I’ve interviewed many entrepreneurs who have gone from $0 in sales to growing a multiple six-figure and in some cases seven-figure ecommerce business.
You can go through the archives of my Crowdfunding Demystified podcast and listen to the stories of all the different entrepreneurs who used crowdfunding to launch a booming ecommerce business.
In fact, a previous guest, Dr. Liz Bales, was just featured in the New York Times for her NoBowl Feeding System, which raised $136,000+ on Kickstarter.
I think that one of the reasons that so many new founders FAIL at growing a successful online store is because the task is so daunting!
You have to figure out how to:
- Identify a problem or pain-point
- Come up with and design a product
- Develop a prototype and test that product
- Figure out how to get it mass-produced.
- Stand out amongst so many other products online.
That’s a lot of work!!
If you think about it too much, you’ll find yourself paralyzed and unable to take action.
That’s why I wanted to break down the steps that go into launching an ecommerce website into clear steps. Let’s demystify the process a bit.
1. Identify a problem or pain-point
Every product solves a problem that a group of people care about.
If you come up with a product that doesn’t solve a problem, it won’t sell.
If this amazingly designed product that took you years to make solves a problem that no one cares about, it won’t sell.
Often times, entrepreneurs will personally experience a problem and then take the time to research that problem, understand others who have the same problem, and then develop a solution.
This was the case for Dr. Liz Bales, as she explained in our podcast interview.
Since these entrepreneurs are the ideal customer for the product, they’re usually much more successful than an outsider trying to understand the problem/market.
However, you can also solve a problem by taking the time to understand the group of people that experience it. Your job is is just 10x harder. You have to research their mindset, motivations, and the existing solutions out there.
Regardless of which approach you take, you must have a high degree of empathy for the target market that you will be serving. Remember, these are human beings, not just customers. By nailing down the commonalities that you find among members of this group, you’ll be able to create a customer archetype.
You’ll find yourself answering questions like:
- Who experiences this problem?
- How do they solve it currently?
- Where do they get informed?
- Why do they want to solve this problem?
- What do they care about?
2. Design a solution to the problem
I’m using the word “design” quite broadly. You’re not going to be hashing out an entire solution. This is the first iteration of a solution to the problem.
You can never start too early. Think back to what Eric Najjar said in our previous article, “You might think that you’re too early in development to be thinking about manufacturing, but that’s like standing at the base of a mountain and ignoring the map you’ll need to get to the top”
First, simply sketch out a solution to get an idea of what the product might look like. It can be as simple as drawing on a napkin or a piece of paper.
Being able to see the product in 2D form is going to bring a whole host of questions and ideas to mind. You’ll start thinking things like:
- What will it be made out of?
- How will it be stored and used?
- Are there movable parts?
Once you begin to get a clear idea of what the product might look like and begin to explore some of the common design questions that will come up, you can move into the prototyping phase.
Prototypes don’t have to be sophisticated. Remember, this is an iterative process. It won’t be right the first time you make it.
Here’s a great FastCompany article on prototyping a new product. The goal of prototyping is to get an even clearer picture of what the product looks like, and more importantly, how the user will interact with it.
Believe it or not, but you’re still in the idea evaluation phase. You could end up making the prototype and find out that your idea isn’t practical.
By creating a prototype using a technology like 3D printing is an excellent way to ensure that you don’t spend your precious time on a product without promise. I’ll link to some of the use-cases below.
3. Market the product
Wait? What? Did I skip a step? NO!!
I’m a big fan of Lean Startup Methodology and one of the cardinal principles is to eliminate uncertainty.
Rather than moving directly into contacting manufacturers and figuring out what you’ll need to mass produce and ship the product, go back to Step #1.
Do people REALLY want this product? Should you REALLY spend time on this?
The only way to know for sure is to find out whether or not people will actually buy it. Yes, this is before you actually have the product for sale.
You’ll be using the compelling prototype that you’ve made and the research that you’ve done up until this point to create the marketing materials to entice customers to buy…well not really.
When they try to buy, you can tell them that the product is no longer in stock or that you aren’t accepting orders at this time. But, you can confirm that they in fact do want the product and are willing to part with their hard-earned dollars for it.
This is the same process that I used to get orders for my first online business in college. I ended up closing that business because I realized it wasn’t cost-efficient for me to offer the service. It saved me a lot of time and money.
So, how do you actually do this? There are a lot of ways.
I’ll link to a few different websites and tools that you can use below to create a website or a pre-launch page.
- Shopify – Can also be used to make an online store.
- LeadPages – Great landing page software that I use at the time of writing.
- Unbounce – Another landing page software
- WordPress – You’d need to install a landing page them and google analytics tracking.
