5 lessons learned from launching an ecommerce during the pandemic

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December 10, 2020 10 min read
This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.
Opinions expressed by Entrepreneur contributors are their own.

Creating a brand and marketing it online has great challenges. Learn how to go from idea to project launch in four months during the COVID-19 pandemic .

Like the vast majority of people, I started 2019 with a stable job, I went to the UDEM to give my entrepreneurship classes and did research in my office. It seemed what a normal semester would be until COVID-19 arrived in Mexico and soon after we entered a red light. Since March, my dining room has been turned into a classroom, office, and research center. Personally, I forced myself to be more productive by setting “entry” and “lunch” times, but after a few months the confinement made me wonder what would happen if they had to cut staff and I had no other source of income. I needed to start generating additional income!

A few months later, I received money from a savings bank for the first time in my life, and brainstorming began to invest it. At that time, in June, due to the pandemic, I had to return to live in my mother’s house, we were eating and we discussed the idea of starting an online business to manage it from home. However, the first questions began to arise: What do we sell? How do we sell it? Do we need to develop a website? How much is it going to cost us to invest? Is it easy to send? Etc.

In my case, I had been an entrepreneur twice before, I studied and specialized up to a doctorate in entrepreneurship, but most importantly, I worked two years before in one of the most important e-commerce stores in Mexico, researching and developing products for Luuna mattresses. However, launching an e-commerce project was something challenging where I had to put all my knowledge into practice. I knocked on a few doors, signed up for all the free trainings AMVO offers, and reviewed my class presentations that I give such as business plan, product development and innovation, and startups.

Currently, we have already launched our online brand of Mexican artisan jewelry KETZALIA . It was a four-month process from when we defined the general idea at the beginning of July until the launch beginning in November 2020. Personally, I decided to summarize the process in five key aspects that I learned and I hope they will help you create your own project.

1. Choose a product with a good margin

If you do not have a product that you can manufacture on your own at low cost, my first recommendation is that you do not choose a product because it is fashionable or you think it will sell well without knowing an approximate cost of the good. You always have to think that the retail price must be consistent, so if a customer finds your product at the same time on Amazon, Liverpool, Mercado Libre or your own online store, they will see similar sales prices unless a store has a seasonal discount. In addition, you have to think that one thing is the cost of production and another is that of sale, in the second you have to associate marketing, operations and logistics expenses. Have you already thought about what packaging you are going to send by parcel and if you are going to charge for that shipment or will it be free?

Customer experience is essential to generate online sales, you have to take care of every detail of the product, packaging, warranty, shipments, delivery times, forms of payment, etc. As a product can offer the best experience at competitive prices, it will attract more customers. Even if we want to give away shipments, for example, these have a cost that the company must bear and directly impacts the profit margin. That is why I recommend analyzing the economics of the product with approximate costs before selecting your idea. There are those who decide to import to reach a good margin without sacrificing experience. We work with artisans at a distance by mail and WhatsApp on product developments, which took more time, but better achieves the goal.

2. Research your market

The normal thing for any business model is that you first identify which are your customer segments to which you are going to deliver your value proposition. When you have that make sure you understand their buying process for your type of products. It is especially important to know what brands they know, how they buy them, what promotions they handle, where they have their advertising, etc. We found out from an online survey that there are many more unknown brands in the market and that customers perceive brands differently.

The research will help you to set the characteristics of the products, prices, promotions, above all, make digital campaigns. In e-commerce it is essential to generate traffic to our product pages and make conversions. You will find hundreds of alternatives to manage your digital marketing campaigns, but do not go with the one with the cheapest price but with the one that knows how to do it well. Generally, the most effective ones charge you for results, that is, for sales conversions not per publication.

3. Invest in community building

Ideally, you will market one or more own brands, although it may be the case that you have a multi-brand store. In either alternative, you will have a name and will require a graphic identity. At this point I want to be explicit that it is not only having a logo but also knowing the different design elements that will help you convey what you want to communicate. In many online stores you can see the graphic identity with the design of packaging, labels, social networks, photography, etc. So what I did was ask for the development of a brand manual, not the development of a logo. I recommend it!

In many online stores you can see the graphic identity with the design of packaging, labels, social networks, photography, etc. / Image: Depositphotos.com

Most of the most successful e-commerce are brands that invested in their graphic identity and have positioned themselves as benchmarks in their industries. The positioning you will achieve if you create a community of people interested in following your updates and you will need to create digital content. Not all digital content is going to be advertising oriented but also to communicate your philosophy and generate loyalty. I recommend investing in social media management that creates content and taking professional product photos.

4. Don’t waste time developing a platform

Perhaps our most difficult decision is whether we have to develop a web platform from scratch to sell online or it is enough to upload the products to a Marketplace. Nowadays a third alternative, platforms like Shopify, WooCommerce, Magento, etc. These platforms offer the infrastructure to set up online stores without the need for programming and for a monthly subscription cost. The investment between developing your own platform or using a subscription platform can be very significant in time and money. What I recommend is that for new stores these platforms are used to have a quick launch and with less investment.

An online customer is not going to check if you used a third-party service to create your website but if it is visually attractive. We realized that a page that is capable of receiving payments and generating shipments is then a functional page for e-commerce. The aforementioned platforms fulfill both by integrating various alternatives of payment carousel and parcel logistics services. Therefore, it is more important for startups to invest in generating traffic to the page and in product development.

5. Be very patient!

The market research and idea planning process shouldn’t take more than a month. The problem is in the development of products with suppliers before an orange traffic light due to the pandemic, which is taking longer. If you manufacture or make up the products in any way, you need to ensure the quality, final design and prices with suppliers. Given this, you will experience a lot of uncertainty and longer delivery periods.

Generating sales on the site takes time, it is not something immediate. You have to invest in generating traffic to the site and wait for the algorithms to optimize the campaigns until the publications are more effective to convert to sales with your customer segments. Usually the first results in sales begin to be reflected weeks or months after launching a campaign.

Finally, the entire legal part of the business is essential and is progressing very slowly in Mexico. From the registration to the Federal Taxpayers Registry (RFC) to the SAT to the trademark registration in the IMPI , there are government procedures that are not working normal hours or they do so with appointments at very distant periods of time. In our case, the incorporation of the commercial company before a notary public and the public property registry took a total of three weeks, but obtaining the RFC to be able to invoice and open a bank account took almost two months. In the end we managed to launch and operate www.ketzalia.com .

Much success with your e-commerce!


 

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