Starting a business presents specific challenges, not every business owner knows how to face or handle. The same happens when starting an e-commerce business. Many make mistakes that can be avoided if they have the correct information, resources, and tools to set themselves up for success. Steven Ridzyowski is an e-commerce and digital marketing expert who founded Ecommerce Marketing Agency. He has seen every mistake been made, so we sat with him to get advice for up-and-coming e-commerce business owners.
Starting with a new product
According to Ridzyowski, the most common mistakes e-commerce newbies make is starting their business by offering a new product.
According to Ridzyowski, the most common mistakes e-commerce newbies make is starting their business by offering a new product. “They try to create their own new product instead of offering a product that is already trending,” says this expert. He believes the best option is to begin a business by following a trend to attract more customers. This way, owners are guaranteed to present a product or service that works and fulfills the needs and demands of the public. “Starting with a new product, something people do not know nor trust, can set you back and lead to failure.”
Choosing a high-ticket product
The second most common mistake is choosing to start the business by selling a high-ticket product. “Starting with high-cost products can be too big of a step to launch your business,” mentions Ridzyowski. “You should focus on starting with a product within your budget to guarantee that you will not be losing money and your revenue will meet your goals.” A high-ticket product means a higher cost per purchase, affecting the different budgets established for the business, such as advertising costs.
Not understanding the metrics
Every e-commerce works according to specific metrics owners should know how to manage, analyze, and put into play. Some important metrics to keep in mind are: impressions, reach, engagement, email click-through-rate, cost per acquisition, organic acquisition traffic, social media engagement, abandonment, micro to macro conversion rates, average order value, sales conversion rates, customer retention rate, customer lifetime value, repeat customer rate, refund and return rate, e-commerce churn rate, net promoter score, and subscription rate.
“The key metrics,” according to this business owner, “are advertising cost, cost of goods, and revenue. It is essential to understand them before you go into business because the lack of knowledge can easily mean losing money when you start advertising. Make sure you understand the cost per purchase and know how to make it work according to your budget.”
Wrong payment processors
Having a suitable payment processor to accept the purchases is key to an e-commerce business’s success. “An example of that could be PayPal putting your money on hold for the next 30 to 60 days,” shares Ridzyowski. “To avoid situations like this, you need to find processors who were specifically created for e-commerce businesses and can make this transaction easier for you and your customers.”
Most of these mistakes can be avoided with research and understanding your return on ads spent. In order to run a successful e-commerce business, it is necessary to be prepared by knowing what kind of mistakes you can avoid by analyzing your market and creating a sound business. Steven Ridzyowski has had enough experience to advise people on how to avoid these mistakes. If you do your research and know your key elements, you will be able to avoid all the common mistakes newbies make.