Whilst scanning my Facebook news feed, I came across an article about a local retail store, which recently closed its doors.  A few months ago when I first heard this, I was somewhat surprised and saddened as the independent retailer had traded successfully on the town’s busy High Street for the last few decades and previously had a particularly good reputation, to the best of my knowledge.

So who or what was to blame for this unlikely situation?

‘Ridiculous rates bills’ or ‘those out of town shopping centres and outlet stores are taking trade away from our town centres’ I hear you say. These are the assumptions I’d have made too, only the headline said something very different – ‘Northern Ireland’s most complained about business!’

Before I go on, I should add that I’ve never consulted for this company and am not personally privy to any information about the finances or specific activities of the business, other than press and social media content which we all have access to.  However, if these sources can be trusted, the primary reason for its downfall points to its e-commerce capability – or lack of it.

Inability to supply goods, taking payment for goods which didn’t arrive and dodgy online competitions where no prizes were actually given are some of its crimes cited which led to it being crowned as the most complained about company in ‘our wee country’.

I don’t want to dwell on this particular case and the rights and wrongs of it, but it did make me think about some of the experiences I’ve had over the last 5 years with companies engaged in e-commerce (selling online) or those on the brink of diving into it.  This leads me to the question posed in my title – is e-commerce an innovative way to grow your business or indeed the very thing that will cripple your business?  The simple, and perhaps somewhat contradictory answer is that it can be both.  There are many hugely successful e-commerce businesses in existence – but their success largely depends on market demand and supply issues and the business acumen of the business owners and support teams behind them.

Should You Create an E-commerce Store to Sell Online?

All too often, businesses create an online shop for their products and services and are subsequently confused about why it’s not making them a ‘small fortune’, or indeed anything at all.  This is because their rationale for going online is sometimes skewed.  The ‘everybody is online’, ‘everyone is my potential customer’ and ‘my e-commerce store means I won’t need to pay Amazon or Ebay a big cut anymore’ arguments don’t always play out as well in practice.

More or less everybody is online in the UK and Ireland but not everyone will want the products or services you sell and those who do, may not want to buy from you. Amazon and Ebay’s websites also have a vital component that new e-commerce sites don’t, i.e. very large audiences (aka website traffic). There’s a long road ahead for a new e-commerce website owner to travel before he or she is able to generate awareness/attention, an interest to find out more, a desire to purchase and actual completion of purchases (the AIDA model) among potential customers, as well as the competition to consider.

AIDA Model

Based on this I have some advice for would-be e-commerce entrepreneurs to get your online business off to a good start:

1. Do your research, feasibility study and strategy development – is there enough evidence that there is a growing market for your products and/or services, or is it perhaps reaching the maturity stage and on the downward slide? Will people buy them online? What is the competition like? Who are your potential customers? (Think SOSTAC – Situation, Objectives, Strategy, Tactics, Action & Control).

2. Have a pot of gold at the ready (or a kick-starter strategy to secure investment) – you’re not over the worst of it when you’ve shelled out a few thousand pounds/euros to get you through the website design and development process.  You’ll need to invest significant financial and human capital to ensure your site can be found (and make sales) before you’ll see a return on your investment.  The costs of building and employing the infrastructure required to promote and drive traffic to your website soon mount up – search engine optimisation, PPC/Google AdWords, email marketing, social media marketing, blogging, conversion rate optimisation and so on will need consideration, not to mention the price of paying the people who will deliver these services.  Also, an e-commerce website is a continual testing ground. Making changes, updating features and even a complete new-build down the line are very much the norm.

3. Get expert advice – speak to other businesses who have entered the e-commerce world already and get their advice on things you may not have thought about yet or mistakes they’ve made that you can learn from and avoid.  Also speak to an SEO consultant or independent digital marketing consultant as their advice is invaluable and can help you to make more informed decisions, and even save you money.  For example, I work on a number of mentoring programmes for local councils so I often advise clients to check if financial or mentoring assistance is available.  I recently pointed one of my Republic of Ireland clients to his local enterprise agency and we’ve since secured a grant of €2,500 to help with the costs of developing his e-commerce website to make it fit-for-purpose.

4. Outsource elements – you may think that you can handle all the marketing yourself to keep your costs down but a) you won’t have the time as you’ll be too busy developing/sourcing your products, managing relationships with suppliers, customers and staff, negotiating affordable delivery rates and so on to do it properly, and b) you’re unlikely to have all of the skills and experience to manage all that is required so it’ll take you longer to do it and you may make costly mistakes, and c) you’ll find it challenging to keep up with all the developments in the digital media world like Google or Facebook’s algorithm changes and new features that get added to platforms all the time. (I’ll let you into a secret here – even digital consultants struggle with this as things can change very quickly!).  My advice is to build a good support team, both within your company and using a number of digital advisors for the specialist areas of support you require such as strategy development and delivery support to implement.

5. Be passionate about your idea – this beast is going to take up a lot of your life for the foreseeable future if you decide to move forward with it so make sure you are passionate about the products, and excited about developing and sourcing new and better ones regularly.  If you don’t love what you do, thrive on tackling the unknown and can’t cope with the financial uncertainty, then the challenges of e-commerce may well cripple you emotionally, as well as financially! It may have you pulling your hair out at times, putting in long hours and wondering why you ever got yourself into it.  It’s not for the faint of heart or risk-averse.

6. Be in it for the long-haul – the e-commerce journey is a long road.  If you did your research at the start, you’ll have discovered that the Facebook, Amazon, Apple, Air BNB, Virgin and all of the other big brand names we recognise didn’t just become an overnight success – they were slogging away at their business models for years before they made significant break-throughs!

7. One size doesn’t fit all – the tactics that drive traffic to your website are typically the same for any e-commerce website but you don’t have to utilise them all or do everything your competitors are doing to be able to compete.  Work out the best strategy for your business based on your goals and available resources – for example, focus on one or two core social channels and do them well, rather than doing six badly.

This may all sound like I’m trying to put you off e-commerce but this isn’t the case.  I’m simply saying that you need to put in the ground work before you dive in and be aware of what it takes to succeed – I meet a lot of people who only seem to realise this after they’ve put blood, sweat, tears and a lot of cash into developing the ideas and the website.  And if you still feel as excited about your e-commerce project after reading this, it’s a good sign that your idea may have legs or you have the right characteristics to make it work so good luck with it!