The Evolving Online Business Environment
The way we interact with the world around us is changing as more and more individuals grow attached to their smartphones. A 2011 survey from the United Kingdom found that 87% of people said they usually do business with companies they have met online, and that 71% would prefer to maintain social contact through email even if it meant they had to meet face-to-face less frequently. Furthermore, 66% of respondents said they would rather buy products from companies they have had positive interactions with, rather than those they have heard or read about.
This evolving environment presents new challenges for business owners who are looking to make money online. To ensure their businesses can grow and thrive in this new digital era, they need to develop and implement new business models to attract and retain customers. One such model is the online store that offers a diverse range of products and services, supported by an e-commerce website.
The Product-centric Business Model
A product-centric approach to e-commerce is all about providing customers with an excellent user experience by focusing on items that they are highly likely to buy. The more you know about your customers’ needs and constraints, the better you can craft the perfect product to meet their needs. The online store owner would strive to create an environment that is as easy as possible for customers to understand and navigate, making sure they find what they are looking for and can leave with a positive experience. Furthermore, this business model is all about providing value and meeting a need, rather than relying on expensive advertising and lackluster affiliates to generate cash flow.
The downside to a product-centric approach is that this can be difficult to achieve because you need to have a clear idea of what the customer wants before you can start designing a product to meet demands. Furthermore, continually redesigning a product to appeal to a broader audience is non-trivial and often counter-productive. Finding the right mix of functional and attractive features that satisfy a variety of users is key to creating a successful product that transcends one demographic.
Affiliate Marketing: Building a Profitable Revenue Stream
In addition to directly selling and serving customers, online stores often rely on affiliate marketing to generate revenue. This is where a business or brand builds a relationship with a retailer or brand owner by promoting a product or service that they believe in while also earning a commission when a purchase is made through their affiliation with that business. Creating a successful affiliate marketing program can be challenging, but it doesn’t have to be. Not all businesses are created equal, and understanding how to establish and run an effective affiliate program is something that even the most inexperienced business owner can achieve.
Just remember that to be successful, you need to develop and maintain an active and growing affiliate program, so be sure to implement the following guidelines.
Vary Your Offerings
Having a single, highly-specialized product or service that is only available through your affiliate program can seriously limit its growth and profitability. To develop a more generalized and diverse affiliate program that can support a wider range of products and services, create different offers for different products or services that your audience will find valuable. Furthermore, make sure that each offer has a unique affiliate URL that will help promote your program and bring in more revenue. Make it easy for potential affiliates to get started with you by providing them with a single, signup form that automatically subscribes them to all your email list.
Create Multiple Streams of Income
One of the major factors that make up a business’s bottom line is how much money they make per year. For that reason, online stores that rely on multiple revenue streams can more easily establish and maintain profitability. Depending on the nature and scope of your business, you can work with a financial adviser to craft a sound business plan that takes into account all your revenue and cost projections. Furthermore, creating multiple streams of income provides more stability even in a weak economic climate. For example, while your traditional, brick-and-mortar store may be experiencing a downturn in revenue due to the spread of online shopping, your online store may be experiencing an increase. Multiple income streams also makes it easier for you to establish a personal savings account, as you don’t have to feel bad about taking a hit on one side of the business to ensure the other.
How to Make Money Online: The Truth About Making Money Online From Scratch
Even though the above discussed models for making money online are all extremely viable and profitable, it is worth investigating whether or not they are achievable for the average entrepreneur. It is important to note that not all online stores will succeed, and the key to becoming a profitable online store is by implementing the right strategic plan that utilizes the right tools for marketing and selling your product or service. Having a good product is important, but having a good marketing and sales strategy is even more crucial. For that reason, here are some of the best strategies for making money online and how you can begin utilizing them:
1. Create a Profitable E-commerce Website
The first step to building a profitable online store is to create an e-commerce website. An e-commerce website is akin to a traditional storefront, with the major difference being that it operates online and requires no physical location. As the name would suggest, an e-commerce website allows for customers to purchase goods and services online, usually featuring a diverse range of products from a single source. A successful e-commerce website will have a comprehensive product catalogue that features high-quality, branded goods, as well as a variety of complementary products and services, including travel and lifestyle-related hubs.
2. Implement the Right Marketing Plan
Once you have created a viable e-commerce website, you can begin to implement your marketing plan. Market segmentation is an extremely useful tool that allows you to better understand your target audience and create tailored marketing strategies to secure their business. In the case of online stores, marketers can use various methods to determine the best approaches to reach potential customers. The methods include surveying those already in the know about the product or service, analyzing traffic to your site, and establishing buyer persona’s and key demographic’s.
One of the first things you need to do is to identify your target audience. To do this, you will need to consider things such as their demographics (e.g., age, gender), psychographics (e.g., what interests them, how they feel about their lives, what motivates them) and behavioral metrics (e.g., what actions do they take, and what websites and mobile apps do they use?). With this information, you can begin to craft personas that will help you to more accurately target your audience and devise a more effective marketing strategy. Furthermore, you can use marketing automation to streamline and automate certain aspects of the marketing process, making it much simpler for you to track and analyze performance.
3. Build a Strong Brand
Creating a strong brand is a crucial step in the process of building a profitable online store. A brand is a combination of a product or service, along with a company’s identity, values, and stance on social issues. To create a strong brand, you need to consider a number of factors, including your target audience, your product, and your delivery channels (e.g., online vs. brick-and-mortar stores).
For example, if you are creating an e-commerce store to sell men’s clothing and accessories, you will want to consider what items in the men’s clothing and accessories category your target audience will find valuable. Furthermore, you can use your brand’s identity to guide the design and creation of your product or service, ultimately resulting in a design that more accurately represents your brand.
4. Test the Product/Service
Once you have created a viable e-commerce website and begun to test the product/service, you need to make sure that you are accurately portraying your target audience. To do this, you will want to conduct A/B testing, where you test variations of a product or service to see which one performs best. When testing, it is important to consider things such as pricing, packaging, and delivery strategy, among other factors.
5. Use Inbound Marketing To Grow Your Audience
Inbound marketing is all about attracting, engaging, and delighting people to grow a business. At its most basic level, inbound marketing is about drawing potential customers in with offers that are valuable and relevant to them, while also ensuring that these customers feel genuinely cared for and that their needs are met.
The most successful online stores, therefore, use inbound marketing as a key method of securing and retaining customers. This entails using various techniques, including content curation, to generate relevant and valuable content that speaks to potential customers, as well as utilizing CRM, digital marketing, and email marketing to continually engage with and delight these customers.