How to Build a Successful E-commerce Business

Building a successful E-commerce business in 2020 is not an easy task as it sounds. During this pandemic time, we constantly come across clients saying that they want to take their business online. Most small and medium size business owners believe that just starting an e-commerce portal and bit of digital marketing shall get them there. What they probably do not know is that about 85-90% of e-commerce initiatives are either failures or do not generate the expected results or return of investment. So how can you approach your E-commerce venture and make it a success?

PS : This is written with a perspective that reader has already identified the product mix, brand and basic funds. Also we will avoid in depth discussion on technical aspects like seo, analytics, AI etc. in this blog and focus on the business aspects of E-commerce.

Step 1: Build a feasible E-Commerce Strategy and Business Model

There are several E-Commerce business models in the market, the most important aspect for the business owner is to understand their own business or idea in deep and start building a strategic business model. The business model document shall define Why you are running the E-Commerce, What value proposition you will be generating for your clients and how you will bring the customers onto your portal for building and sustaining your business. Once the model is built, a focus research should be performed to establish the feasibility of that model. Once a by and large feasibility is built, its time to work out a business plan and refine the model for operations.

Step 2: Building an internal Business Plan & Refining Business Model

After the business model is established, the next step is to build a strategic business plan. Failing to plan is planning to fail is the perfect adage for E-commerce business. The internal business plan will help in deeply establishing the feasibility of the model and provide you clarity on how the business will function on a day to day basis, provide you a clear view of resources and finances you will require to carry out the business. If you are making the business plan, it shall be worthy to get it vetted by an expert so that there is an objective assessment of the plan. If you are not doing it yourselves, its wise to engage a consultant who can really do it well.

Key Checkpoint: If the above two steps are not done properly the chances of failure of business is extremely high. Ensure the following is available at the completion of this stage in the document before progressing with further investment.

i.          Vision and Mission of your E-Commerce business

ii.          E-Commerce brand name and brand identity definition to ensure the right message to the clients

iii.          Business entity structure and organization structure

iv.          Key products and services that will be offered

v.          The business model in which you will serve your clients

vi.         The target client market for your business

vii.         Marketing plan for business

viii.        Sales plan aligned to brand and marketing plan

ix.          Technology plan for your E-Commerce

x.           People and Resourcing plan for E-Commerce

xi.          Transportation and Delivery plan for E-Commerce

xii.          Alliances and Partners for your E-Commerce

xiii.         A 5-year financial model and projection of your E-Commerce

xiv.         Return of Investment on the whole project

xv.          Key financial metrics to track for success of your E-Commerce

xvi.         Critical success factors and Risk Management for your E-Commerce

xvii.       Implementation roadmap and Timeline for E-Commerce

Step 3: Technology Vendor Finalization and E-Commerce Web Application Development

Once the model and plans are ready, the next step is to identify a good E-commerce development company who can understand your business requirements and help you realize your dreams. The following is key to selecting an E-Commerce developer.

i.The selected vendor must have deep experience in developing E-Commerce web and mobile applications.

ii.They should have deep knowhow of E-commerce platforms and able to suggest the best suited platform for your business.

iii.The vendor should have a strong team who can-do front-end design (the part of E-commerce which interacts with customers) and backend design (the algorithms and programs which eventually leads to strong design and performance)

iv.The vendor should have deep knowhow of infrastructure like cloud and cyber-security aspects so that they either select the platforms with right features and tools or are able to deploy that on the E-commerce platform.

Once the vendor is identified and shortlisted, it is important to have a clear contract for development and support of E-Commerce. This contract and its terms shall govern the entire development in stages and becomes a pivotal document to ascertain if you got what you wanted, as you wanted or not.

 Step 4: Testing, Cyber Risk Management, and User Experience Optimization (UEO)

Once the web application is ready and internally tested, instead of going for a big launch, it is recommended to a silent soft launch. Most businesspeople are desperate to launch by this stage which may not be a great idea. Here I recommend a soft launch to understand the real market conditions. This will lead to knowledge gathering and implementation of calibrations required to give a fantastic user experience. Unless you provide a unique and value adding user experience, no amount spent on marketing and discounts are enough to make the customer happy and help you retain them in the long run.

Step 5: Marketing and Sales and Customer Life Cycle Management

After the E-commerce website and/or application is ready, it is time to launch to the big league. Here also, depending on delivery and model dynamics, it is advisable to do a single location first and then stabilize to go for a bigger launch. The most important thing at this stage is to keep enough funds aside for marketing and develop smart marketing strategies which will give strong return on investments. You need to develop right key metrics and track them to see what is working and what is not and keep calibrating to get it right.

Next important thing is to ensure customer acquisition, customer management, customer retention and customer satisfaction management is done correctly to ensure customers remain with your e-commerce for a longer time. A loyal customer base is the biggest asset for an E-commerce business and this base helps in generating the profits in future.

An online e-commerce business is almost inevitable today, however business owners need to be aware that it is an important move for business and moreover the brand. The brand is expected to provide similar experience offline and online and if it is not done right, may have significant business impact on offline business as well.

Author is the Managing Director of CAPITAIRE Consulting Pvt Ltd. At CAPITAIRE we help our clients grow their business ethically, profitably, and professionally through our integrated value delivery-based management consulting services. 

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