How To Set Up A Successful Shopify Store in 2021: Common Misconceptions and Tips To Succeed
“How to start an ecommerce store (8 Steps, no experience required)”
“How to Open Your Online Store in Five Simple Steps”
“How to Quickly Start an Online Store”
…are only some of many headlines about setting up your own online store – a simple and easy process that won’t take long.
And that is, in fact, absolutely true.
Hosted ecommerce solutions for website development like Shopify, help you to set up your online store – in minutes! Shopify offers an all-in-one solution for ecommerce stores, Shopify apps offer solutions ranging from customer service, inventory optimization to marketing automation.
No matter how easy the technical part may be, what comes next, isn’t. There are several other crucial aspects to think about. Setting up a successful store that generates sales and profits, and can succeed long-term, requires more than just a storefront.
Around 90% of ecommerce start-ups fail within the first 120 days of launch, according to Marketing Signals research from 2019. Some say that Shopify success rates are around mere 5% – 10%. However, it is hard to estimate the true numbers of ecommerce success rates due to so many varying factors.
There are several myths about how easy it is to open an ecommerce store, but the truth is, that being successful with it is hard. We have named each misconception, by knowing them, you can actively make changes in your strategy and increase your chances of success.
Common myths when it comes to setting up an ecommerce store
Dropshipping – it is always profitable
Yes, dropshipping in 2021 is in fact still pretty popular. And yes, it can also still be profitable. It just has to be done in the right way.
Importing stock from China and adding a margin to it might just not cut it anymore, and even if it does, isn’t sustainable. Steep increases in shipping costs have made it impossible to take a hit on the margins, without transferring the cost to the end consumer.
Dropshipping industry in 2021 is still booming with new business opportunities. But a common misconception is that it is always easy and profitable. There are still significant challenges to consider, such as low margins (returns and damages, delivery delays), high competition, control over supply chain and flexibility in product innovation.
Tips to succeed:
Before diving in head-first, you should take into account the above and think where your brand and business would stand in the market. Make sure to discover white spots and define your niche to be successful with the dropshipping model in 2021.
Don’t put too much reliance on a single supplier, what we experience especially during the pandemic, you never know when they experience a supply disruption or decide to increase their prices. Always provide proper customer support, just because you aren’t in control of your stock, doesn’t mean you shouldn’t be in control of your customers.
The market is oversaturated, it is hard to succeed with the dropshipping model, but there is still some space if you choose your niche wisely.
Marketing – couple of paid social media ads and you’re good to go
Shopify store Taylor Stitch was launched in 2010. Their success can be attributed to their extreme customer focus and combining their marketing strategy directly with customer experience.
When operating an online store, everything comes down to marketing. With such high competition, there is no way customers will just find your store. Statistics by Marketing Signals show that poor online marketing (37%) and lack of online search visibility (35%) are the two top contributing factors to the failure of online retail start-ups.
In brick and mortar, having a store-front is already advertising by itself. Sure, you can reach a wide audience, but you have to work for it to get these customers on your page.
Tips to succeed:
There are several ways to do more with marketing besides just paid ads. You should first of all optimize your page (SEO), define your buyer persona, use different marketing mediums such as SMS marketing and use social media influencers to promote your products.
- Ecommerce SEO – optimize your page and product descriptions with relevant keywords, create engaging content, also for non-product related keywords, optimize your FAQ page, generate content that people would link to as a resource.
- Paid marketing – on social media, Google, marketplaces such as Amazon and Ebay – is still a good option. Some do very well with paid marketing, some do not. Try it out, but don’t waste all of your time and money on paid ads. Sometimes you aren’t catching the right consumer and therefore just wasting time.
- Influencer marketing – marketing goes hand in hand with sales. Promoting your products through influencers you can reach a wide audience. Just choose the right influencers – the ones that your target consumer can resonate with. A great example here is Gymshark, who combined their sales strategy with social media influencers.
- SMS marketing – is actually a great way to promote your online store. SMS marketing is extremely effective due to its high engagement rates. By sending targeted messages to your customers, you can direct them to your page, for example, send promotions and offers or product updates.
- Content and store design – you should pay close attention to your store content and design. Engaging ecommerce banners are a great way to attract customers, increasing click through rates and sales.
What is more, Shopify offers several design templates that are super easy to incorporate in your store design to make it more visually attractive to your customers. You can use these, or choose from free stock photos if you need to keep your costs low.
