Ecommerce businesses have recently seen a growth in their sales, and many business people have decided to start their own ecommerce business to capitalize on how well ecommerce has performed during COVID. However, newbies tend to make common mistakes that could easily be avoided if they caught them on time. These mistakes do not happen due to a lack of interest or knowledge, but probably due to the speed in which people are trying to jump into business. Once you realize the errors, you can easily correct them with a little more research.
The most common mistake newbies make is starting out with a new product. They try to create their own new product, instead of offering a product that is already trending. It would be better to start by following a trend to get people interested in the brand. This way, your business will attract more customers who want to purchase a product they have already seen others use and know it works, or it will fulfill their needs. By starting out with a new product, something people do not know nor trust, can set you back and lead to failure.
Some also choose to sell a high-ticket product. This means it will be a much higher cost per purchase, and you will need to have a set budget separated for advertising costs. Starting with high-cost products can be too big of a step to launch your business. You should focus on starting with a product within your budget to guarantee that you will not be losing money and your revenue will meet your goals.
Another common mistake is people not understanding their metrics correctly. There are several metrics to keep in mind. Some of the most important ones are:
-Cost per acquisition.
-Organic acquisition traffic.
-Social media engagement.
-Micro to Macro Conversion Rates.
-Average order value.
-Sales Conversion Rates.
-Customer retention rate.
-Customer lifetime value.
-Repeat customer rate.
-Refund and return rate.
-Ecommerce churn rate.
-Net promote score.
The key metrics–the ones you really need to know and understand–to start your ecommerce are advertising cost, cost of goods, and revenue. It is particularly important to understand them before you go into business because the lack of knowledge can easily mean loss of money when you start advertising. Make sure you understand the cost per purchase and know how to make it work according to your budget.
One common mistake newbies tend to make is not setting up the right payment processors to accept the purchases. An example of that could be PayPal putting your money on hold for the next 30 to 60 days. To avoid situations like this, you need to find processors that were specifically created for ecommerce businesses and can make this transaction easier for you and for your customers.
Luckily, these mistakes are avoidable. The most important step is to do thorough research and understand your return on ads spent. You need to have an advertisement budget set aside; to spend and to have in case you lose money. Create a spreadsheet with your cost of goods and your revenue. Find merchant processors that are experts on ecommerce and suppliers who can provide the best prices to lower your cost of goods.
Starting an ecommerce business is like starting any other business. You need to be prepared to do it, understand what it takes to start a business and have the knowledge of what steps you need to be taking. If you do your research and know your key elements, you will be able to avoid all the common mistakes newbies make.
Steven Ridzyowski has been a leader in the eCommerce/digital media buying space for over ten years. Ridzyowski takes pride in being self-taught in all aspects of his career. It’s probably why he is such a driven entrepreneur today! He started out of high school, deciding to never go to college and learning advertising blogs with Google AdSense and taking on what would soon become his career and passion.
After a couple of years doing that, Ridzyowski was introduced to affiliate marketing. During that time (2008-2010), cellphones and ringtones were becoming popular, and Ridzyowski became an affiliate in the ringtone niche for a few years. Little did he know, he was paying “influencers” on YouTube to have links for ringtone offers in the music video description, before “influencers” became the sensation they are now.
As he grew and became a successful affiliate marketer, he worked alongside many advertisers and colleagues. Ridzyowski then went on to create his own white label skincare brand, which became one of his pivotal successes.
Between the moment of changing from affiliate marketing to owning and running digital media buying for his own skincare brand, he started to follow trends, learning the ins and outs of digital marketing, spending over $30m in paid digital ads across the entirety of his career. Ridzyowski mastered different advertising platforms, generating income across many businesses in various niches and verticals.
Today, Steven Ridzyowski is focused heavily on e-commerce and marketing, especially with his new agency, which offers a turnkey solution for e-Commerce. Ridzyowski has mastered everything from product research, to product trends, to marketing in all kinds of niches. In the past three years, he has created converting funnels to growing multiple 6 to 7-figure stores with his agency. He has helped hundreds of companies, both large and small, reach their full potential and created an online presence for them. Ridzyowski is also a member of the Forbes Business Council and the Young Entrepreneur Council.
Connect with Steve Ridzyowski on LinkedIn at https://www.linkedin.com/in/stevenridzyowski/
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