COVID-19 has forced many SMBs to quickly adapt to online retail channels, sending Shopify’s recent Q4 revenue to record highs as seller demand surged, and pushing Amazon to acquire Selz, a similarly configured e-commerce platform provider. While e-tail hosts like Shopify and Amazon are making it easier than ever for small businesses to transition online, success is far from guaranteed for every small business that makes the switch.
In order to thrive, small businesses must find ways to strategically utilize their platform’s offerings to their advantage, develop an accurate understanding of their operational data and business health using every tool at their disposal, and become comfortable that day-to-day operations in the online marketplace will run smoothly. It is crucial that online small businesses, particularly those new to the e-commerce space, work to bolster their footing on these platforms—not only sowing the seeds of trust early but knowing where to plant them.
What to Look for in an E-commerce Platform
Strategically navigating the e-retail space as it continues to grow is necessary for small businesses looking to scale their operations today and into the future. Here’s some of the ways SMBs can find the right e-commerce platform with which to establish a secure partnership in this burgeoning digital age.
The Basics: Profit Calculator
It is important for small businesses to understand their operational costs both before and after they begin turning a profit, so when it comes to tracking expenses and calculating profits, the sooner the better. For new business owners, exploring which platform is best for them should go hand in hand with finding reliable ways to keep track of their operational data. A good e-commerce platform will help them do so from the outset.
Most platform providers host an array of dedicated apps that, once downloaded, can be integrated with a business’s interface—some boast thousands of apps, while others hundreds. But, with the right app, SMBs only need one tool for tracking all their expenses so new businesses should look for quality, not quantity as they explore any given e-commerce app store.
The best profit calculation tools will have a suite of capabilities that can be tailored to a business’ particular needs. For local businesses that turned to e-retail to survive COVID-19, this could entail the simplest spending vs profits metrics–product inventory, shipping and marketing costs, etc.–while more established SMBs looking to bolster their international presence could turn to the same tool for complex breakdowns of customer spending based on product and geographic location.
Owners who are able to accurately understand business operations by the time they start making profits, will be infinitely more successful than those who start making profits and then scramble to try and understand them after the fact.
Have Funding With It
Understanding financial health is important for day-to-day operations, but astute profit calculations hold more potential than mere charts and trend-lines. For stores hoping to grow their business and tackle new projects, acquiring loans is often the only way to take those next steps. E-commerce platforms can help.
The metrics from profit calculations or from any other operational analytics can prove to be more vital for loan applications than some SMBs expect. Those handing out the loans won’t necessarily care that a small business has a strong brand or sells a quality product, they’ll want to view a business by the numbers. A comprehensive presentation of expenses and profits will paint a portrait of a small business that goes deeper than their website design.
When a business is turning a profit, having the numbers to show for it will make it easier to know which loans will fit their eligibility, how much exactly they need to pursue in the next round of funding, and ultimately in showing loan providers that they understand how to turn that money into more money – for both parties.
Keep Marketing in Mind
Advertising is an important part of growing any business, and in today’s digital age, online advertising is an obvious choice. Similar to finding the right profit calculator, SMB owners must take the initiative to explore the best online advertising channels for their given businesses — Facebook? Pop-up ads? Email marketing? — and consider the ways their host platform can (or cannot) offer support for their advertising efforts.
Marketing strategy development is yet another instance where integrated analytics can be put to use, and where e-commerce platform providers have a chance to either help or hurt their stores through the data they share. Tracking customer data can be a simple way for online SMBs to learn where best to put their ad funds for gaining exposure and driving sales, and a good e-commerce platform will allow for this helpful data — where customers are coming from, in-store vs. online sales trends, etc.— to be responsibly tracked and factored into any integrated analytics reports.
SMBs must also trust that their e-commerce marketplace will offer an intuitive and seamless interface for customers coming in via online marketing with links that bring online shoppers straight to a relevant page without making them jump through any third-party hoops.
And in a less technical sense, SMBs can leverage the name brand value of their platform to establish authority and legitimacy with customers. It’s hard to beat the wide exposure of companies like Shopify, Amazon, and Etsy, so even for businesses looking to establish a unique individual brand, it can still be effective to mention that their store is hosted by a household name.
A young, non-stop serial entrepreneur, Eden is the co-founder and CEO of Become, where he brings the company his 13 years of experience in a variety of online businesses, marketing technologies, methodologies and platforms. Become is a profit optimization platform that provides data-driven financial solutions to help small businesses grow and increase their profits. Their embedded financial metrics, lending solutions, and profit calculation tools help SMBs track expenses, analyze reports, optimize online seller profits, and easily compare funding options to choose their optimal solution.