys will as well
we'll go over two events that they're
hosting for e-commerce sellers that you
guys will find
super helpful basically they connect
buyers all across the world with over
100 000 suppliers on their ecommerce
marketplace they have over 40 different
product categories
and you can search for good products to
sell send buying requests get quotes and
work directly and safely with
suppliers right now they are having
their super september annual event which
helps small and medium-sized businesses
find great deals on new products to sell
it's a live stream event where you can
connect directly with suppliers
as a buyer you can browse new product
assortments and design solutions in 3d
reality and virtual showrooms so if
you're thinking about starting your own
e-commerce business then this is the
perfect event for you and i totally wish
i had something like this when i first
started they'll have tons of big
discounts for buyers during the super
september event so i'm positive that it
can save you a lot of money for example
they do have benefits like reduced
transaction fees
60-day payment terms without any fees as
well as big discounts on shipping costs
the second thing i want to talk about is
that they are giving away
50 000 to spend on products as well as
30 other winners of smaller products
it's called their
50k challenge 2020 campaign to enter
follow alibaba.com on facebook and then
share your own 2020 business story so
basically like
what your business is how you got
started the roblox you faced
your successes and pretty much anything
else you want to share share the post
with your network
and then take a screenshot of your post
and send it to them by the deadline that
is listed on their facebook page the 20
posts with the most likes by september
21st will move on to the next round
there a panel of judges will select one
winner who will win that fifty thousand
dollars to spend on products and they're
also picking 10 best stories
every week for other special prizes so
if you potentially want to win 50 000
to start off your e-commerce business
then this is a pretty cool opportunity
i'll post a link to their facebook page
below so that you guys can enter all
right
back to the video all right next up is
that your customers should not be
everyone this is a very important part
because i think that a lot of
new e-commerce people think that if they
make a product that appeals
to everyone then everyone will want to
buy it the truth however is that if you
do have a product that appeals to
everyone
that product will likely only appeal to
everyone a little bit
certainly not enough to get them to buy
there's a certain tipping point or a
hump that the customer has to get over
in order to buy your product and based
on past experience general products
are just not likely to make that cut
instead that customer is likely to just
purchase something that's more
specialized or more directed at a
certain need the most successful
products and this
is especially true for private labeling
are niche products
this is a type of product that you don't
think that there would be too much
demand for but there actually is
so when you are creating your first
product just note that it does not need
to appeal to everyone and like i said
before it actually
should not appeal to everyone it should
be a product that clearly fits the bill
for a small group of people like for
example
rose gold rimmed plastic cups or a
journal with specific prompts or
questions
that only a small subset of people would
like aiming your product at a smaller
audience
also helps with your marketing return on
investment no one has enough money to
market to everyone in the world
so don't even think about it instead
what you want to do is you want to
market towards a specific crowd of
people and for most the more narrow this
crowd is
the better not only does it make your
marketing budget smaller but also makes
it far more effective and it makes your
conversion rate
way better as well so think about your
gold buyer their age their demographic
their interest their location their
gender their values and that is
something you need to have in mind
when developing that product if you can
pinpoint a certain type of person that
is most likely to buy a product
then that is a great sign the next thing
i want to talk about is the fact that
your pre-launch is more important than
you think a lot of people think that if
they make a good product then sales will
start flowing in
the moment they launch it however you
guys this is just not true there's just
too many different products
brands or services in the world and the
fact is that without a proper pre-launch
strategy
no one is going to buy your product on
the first day it's launched one crucial
thing that a lot of companies miss
is starting to market before they create
the product
this can be done by creating an audience
a newsletter a website or a social media
account before the product is ready to
sell a lot of successful e-commerce
companies are started way after that
initial audience
is created and this is why i'm such a
big fan of personal branding this is one
of the most powerful ways to build an
audience before you ever start a company
and by having a successful personal
brand
you have this pre-built audience who's
going to support whatever business you
have
in the future the same goes for a
popular website or a social media
account with a lot of followers as long
as these accounts are targeted to
specific interests then they should
react
pretty well to any future marketing for
a company that you create the sort ties
into marketing but this type of
marketing is done
way before a product is built and even
before a product is conceptualized this
is the number one way to guarantee that
your company has a successful launch
and sees sales at the beginning as you
guessed my company charge did not have a
good pre-launch strategy so on the first
day we launched i got
zero sales all right so the next thing
on my list is when you find a product
and you start building a product
you have to change at least one thing
about it this differentiating factor is
probably going to be tied to some type
of solution
for a problem but i have to emphasize
that you don't need to
completely reinvent the wheel if you're
