Ecommerce, according to data from the U.S. Census, is growing much faster than traditional retail. Shopping online, whether for holiday gifts or day-to-day items, has become the norm for a large portion of American (and international) society. From small businesses to gigantic corporations, ecommerce has forever changed the way consumers view and engage with retail.
In 2017, ecommerce transactions reached $2.3 trillion. According to a recent report, by 2021, global ecommerce is expected to reach $4.5 trillion. In the United States, ecommerce accounts for nearly 10% of retail sales, and is growing by 15 percent per year.
According to Shopify, ecommerce itself is evolving beyond the desktop computer and search results, to incorporate mobile and social media into the retail process: “As much as 11 percent of online shoppers now shop online via their smartphone on a weekly basis, and 35 percent say it will become their main purchasing tool. Around 39 percent of online shoppers use social networks to get inspiration for purchases.”
For those looking to pursue a career in ecommerce, an MBA is the top choice to help develop the business skills needed for the successful creation and operation in the online sales industry.
Additionally, here are several other tips to create a successful ecommerce business:
Have a plan, including an understanding of what you want to sell (product, service, etc.), how you want to sell it, and the targeted consumer demographic. Be certain to consider obstacles and possible unforeseen challenges (an MBA will help conceive and predict what types of issues these may be). Without a well-conceived and documented plan for creating an ecommerce business, there is the increased potential for overspending, a lack of preparedness and other destructive inefficiencies.
Manage your finances, starting with a balance sheet. From the U.S. Small Business Administration (SBA): “A balance sheet will help you account for costs like employees and supplies. It will also help you track assets, liabilities, and equity. You can get insights by separating and analyzing segments of your business, like comparing online sales to face-to-face sales.”
The SBA also encourages those creating an ecommerce business to establish their business credit and to determine the type of accounting they wish to use, generally accrual or cash methods, seeking expert accounting assistance from a licensed Certified Public Accountant or business consultant as needed.
Research the competition in your market by identifying the top sellers, then note what it is they do well and what they do poorly. Shopify suggests the following markers to consider when researching potential ecommerce competitors:
- How do they emphasize their value proposition?
- What are their prices like compared to yours?
- What is their product photography like, and how are their product descriptions?
- What are their shipping options and prices like?
- Where are their calls to action, and how effective are they?
- Are they trying to build an email list?
- If so, how are they employing their email list?
- Is their site optimized for mobile?
Other important competitor data: What is their social media presence like; which platforms do they use; how often do they interact with customers, and how do they speak with their customers?
Build a website and social media platforms, then drive traffic to them. The building is the easy part; Shopify and other ecommerce platforms provide many templates and step-by-step instruction for setup.
However, the understanding and usage of search engine optimization (SEO) in website copy and engaging content (and hashtags) on social media, combined with a quality product and business plan, ultimately will drive success.
Stay up on the latest ecommerce trends. For example, Forbes lists email sales, continued engagement and credibility outside of purchase points, brand personalization and voice search as some of the current trends to know and utilize for ecommerce success.
As ecommerce continues to grow, so will the level of competition and savvy customer expectations. An MBA is vital in preparing for the demands of the ecommerce market and adapting to it. In addition, understanding and keeping up with the rapid evolution of the online marketplace will help new business owners find ecommerce success.
Return to Business Blog.