5 Things Every New E-commerce Business Owner Needs To Know
It seems as though everybody is jumping on the #sidehustle bandwagon.
Friends and family with their own e-commerce stores are popping up all over social media, and hey, you’ve just started one too!
Whether you are trying to earn a bit of extra cash on the side, have a hobby that you’d like to monetise, or want to start small and scale big, there are a few things that you should know about starting an e-commerce business.
I started mine (Full Bloom Lingerie) about a year and a half ago.
Having experienced all the joy and frustration that comes along with starting an e-commerce store, I wrote this article so other new business owners don’t go through the same experience.
Here are the five things that you NEED to know before and after you start your e-commerce business.
1. Don’t spend money unnecessarily
It’s tempting to do the big beautiful photoshoot or the big launch party, but it only makes it harder and harder to break even or make a profit.
You can have a virtual launch party for almost no cost and take professional looking photos on an iPhone with a beautiful background and with friends as models.
The money you spend upfront before you make any sales is money that you have to take out of your profits and try and earn back.
Don’t start your business with that financial stress; it’s not worth it.
2. Discounting your product isn’t always the answer.
So, you’ve hit the ‘live’ button on your website, and the likes on your Instagram are growing, but sales are kind of slow. What can you do to get some action?
And sure, it works. And then it slows down again, so you have another sale.
Pretty soon, the only time you sell products is when you apply a discount, which cuts into your profit margin, and it takes longer to make a profit.
After all, anyone can have a business; the aim is to make a profit.
If you’re discounting your products all the time, people will never buy your products at full price – they’ll always be waiting for the discount.
It also makes your brand look cheap.
Instead of driving sales through well, sales, try other methods like gifting product to influencers or holding a competition.
You’ll increase visibility for your brand, which will lead to a higher chance of someone buying your product without waiting for a discount.
3. Not allowing returns may be good for your wallet, but it’s bad for business.
This advice applies mainly to clothing e-commerce store owners - when creating your returns policy, don’t be the jerk that says “no refunds; credits and exchanges only”.
Trying on clothing in a store is traumatic enough, let alone taking a chance on a small business’s product, having it not fit, only to find that they don’t offer refunds.
Not every item can be refunded for hygiene reasons, but not providing customers with a refund after they are already disappointed that your product doesn’t suit them is very bad for the customer experience.
You are more likely to have a happy customer, even after they have returned your product if you give them a refund than if you don’t.
And you know who is more likely to leave reviews and tell their friends and family about their experience?
Think of the last time you returned an item or clothing to a big clothing brand– you don’t see the store assistant or the CEO getting upset.
Returns and refunds are a part of a business, and you’ll have to get used to it.
4. You probably won’t make a profit in your first year.
It’s one of the hardest realisations to have as a small business owner: your pride and joy will be a money sucking pit before it becomes a money-making machine.
We all hear about these amazing businesses that made $100k in the first year and believe that it will be us, but these are the exceptions, not the rule.
If it were that easy, half of all small businesses wouldn’t fail in the first year.
After speaking to several business owners, it seems that year 2 and 3 is where you start breaking even or making a profit, but smart business owners will always invest this profit back into their business to grow.
The more time you spend working on your e-commerce store, the smarter and savvier you will become.
Costs will come down, profits will go up, and you will finally start to see some light at the end of the dark retail tunnel.
5. You will never really know how well another business is doing, so don’t feel envious.
Just like you probably wouldn’t post a terrible looking photo of yourself on Instagram, if you have your own business, you aren’t going to post when the going gets tough.
It’s easy to get caught up in the #girlboss movement where everyone has an amazing side hustle that is doing fantastically well and “hey, look at my gorgeous iMac and home office”.
Unfortunately, what you don’t see is the stress of doing it alone, the start-up costs and the imposter syndrome that makes you question everything you do.
Luckily, there are communities out there like the Lady Startup Facebook group where you can ask questions, celebrate your wins and air your grievances with other like-minded lady bosses.
Starting an e-commerce business is an exciting prospect, just remember to be smart about it!