An eCommerce business can be both rich and rewarding. The potential, if done right, can be an idea that is worth millions. The challenges, on the other hand, can be great, the risk high, and the cost large. But in the end, it might well be worth the time and money spent to get a great business underway. Like any business, starting a business that sells products has its challenges. Let’s review some thoughts as to what you need to do to start an eCommerce business.
Differentiation
In a world where there is a plethora of products and services to choose from it becomes hard to stand out. The race for many companies is the lowest common denominator – price. Insurance and products often seem to be that way. The drive down on price can quickly be a losing battle for everyone involved. A company that is looking to have a competitive edge can approach this through differentiation.
- Differentiation by Product. A new product or service can be challenging to achieve. If you have then congrats to you! You have the first movers advantage. But be quick because whatever it is you have someone else may take notice. For most companies, differentiation might be defined by extra add-ons to the business. Perhaps you can add just something a little better to the experience. An example of this, a sunglasses company I’ve bought from adds guitar picks with their sunglasses. I didn’t ask for it but was a pleasant surprise.
- Differentiation by Service. Many companies utilize services with free returns, free shipping, no wait on phone calls. Companies like Hubspot have a proactive approach by providing assistance before you ask. So finding a way to help people get what they want in a way that makes them feel special can help you compete.
- Differentiation by branding. Differentiation based on the perceived feelings or affinity for the brand can be special. Building a brand that speaks to someone and makes them want to purchase because they identify with it can have special rewards. This is difficult to do but a great example of this is Apple.
- Differentiation by Niche. Companies can maximize opportunity by fitting into a particular industry segment. Being all things to all people has been the death of many businesses and companies. Messaging to the right demographic often pays out in dividends. When I ask companies who their target market is, sometimes they are too broad making hard to reach anyone. Narrow it down to a specific audience.
- Differentiation by Social Good. This comes in all kinds of ways. Companies like LSTN Sound Co. provide hearing to the deaf with each purchase. Newman’s Own among others use this to grow by the good feelings people have toward the company. The challenge for companies is that the cause may eat the profits to death. So figuring out how a model that works where the cause resonates with people and has the balance of good and profit can be rewarding.
This isn’t the end all of the differentiation but hopefully a jumping off point to get you started on your business. The best thing to do is communicate that difference to your customers so that they understand it. The reward is a winning business that your customers recognize. How are you differentiating?