Part 2 – Things You Need To know About Starting ECommerce
Wisdom from Paintmetwisted.com Part 2
by Timothy Thomas
Recap
Okay, Welcome to Part 2 of Starting An Ecommerce Business-Things I Wish I Knew. If You haven’t read Part 1, You can find Part 1 here. If you have read it, then here’s the recap:
- I Covered my backstory, including taking care of my disabled wife. I needed something to make money, and at the same time keep me close to home. A website was the most common answer. I had worked in retail for many years, so I had this covered. Good to go.
- Then I told you about looking at the different sites to make my website. The Many options and the many impressive offers that were popping up. Then I discussed Sellvia, the promises and the deceptions.
- I cut all the products from my site, found a couple places to Print On Demand and started over. That was a whole new nightmare.
First Things First In Ecommerce
Businesses fail. They fail from several factors:
- Funds run out before profits come in.
- Improper money management and bookkeeping
- Products become obsolete
- Inventory vs demand
- Inadequate market research
That’s to name a few. As you can see from the chart below (Fig. 1) failure rates are devastating. And if you’re reading this then you are thinking about going into ecommerce, the numbers are worse. Those statistics are for brick and mortar businesses.
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Business Failure Rates by Industry |
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|
1-Year Failure Rate |
3-Year Failure Rate |
5-Year Failure Rate |
10-Year Failure Rate |
15-Year Failure Rate |
20-Year Failure Rate |
|
Agriculture, forestry, fishing and hunting |
15.6% |
29.4% |
36.8% |
54.4% |
62.3% |
68.6% |
|
Mining, quarrying and oil and gas extraction |
22.7% |
39.4% |
48.3% |
61.9% |
73.5% |
80.8% |
|
Utilities |
17.1% |
34.9% |
49% |
58.4% |
64.6% |
69.9% |
|
Construction |
25.4% |
42.6% |
52.5% |
74% |
79% |
83.2% |
|
Manufacturing |
20.6% |
39.5% |
48.9% |
64.6% |
70.9% |
75.5% |
|
Wholesale trade |
22% |
42.1% |
52.8% |
69.4% |
77.6% |
83.1% |
|
Retail trade |
17% |
34.3% |
44.8% |
60.1% |
66.7% |
73% |
|
Transportation and warehousing |
24% |
43.6% |
54.3% |
70.9% |
77.6% |
82.1% |
|
Information |
27.6% |
49.7% |
60.9% |
75.3% |
82.7% |
86.8% |
|
Finance and insurance |
19.6% |
37.1% |
46.3% |
64.5% |
71.7% |
77.3% |
|
Real estate and rental and leasing |
16.8% |
33% |
44.2% |
64% |
71.8% |
77% |
|
Professional, scientific, and technical services |
21.6% |
43.1% |
52.6% |
68.5% |
75.7% |
80.8% |
|
Management of companies and enterprises |
17.4% |
27.5% |
34.6% |
43.8% |
51.4% |
62% |
|
Administrative and waste services |
24.3% |
44.1% |
53.5% |
69.9% |
77% |
81.8% |
|
Educational services |
19% |
36.3% |
46.2% |
60.8% |
69.1% |
75.5% |
|
Health care and social aid |
18.9% |
35.5% |
45.2% |
59% |
69.3% |
76.6% |
|
Arts, entertainment and recreation |
21.9% |
40.9% |
51.1% |
67.5% |
76.6% |
82.3% |
|
Accommodation and food services |
19.2% |
36.1% |
45.9% |
59.5% |
67.3% |
74.2% |
|
Other services (except public administration) |
19.7% |
37% |
47.5% |
62.8% |
70.8% |
77.7% |
Source: Bureau of Labor Statistics
Ecommerce Good and Bad Numbers
According to Forbes ecommerce spending was up 44% in 2020 and still gaining into 2021. But I had to dig deeper. At the United States Census Bureau, I found that they had real numbers I and you can understand. (See Fig 2)
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“They estimate of U.S. retail e-commerce sales for the fourth quarter of 2023, adjusted for seasonal variation, but not for price changes, was $285.2 billion, an increase of 0.8 percent (±1.1%) * from the third quarter of 2023. Total retail sales for the fourth quarter of 2023 were estimated at $1,831.4 billion, an increase of 0.4 percent (±0.4%) * from the third quarter of 2023. The fourth quarter 2023 e-commerce estimate increased 7.5 percent (±1.2%) from the fourth quarter of 2022 while total retail sales increased 2.8 percent (±0.4%) in the same period. E-commerce sales in the fourth quarter of 2023 accounted for 15.6 percent of total sales.” |
But according to Forbes, as things stand, 90% of ecommerce brands fail within four months of launch. It’s the worst metric of all start-ups.
