7 Tips for Building a Profitable Ecommerce Store

7 Tips for Building a Profitable Ecommerce Store

Every business owner wants to have a profitable eCommerce store, but plenty of things can get in the way. For example, you might not know how to spend your time and money, what tech to use, or how to optimize your store. To help you grow your eCommerce business, we’ve put together seven tips designed to address common customer pain points while helping you stand out from the crowd.

While there’s no magic set of tools or products you can offer to become profitable immediately, there are some common features and habits of leading eCommerce stores. Keep reading to discover seven tips that you can use to grow your eCommerce store at any stage.

1. Create a Business Plan Around Your Niche

There are already millions of eCommerce stores online, and it’s likely a new one will be available by the time you finish reading this article. But, unfortunately, many stores fail to gain traction and generate revenue, let alone a profit. One of the biggest threats to surviving is not having a clear business plan and an ideal product mix. 

Instead of trying to be the store for everyone, find a niche where you think you can provide high-quality products and services. For example, if you’ve got a good eye for design and love dogs, why not create a store for the best handmade scarves for dogs?

Narrow your focus. It’ll help you minimize the capital requirements for starting a store while potentially uncovering an audience that isn’t being served.

From there, you need to craft a traditional business plan. This means researching products and competitors. Next, look at related search and social media trends and assess the strengths and threats of both your niche and your team’s skill set.

The final step is to choose a business model. Do you want to sell directly to consumers or other businesses? If you can’t manufacture your products, will you buy from a wholesaler and need an operation to fulfill orders? Or will you go the dropshipping route and trade lower margins for the ease of not needing to handle order fulfillment? If you can produce your products, will you use established B2B sales channels or embrace the growing direct-to-consumer trend?

2. Choose the Right Software Tools

One way to set yourself up for success and avoid common issues — like spending hours trying to figure out if a specific feature is possible — is to start store construction or expansion with the right tools. Read reviews and look for demos when purchasing a new software tool for your store.

Managing the tech stack is one of many jobs an eCommerce store owner has. Focusing on tools that you know or those from trusted developers makes it easier. If you’re making a change, such as switching your shopping cart provider, ensure that any option on your shortlist is compatible with your eCommerce platform and other plugins or tools you use.

Not sure how to find suitable options? New shop owners can start with selections recommended by their eCommerce platform. You can also look for groups focused on eCommerce or your niche on Facebook, Reddit, LinkedIn, and more.

3. Design Your Online Store for Mobile

One of the joys of eCommerce is that you can shop anytime from nearly anywhere. Whatever device is closest can help alleviate boredom or find the coolest new thing. From the store perspective, you’ll want to capitalize on all that potential traffic. Throughout the world, especially in major markets like the U.S. and China, that means being shoppable on smartphones and tablets.

Many store-building tools automatically create mobile versions. Always test every function across multiple devices, using physical hardware or emulators. As a bonus, responsive and mobile-friendly designs generally make it easier for users to share pages and reduce the amount of time it takes you or a web designer to manage and update your site.

One thing to keep in mind is that more people are shopping via social media. Facebook, Instagram, WeChat, and others are expanding their sales functions. Creating a page or ad campaign can lead to a direct sale. That’s predominantly happening on smartphones, with one study noting that 95.1% of active Facebook traffic comes from mobile devices.

4. Streamline Shopping Carts and Checkout

Your products and presentation are what make a sale. Unfortunately, frustrating shopping carts and checkout processes can lose it. Perform the entire sales process from adding products to the cart through final checkout and payment. Are you offering the same kind of experience and speed that your favorite stores do?

The best stores prioritize streamlining carts and checkouts. This means using shopping cart tools that follow users across every page on your site. If you have standard shipping costs, the cart should display these as soon as a product is added. When expenses like taxes and shipping are based on customer location, that should be displayed in the cart window.

For checkout, help people pay as quickly as they want. First, this means allowing people to use guest checkout options. You’ll still get their email address to send the confirmation email and their name in the payment section. That means, even with guest options, you’re capturing all the data your marketing teams need.

One way to help people is making the billing and shipping address the same by default, allowing someone to uncheck a box if they need to change one. Also, keep the checkout pages to as few pages and locations as possible. And, show costs like taxes as soon as you can. Mayple has a smart list of plugins and add-ons you can use to improve the checkout process, plus tips to optimize your mobile checkout options.

5. Continually Review Shipping Options

Shipping is a balancing act. You want to reach customers quickly but not kill your margins. Nevertheless, the problem is something that you must address. That’s because more than two-thirds of eCommerce shopping carts were abandoned in 2020, with shipping speed and price being two of the top reasons.

Many companies will offer free shipping on specific order values or only charge customers for faster options to tackle shipping concerns. Others will heavily promote free shipping by baking costs into the prices of products. And some will charge customers a flat rate for their shipping.

Your business needs to do what works best for you and your customers.

The critical thing to note here is that the “best” option can change. Flat-rate shipping may be the easiest option for you immediately. There may be one carrier with a store near your location, so you can quickly bring orders to them during the day. You have enough orders for carriers to come to you regularly, reducing your gas costs.

The aim is to grow large enough that carriers will offer you a discounted rate based on your order volume. They want reliable customers and regularly make deals so that you’ll consistently choose that carrier. Your business may be able to get a flat percentage rate discount on certain types of packages or mailing options. Some carriers will give you better DIM weight calculations or remove things like residential surcharges.

Regularly reach out to carriers, negotiate as you go, and consider looking into working with a 3PL or fulfillment service that might be able to offer you even better discounts and reduce your overall inventory storage and order management costs.

6. Don’t Pocket The First Profits

The most profitable eCommerce stores continually reinvest in the business. They use early profits to scale and hire, perform better research, expand products, or launch more marketing campaigns. Of course, owners should pay themselves a salary from the eCommerce store. But profits need to go right back into the business.

If you have profit and aren’t in dire need of an essential business tool, like an email platform or a ceiling that isn’t leaking, many leaders recommend you first invest in marketing. Stick to small-dollar campaigns on your best social channels. Ad services like Facebook’s one allow you to target different objectives. Starting out, awareness campaigns can generate interest and help you learn more about potential audiences. Then, if you have market and audience research, shift to consideration-focused ads that help people find you.

You can start with a series of $5 cost cap campaigns (budget about $25 per day) to learn what works best for your audience. When you have an audience and a channel that generates interest, ramp up your spending to help double down on those early profits.

7. Be Trend-Friendly, Not Trend-Focused

Our final piece of advice is to embrace trends when they coincide with your niche and products but avoid those that aren’t related. Following trends can be lucrative when you’re a natural fit for what’s popular. However, trying to force a connection can come out as disingenuous, limiting new sales and potentially harming relationships with existing customers.

Stick to the values, products, and presentations that land your first customers. Refine what works, but don’t give up on it. You may get lucky and chase the perfect trend once. But the second time, you might arrive far too late and have sunk your capital in inventory you can’t move.

If tastes have changed and you need to shift strategies, look for natural evolutions that help you target your core audience. Good luck, and when you find something that works well, share it with your community and help them grow too.

About the Author

Jake Rheude

Jake Rheude is the Director of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.

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