Module Two

In all our previous chapters, we were gaining valuable insights about eCommerce. But now, it’s time to start building. Planning plays a crucial role when it comes to the success of every eCommerce business. 

The current learning module aims to teach you about setting up an online store. So, we will cover each aspect in detail in this and the upcoming chapters. In this chapter, we will talk about planning your eCommerce business. 

 

With this chapter, you will learn about:

 

• Doing market research and competitor analysis
• Identification of your target audience
• Creating a business plan
• SWOT analysis framework for market research

 

A good plan always holds the potential of doing wonders when it comes to execution. So, let us proceed with our discussion and take one more step in the direction of setting up your online store. 

Doing Market Research and Competitor Analysis

 

Now that you have made up your mind about starting an eCommerce business, what do you think should be the first step? Right! Market research and competitor analysis are the first stages of your journey. Let us understand what these are and how one can proceed with them.

 

Market research refers to the structured effort to gain useful information about the targeted market and the consumers. From the perspective of starting an online business, it refers to the process of gaining useful data that will further help in decision-making and planning the business accordingly. 

 

How would you get an advantage by doing market research? This is one question that many individuals ask. Why should you invest your time and effort in this? Well, by doing proper and organized market research, you can:

 

• Find out the workability or usefulness of your business or product 
• Find out if there are new markets available 
• Keep a check on what’s happening in the market
• Identify and track demand for the new product or service 

 

So, either by directly interacting with the customer, conducting interviews and surveys, or other means, this valuable data is collected and then later utilized for planning and making business decisions. 

 

Now, the next thing that you need to know is competitor analysis. What is competitor analysis and how can it be useful for you? Competitor analysis is one of the most useful processes when it comes to establishing your presence as a business in the market.

 

It refers to the process of identifying competitors in the industry, both current and potential. From understanding their strengths and weaknesses to identifying what their USPs are, you get a better idea to formulate your strategy and approach. 

 

You, as someone starting an eCommerce business, should take competitor analysis seriously because of several reasons. One of the most important aspects of doing competitor analysis is developing a plan that can help you surpass your competitors and provide you with a unique identity in the marketplace. 

 

Competitor analysis holds the potential to bring new ideas to your business, and also upgrade and enhance the existing ones. Thus, both market research and competitor analysis hold a crucial role in the primary stage of planning your eCommerce business. 

Identification of Your Target Audience

 

As someone planning to establish their online brand and business, it becomes crucial to identify their target audience. Until you are not aware of whom you want to sell your products and services to, how are you going to curate the strategy? Not possible, right?

 

So, the identification of the target audience becomes a prominent part of the process of establishing your e-commerce business. Now the question is how to identify your target audience. Well, you need to keep the following steps in consideration when looking forward to identifying your target audience:

Step 1 – Understand Your Product

 

The first step of understanding your target audience involves developing an understanding of the characteristics of your products or services. What does this mean? It means that one has to understand that the product they are selling is targeting customers or other businesses. Ask yourself three questions to know your product better:

• What problem does your product aim to solve?
• Who is getting benefits from your product or service?
• What is your unique selling proposition?

Step 2 – Analyze Your Market and Competition

 

The next phase of identifying your target audience is to analyze your market and competition. You have to develop the quality of looking beyond your business into the details of how others are performing. How is your competition targeting its audience? What difference can be made from your end that separates you from your competition? Having a clear viewpoint about these aspects can help your business grow. 

Step 3 – Defining Target Audience Clearly

 

Now, what you have to consider is defining your target audience. It is essential to clearly define the audience that you are targeting, even if it is imaginary. For this, you can utilize the data you have already collected. It is generally referred to as creating a buyer persona. The data includes aspects like:

• Age
• Professional Details
• Income
• Pain Points
• Hobbies
• Habits
• Goals
• And more.

Thus, it is going to be helpful for you in the proper identification of your target audience. 

 

Step 4 – Conducting Surveys and Questionnaires

 

One of the most effective ways to understand your target audience is to conduct surveys and questionnaires. Using surveys and questionnaires, you can get a clear picture of what people want and what their opinions are. Moreover, these tools can help you get any kind of information that can ultimately benefit your business. So, conducting surveys and questionnaires helps, always. 

Step 5 – Utilizing Social Media

 

Today, social media has the potential to take your business to a whole new level. But, are you aware that you can also use social media to understand your target audience? Leverage social media to find out who is interacting with your account and posts. What demographic qualities do they have? Considering such aspects, you can look ahead to planning your business.

Thus, with these steps, you can identify your target audience. 

Creating a Business Plan

 

What is the role of planning when it comes to an eCommerce business? Well, in any venture of your life, planning is one aspect that can make a difference between success and failure. The better you plan, the higher your chances of reaching the pinnacle of success. 

 

But wait! Do you know how to plan in the right manner? Are you aware of the essential components of an effective business plan? In this section, we are going to understand it in detail. Let’s proceed.

 

Writing an Executive Summary

 

Imagine that you met an investor in an event for just 3-4 minutes. They ask you about your business. How are you going to define it? Will you be giving a boring long presentation? Don’t you think the longer and boring your explanation is, the higher your chances of losing the investment? 

So, in such cases. You need to have an executive summary. A summary, defining your business, goals, and ideologies, crisply and concisely. Ideally, it is the last step to finalize your executive summary. However, you should ensure that you draft an executive summary before, just as a blueprint of your e-commerce business development. 

