What Can Make E-commerce Companies Profitable?

How Do You Build A Successful E-commerce Business?

1. There were 1.92 billion digital buyers in 2019, and it's estimated that by 2021, e-commerce sales worldwide would reach $4.9 trillion.
2. These figures say a lot about the rapid development of this industry and, thus, competitiveness too.
3. To remain in the business for the long-term, you should be making enough money so that you can keep up with growing competition and upcoming technology needed to be successful in this business.
4. Below are the five important tips that can make your e-commerce business profitable if followed strategically and effectively.

1. Find Products With High Demands

To choose the right product, it's important to find the product's demand first. Selling a product with zero or low demand usually leads to wastage of your time, money, and efforts. Therefore, it's crucial to do product research beforehand. The four tools to help you check your product's demand are outlined below.

Google Trends

• So if you type any product's name, say, jackets, a pattern showing demand trends for the jackets over the period will appear on the screen.
• You can also judge which products are hyped and have seasonal demand.
• It's advisable to avoid hyped products, as profitability in this business is likely to fade away soon.
• The products with a consistent and upward moving trend are the ones you should be looking to invest in.
• You can also check out the exploding topics feature, which provides information about the products that may soon become popular and products which might face a downward trend.
• Viral Launch: Viral Launch scrapes data from Amazon.com. It provides information about the search volume, which allows you to check the popularity of the item. The key highlight of Viral Launch is that it does competitor analysis for your product. Thus, you can know about the amount of revenue your competitors are generating, which can help you set a target for your business.
• Reviews: This is one of the most counterintuitive ways of searching demand for a product. It's vital because 90% of shoppers read reviews of the item before purchasing that item. Customer reviews give insights on improving the quality of products.
• Market Research: You can find various reports on the industry or the product that you want to invest in. These reports give you information regarding the market size of a specific product or industry, current trends in the market, and other crucial data that would help you in making a better judgment about that product.

2. Focus on the Customer

While competing with your rivals, don't forget to keep an eye on your customers. Jeff Bezos once said, "We don't make money when we sell things, we make money when we help customers make purchase decisions" this is one of the core values that amazon follows, which has also contributed massively to its success. Thus, the most important thing is to focus on the customer. From doing product research to reading reviews, you need to understand what the customer wants from you.

3. Targeting Audience

Let's be honest, it's not easy or sometimes even impossible to impress everyone. Therefore, a business must define its target audience. You can categorise your target audience based on their gender, profession, age, etc. For example – Suppose you start a footwear business. However, you only sell ladies' fancy footwear. In this case, your target audience would be females of or above 18 years. Similarly, if you only deal with kid's garments, your target audience would be people below the age of 15 years. Developing the right product for the right customer is the key.

Using Social Media- 87% of the people who shop online shoppers believe that social media have helped them in deciding what to buy and what to not. Thus, social media platforms are of great significance to e-commerce businesses. These days it takes seconds for a video to get viral on the internet; you see that's the power of social media. Gone are the days when products were advertised or promoted through newspapers, hoardings, pamphlets, and brochures. Advertising on these platforms is expensive. Thus, a major portion of the revenue earned is spent on covering marketing costs only. With the advent of several social media platforms, business owners find advertising to be cost-efficient. As the cost involved in digital marketing is comparatively low, and the reach is huge.

All you need is to create business accounts/pages on platforms such as Instagram, Facebook, YouTube (here you can set up ads on random videos), LinkedIn, Pinterest, etc. Another advantage of social media can be availed through 'influencer marketing,' where you can hire social media influencers with extensive followers to promote your product or a brand. These micro-influencers generally charge less when compared to the big celebrities. Thus, if you are a small e-commerce business owner, you don't have to worry about the marketing of the product anymore. As it just takes a click of a mouse to set up an ad on social media platforms. Making effective use of social media would contribute to your business's growth.

SEO or Search Engine Marketing: When it comes to e-commerce SEO, you have to do dynamic optimisation. In layman's terms, it means that you have to use a set of rules to optimize your website. Here you can use a predefined template to hone any segment of your website. These templates can be updated. All e-commerce sites need to have a review generation strategy; these reviews are what help your product rank better and add unique content to your website. The more reviews you have and which are 100% unique (they haven't been placed on other websites), the better your e-commerce site will rank. It's important to put up unique product descriptions as well. Further, use content marketing efficiently, as about 72% of online marketers believe that content marketing is one of the most effective SEO strategies.

Automating the process: Automation, in simple terms, means the work done without human intervention. The automated emails that you get from e-commerce companies are one of the examples of e-commerce automation. E-commerce automation becomes crucial when your business starts growing. 80% of the marketing advertising will be automated by the year 2022. Usually, at the growing stage of a business, you have plenty of things to work on, and it's not easy to keep track of every task. This is why automation is needed in performing some of these tasks, as it can save your time and efforts. Hence, allowing you to focus on other key areas of the business. It also improves customer satisfaction as you can stay engaged with them without actually being there. Further, these systems can accept orders, track orders, print bills, etc., which helps in avoiding errors that are likely to occur if the work is done manually. It might take some time and money to build these systems, but they're worth it.

4. Distributed Commerce

Any e-commerce site, especially if you have your own products, must be doing distributed commerce. One of the ways of expanding a business is through this strategy. In this case, you don't sell your product directly to the customer, but a middleman does. For your e-commerce business to grow at a fast pace, your business needs to be present on multiple platforms online. Just like in offline business, a businessman opens various shops in other states or localities to grow or expand the business. In online business, you can do so by selling your product on websites like Amazon, or Flipkart, which already have an enormous user base or audiences. These massive sites allow you to sell your product and to get more sales without you having to manage inventory on your site but manage it on their site, so make sure that you're taking advantage of distributed commerce.

• This is a non-exhaustive list; there are various other strategies used by big e-commerce businesses to make money, such as deep discounting, offering fixed subscriptions, rewarding customers for their loyalty to the brand, setting up targeted ads, etc.
• So if you are about to start a new e-commerce business or are already doing one, keep in mind the above-mentioned suggestions for a healthy start.

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3) How To Start Your Own Franchise?
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