The eCommerce industry is growing rapidly at a rate of 23% year after year. It’s one of the largest growing industries in the world right now?
But is eCommerce worth it? and Can it be profitable?
Yes, eCommerce is worth it. If you have the ability to create problem-solving products, market and sell them, there is still a lot of money to be made in the eCommerce industry. eCommerce is never going to die unless and until people stop purchasing online ( which is never going to happen).
If you do not have the capability to create your own product, you could have a look at drop shipping where you can find and sell manufactured goods to potential customers.
Now, let’s dive a little deeper into why eCommerce is worth it? and Why you should start one in 2021?
5 Reasons Why eCommerce is Worth it?
There are a lot of reasons why eCommerce is worth it. Some of them are:-
eCommerce is highly scalable. However, it will depend on your product. If it’s a micro-niche product, you will find it hard to scale. But, for the majority of the products, you could actually scale your businesses to the moon!
One such eCommerce business that I absolutely love talking about is The Oodie. That brand has approximately made over $250M in revenue. (You should probably follow its founder on YouTube if you are interested in eCommerce)
There are lots of eCommerce businesses like these that actually make a lot of money.
2. A Growing Industry that’s never going to die
eCommerce is never going to die. It’s an ever-growing industry. As long as people buy from the internet, eCommerce will thrive.
However, it is true that the competition has certainly increased but that doesn’t mean eCommerce is anywhere near its end. You just have to stand out from your competition by providing a good product, awesome customer service, fast shipping, and other things.
3. Low Startup Costs
Starting an eCommerce doesn’t require you to have an enormous amount of money, especially if you are starting a dropshipping store.
Here’s a rough estimate of how much you would need to start an eCommerce store
|Selling Your Own Product||Dropshipping|
|Product Costs||Depends on the product||$0|
|Website||$29/month+ domain($10)||$29/month + domain($10)|
|Marketing||at least $500||at least $500|
|Warehouse/Fulfillment||$20/pallet/month and $2.5/per order pickup and deliver||Just Shipping charges (0-$5)|
|Shopify apps(optional)||about $20/month||about $20/month|
eCommerce when done right can be highly profitable. There are a lot of people who have succeeded with eCommerce.
The cost of manufacturing, fulfillment, and marketing are the three main things where you must focus on if you wish your eCommerce business to be profitable. Pricing the product competitively is also important.
Succeeding in this business will take time. However, if you have the right product and a good marketing strategy, then you will succeed faster than any other online business like Blogging, freelancing, etc.
But, the problem here is that most people won’t be able to do that. At least, not a beginner to the eCommerce industry.
5. Tons of ways to Market your Product
There’s literally a lot of ways by which you could market your product. It could either be a slow way which includes SEO, building an Instagram account or it could be a more aggressive approach where you run ads to potential customers on Youtube, Instagram, TikTok, etc.
Something like Facebook ads and Google ads lets you really find the desired customers if you target them correctly. So, make sure you learn about both of these if you are planning to spend money on ads.
Related Article – Is Ecommerce Profitable? Can it be a Good Career?
3 Problems of eCommerce
1. Customer Service
For any type of business, whether it’s eCommerce, consulting, or anything – Customers come first. If you can’t handle your customers, then you will probably fail.
Your customers will probably ask for refunds, returns, and a lot of other product-related things. Make sure you reply on time and with kindness.
When you are starting out, you will probably have to take care of your customers yourself. And when you scale, you could probably hire someone to do it for you.
2. Competitive Industry
Over the past 5 Years, eCommerce has become quite competitive. There are a lot of people selling online, the majority of them being dropshippers.
Especially in the year 2020, when a lot of offline stores shut down, we did find a lot of people moving towards the eCommerce industry.
When competition increases, it would be harder for you to find a unique product and sell it. Also, along with that, the advertising cost will surely go up.
So, it’s essential that you stand out from the crowd and try to be unique. One way of doing this is to create your own product that solves a problem rather than selling someone else’s product.
Also, branding your online store is a must if you plan to succeed in 2021 and beyond.
