The book “How to Start a Home-Based Online Retail Business” by Jeremy Shepherd is one of my favorite startup guide for starting an ecommerce business. The author writes from the perspective of someone who will run the business from a small office tucked in the kitchen with the inventory located in a spare room or basement.
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The author lists a good list of 10 reasons why online retail merchants will make it big:
- Good product niche
- Good web site design
- Excellent customer service
- Good market research
- Competitive prices
- Innovative Marketing
- Established word-of-mouth buzz
- Good product sourcing
- Good business and financial planning
- They never lose their entrepreneurial spirit
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He also puts out a top 10 list of mistakes made by online entrepreneurs
- Lack of product research
- Not finding a product niche
- Lack of familiarity with online retail
- Poor web site design
- Lack of financial planning
- Poor customer service
- Ignorance of online legal issues
- Lack of competitive edge
- Lack of commitment
- Lack of passion
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One thing that I will add to the list of common mistakes of online entrepreneurs is the failure to understand the site’s metrics. Big companies often pore through their data trying to understand how customers purchase through the site and make the necessary adjustments.
Small business owners, on the other hand, commonly fly through the seat of their pants praying their Hail Marys that customers come to the site and buy. But they don’t have the knowhow, interest or time to carefully analyze at what point of the buying process they start losing their customers, or why their customers are abandoning the shopping carts at a high rate.
Small online entrepreneurs may not have the deep pockets to use the latest technologies in their website but there are tools such as Google Analytics that can give them a perspective of how visitors are using their site and what kind of visitors convert into buyers.