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Creating Business Plan for E-commerce Business

How to Build an E-commerce Business - Creating Business Plan for E-commerce Website - iPay88

In order to start an e-Commerce business, you require patience, hard work, and decisions that come together with the right idea, right moment, and right time.

There are various factors, that come into play when you launch your online store and want it to grow. 

How to build an e-commerce site?

In order for you to imagine better, we have compiled all the steps for you to build an e-commerce business and split it into 3 major parts or stages;

  1. Define stage
  2. Development stage
  3. Acquisition stage

In this article, we are going to cover the first part of the process or stages or parts, which is the Planning stage.

Business plan for e-commerce website

Creating a solid business plan for your e-commerce website is like laying down the roadmap for your digital empire. These are the highlights of the business plan;

  1. Identify the problem
  2. Define the target market
  3. Detail the product/service
  4. Articulate the unique selling proposition
  5. Operation and channel planning

A well-thought-out business plan isn’t just a document; it’s a strategic tool that guides your decisions, attracts investors, and ensures your e-commerce journey is not just a stroll but a memorable adventure.

So, let’s explore further the details of each step below.

Identify the problem

Before diving into the development of your e-commerce platform, it’s crucial to identify the problem your business aims to solve.

What gap or need exists in the market that your product or service can address?

This could be a pain point for customers or an inefficiency in the current market landscape.

Think about those moments when people go, “Ugh, I wish there was a solution for this!” What’s that pain point in the market that’s just waiting for us to swoop in and fix?

Whether it’s streamlining a process or addressing a common frustration, identifying this problem is like finding the treasure map for our e-commerce adventure.

target market

Define your target market

Understanding your target market is fundamental. Who are the potential customers for your e-commerce platform?

Consider demographics, interests, and behaviors. Conduct market research to gain insights into the preferences and needs of your audience.

Apart from that, another good start on defining your target market is to target a specific market. Targeting a specific market does not mean that you are excluding people who do not fit your criteria. 

Rather, target marketing allows you to spend your marketing budget wisely and efficiently. 

Not only that, it helps you to position your brand message properly in a specific market that is more likely to buy from you.

a) Questions to be asked

Some of the questions for you to consider:

  • Gender?
  • Age group?
  • Location?
  • Income?
  • Marital status?
  • Lifestyle?

Imagine that the baby boomer generation has a totally different perception of shopping and the way they find what to buy, compared to, for instance, Generation Y. 

It is important to consider the demographics of your target audience and play around the rules by which they are comfortable to play.

However, do note that in the earlier stage of e-commerce business, you might need to outstretch your marketing budget in order to drive and capture your target audience.

Articulate your solution

Once you are done with the first two steps, clearly define what your e-commerce platform offers to solve your audience problem.

Is it a product, service, or a combination of both?

Outline the features and functionalities that will set your platform apart. Consider user experience, ease of navigation, and any unique aspects that will make your e-commerce solution stand out in a crowded market.

a) Questions to be asked

On another hand, before you plan any product/service to sell, ask yourself the questions below and find the answers to them:

  • What type of product/service you are selling?
  • How do your customers find your product/service? Can it be found locally or internationally?
  • What are the prices for your product/service?
  • What is your mark-up price? Is it based on the market price?
  • Who is your competitor?

When you have the answers to these questions, you should have a clearer picture of how your business is going to look and what points you should address next.

Not to forget, you also need to be aware of why competing on prices is bad for your e-commerce business. This is very important to ensure your business is last long in the game.

Establish your Unique Selling Proposition (USP)

Regardless of what business you do, there will always be bigger players in the market. 

This is why the first-mover always has the advantage. There will always be an e-commerce site with more customers, a blog with more readers, or a brand that’s more widely known. 

Often, there will be at least one or two market leaders in the industry you are in. If there are a lot of players in your niche, it can be a signal that the market has been validated. 

To compete with these players, you need to create good reasons for your customers to get your product/service.

a) Questions to be asked

To start defining your business value proposition, you need to ask yourself the following question:

  • What is your product story?
  • What are the benefits of your product?
  • What’s unique in your product?
  • Is your product/service solving your customer’s problem?

Uniqueness is a key to attracting customers. If you offer ordinary products that your potential customers can find elsewhere, think about unique packaging or additional perks that a customer could get. 

For example, a great perk is loyalty programs as people love connecting to a brand that can offer something in return.

You also can leverage your uniqueness during the festival to attract more customers and build your own loyal customers through it.

handing website using pc

Plan your business operations and channels

The way some people think about e-Commerce is that it is a fully automated business model that doesn’t suffer the same pains as brick-and-mortar. 

In fact, e-commerce is just as challenging as any other type of business. In some cases, it is even more challenging than a conventional business model.

This is because it is so reliant on a single variable – a third-party platform. In order to build an e-commerce business, you need to leverage a third-party platform.

You can sell your products independently through a custom-build website, but if you wish to scale up your operations, at a certain point you need to integrate with one of these platforms. 

a) Questions to be asked

Upon having your website ready, you need to ask yourself the questions below:

  • How often you are going to update the information on the website?
  • How are you going to manage your inventory and where will you store it?
  • How are you going to pack your products?
  • How are you going to ship the purchases and what costs does it incur?
  • How are you going to handle your customer service?

There’s an endless list of questions that you need to reflect upon. 

Thus, in order to save your valuable time, you should develop your business plan according to the Business Model Canvas based on the nine points given.

If you managed to answer all of it, congrats!

Business Model Canvas

business model canvas

Incorporating the Business Model Canvas (BMC) into your e-commerce business planning is like having a dynamic blueprint that brings your ideas to life.

The BMC breaks down your business into nine key building blocks, offering a holistic view of how each component interacts.

1. Core components

At its core, the Canvas prompts you to define your value proposition – what makes your e-commerce platform a must-visit?

It guides you in understanding your customer segments, helping you tailor your offerings precisely to their needs.

2. Secondary components

By examining channels, customer relationships, and revenue streams, the BMC ensures you have a strategic plan for how your e-commerce venture will reach customers, engage with them, and turn those interactions into revenue.

3. Tertiary components

The key to a successful e-commerce business often lies in efficient operations, and the BMC’s focus on key resources, activities, and partnerships ensures that your engine runs smoothly.

It prompts you to identify the critical elements needed to deliver your value proposition, outlining the backbone of your operations.

4. Additional components

Additionally, the Canvas encourages foresight by addressing costs and revenue models, helping you foresee potential challenges and identify areas for growth.

Failing to plan is planning to fail.

As the saying goes, the BMC is your proactive tool to strategically plan and execute each facet of your e-commerce business.

By leveraging the BMC, you can transform your business plan from a static document into a dynamic, adaptable strategy, allowing you to tweak, refine, and innovate as your e-commerce venture takes flight.

Get ready to the next stage

Thus that concludes the planning stage on how to build an e-commerce business. Once you finalize your planning, let’s head to the next stage which is the Development Stage of building an e-commerce business.

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