- SquareSpace – A website builder with nice themes and ecommerce functionality.
Ideally, you want people to put in their credit card info before they get the notification that the product is not in stock, or at least their email. This way, you can get an email list going and market to that list when your product actually does come out.
At the end of the day, there are two parts to marketing. One is creating the hard assets or materials that will convince visitors to take action. This takes the form of your images, website, copywriting, testimonials, etc.
The second part is driving traffic to your website. For the purposes of this phase, I recommend just using Facebook, Google, or another marketplace to drive relevant paid traffic from your target market to this page. You could always drive organic traffic, but you need a bit of social media know-how and an existing audience.
If you don’t know where to begin with paid traffic, I highly recommend checking out Bryce’s online course, Seven Figure Funding. Bryce came on the podcast in episode 86 to share details about this course.
After raising $1.3 million on Kickstarter, he created the course to explain to the average entrepreneur who doesn’t have a big budget or marketing savvy how to market his or her pre-launch page. It’s a great product!
You might find out after marketing the product that people aren’t interested in buying it, that they’re skeptical about some aspect, or quite simply that they love it! By going through this phase, you’ll confirm that you SHOULD spend time on this product and go forward with your plans.
4. Nail down production costs and logistics
Okay, now it’s time to get serious about manufacturing and delivering the product to your future customers.
Your costs are going to be magnified if you make a mistake. Attention to detail is a must!
The goal of this phase is to make sure that you set up systems that can handle your anticipated order volume. Over time, you’ll be refining these systems, but for now, you just want to make sure that they won’t break on launch day.
As you begin to figure out costs and logistics, you’re going to get a better understanding of how you’ll need to price the product (though you should have thought of this pre-marketing phase). You’ll also begin developing relationships with key shipping, fulfillment, and manufacturing partners.
We’ve put together a few different websites that can help you during this leg of the journey.
5. Get funding or invest in the company!
This is my area of expertise. Since 2012, I’ve been writing about how entrepreneurs can use websites like Kickstarter or Indiegogo to raise money for the initial production run of their new product.
There are several key ways that you can obtain funding for your startup.
- Crowdfunding sites like Kickstarter or Indiegogo.
- Angel investors or family & friend investors.
- Equity crowdfunding websites.
- Taking on debt via a loan from a bank.
- Getting a loan from Upstart, Prosper, or Lending Club.
- Use your own savings.
I like Kickstarter and Indiegogo because you can get the funds needed to mass produce the product from your actual customers. It can be thought of as a pre-order. Don’t believe me? I’ll explain how Kickstarter works below.
There are definitely risks associated with raising money on Kickstarter or Indiegogo. You’re going to have to make good on your “perks” or “rewards,” otherwise, you’ll have a lot of angry backers and potentially face a lawsuit.
You also might end up raising a lot of money and run into problems that you didn’t anticipate. Make sure that you thoroughly calculate your costs before launching!
No matter which route that you take to finance the ecommerce store, there are going to be pros and cons. There is no “magic bullet.”
I can’t make the choice for you, but I can show you some more low-cost tools that you can use to enhance your web presence, get more customers, and keep your expenses low. That’s what we’re covering next!
6. Set up your ecommerce shop
You’re FINALLY ready to sell this product to the public. Hurray!!
But, how do you actually build an online store without paying thousands of dollars.
Haha, great question. I actually saved one of my readers a lot of money recently.
“I was able to read your email the day before signing a contract with a big development firm and you saved me $23,000 and 6+ months of headaches. I am forever grateful and will not be a lifelong listener.
I went with ——-, which literally does everything that the $23,000 website would have done for me. This way, I can build my site, beta test the site and the market for the site’s purpose and then hire developers if/when I reach some monetary success with the WordPress version.” – Cody Healey
I gotta admit, I sometimes think I have commitment issues (haha). But actually, I just am cheap and I don’t want to commit resources to a project unless I know it’s worth my time and money.
Here are a few amazing tools that you can use to set up a quality ecommerce website quickly and cheaply.
Where should you go from here?
If you have any questions, I invite you to leave a comment below. These are the very broad strokes of launching an ecommerce business. I look forward to going more in-depth in future articles. Be sure to get on my email list!
A lot of launching a new business is identifying what you’re good and not so good at. We all have different levels of resources. When I first started, I had 0 resources, so I had to learn many different key skills like programming, writing, speaking, accounting, customer service, basic legal ramifications, sales, marketing, etc.
You might have more resources than I had and can afford to hire out some of these components. Just remember to always hire quality. When all is said and done, the quality of your company = the quality of your employees and products or services.
Good luck and shoot me an email when you’ve launched!