Four months, on average, the online store, which you had big plans for is gone. Just lonely pieces of code floating through the cold expance of internet. But It’s not your fault. Well, Yes it is. It is your fault because you believed in the great Lie.
If you Google, “How to open an online store” you will see the SERPS (bold, underlined, itlicized words you should write down and learn) . The first dozen or so will be paid ads. You can tell this by the word “Sponsered” above the entry. Then you will see different hosting websites like, Shopify, Wix, etc. Then you’ll run into the Videots who will tell you how to do it in a 30 minute You Tube video. But wait there’s more! More people telling you how to do it in 9 easy steps.
What You Really Need To Do
Go to Econsultancy and bookmark it. It’s a glossary of ecommerce terms. Refer to it often. Then go to Search engine Journal and bookmark their SEO Glossary then go to their homepage and bookmark that too. I read all of their articles. Then Go to this page from Chris Malta (I was not paid for this, this is just my path to get smarter) sign up and watch the 12 video guide to ecommerce. This dude doesn’t pull punches and has a pedigree from hell. It’s your option.
These reference tools will help you greatly. You won’t be so blind going in. Back to what you need for school.
- Market research.-find out what your customers need. This is key. What your CUSTOMERS need. What your CUSTOMERS need. NOT what you want. NOT what you think they think, would be cool. Because its not. Just because you like model airplanes from WWII, and you keep buying them up from the store down the street, doesn’t mean everyone else is buying them. But if you do research, you’ll find that out. And if they are that popular then that is awesome, because you know all about them. Which brings us to number 2.
- Find the product and be an expert on it. You notice I said “product” not plural. Get one Product and become an expert. This is called a Niche . I have tried the general store model and it doesn’t work. Everything you are going to read will tell you that a niche store is how you will make it
- When you have decided what to sell, find suppliers. When you have a list of suppliers, start serching for reviews about them. Check Reddit, check everywhere. The reviews will let you know the truth.
- You are going to have to re-write your product descriptions. Your keywords from your keyword research will be weaved into your descriptions flawlessly. But first you need to find your keywords. So go to google and type in, “Keyword Research For dummies”. I’m not being a smartass, I’m serious. All your top players in the game have articles on the subject. Read about three different articles on the topic. Or you can hire somebody to do this for you. It will run you about 500+ dollars to hire someone from Fivrr. More if you hire an agency.
The Cost Of Ecommerse
First, don’t go signing up for subscriptions to these big sites that have the grade A research tools. Sites like Semrush and Ahrefs are too far above your head. Stick with Googles Keyword Planner because it’s free. You can go check out the big dogs, you can get a few searches a day for free. These site will cost you hundreds of dollars a month. When you start selling and making a profit, go for it. Keep it simple.
Your money is going toward your website. Which ever you choose, you will have a monthly payment. Your website name will cost you anywhere from $15 to $5000. It all depends. Your money will mostly go to the apps you are going to get.
The Apps you Will Need:
- Email and SMS Marketing .
- SEO If you choose a Wordpress Site or Shopify, I would suggest Yoast. It helps write content. It doesn’t write it, it guides you. Once again, I am not getting paid to use their name. It’s what I use and I like the product.
- A popup generator for inhouse coupons.
Those are just a couple of apps. They will run you $20 to $50 per month.
In Conclusion
Read, research and read some more Understand that it could take 4 months to a year to see any activity in your store. It may take over a year to make your first sale, or you might get lucky. You just never know. Study everything you can to get ahead of the game and good luck. Drop me any questions in the comments or come visit my PaintmeTwisted.com.