With billion dollar company Thrasio buying up small e-commerce stores and many small businesses following suit, starting one and flipping it later is a great way for solopreneurs to start building wealth. .
But even online shopping peaked after the pandemic — e-commerce sales in the United States hit $871 billion in 2021, according to MarketPulse — e-commerce has become crowded and competitive.
So how can you find your niche? Chloe Thomas, host of the eCommerce MasterPlan podcast, recently shared her insights on how newcomers can break into the field. Thomas, an online marketer involved in e-commerce since 2004, is the bestselling author eCommerce Marketing and four other books on the subject and hosts an annual e-commerce summit.
Elaine Pofeldt: Many people are eager to start an e-commerce brand but don’t know where to start. How can they start?
Chloe Thomas: The first thing is to find the problem to solve. What does your product bring to the space that no one else’s product does? People are buying online, but the competition has increased massively. A lot of people who didn’t sell before are now selling online. It is rare that you cannot find what you are looking for as a consumer.
If you want to start something new, you need a reason why it should exist. Maybe everyone’s product is terrible in space and your version is the best. If you don’t create something that people actually need and want, you’ll have a hard time growing the business.
All marketing channels are crowded and competitive. There is so much noise outside. You have to find a way to reduce this noise. You need a product that people need and that solves a problem that nothing else solves.
I don’t think the “I want to do e-commerce” idea is the way to success. If it’s “Everyone makes garlic presses”, you can’t do that anymore.
It’s “I want to do X and e-commerce is the best way to do it.” If you want to start something from scratch, you need to have the vision and the opportunity to solve the problems behind it.
Elaine Pofeldt: Are there any great research tools that you can recommend?.
Chloe Thomas: Where I would go to research, I would look at other people selling similar products and look at their reviews, whether on Amazon, eBay, or Etsy. See what people don’t like or miss. If your product matches any of these, you’re probably onto something good.
I would be in front of the target customer going to a real market. See what they think of the product. See how people react to it and how they would be willing to pay for it. Or you can do it online these days. You can deliver a Facebook ad to the target audience. Have them take a 30-minute survey or Q&A where you send them a Starbucks gift card.
You need to do more due diligence before you start selling. There is still a research process. You need to do the up-front work before you invest any money and find out that it has no impact. There are a lot of good business ideas where it hasn’t been possible to attract enough audience at a price that works. Or, basically, there weren’t enough people who wanted to buy the product.
Elaine Pofeldt: How do you know if a business has legs?
Chloe Thomas: Businesses don’t always fail because they can’t make money. They are often chosen to be closed because they do not sufficient money. The opportunity is not big enough. Anyone getting into e-commerce is likely doing so because of the platform’s rapid scalability.
The failure keeps saying, “I know there are five people who want this product so it must work.” The most successful and sensible thing you can do in this scenario is to shut down the company and say, “It’s not doing what we want it to do.”
On the research side, the other area I’m tapping into is the growing number of trading brokers developing e-commerce stores, like Empire Flippers. They list Fulfilled by Amazon businesses, Amazon associates, or affiliate businesses. Here you can see the trends that are popular with the end consumer. There is a first-hand opportunity to buy something. If you have no idea, that’s where I would go: buy someone else’s business.
Elaine Pofeldt: How long should someone give a company before reaching a verdict on this?
Chloe Thomas: That’s the million dollar question. I don’t think there is necessarily a time limit. You can put a line in the sand that if he hasn’t made it by that date, we’ll reevaluate. How quickly you can find out if it works or not will depend on how quickly you manage to make it visible. Failure comes from not running the business, not optimizing, not trying new challenges. If you do the work and do your SEO, within 6 months you should know if you have a potential opportunity. Then it might be a few years before you know it’s a good enough opportunity or not. There is always this danger that you fail to tap into the one thing that would have actually worked. It could be, for example, that influencers are a magical thing in your space.
I had a business on the podcast called Bouq, an American florist. They have a really complicated end-to-end supply chain. They went live, thinking their target market was men. In less than 6 months, they discovered that their target market was women – women buying for other women and for themselves. They did a total of 180. They had to completely rework all of their branding, messaging, and marketing. Once they appealed to their current customer base, they were able to bring in flowers for a fresh flower subscription service.
Elaine Pofeldt: What advice do you have for businesses looking to scale?
Chloe Thomas: Look for the data. Once you start having data, you start having success. You have the information you need to get things done the right way. You can add additional marketing channels into the mix.
Elaine Pofeldt: What are the important trends readers need to know about right now?
Chloe Thomas: A few key things you need to consider if you want to grow your business are largely based on two big trends we’re seeing. The first is the increase in online competition. There are cookie issues. It’s hard to get visibility on marketing platforms. It’s hard to stand out, to get people to your website.
The other is consumers’ growing desire to have some form of connection and friendship with the brand they are buying from. There’s a lot going on around sustainability, doing better for the planet. While we’ve all been through a pandemic where we’ve been denied any social connection, people are increasingly reacting to emotion-based content.
You take these things together and you have to diversify your marketing a bit. Now is the time to try offline marketing – direct mail, magazine and newspaper advertising. Larger scale PR. It’s essential to stand out from the competition right now.
We also need to focus on the algorithm game towards the actual creation. I firmly believe that by the end of this year we will see a massive increase in copywriting, graphic design and videography. All brands need to build their content capabilities. You need strong content, strong creativity, in your email, in your advertising, in everything you do to get the right message across and attract the right consumer to your business.
Elaine Pofeldt: Any tips for standing out?
Chloe Thomas: The way to stand out is not to make a half-price sale. It’s to tell your company’s story. Why are you supporting World Bee Day or removing plastic packaging from your company?
The other key part of creating is having really solid customer reviews. Rewards are nowhere near as helpful as a customer giving you a video review. You use them in your advertising. If you only have the bandwidth to make one, work on engaging your existing customer base. It’s about the creation rather than the algorithm.