TCM #030: A step-by-step guide to starting your first ecommerce business

 A Step-by-Step Guide To Starting Your First Ecommerce Business 

TCM 030 / Sunday, 10 March 2024 / Read time: 4 minutes 

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Most people fail when they start their first ecommerce business. 

The list of reasons why they fail is never ending:

• Wrong niche
• Wrong messaging
• Wrong customer profile
• Wrong product
• Wrong offer

The list goes on and on...

How do you give yourself a better chance at success?

Here's what I would do if I were starting my business from scratch tomorrow (and what I'll be doing soon when I launch the 'new TBD brand').

Step 1: Focus on one problem that one specific group of people have

Not "everyone". Not "all problems".

You need ONE problem that ONE very specific group of people all have in common.  

If you can identify a problem, you then need to know how to solve it.  

The easiest way? Look backwards and start there.

What's a problem you had a few years ago that you solved?

Example: Let's say you and a handful of your colleagues suffer from caffeine jitters every time you consume coffee. You're not about to give up coffee cold-turkey.

And then you personally figured out if you consume coffee with L-Theanine, the jitters evaporate.

Congratulations. You solved a problem for fellow coffee addicts. (FYI that's what got me hooked on NooWave. Not a sponsor, but I wish they were.)

Step 2: Create a clear step to solving that specific problem

We overestimate how much people want to learn at once. (I've been guilty of that when writing this newsletter, you know that firsthand as a reader, I'm sure.)

Most people are looking to solve one problem as it crops up. 

To go from problem to solution quickly, easily, and affordably. 

Problem > Solution

Craft a product offering in the form of a map that is aimed at your specific customer group. 

Example: Say goodbye to the jittery side effects of regular coffee and embrace a smoother, more focused and productive day.

What worker, suffering from coffee jitters who drinks coffee to enhance their productivity, wouldn't pay money to try that?

Step 3: Figure out your product format

This doesn't matter as much as you think it does. 

Pick a form you prefer, that has a short lead time and a low MOQ.

• Source a powder.
• Produce a coffee blend. 
• Turn it into a Ready-To-Drink.

There are so many more options. It doesn't matter, provided you're following step 1 or 2.

Source it and produce it in the format you're able to quickly get ahold of, achieve a 70%+ gross margin on, and at low volume. 

Step 4: Figure out how to sell it

Much like step 3, there are a thousand and one solutions out there. 

Don't overcomplicate it. 

Go with Shopify, Amazon, Etsy, eBay, Facebook Marketplace, Vinted or SquareSpace if you really must. (I promise, there's a reason I've been on Shopify for 10+ years.)

Just pick one and get started. Do not spend a ton of money. 

There's plenty of time to get complicated and fancy with design further along this path. Just get the ball rolling and cash coming in. 

Charge a price that gives you a gross margin of 60-80%. That's affordable enough to get buyers quickly, ensure you've got room to make mistakes and later spend on marketing. 

The goal? Solve your customers problem and make a profit. 

Next?

Step 5: Find customers

It's 2024. There are no excuses for not being able to find customers. (Even when Meta is having a meltdown.)

• Write an article on your website or as a guest blog
• Put it up on LinkedIn
• Chop it into a Twitter/X Thread
• Record an Instagram Reel of the Thread
• Answers questions in Facebook Groups, or on Quora
• Find TikToker's with an audience of your ideal customers, befriend them and seed them free product

It all works. It's all free.

Test which one brings in sales and then double down on it. 

Step 6: Turn customers into reviews

Once you have a handful of customers, start automating the collection of reviews. 

I ask for a review using Judgeme, or Loox, or Junip via an automated email 2 weeks after someone receives my product. 

Then use reviews everywhere.

Your website, your social feeds, your blog articles, your landing pages, your emails, your SMS messages – EVERYWHERE.

Social proof sells. Just ask Oddit. 

Step 7: Create a system for repeatable sales

Every great ecommerce business has a repeatable system. 

Know exactly where you'll post every day. 

Know what time. 

Know why.

Here's a great starting point to shoot for:

Find 10 people who will buy your $30 product every day.

10 x $30 x 365 = $109,500

And that assumes no one is making a repeat purchase.

That's how you create a 6-figure ecommerce brand that serves a niche audience. 

If you know you can achieve a 5-10% conversion rate, then you need to drive 100-200 people to your site each day. 

Figure out which channel from above is your best bet and find those people from there. 

That's it for today. I hope this is helpful.

Cheers!

Tom

P.S. Your feedback fuels this newsletter. Got a question or success story? Hit reply. Let's keep the conversation going.