3. Product Returns and Refunds
Almost all eCommerce companies and brands experience product returns and refunds. And it can’t quite be categorized as a Con.
But if you get a lot of returns and refunds, then you should probably fix the problem with your product or you should stop exaggerating how good your product is.
How Can You Start an eCommerce Store?
You can basically start an eCommerce store in 2 ways –
- Selling your own Products
- Selling someone else’s products AKA Dropshipping.
Both of them have their own advantages and disadvantages. So, start with something that you are comfortable with. Anyway, the steps are almost the same.
1. Finding a Product
Obviously, the first step is to find a product that you could potentially profit from.
This has to be the most time-consuming process of all the steps listed. To find a good product, make sure it satisfies the following
- The product needs to solve an existing problem(Most Important).
- If it doesn’t solve a problem, Atleast it needs to be entertaining or visually appealing.
- Check if your product may have a considerably large audience. Having a very narrow audience may not be good if you intend to scale this business
- Check if there are other competitors selling this product
- If so, try making it a bit more affordable
If you take 10 minutes to find a good product (that you think), then it won’t probably be a good one. Because there will be others who would do the same thing in 10 minutes.
Just make sure you really research before you start this business.
Once you have selected the product, Manufacture or source it from anywhere possible.
2. Naming and Buying a domain
The next step is to find a good name for your eCommerce business. The name that you select is crucial. So, make sure you spend some time researching for good names.
Branding is quite important because people recognize your business with that brand name. So, the name should be short and readable.
Along with this, you will also have to buy a domain name with the same name and that’s an annoying task. Because once you choose a good name and when you try to buy that – it might be already registered.
Try entering your desired name below and see if there’s a domain available:-
3. Creating your website
Once you have a good product, you can start building your website. This can take anywhere from one day to a week depending upon your experience.
I highly recommend you start with Shopify because it is not only one of the best platforms out there but also it’s one of the easiest ones to start.
To create one, just go to shopify.com, and sign up for their 14-day free trial. After the free trial, Shopify charges $29/month.
Once you sign up on the platform, you will be redirected to a page like this –
Then, there are some basic things to set up. Things like payment gateway, shipping info, taxes etc. I would highly recommend that you watch a video on Youtube about this.
Related Article – Is Shopify Worth It? (6 Reasons to Love Shopify)
There are lots of ways to market your product. Some of the ways are:-
1. Social Media Marketing
You can use platforms like Facebook, Instagram, Tiktok, Youtube to promote your product. You can also do paid advertising on these platforms. But please make sure that you learn the basics from Youtube.
If you don’t have the money to spend on ads, try building an Instagram page, Facebook page, a Pinterest account, etc, and create content related to your product on these platforms. Then slowly bring your followers to your online store.
2. Influencer Marketing
There are lots of influencers on Social media. Find some influencers who have good engagement on their profile. Mail them for a possible collaboration.
Influencer marketing can really work if the influencer creates content related to the niche that your product is in. So, make sure you find the right influencer.
Also, Most people forget about Youtube influencers and a majority of them collaborates with influencers on Instagram. The good thing about Youtube is that the video can go viral or will be viewed for many months to come if it’s an evergreen topic. This is quite opposite for Instagram.
However, Youtube influencers will charge a lot more than influecer from Instagram so make sure you have the budget for that.
SEO or Search engine optimization is a way by which you try to rank on search engines. This is an extremely slow process and can take months to actually show up on search results. So, my take is that you can try SEO as a secondary marketing techinque.
Conclusion – Is eCommerce Worth It?
Once all of this is done, you will probably start getting some traffic and sales. Just fullfil those orders and keep the profit.
Now, this all sounds simple, but there are a lot of problems that eCommerce entrepreneurs face everyday. Some of them being – Facebook ad account bans, keeping the customers happy, inconsistent sales, delivery delays, product returns, etc.
Also make sure that you don’t over expect things if you are going to start a brand new eCommerce store. It definitely won’t be as you thought it would be.
Even though it does have some problems, starting an eCommerce is still worth it. I enjoy doing eCommerce and hearing that kaching sound on the shopify app.
So, if you really into starting one, definitely try it out.
Best of Luck.