The boom of e-commerce allows businesses to soar in sales using digital markets. Standing out against competitors is essential for startups to grow. In a busy marketplace, how can companies achieve this?
Lassonde for Life, a lifelong entrepreneurial support program for University of Utah graduates, offered a workshop led by Katy Luxem to answer this question. Luxem is the founder and CEO of Big Dill Pickleball Co. and a 2023 Master of Business Creation graduate. She spent years working at Amazon, consulting for brands ranging from startups to international corporations. Luxem has also worked with more than 250 e-commerce companies and noticed the patterns behind mistakes and how to identify hidden opportunities. She began thinking about different products she could sell and launched an Amazon-focused business to do things her own way.
In 2020, Luxem founded Big Dill Pickleball Co., a company creating beginner-friendly gear for the fastest-growing sport in America: pickleball. She noticed a need for exciting gear that served the inclusive and accessible nature of the sport. She implemented her e-commerce experience to create and market her brand and help her succeed in the space. In the workshop, Luxem shared the best strategies, benefits, and downsides of e-commerce.
Identify Market Gaps
Noticing a market gap is the first step in launching a successful e-commerce idea. Think outside the box to consider what problems need solutions and what those solutions could be. For example, Luxem noticed pickleball rackets were either priced high and unnecessarily high-tech for beginners or were poor-quality and just plain boring. Unable to find a paddle that stood out from the crowd, Luxem created her own, saying, “I thought we should have a pickle on this and be really fun about it.” The lesson is to think about what makes a product stand out and what specific needs will entice consumers.
Simplify the Process
Businesses that thrive often have simple operations that allow for initial low costs and limit bottlenecks. Luxem wanted to skip the headache and avoid expiration dates, transporting liquids, and other regulatory and shipping issues. If selling a product, choose one that makes sense – like a pickleball paddle. Focus on creating something easy to import, manage, and store. By keeping the process as simple as possible, entrepreneurs can hope for a smooth company launch.
Create a Compelling Brand
Entrepreneurs should understand that there is a difference between an idea, a product, and a substantial business. While every great business starts with an idea, becoming successful is an accumulation of many precise steps along the way. Turning an idea into a brand requires a unique story and communicated purpose. Different components include copywriting, graphic design, social media curation, accounting, and more. Things can get hectic quickly — so plan to outsource help. Founders should personally invest their strengths and utilize outside assistance for the rest.
Know the Real Cost
While e-commerce selling can start inexpensively, many companies don’t account for how quickly costs rise as they grow. Expanding through a second channel might be great, but it can also cause marketing expenses to double, for example. Be sure to track company expenses meticulously and accurately project potential changes as you evolve.
Nail Your Presentation
When selling a product or service on a digital platform, make a good impression on consumers. Keep marketing images and content professional and accurate. Product information should also be truthful – one bad review from a disappointed customer can negatively impact sales and brand reputation and even cause a platform to drop your product. On the flip side, great reviews, clear images, and accurate marketing will entice purchases from consumers and positively affect your brand.
Noteworthy Benefits
There are many benefits to selling through e-commerce. There is a low barrier to entry, as it is less expensive to get started. Starting with low inventory and a minimal range of products is ideal. There is less risk associated with e-commerce, as the initial investment and inventory rate can be minimal.
A brand can go from being on one platform to expanding multichannel quickly. Different online selling channels allow companies to hop on from Amazon, Shopify, or social media platforms.
An e-commerce business also allows for flexibility. Customers connect with sellers through online platforms, so e-commerce entrepreneurs need not worry about where they work from.
Considerable Downsides
Drawbacks to selling through e-commerce include high competition and saturation on platforms like Amazon. There are millions of sellers and products, and some categories are extra competitive. Average products don’t sell – you need differentiation, compelling branding, and a clear purpose. Luxem suggests considering “where to play and how to win.” Choose platforms and channels best suited for your product and nail the details to stand out against the competition.
Marketing is essential for successfully selling a product or service online. Slacking off on promotions risks losing consumer attention and makes them risk choosing different brands. While investing in marketing is essential, going overboard and not paying attention to your bottom line is a common mistake. Selling and advertising on multiple different channels can rack up expenses fast. Keep marketing strategies cost-efficient and effective where you see a good return on your spending.
Selling through external platforms, such as Amazon, often involves fees, which are subject to change and outside of a seller’s control. Be sure to account for these possible costs with high profit margins and aim for 40% or more. Lastly, be sure to adhere to federal requirements, whether for packaging or behind-the-scenes operations.
