First-hand tips from Andrew Hassard
How to start an Ecommerce business? What better way to learn about identifying a niche market and building your business than to hear directly from Ecommerce entrepreneur Andrew Hassard.
Andrew, who is Managing Director of Northern Ireland-based company Mango Bikes, talked Ecommerce and business start-up during a fascinating ProfileTree video interview.
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How to Start an Ecommerce Business
He explained the story behind his business: “We have been set up for around a year…we make leisure bikes, recreational bikes, single speeds, fixies, hybrid bikes. A lot of our customers are students and commuters, also leisure and recreational cyclists.
“The way I’d explain it is this: if you go to a cycling club and you said to someone ‘what’s that bike you’ve got’ they might say ‘it’s a Trek Madone 3.0’ yadda yadda and quite quickly you are bamboozled.
“With our customer base it’s ‘what bike have you got?’ and they’ll say ‘I’ve got a Mango’…and that’s it. We’re happy in our skin that that’s our customer base.”
Andrew also talked through his own path to becoming Mango Bikes managing director: “It’s 20 years ago this year I finished university. I went to University of Leeds and did Food Science as my undergraduate degree and a couple of post-grads in Management and Marketing from Queens and Dublin Institute of Technology.
“I worked in the food industry for a few years in a number of roles, in manufacturing, operations, supply chain, project and process management. Then I moved into the bike industry about 10 years ago, starting off with Chain Reaction Cycles as a Supply Chain Manager…then moved into the Commercial Trading Team and managed one of the categories within it.
“I was with Chain Reaction for about five years and was approached to be part of a management buy-out team of another online bike retailer in England. Then, I worked for Go Outdoors…helping them introduce both branded and their own brand of bikes.”
Andrew always had a desire to set up and run his own business so, as he progressed his career, he found himself saying “if I ran this business, I would do x, y and z”.
“I realised I was going to have to make a big decision between shutting up and doing what I’m told, or don’t shut up and actually go and do it myself.
“I had been working for myself doing a bit of consultancy, doing a bit of buying and selling and trading myself. Working in the bike industry myself I had seen a few sectors I thought were emerging markets.
“I started to develop a range of urban, recreational bikes myself and I had a few people who’d said ‘if you ever set up on your own we’d like to back you’. I was at the point where I had a range of bikes developed, I had the proposal…and all the usual stuff.
“We were getting ready to press the big red button and say go, and in September/ October time 2017 Mango Bikes went into administration. I had looked at that as the kind of business model I was lookiing to emulate and the bikes weren’t quite the same but similar to it, so I contacted the administrator.
“I genuinely had no interest…in taking it on, I just wanted to see the books and get an idea with what was happening with it and see if my forecasts and budgets were there or thereabouts or complete nonsense.
“What I saw was a business which had the top line going in the right direction and had just let it’s cost base and bottom line go a little astray.”
To discover more insights from Andrew’s industry expertise, including brand strategy, marketing strategy, Ecommerce and more, see our full ProfileTree Business Leaders series video interview.
Mango Bikes – www.mangobikes.com
We really enjoyed our sit-down with Andrew, and we do know that setting up an ecommerce site has its challenges. We love using Shopify, and there’s some really popular shopify developers out there. Check them out!
Ecommerce Business: A Booming Landscape with Challenges to Conquer
Ecommerce is no longer just a futuristic concept; it’s the present and future of retail. With a global market size exceeding $5 trillion and projected to reach $9 trillion by 2025, it’s a goldmine ripe for the taking. But before you grab your pickaxe, let’s take a nuanced look at the opportunities and challenges that await.
- Accessibility and Reach: Ecommerce transcends geographical boundaries, allowing you to reach customers worldwide. Gone are the days of brick-and-mortar limitations; your online store is open 24/7, accessible to anyone with an internet connection.
- Lower Operational Costs: Compared to traditional stores, ecommerce requires less physical overhead, reducing expenses on rent, utilities, and inventory storage. This translates to increased profit margins and flexibility in scaling your business.
- Data-Driven Insights: Ecommerce platforms provide a treasure trove of customer data, allowing you to personalize marketing, optimize product offerings, and improve customer experience, leading to higher engagement and loyalty.
- Diverse Revenue Streams: Beyond product sales, you can explore digital downloads, subscriptions, memberships, and other creative revenue models, diversifying your income and catering to different customer preferences.
- Experimentation and Agility: Ecommerce allows you to test new products, marketing strategies, and pricing models quickly and affordably. This agility empowers you to adapt to changing trends and customer needs, giving you a competitive edge.
- Competition: The online marketplace is saturated, with established brands and new players vying for attention. Standing out requires a unique value proposition, effective branding, and a strong competitive strategy.
- Logistics and Fulfillment: Ensuring efficient delivery, managing returns, and maintaining inventory levels can be complex, especially for growing businesses. Robust logistics infrastructure and efficient fulfillment processes are essential.