Who Are You – Company’s Description

 

The next prominent step in the process is to write down the company’s description. It is important to tell investors and consumers about your company, too, in detail. So, writing down the company’s description is a prominent step in the process. 

 

Are there any specific components that you should include in the description? Yes! Ideally, you should be as specific as possible. Take yourself as a customer. Who will you trust more, a company with a clear description or someone you don’t have much idea about? The first choice. So, include the following components in your description:

• What is the structure of your business? (Proprietorship, partnership, corporation, etc.)
• Your registered business name
• Your business model
• What industry do you serve?
• Background information on your business.
• What products or services do you offer?
• Aim and objectives
• A brief introduction of your team
• Brand values
• Mission statement and the vision you have for your business

The idea is to provide an understanding of your business to people, so writing a clear and elaborate company description is essential. 

 

Conducting Market Research

 

 As discussed above, in planning your eCommerce business, doing market research plays an important role. Sometimes, lenders and investors are keen to understand how your business is different from the rest of your competitors. For that, it is essential to conduct and lay down your market research.

 

However, it is important to understand that even if someone is not interested in your market research, you should still conduct it well. Market analysis and research help you in identifying whether the product or service that you are selling is suitable for the market or not. 

 

How big is the market? Who are your competitors and how are you different from them? You should also consider doing a SWOT analysis (we will discuss this further in detail). It will help you identify the gaps that are present in the market and come up with ideas and strategies to fill them. Moreover, it helps you perform customer segmentation accordingly. Thus, doing market research is something that you cannot undermine. 

Building a Marketing Plan

 

The next crucial aspect that you have to consider is to come up with a solid marketing plan. How do you plan to market your product and services to the audience? What are the strategies and pathways you are going to involve? Cover every aspect such as promotions, price, and product on which marketing will be conducted. 

 

Will you include paid advertising? Do you plan to integrate social media? Asking this question to yourself and your partners is important. Ultimately, it is advantageous to come up with an effective marketing plan to ensure that more and more people know and reach your business. 

 

Curating a Logistics and Shipment Plan

 

Do you know what is one major issue that most eCommerce businesses face? Especially, when they start performing pretty well in the later stages of the business cycle? Well, they face issues with logistics and hence are not able to deliver well. As a result, ultimately their sales decline, and customer satisfaction and retention are also affected to a large extent.

 

So, to ensure that you do not face such issues in the long term, you must build a logistics and shipment plan. What should you include while making this plan? Well, consider the following aspects when you are devising a logistics and shipment plan:

• Suppliers
• Production
• Fulfillment
• Warehousing
• Shipping and Logistics
• And more.

In, you can also get assistance from professionals or find the right courier aggregator who can help you with this.

Drafting the Financial Plan

 

No matter how good your business idea is, how amazing your team is, or how well you are executing your proposed plan, the financial health of your eCommerce business plays a crucial role in the overall success of the business. Ultimately, if someone wants to invest in your business, they need to see their profitability as well. 

 

So, how can you draft a financial plan for your business? Do not worry. We will be helping you do it efficiently. How detailed your financial plan will be depends on a lot of factors. However, it should always have:

 

• Income statement
• Balance sheet
• Cash flow statement

In addition, you should ensure to include clear financial projections in the financial plan of your business. The clearer, more concise, and more accurate your financial plan is, the more investors are going to trust your business.  

Visualizing Each Element and Adaptation

 

Last but not least comes the visualization part. After drafting your complete eCommerce business plan, sit down and visualize. Track down everything from the start to the final stage of execution. 

 

During visualization, note down every minute detail, change, or adaptation that comes to your mind. Visualization of the plan and then discussing it with your team helps in identifying any shortcomings and other areas of improvement. 

 

Are you aware now of how to make an effective plan for your business? Planning plays a crucial role in the overall success of your business. So, build a strong plan for your business and see how things turn in your favor. 

SWOT Analysis Framework For Market Research

Sometimes or other times in our lives, we must have come across something called SWOT analysis. Whether a personality development session or even planning for your next football match, SWOT analysis has always played an essential role in planning. 

But what is SWOT analysis? Well, SWOT refers to Strengths, Weaknesses, Opportunities, and Threats. While planning for your e-commerce business, it plays a crucial role. So, using SWOT analysis, the business can understand its strengths and weaknesses to work on them, identify and seize opportunities, and develop strategies to eliminate threats. It plays a significant role in building significant business strategies that work. 

 

So, ideally when planning, the SWOT analysis framework would be to answer the following questions and work toward them:

• Strength – What are you good at? What does your eCommerce business deliver that is different and unique than others? What are your advantages?
• Weaknesses – What are you lacking? Are there any shortcomings in your business? Do you have any disadvantages?
• Opportunities – What is the gap in the market that your business can fill? What are the opportunities, capitalizing on which, your business can prosper? 
• Threats – What aspects of the market or the business can be a threat to your eCommerce business?

Thus, answering these questions will help you understand those aspects where your business has an upper edge and the aspects where you need working. So, are you ready to move to the next stage of setting up your online store with Zopoxo? 

Crucial Takeaways from this Chapter

• Market research and competitor analysis are foundational for planning your eCommerce business.
• Identifying your target audience is essential for crafting effective strategies.
• A comprehensive business plan should include an executive summary, company description, market research, marketing plan, logistics, and financial plans.
• SWOT analysis helps in understanding strengths, weaknesses, opportunities, and threats.
• Visualization and adaptation of the plan ensure smooth execution and help identify potential improvements.