trying to create a product you know what
you want to do is
take an existing product and ask
yourself is there one thing that i can
change about this that is going to make
it better
it can be the price the design the color
dimensions functionality etc we don't
need
more sellers selling the exact same
product what we do need is more sellers
finding solutions to
existing problems creating something
that is a little bit better and then
selling that that is when you create
real value and that is also when you can
differentiate your product
from the competition so how do you do
this well one of the best ways to do
this
is to look at reviews of the types of
products you're trying to sell
look for certain pain points or common
feedback that you see in multiple
reviews
take that and use it as free market
research for your type of product and
then of course
implement it before starting ecom you
just need to know that differentiation
it essentially
keeps your competition farther away and
it's giving value to your customer you
aren't giving value to your customer
if you're selling them the exact same
thing that everyone else sells but you
are if yours is a little bit different
aka it matches their needs a little bit
better or is just an improved product
overall all the products i've ever sold
in my entire life
have always had some type of
differentiating factor
i've done bundles i've done different
dimensions and sizes that i thought
would work better and i've also made
cheaper alternatives to name a few this
is an important strategy that i
definitely recommend
implementing in your first e-commerce
business because without it
your life is going to be a lot more
tough all right another thing that is
imperative to the success of any brand
especially its long-term success is
creating a story around that brand i
know this sounds sort of cliche but
storytelling plays such a vital part
in creating an identity as well as an
authentic relationship
with the buyer not only does it help
with your brand loyalty but it also
helps with your marketing so when you
are marketing using like a story or
emotions
this allows that ad or whatever it is
you're using to connect with the
audience on a whole different level so
that's really why i wish i knew this
before i started it would have changed
the way that i
shape the brand for example the motives
the brand slogan and images
and probably most importantly the
website for the website i totally would
have changed the way that i portrayed
the brand for example with my clothing
company charged
instead of selling the clothes and how
great they were i should have tried to
sell the story and experience of
actually wearing the clothes people like
to buy not only a product but also the
story behind it and when they do
participate
in the story that creates a big win for
you for example take a look at the brand
patagonia who does such a good job at
this their buyers
completely feel like part of the brand
when they wear their clothes so this
will not only boost your short-term
growth although you know it is harder to
market initially with a story than
versus just peer marketing but it also
ensures that your products and your
brand
last a long time a story is hard to
create but it's like building equity in
your company the stronger you get your
story be more efficient your
marketing will be and hence you will
have a better return on investment it
also encourages people to
share the story and the brand this word
of mouth will pay
huge dividends throughout the course of
your business alright the last thing you
guys need to know before starting your
ecommerce business
is that customer service is key if you
take a look at some of the most
successful e-commerce businesses
one key reason why they succeed is
because of their customer service
for example take a look at zappos and
their ceo tony 75
of their purchases are from returning
customers so you can see that they are
extremely loyal and also about 44
of the customers heard about them
through word of mouth a huge contributor
to this is how they treat their
customers their ceo tony shea is
known for his unconventional approach to
customer service he has said that his
goal with customer service is not to
save money and it's not to be
highly efficient instead the only metric
that he uses is how happy and how
satisfied that customer is
at the end of that service interaction i
wish i knew this before starting my own
ecommerce businesses because you know
lots of businesses
they just don't prioritize customer
satisfaction as they should
and this is another means of
differentiation but it's more on the
company level
and not really the product level placing
your customer first places
money into your future business and
gratitude bank account the more positive
customer service interactions
the more full this jar gets so this
point is crucial for both you as the ceo
as well as any customer service
representatives that you hire in the
future
you have to train them well and you have
to make the priority of top-notch
customer service extremely extremely
clear
i guarantee you that any of those extra
minutes you spend making the customer
happy or any extra dollars you spend
making them happy will pay off in the
long run plus it's just a better way of
running a business so yeah you guys
those are my biggest takeaways
things that you need to know before
starting your own ecommerce business
it's not easy and it certainly takes a
lot of time to set up
any good business but the more you wait
the harder it's going to be
so you know i just really encourage you
guys to take that leap and learn from
the process
i'm so grateful that i took the chances
with my own e-commerce businesses and
yes some of them have failed and some of
them have been successful but really you
don't know until you try so yeah
hopefully you guys found this video
helpful if you did
make sure to share it with a friend
who's thinking about starting their own
ecommerce business and hey drop a like
and subscribe if you want to see more
content just like this i make a ton of
videos about personal finance
investing in entrepreneurship thank you
so much and i'll see you guys in the
next video peace
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