The Do’s & Dont’s of Building a Successful E-commerce Business

13 September 2019
Mark Friend
Building a Business, Digital & Tech

In recent years the High Street has been severely impacted by the rise of on-line retailers and this trend is set to continue. According to the ONS (Office for National Statistics) in July 2019 online retailing accounted for 19.9% of total retailing compared with 18.9% in June 2019, that’s an overall growth of 12.7% when compared with the same month a year earlier.

Is it any wonder then that as a firm we are seeing more e-commerce startups!

But how easy is it to set up a successful e-commerce site?

To find out we put a number of questions to Mark Devaney and Laura Wills, the directors of a successful on-line e-commerce site, Hardcloud.com. Their company, Surf Street, competes in the highly competitive market of fashion and as the name suggests focuses on surf clothing (brands like Quicksilver) and street wear with brands such as Volcom.

Here’s what we learnt from Mark and Laura.

“How important is a good website?”

“Don’t expect your website alone to generate business.

Do however expect to spend a lot of money on advertising your website to gain awareness of your site. Google adwords is a must. To gain traction you will need to spend and you are unlikely to breakeven for some time.

If you have a product line of more than 50 items get an agency who specialise in pay per click to run your campaigns. For less than 50 products you can probably do it yourself.

If you do engage an agency then give it time. They won’t know your business and it may take a year before they fully understand your business and start to make real headway. You will probably need a further 6 to 18 months to recoup your investment.

Make sure your website is mobile friendly. Mobile and tablet sales are on the increase and it is essential your website is mobile/tablet friendly.”

“Should you use third party platforms?”

“Absolutely! We recommend maximising your exposure on third party platforms such as Amazon, Ebay, Fruugo, Not On The High Street and so on. Only a small percentage of our sales come direct, the rest come via platforms.  Also you must reach the largest audience possible so try to sell your products internationally.  More than 50% of our turnover is from outside the UK.

Selling platforms will get you exposure but note you won’t get customer email addresses from Amazon. You will however have their addressed to dispatch the goods so include in your parcels leaflets with offers direct from you.

Do factor in the cost of the platforms. 15% of the sales (depending on product category) and postage price will be charged by Amazon so a £100 sale costs you £15 and £10 postage costs you an extra £1.50.”

“How do you make sure you get good online reviews?”

“Try to offer exceptional customer service, that’s the best way to get great feedback and reviews.

The feedback assessments on Amazon and Ebay are essential. Those retailers which rate highly with customer service get preferred listings. Similarly google will rank you based on feedback.

You’ll also need to sign up to a review site such as trust pilot.

Ensure you have sufficient stock available, particularly if you sell on multiple platforms. If you can’t fulfil an order you will get a negative review and the platforms can suspend your account if this happens enough times.”

“How do you work out pricing?”

“If you sell widely available products it’s worthwhile making sure you are the cheapest so that price isn’t a hurdle. If you have thousands of products then checking prices can be really time consuming, so see if you can get or develop systems to do this automatically.

Do offer price matching, a loyalty program and provide discounts on your site.

But most importantly, make sure you cost everything out. Margins are surprisingly thin with direct online competitors, platform costs, pay per click, trust pilot fees, website hosting and emailing software. Then if the business grows you will need a warehouse and more staff.”

“What marketing tips do you have?”

“In our experience old-school marketing such as mailshots doesn’t work and mass emailing is risky. If email providers consider the emails to be spam they can blacklist your domain. Either email in small batches or use a platform such as Mailchimp or Pure360 as they will test your emailing.

Do consider social media. If you have a new hot product then social media is a must. More old fashioned products are likely to find social media a challenge. This is a very time consuming and difficult activity with no immediate business benefits. The key is to get people talking about your products to build brand awareness.”

“Finally, what top tips would you give someone starting out as an online retailer?”

“Try to automate everything! You need to continually work on your business rather than in it. Margins are tight so every small efficiency needs to be made.

Do check the market before starting to sell new products. We looked at selling a popular footwear brand but quickly found that other sites were charging very low prices leaving no margin in it for us so we decided to not stock this product range.

E-commerce businesses are challenging because you are in an extremely crowded market. To get above the noise you need to spend a lot of time but if you can develop your niche and get traction then the rewards are there.”

A big thank you to Mark and Laura for this insight into the world of e-commerce which we hope you will find illuminating.

Although we can’t help you with a lot of the above, we do have specialist knowledge of digital businesses and can help in many areas which are specific to digital businesses. Check out our website page on digital businesses to see what we can do and if you need help and advice please contact us.

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