Online Business Model Options
I’ve written about e-commerce business models and identifying your ideal customer is in the past. This can be customers who are B2B (business to business) or B2C (business to consumer). You could be selling other businesses an online software product subscription service or going straight to the consumer via retail apparel. You can view this article here to see the definitions of different types of e-commerce businesses.
Good questions to ask yourself when deciding on an online business model are:
- How can e-commerce complement what I’m already doing?
- What is a product or service that could be sold efficiently online to reach more people?
1. H&R Block – Traditionally, they have been a low-cost tax preparation business. They have brick and mortar locations that are still frequented by their customers. They rely heavily on foot traffic and getting people to physically come inside to get their taxes done.
The rise of online tax software platforms such as TurboTax made it a necessity to compete in the online space. They also have the resources to be competitive so they establish an online tax service. This is a great example of how to take what you are already doing and bring it online to reach a new client base.
2. MVMT – These guys make affordable modern watches. They started in 2013 and built a following through social media. You can read their story here.
My point in showing you this brand is that they took a traditional product sold in stores and created a massive following and brand online. They do a lot of business from their website by making their products accessible to everyone.
Their genius is their ability to create a community of watch lovers online. They instill their brand, vision, and product, ultimately creating a lifestyle that influences their customers to make buying decisions around their watches. They do this through various social media platforms and their blog driving customers to their website to buy their watches. That is the power of e-commerce.
3. Inkjets.com – Inkjets is a trusted supplier of remanufactured printer cartridges. Their mission is to provide more affordable solutions to business owners with great customer service and fast shipping. They found a way to cut costs on a very expensive item and get it to market with no issue.
Ink and toner cartridges can be a big expense and having an alternative to the original manufacturer’s overpriced cartridges works great for them. They’ve made their product available online to reach many more customers than they would have in just their brick and mortar store.
Website & SEO
You need to have a solid website up and running. This is especially important if you’re taking online orders and have a lot of payment processing activity. This will require more work on the back-end and added security to protect your customers. You want your website to be functional and easy to use for the consumer.
You don’t want customers getting frustrated or have difficulty finding what they’re looking for on the site. Think of it as an experience. Try to recall a positive experience you’ve had online and replicate it. Did Zappos make it really easy to find new shoes or did Amazon make a great book recommendation and then you were able to check out with one click?
SEO (Search Engine Optimization) will drive organic traffic to your site. You need traffic to get customers. Create an SEO strategy based on your niche and come up with the necessary keywords and types of content to get your site ranking on the search engines. This is a long term strategy but can be very cost-effective over time.
Marketing and Advertising
Building off my previous point with SEO, you need to market your company so you can get in front of more people and people can identify you. I’d recommend having a marketing budget you can maintain and increase as sales grow. You do not have a business without marketing and sales, so they need to be a priority.
There are countless strategies to implement. You should pick a few avenues like paid ads, blogging, and partnerships and then monitor and adjust accordingly. Consistency and awareness are a big factor of success. Don’t get discouraged and stick to it.
Email marketing is extremely important. This is a direct line to your current and prospective customers. A newsletter can be a great way to showcase your knowledge or product and what you do for people.
Your SEO strategy and website design should support your email marketing. When people come to your website you need to capture their information by providing free valuable information like an e-book to gather their emails. People aren’t always ready to buy so you need to stay in front of them until they are.
There are many platforms to help with email marketing like Mailchimp, ActiveCampaign, and Constant Contact. All of these platforms will help you manage your email list and create professional campaigns.
Partnerships & Audience Exposure
Who do you know in your industry or in a complimentary industry with an audience that could use your product or service? Partnering with someone who already has an established brand and following can be a great way to get in front of the right people and get you exposure.
Get creative and research potential business partners online who could be a good fit. Reach out to them and see if they would be interested in some sort of partnership program with you. These can be things like hosting a webinar or podcast together. You could also create a service or product that incorporates both of your businesses.
Choosing Your E-Commerce Business Strategy
The main thing when first starting out with an e-commerce business is to decide on a business model you think has a good chance for success and there is a large enough need. You can then develop a strategy for getting in front of the right people and getting customers in the door. You can always pivot and make changes as needed.
If you’d like an objective second opinion about your finances, please contact Michael Shea, a CERTIFIED FINANCIAL PLANNER, at Applied Capital. Email him at mich[email protected] or fill out a contact form.
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