The First Steps e-Commerce Start-ups Must Make Before Investing a Dollar

By Carley Johnson

Thinking of a business idea for some may happen overnight and for others, it has been a long mind-changing journey. Regardless you have an idea, and in this article, I want to encourage you to not rush into launching your idea, I want to encourage you to take your idea from a gut decision and to run it through 6 essential validation steps before investing a dollar more.

Over my 8+ year career in Fashion eCommerce, I have seen so many brands launch and fail simply because they didn’t do their research. They progressed forward into building a brand simply based on a gut feeling and because of this they have lost $10,000’s on failed launches.

Especially in 2020, data has become even more important in every business category. Consumer demand is changing daily it feels, driven by the virus. So, from day 1 startups need to build a brand that is based on, and reacting to, data (research).

Ask yourself; what is your starting point?

The brand validation process should start with a keyword search. So ask yourself what is your starting point?

• What product category do you want to sell?
• What country do you want to launch in?

By answering both of these questions, this gives you a starting point.

Once you have your starting point, for example; women’s swimwear in the UK, you then need to use keyword search tools to find your product/service with the highest demand with lowest cost and competition. Keyword search tools I can recommend are: Google Trends (paid) and Ubersuggests or Ahrefs (Free)

Playing around with your keyword close to your starting point, you will eventually find a workable keyword, a niche, meeting the above metrics.

What are the next essential validation steps I need to take?

Now you have secured your keyword that has a high demand with low cost and competition, you now need to understand;

• Who are your competitors and how do they compare on both product and social media?
• Who is your target audience, what are their hopes, dreams and fears?
• What is the best sales channel and market for your brand launch?
• Competitor pricing, to ensure you can price your brand competitively.

By completing these next steps, you are validating your starting point that little bit more, building a competitive advantage in your launch market. Ensuring you have found your niche in the market before investing a dollar in design and development.

In this next section, I will share with you tried and tested methods and tips for you to implement right now.

What should a competitor analysis cover?

To truly learn from your competitors, I recommend that you:

• Sign up to their newsletters using a personal email address.
• Buy a product to review their delivery and customer service.
• Follow them on all social media channels using a personal account.
• Visit a physical store if that’s applicable.

To really understand and learn from your competitors you need to get into the detail, the ‘real-life’ of their operation.

Competitor analysis is not a one-off process, this is something you should continually be doing to ensure you’ve got a competitive advantage. Challenge yourself to learn from their strengths and do it better.

How much do I need to know about my target audience?

More than just their demographics, that being age, gender and location.

You need to understand their personality traits and trends, a way to do this is to learn about generation types. Second, to this, you need to understand their mood.

The best way to do this is to join FB groups that they are in and read their comments and reviews in forums and on their pages, along with social media. Really understand what makes them tick.

What sources can I use to understand more about the eCommerce market?

Knowing what country to launch-in comes down to 1 of 2 choices; either you choose your home territory or a country that has the biggest opportunity.

To learn more about the potential in the eCommerce market I encourage you to use Statista, as well as, McKinsey.

Why you need to consider your finances now.

Before investing a dollar in your brand, you need to understand your finances and that starts with analysing how your competitors’ price in the market and understanding your product price structure, therefore the potential revenue you can reach.

A lot of businesses fail in their first year due to not having a high demand niche, but also due to not having the cash flow to support their business. So do your research and launch a successful brand!

What does your audience think?

It is essential to finalise this process and validate your idea by conducting surveys. Talking to your target audience directly. This is one final piece of valuable insight, as well as, directly starting to build and engage an audience ready to shop your product/service. A final benefit is you will also gain an email database ready for your launch.

Only once all the research steps are complete should you feel 100% confident that you have a great product and service to now make into a brand. Only now should you consider investing a dollar into design and development, now you have truly validated your idea and secured your niche in the market.