E-commerce is a commonly used term that everyone seems to know about, but do we truly understand what the word means? What is E-commerce exactly? In simple terms, E-commerce is the activity of electronically selling or buying of products on online services or over the internet. Qoo10, Shopee, Shopify, Lazada, and Tao Bao are E-commerce platforms most people are familiar with. The usual E-commerce scene goes with suppliers and businesses earning money while individuals spend. Wouldn't it be fascinating to know how individuals like us can use E-commerce to earn money too? Here are 5 tips individuals should know before they dive into the world of E-commerce.
1) Your product is the solution to a problem
You are not selling a product, you are selling a solution to a problem. One common mistake people make is to dive right into deciding which product to sell without identifying a problem to solve. Thus, what you could do before you start is to find a problem that exists or, better yet, a problem you have experienced. Do research. Be diligent. Find some problems. Turn those problems into questions, and find the products that can answer them.
For example, the problem identified is the massive amount of plastic straws being wasted every day. So, the question can be formulated into: What can we do to reduce plastic straw usage in Singapore? From here, the type of product chosen should be one that can
- replace plastic straw
- reduce plastic waste
2) Your product needs to be viable for E-commerce
Not all products are viable for E-commerce. Some key deciding factors to determine whether your product is viable for E-commerce are:
Can the product be shipped worldwide?
The product should not be too heavy to ship worldwide or your shipping costs might be too high
The product should not be too fragile or you might be issuing a lot of refunds.
Using the plastic waste problem, which product do you think is the best solution?
Glass straws vs metal straws vs paper straws.
Of course, no straw is still the best solution. However, you should take into consideration the above factors before determining what type of product you want to sell.
3) You need to be able to communicate how you are different
Being able to stand out from your competitors is important because it will convince people to buy your product. You don't need a crazy good idea, or a revolutionary product that can change the world. Successful E-commerce businesses are often seen making a simple twist to an existing product. These tweaks are enough to effectively solve an existing problem.
Here are a few questions you can ask yourself while planning your E-commerce business:
- What are you currently doing that your competitors have not done yet?
- What are some of your competitors' weaknesses?
- Does your business address your competitors' weaknesses? If so, that can be your Unique Selling Point. If not, that can be a potential gap for your business to develop.
4) Your customer is not everyone
The harsh reality is nobody can afford to market to everybody. Not everyone would want to buy straws, and even if you spend a fortune marketing to them, some would not even budge. Hence, it is important to identify your target market. Be specific. One way to do this is to reverse analyse your product.
The two ways you could do this is through the product centric approach or the audience centric approach.
For audience centric approach, what you should consider is their demographics such as their age, income level, ethnicity, and et cetra; as well as their psychographics such as their personality, values, and interests.
For product centric approach, you want to take the product and consider its core offerings such as its design, function and price. Who do these features appeal to most?
To identify your target customers, it is best to use some factors from each approach.
5) You can build an audience without having a product
Building your product first and waiting for the market can often take a long time for the business to flourish. The right way to go is to build the latter first. Social media platforms such as Facebook and Instagram are simple ways you can build your audience for minimal costs. Similar group of people are more easily gathered and there are higher chances for you to sell off your goods once your product launches.
With all that being said, one should always do ample research before jumping into this field of work. Or else, unnecessary time and money can be wasted. We hope you have learnt a few tricks before starting your E-commerce journey.
If you are interested to know more about E-commerce, Make The Change offers an E-Entrepreneurship workshop for secondary school students in which we equip students with skills in Design Thinking, Business Planning and the Enhancement of Web-User Experiences. We also run a Persons With Disabilities class that equips our participants with essential IT skills and know-how to manage the E-commerce portal via existing open source platforms or self-design platform with an entrepreneurial mindset.