- Marketing and Customer Acquisition: Standing out in the digital noise requires creative marketing strategies, targeted advertising, and effective SEO optimization. Building brand awareness and attracting customers can be a costly and ongoing challenge.
- Cybersecurity and Fraud: Ecommerce businesses are prime targets for cyberattacks and fraud. Robust security measures, data encryption, and fraud prevention tools are crucial to protect your business and customer information.
- Building Trust and Customer Loyalty: Unlike brick-and-mortar stores, trust is harder to establish online. Building customer relationships, offering excellent customer service, and fostering a positive brand experience are key to retaining customers and driving repeat business.
While the challenges may seem daunting, they shouldn’t deter you from venturing into the exciting world of ecommerce. By carefully planning, understanding your target audience, and adopting innovative solutions, you can navigate the challenges and unlock the immense potential this booming landscape offers.
Latest Ecommerce Industry Statistics and Trends to Inform Your Decisions:
Market Growth and Size:
- Global e-commerce market size: $5.5 trillion in 2023, projected to reach $9 trillion by 2025 (Statista).
- E-commerce penetration: 22.9% of global retail sales in 2023, expected to reach 25.4% by 2025 (eMarketer).
- Mobile commerce: 63.5% of global e-commerce sales will be via mobile devices in 2023 (Statista).
- Social commerce: Social media platforms like TikTok and Instagram are becoming major drivers of e-commerce sales, with influencer marketing and shoppable posts gaining traction.
- Personalization and AI: AI-powered product recommendations, chatbots, and dynamic pricing are being used to personalize the customer experience and boost conversions.
- Subscription models: The subscription box market is booming, with customers embracing recurring delivery for various products and services.
- Voice commerce: Voice assistants like Google Assistant and Amazon Echo are making voice-based shopping increasingly popular, requiring businesses to optimize for voice search and accessibility.
- Sustainability and ethical sourcing: Consumers are becoming more environmentally conscious, leading to increased demand for sustainable products and ethical sourcing practices.
Data and Analytics:
- Big data analysis: Businesses are leveraging customer data to understand buying patterns, predict trends, and personalize marketing campaigns.
- Customer lifetime value (CLV) focus: Businesses are shifting from focusing solely on customer acquisition costs (CAC) to maximizing CLV by retaining existing customers and building long-term relationships.
- Omnichannel strategies: Integrating online and offline channels is crucial for providing a seamless customer experience and maximizing sales opportunities.
- Focus on mobile-first optimization: Ensure your website and marketing efforts are optimized for mobile devices.
- Invest in personalization and AI: Utilize data and AI to personalize the customer experience and improve conversion rates.
- Explore social commerce and influencer marketing: Leverage social media platforms to reach new audiences and drive sales.
- Consider subscription models: Offer subscription boxes or recurring services to increase customer loyalty and recurring revenue.
- Prioritize sustainability and ethical sourcing: Cater to the growing demand for eco-friendly and ethically sourced products.
- Invest in data analysis and customer insights: Utilize data to make informed decisions about marketing, product offerings, and overall strategy.
- Develop an omnichannel strategy: Integrate your online and offline presence to create a seamless customer experience.
Detailed Frameworks for Key Ecommerce Phases:
1. Research Phase:
- Identify your target audience: Define their demographics, psychographics, online behavior, and pain points.
- Analyze market size and trends: Understand the overall e-commerce landscape, competitor landscape, and growth potential in your niche.
- Research pricing strategies: Analyze competitor pricing, customer price sensitivity, and profit margins.
- Identify potential legal and regulatory requirements: Understand relevant laws and regulations for e-commerce, data privacy, and product safety.
- Validate your product idea: Conduct surveys, focus groups, and competitor analysis to assess market demand and viability.
- Develop a unique value proposition: Identify what differentiates your product and resonates with your target audience.
- Source products or develop prototypes: Find reliable suppliers, manufacturers, or partners for your product or service.
2. Business Model Finalization:
- Choose a primary revenue model: Define how you will generate income (e.g., one-time purchases, subscriptions, memberships, advertising).
- Develop pricing strategies: Determine pricing based on market research, competitor analysis, and cost analysis.
- Consider additional revenue streams: Explore potential for upselling, cross-selling, and other revenue opportunities.
- Define your fulfillment strategy: Decide on dropshipping, inventory management, or other fulfillment methods.
- Choose your e-commerce platform: Research and select a platform that aligns with your needs and budget (e.g., Shopify, Magento, WooCommerce).
- Plan your shipping and logistics: Determine shipping rates, delivery options, and return policies.
Marketing and Customer Acquisition:
- Identify your marketing channels: Choose the most relevant channels to reach your target audience (e.g., social media, email marketing, search engine optimization).
- Develop a content strategy: Create valuable content that attracts, engages, and converts potential customers.
- Establish budget and timelines: Allocate resources for marketing campaigns and track your return on investment (ROI).
3. Tech Stack Selection:
- E-commerce platform: Your chosen platform for building and managing your online store.
- Payment gateway: A secure platform for processing online payments.
