5 Ecommerce Mistakes to Avoid: A Newbie's Guide Don't repeat these common mistakes as you venture into e-commerce.
By Benjamin Kabin •
Opinions expressed by Entrepreneur contributors are their own.
With so many economical, accessible and customizable platforms, it's never been easier to create an online store or even sell through established marketplaces like eBay and Amazon that provide their own steady supply of vendors and traffic. Still, it's just as easy to overlook important details that can hold your online business back.
"Everyone that starts a business has big dreams, ambitions, and excitement," says Terry Lin, the founder of Baller Leather, an online fashion accessories retailer. "But the growth of your e-commerce business depends on the ability to acquire new customers and increase sales from existing ones. Every marketing channel has a cost in time, money or energy -- it's up to you to find the right balance."
To help you find that balance, we talked to a number of experts with decades of online retail experience between them. Thanks to their expertise, we've assembled these five tips to help you avoid the most common pitfalls.
Mistake #1: Not knowing where to find your customer online. Not every channel is going to make sense for every business. For obvious reasons, selling industrial machines on Etsy, a niche online marketplace for vintage, one-of-a-kind and handcrafted goods, probably won't be very successful. But if you make mittens and hats, Etsy could be a great place to make some extra cash.
"It's critical to do your homework beforehand and make sure you're selling something people will buy," says Lin. "Until people are willing to vote with their wallets, you do not have a business."
To start, look for products similar to yours sold online. Which marketplaces do your competitors use? Browse the rest of the marketplace's offerings to get a sense for its buyers and those buyers' needs and whether you could see your customers among them.
Related: The 7 Mistakes Entrepreneurs Make When Launching an Ecommerce Startup
Mistake #2: Not maximizing social media. E-commerce entrepreneur and educator Ezra Firestone says it's also important to master platforms like Facebook, Twitter and Google. Make your brand accessible and pull your customer into your company's story with sneak peeks of new offerings and behind-the-scenes photos. Says Firestone, these platforms can also help you create a dialogue with customers in order to know and serve them better and survey them on which direction to take your business.
Mistake #3: Not knowing your niche. Dave Huckabay, who sells scientific and industrial equipment from five different e-commerce sites, says one of the biggest sources of failure for online retailers is trying to sell too many different kinds of products to too many different types of customers. You need to provide a reason for people to buy just from you and by offering a one-of-a-kind product or serving needs that go unmet from other marketplaces can give you an edge.
"Your small niches are in the fringes," Huckabay explains, saying that if he were to sell pet supplies online, he wouldn't sell general supplies but focus on a category not seen anywhere else, like special toys or safety tools.
Huckabay suggests getting as specific as possible, to cater to enthusiasts and hobbyists with specific product knowledge and expertise. For instance, a site selling hang gliding equipment could concentrate just on harnesses. "Enthusiasts go really deep," Firestone says. "A store like Amazon is not going to be able to cater to a hobbyist like that."
Related: 5 Tips to Stand Out When Selling on an Online Marketplace
Mistake #4: Getting ahead of yourself. It's important, especially in the early stages, to use your time and resources wisely. Huckabay says one of the mistakes many new e-commerce businesses make is building up their inventory before they even know what their demand will be, ending up with a garage full of inventory and no one to buy it.
To avoid this, Huckabay suggests getting a sense of an item's demand by searching for it on eBay or other marketplaces to see how many have sold in the last month. That will give entrepreneurs a sense of how much demand there is for that product.
Mistake #5: Losing focus. When launching an online store, you have to wrangle a multitude of details, from shipping supplies to acquiring image photos. As to-do items add up, prioritize what keeps customers happy and your business healthy. "Getting your products in the hand of customers is much more critical than fixing images that are off alignment by a few pixels," says Lin.