Product – as soon as I launch, my products will sell
35% of failures come from little or no market for the products or services, and 11% due to launching the products at the wrong time, according to the research into ecommerce success rates by Marketing Signals.
Sure, you think you have an excellent product, and you probably do! But, is there a market for it?
Steve Jobs once said Segway will be the biggest invention since the PC. Last year, they ended their operations. There wasn’t enough demand due to high prices and convenience of the product. They didn’t enhance their product as the market evolved to electric scooters and hoverboards.
Tips to succeed:
Do your research. Make sure to thoroughly research your audience, your competitors and know who they are and what they buy. What is more, don’t forget to innovate as you go along. There are some steps to take and consider before:
- Always try to solve the customer’s problem.
- Know your product, from your own expertise or get external experts.
- Jump on the trend early.
- Don’t always copy your competitors.
- Find opportunities by doing keyword research to what people are looking to buy.
- Check if the product margins.
Funding – there is no risk involved, running an online shop is cheap
This is true, running an online shop can be cheaper than operating a brick-and-mortar store. Yet still, running out of cash is still one of the top reasons why 32% ecommerce start-ups fail, according to Marketing Signals. Because you don’t have to pay for a location rent or sales staff, doesn’t mean your operational costs aren’t high.
You still have to rent a warehouse space and pay for logistics (unless you are operating a drop-ship store), handle product returns (which are much higher online), website hosting improvements and customer service.
Tips to succeed:
When thinking about how much capital you would need to start out, do your research, speak with a fellow entrepreneur to find out exactly how much it would cost for your operating model to succeed also long-term.
Prices – lower prices and more sales will lead to success
29% of the start-ups noted price and costing issues as their main problem, analysis by Marketing Signals shows. Several entrepreneurs make the same mistake of only striving to beat the competition with better prices and more sales.
Better sales doesn’t necessarily mean higher profitability. Of course, at first you have to aim for growth, but keeping an eye on operational efficiency in the long-term is essential.
Tips to succeed:
Keep a close eye on sales and consistently analyse, track and improve your key performance indicators (KPI’s). Ultimately, you need to try out which products work best at which prices to achieve maximum profitability and break even.
Consider shipping costs, competitive pricing, production costs and operational costs, and see whether they are worth adding to your portfolio or not. At the end of the day, what works for one store may not work for the other and vice versa.
Competition – copy successful competitors and you’ll also do well
Another myth is that if you copy your competitors, you will also succeed. In the statistics by Marketing Signals, 23% of the surveyed businesses have noted competition as the main reason for not succeeding.
Retail giants, online marketplaces like Amazon or Aliexpress are stopping smaller players from standing out from the crowd, as they fail to offer either faster delivery or cheaper prices. But let’s be honest, it is impossible to compete with these conglomerates – they have all the power to offer the best to their customers.
Tips to succeed:
Differentiate yourself from the competition and don’t try to copy them. Whatever they are doing, is working for them, but it doesn’t necessarily for you.
At the end of the day, why would the customer go to your store if you offer the same product, with higher prices & slower delivery? Think about what your unique selling proposition (USP) is.
Customer service – just provide a contact number on your web shop
In the Marketing Signals survey, 16% of the businesses surveyed said that lack of customer service contributed to the failure of their online shop. Especially now, as consumers care more about customer experience, and consider it as a key factor in their purchasing decision. Customers nowadays expect much more, and would even consider going to the competitor over bad customer service.
Tips to succeed:
Consider integrating an FAQ page and live-chat to your store. This can directly contribute to higher customer satisfaction levels and increase your sales and customer retention and loyalty. There are several excellent apps available on Shopify, such as HelpCenterApp, which provides free plans, or Gorgias, which offers more features.
Repeat customers and their purchases will directly contribute to your cash flow and will help you grow your chances of long-term success.
If you are thinking about starting your own successful ecommerce business, don’t assume, know. Do your research and don’t fall for the common misconceptions, know what they are and how you can avoid making the same mistakes.
After all, you want your business to succeed long-term. Things can add up quickly, so make sure to have a good proper strategy. Think about all of the aspects of your business – from marketing, funding, product, target audience, website design to competition.
But, above all….don’t be afraid to make mistakes! No one knows it all, entrepreneurial experience comes from doing, not sitting around waiting for the right day to come. Failures happen, this is inevitable and a part of life, but to an extent – some obvious mistakes can be avoided.