- Shipping and fulfillment tools: Automate shipping processes and manage inventory.
- Email marketing platform: Build and manage email campaigns for customer engagement and promotions.
- Customer relationship management (CRM) system: Track customer interactions and personalize the customer experience.
- Website analytics tools: Monitor website traffic and measure campaign performance.
- SEO optimization tools: Improve your website’s search engine ranking.
- Social media management tools: Schedule and manage social media content.
- Product information management (PIM) system: Manage product data and facilitate product listings.
4. Marketing Launch Plans:
- Build brand awareness: Create a strong brand identity and generate hype through social media, influencer marketing, and content marketing.
- Gather email subscribers: Offer pre-launch promotions and incentives to build an email list for launch day announcements.
- Optimize your website: Ensure your website is user-friendly, mobile-optimized, and SEO-friendly.
- Run targeted advertising campaigns: Utilize paid advertising on relevant platforms to attract potential customers.
- Offer launch-day discounts and promotions: Generate excitement and drive initial sales.
- Engage with your audience: Respond to customer inquiries, provide excellent customer service, and encourage feedback.
- Analyze your launch results: Track key metrics like website traffic, conversion rates, and customer acquisition costs to adjust your strategies.
- Continue marketing efforts: Maintain a consistent marketing presence to retain customers and attract new ones.
- Implement A/B testing: Experiment with different marketing strategies and website elements to optimize performance.
- Build a loyal customer base: Offer excellent customer service, personalized recommendations, and loyalty programs to foster long-term relationships.
Inspiring Voices from Ecommerce Success Stories:
1. Sarah Jones, Founder of “Sustainable Sips” (organic tea e-commerce):
“It wasn’t just about selling tea; it was about building a community of conscious consumers who shared my passion for sustainability and wellness. We achieved that by focusing on building trust through transparency, storytelling, and ethical sourcing. Remember, your customers are looking for more than just a product; they’re looking for a story and a brand they can connect with.”
2. David Chen, Founder of “Tech Toys Galore” (gadget e-commerce):
“The key to succeeding in a competitive niche like ours was agility and personalization. We used data analytics to identify trending products and customer preferences, and then quickly adapted our inventory and marketing strategies. Additionally, we offered personalized product recommendations and responsive customer support, creating a sense of value and loyalty.”
3. Maria Lopez, Founder of “Handcrafted Haven” (artisan crafts e-commerce):
“Empowering our artisans and telling their stories was crucial to our success. We built a platform where customers could connect directly with the makers, understand the process behind each handcrafted piece, and appreciate its unique value. This fostered a sense of connection and authenticity that resonated with our audience.”
4. Michael Brown, Founder of “Global Gear” (outdoor equipment e-commerce):
“Building a strong brand identity and creating immersive experiences were game-changers for us. We focused on high-quality product photography, engaging videos featuring real adventurers, and interactive content that transported our customers to the heart of the action. This emotional connection and aspirational branding helped us stand out in a crowded market.”
5. Emily Rose, Founder of “Blooming Blooms” (subscription flower service):
“Convenience and personalization were key to our success. We offered flexible subscription options, catered to individual taste preferences, and provided seamless delivery experiences. We also leveraged data to curate surprise-and-delight additions to our boxes, exceeding customer expectations and building long-lasting relationships.”
Q: What are the biggest challenges of starting an e-commerce business?
A: Competition, marketing and customer acquisition, logistics and fulfillment, building trust and customer loyalty, and staying up-to-date with industry trends are some of the key challenges. However, with careful planning, execution, and adaptation, these challenges can be overcome.
Q: How much capital do I need to start an e-commerce business?
A: The initial investment can vary greatly depending on your product, business model, and chosen platform. Start with a lean budget and focus on bootstrapping initially. As you gain traction, you can reinvest profits or seek additional funding for growth.
Q: What are the most important skills for success in e-commerce?
A: Strong marketing and digital marketing skills, analytical and data-driven thinking, customer service and communication skills, basic technical knowledge, and a passion for your niche and entrepreneurial spirit are crucial for success.
Q: How long does it take to become profitable with an e-commerce business?
A: There’s no one-size-fits-all answer, as profitability depends on various factors like your market, niche, and marketing efforts. However, with a solid plan, consistent execution, and continuous learning, you can achieve profitability within 12-18 months for well-managed businesses.
Q: Where can I find more resources and support for e-commerce entrepreneurs?
A: Numerous resources are available, including the ones listed in this article (business plan templates, market research tools, platforms and tools, etc.). Additionally, organizations like the U.S. Small Business Administration (SBA) and SCORE offer valuable support and guidance.
The e-commerce landscape is brimming with potential, but it also presents its fair share of challenges. By understanding the latest trends, leveraging available resources, and implementing the frameworks and insights provided in this article, you can equip yourself for success in this dynamic and rewarding field.
Remember, building a thriving e-commerce business requires dedication, continuous learning, and a passion for your product and your customers. Take the leap, embrace the challenges, and embark on your journey to creating a successful e-commerce empire.
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