3 top tips for success with your growing online business
Neil Parker is owner of DriveDen, an online automotive accessory retailer.
After starting out on eBay, the business has gone from strength to strength, and now sells to a large customer base through its popular website where customers can buy from the company directly. In this article, he shares his top three tips for success with a growing online business.
Don’t be afraid to start small
If you are toying with the idea of starting your own online business, know that you don’t have to start with a big idea or with a high level of risk. There is nothing wrong with starting small with a low-risk idea if you don’t have a lot of experience in the retail sector. Think about selling on a website like eBay or Amazon Marketplace, which will provide both a stable retail environment and a large customer reach in a trade-off for a listing fee and a percentage of your sales.
I started DriveDen as an eBay store, and it offered me the perfect platform to begin making a profit at an early stage. The site possesses incredible pulling power, with more than 17 million visitors to the UK website each month. The opportunity to access a market like this is something that no new vendor should pass up, especially at the beginning when sales may be slow. When you are established and making a good return on a site like eBay, you can then begin to think about expanding the business into something more. This is exactly what I did with my own business, and I haven’t looked back since.
Take advantage of multiple markets
With DriveDen, we now sell through our own website, as well as eBay and Amazon. Although being able to establish our very own site was an essential part of growing the brand, we haven’t turned our back on our eBay and Amazon customers either. Striking out on your own may seem like the close of a chapter, but it makes more business sense to try and keep as many profitable revenue streams open as possible.
I would advise anyone who is thinking of selling in more than one marketplace to invest in some good multi-channel management software. This software allows us to manage our inventory, listings, and warehouse operation easily — avoiding any overselling of one particular market. This programme has been instrumental in our growth, keeping the need for extra staff to monitor these metrics low, and ensuring that customers are kept happy with up-to-date stock information.
Balance your stock levels and your prices
One thing that I have learned from running an e-commerce business for ten years is that you need to strike the balance in managing both your prices and your stock levels. Selling online can be highly competitive, especially if you are retailing in a market that has a lot of merchants with similar products. Avoid getting into a pricing war, as there is always someone who will be willing to go one step cheaper than you — instead, focus on fair pricing and offer products that are of a higher quality or a little bit different from what other stores are selling.
Stock-level management is also very important. If you don’t hold enough of a popular item, you will lose sales while you restock, driving your customers to look for alternative products from other vendors. On the other hand, carrying too much stock will lead to wasted cash flow. You should also watch out for a best-selling product becoming a zero-seller, as there is a risk of overstocking if you don’t spot it in time. As I mentioned earlier, having a good management software package can help you to keep a close eye on your stock levels. You can get some really good programmes that will help you spot trends and declines in sales, helping you to anticipate customer sale patterns. You can find out more about how these packages can help your business in this ultimate guide to multi-channel software.
If you follow these tips and apply them to your own growing online brand, you will see a great improvement in your store’s performance. Be patient and allow for signs of natural growth before you push ahead with your more ambitious plans.
