Build a profitable online shop

While many brick-and-mortar stores were struggling and going out of business during the pandemic, Amazon’s profits skyrocketed by over 200%. Walmart reported a 74% increase in e-commerce sales and small and medium-sized enterprises also saw a surge in online sales. As these results show, resilience is a key benefit of an online store.

The disruptive nature of e-commerce has forced traditional stores to adapt in order to ensure their survival. These stores can no longer afford to remain exclusively offline, if they hope to stay competitive. Some businesses have created or expanded online stores to complement their offline presence. Others have abandoned their physical stores and transitioned to an online only operation.

An online store opens up access to a global market which would otherwise be out of reach. People have grown accustomed to the convenience of shopping online with many stating that this now their preferred way to buy goods and services.

Choose a niche

Trying to appeal to everyone often results in appealing to no one.

Many newcomers to e-commerce target a large market. The logic is that sales is a numbers game and the wider you cast your net, the more customers you will catch. The problem with this reasoning is that it fails to account for a significant obstacle. Competition.

Your new store would be competing for market share with bigger, established stores that have been around for years and have strong brand recognition.

A niche market is a segment of a broader market that has its own unique wants and needs. Targeting a distinct group of customers allows a business to stand out from the crowd and connect more deeply with its ideal audience.

An example of a huge market is pet owners. Dog owners is a niche market within pet owners. You could drill down even further by targeting a niche within the dog owners niche, German Shepherd owners.

Below are three ways to choose a niche.

Choose a niche that you are passionate about

If you are passionate about gardening then you could use your knowledge and expertise to choose essential products that you already use.

Browse niches on Amazon

Amazon lists over 45 million products, making it a great source of inspiration when brainstorming niche ideas. Visit the website and click the “All” button. This will reveal a long list of potential niches.

Browse niches on AliExpress

You can also get niche ideas from another e-commerce giant, AliExpress. Visit the website and click, or hover your mouse pointer over, a category to reveal its subcategories.

Source products for your store

Product sourcing is the process of finding and acquiring products that you want to sell. You have several options, depending on your budget and preferred business model.

1. Stock third-party products. These can be sourced in bulk from wholesalers, either locally or via online marketplaces such as Alibaba.
2. Stock your own products. This can be done by by partnering with a manufacturer. You send them a product design and specification. The manufacturer creates a prototype and several iterations may be needed until you are satisfied with the result.
3. Dropship products. These can be finished third-party products or white-label products that can be customized. Suppliers of the former can be found on AliExpress, while the latter can be sourced via print-on-demand (POD) services such as Printful and Printify. In this business model, a customer visits your online store, places an order and pays upfront. The order is routed to your dropshipping partner and they ship the order to the customer.

Options one and two are expensive, time-consuming and risky. Manufacturers and wholesalers typically have minimum order quantity requirements. This requires significant capital and adequate storage space, such as a garage or warehouse, to store all of the products. There is also the risk that you would be stuck with unsold inventory if you were unable to sell everything.

The third option does not require much capital, as no inventory is held. It is also less complicated because you can outsource most of the fulfillment process. Dropshipping is ideal if you are on a limited budget, have limited time or are risk averse.

Create a store

Etsy is a popular online marketplace where sellers can set up virtual storefronts and list items for sale. There is a fee of $0.20 per listing.

Shopify is a popular e-commerce platform where sellers can set up online stores. Shopify currently has an offer where you can get a free three trial, followed by a heavily discounted three months at $1 per month. This is great as it means that you have plenty of time to evaluate the platform and decide whether or not it is a good fit for your store, without spending a fortune. After the offer period, pricing starts at $32 per month.

You can connect your store to Printful or Printify. Both are free to use. You only pay for the products that make up your customers’ orders and their associated shipping fees.

Promote your store

You can have the most visually stunning store but you will not make a single sale if nobody knows it exists.

You can get the balling rolling by letting family, friends and colleagues know about your new business venture.

Social media is great place to create a buzz around your store. You could build brand awareness, and grow an audience, on Instagram by sharing high-quality photos of the items listed for sale on your site.

Gaining a decent following on social media is a good strategy to get free traffic to your store, but it can take quite some time. You can see results much sooner by running paid ads on one or more of the social media platforms. Crafting compelling ads is a bit of an art and requires creativity and experimentation. Get some inspiration by studying your competitors’ ads.

Fulfill customer orders

Order fulfillment is a process which begins when a customer places an order and ends when the customer receives the order.

You have two options when it comes to fulfilling customer orders:

Manual

For some stores, it may make more sense to fulfill orders manually. This gives you greater control over inventory and when orders are shipped to the customer. If you have fast-moving products that frequently go out of stock, or your products are made to order, this is your best option.

Automatic

This is the preferred option for stores that mostly use a third-party fulfillment service, as is the case with dropshipping.