Starting a business online is certainly an exciting, risky and potentially lucrative thing to do. If you do it right, and work hard at it you can make a great living for yourself and potentially free yourself from the monotony of the 9-5 lifestyle. Unfortunately, a large majority of people who decide to start selling stuff online never reach this goal. An e-commerce business can fail for a multitude of reasons, but here are 5 common mistakes to avoid.
However sure you are that your products are going to be hot sellers, you can in reality never know what will happen until you put them on sale. Don’t make the mistake of buying a whole load of stock of an item you have not tested yet – because if it doesn’t sell like you hoped you will make a big loss which could kill your business instantly.
Instead, why not work out what your selling price would be and then just try selling some at that price, and sales can be fulfilled by buying the product at retail price from another shop. You will make a small loss, but testing the concept could save you a fortune.
If you make many of your sales to customers in other countries you probably have an element of currency risk in your business. Not keeping a close eye on currency movements can spell disaster for a small business. If you expect a lot of your profits to come from overseas sales you should control your costs very carefully, try to build in a healthy margin and keep a close eye on currency conversion rates in case anything changes.
The build it and they will come philosophy is a dangerous one and it rarely works out as such. Once you have set up your shop with all of your wares you will need to figure out a way to get customers through the door. When you are planning your e-commerce business, don’t underestimate the amount of money and effort that you will have to put into marketing. Allow a healthy budget for advertising costs and don’t be over optimistic about how many sales you will make.
This has to be the biggest mistake for most e-businesses and it is sad because this can make the difference between a profitable business and a loss making one. From the very outset you should put in place a plan for managing your customer list. Marketing to previous customers is an easy way to increase sales but you have to make the effort to actually get the job done. Don’t let this slide.
Authored by Stuart Hutchinson of Danson Digital. Danson Digital is featured in the web development category on thebestof Brighton and Hove...
