One approach to growing your self-employed business is developing multiple revenue sources, allowing you to build your own properties and lower the risk of relying purely on contracted work. Find out how to start an additional eCommerce income stream, and you could create a new multi-million retail empire from your side hustle.
The biggest risk to many contractors and freelancers is a sudden drop in new projects, so even a small recurring income can provide a bit of a safety net. And building a simple eCommerce business around your existing skills or interests can also provide a place for you to test new ideas, create awareness about your client services, or allow you to focus entirely on your own brand in the future.
It’s never been quicker or easier to set up an online retailer, but that means you also face lots of competition. So, investing some time to identify gaps and opportunities is worthwhile as you develop your eCommerce proposition.
Identifying suitable eCommerce opportunities
With so many online retailers, it can feel as if every possible niche has already been covered. But even some basic research or knowledge of a particular sector can help you find ways to offer a better product or shopping experience which can help you stand out.
You may be self-employed in a profession which generates saleable products already. For example, photography and design. Or it might be something retail adjacent, such as a personal trainer starting to sell fitness items, or a musician selling instruments.
In these cases, it’s easier for both businesses to cross-promote and fuel each other. You’re also more likely to know the relevant suppliers, or be able to sell products to clients.
Another area to think about are hobbies and interests that you could monetise. There are obvious opportunities if you enjoy woodworking, pottery or other arts and crafts in your spare time. But you could equally build a business based on your love of pets, sports, antiques, video games, or anything else someone is potentially willing to purchase.
A big benefit to this approach is that you can use your genuine enthusiasm as a marketing tool, and working on your eCommerce business won’t feel so onerous if it’s selling something you enjoy.
The third option is to choose an area where you can apply your business knowledge and experience, without necessarily being an expert in the products. For example, PR expert Mark Rofe operates a business selling Christmas trees, while digital agency owner Ash Young has built a multi-million car mat business.
In many cases, this approach requires you to work with a supplier who can deliver the product side, allowing you to focus on the business strategy and delivery. Beyond the benefit of leaving the day-to-day process of fulfilling orders to someone else, it also means you’re less emotionally invested, allowing you to be more objective when it comes to revenue, issues, and possibly offers to sell up.
A wide range of tools exist to help you quantify the potential interest for your business. Google Trends is a quick way to see what people are searching for at the moment, and tools such as Buzzsumo, SEMRush, Ahrefs and more will allow you to analyse specific terms and keywords, the websites of existing retailers, and other useful data.
This can also help you identify if what you’re selling might be a temporary fad (there are still warehouses full of fidget spinners around the world). Or if it’s something which has sustainable demand for the foreseeable future.
You can also use a variety of social media monitoring tools to check the volumes of people discussing a topic on Facebook, Twitter, Instagram and more. A growing number of retailers are powering their businesses by selling direct to consumers through apps including Instagram and TikTok, while Youtube has also become a very valuable promotional tool for eCommerce brands. Even large purchases, such as cars and motorcycles, is possible through social networks with the right audience.
If you’re offering something completely new, then there may be little existing data available. In this case, you can still test your idea by setting up a very simple one-page website using a variety of platforms. This can be shared in relevant online communities with an email sign-up to capture the details of relevant potential customers for the future (just remember that not everyone will necessarily commit when it comes time to actually make a purchase!
Understanding your potential buyers is also important to become successful, as you need to know the best routes to reach them, and what they’re looking for in a product and retailer. The more you know your potential customers, the more effective you’ll be in selling to them.
Choosing the right eCommerce business model
The most suitable eCommerce business model for your new income stream will depend on the product and niche you intend to target, what your objectives are, and how much control you want over quality and pricing.
If you’re creating the products you intend to sell, then your inventory will be limited by what you can make in the amount of time available. It’s important to be realistic, and to ensure you can achieve a worthwhile profit, otherwise you’re better investing the time into your main business. And it will be difficult to scale to meet demand, unless you can bring on other staff and train them up quickly.
Alternatives to building your own production line include;
- Manufacturing: Paying upfront to an existing manufacturer for inventory, which means the cost of storage, and the risk of some items not selling.
- Arbitrage: Buying wholesale, commercial, white label or returned products, and then selling them for a higher price, allowing you to take a profit from the transaction.
- Drop shipping: Partnering with a company that will make and ship orders directly to customers once they’ve ordered via your site. This reduces your costs and risks, but your margin and revenue are likely to be much lower.
- Print-on-demand: Similar to drop shipping, this is most common for apparel and merchandise. You upload your designs, and the supplier makes and ships their products when something has been ordered, with a percentage commission for your business.
- Digital products: Cost-effective and potentially easy to produce and replicate, but this can mean competition is fierce for customers.
If you’re selling a high price product to businesses (B2B) or consumers (B2C) with a large profit margin, you may only need a handful of sales each year to make it worthwhile. Whereas a cheaper item, with a lower margin from drop shipping or print-on-demand (POD), may require thousands of sales to be worthwhile.
This will help you to choose the right marketing and promotions to reach your ideal customers as part of a business plan. Outlining your potential revenue, timescales to achieve success, and the potential risks and costs will also help you to avoid sinking time and money into something which isn’t working.
Launching and promoting your eCommerce income stream
Finding the right sales channels may take some practical experience, but launching a new eCommerce business has never been quicker or easier. A variety of services exist to help you reach customers, although they all require a certain commitment of time and resources to achieve results.
Some of the common channels include:
- Retail platforms including Amazon, eBay, Etsy, and more specialist aggregators of retailers, which allow you to reach a potentially massive audience of potential customers. Most will involve some fees on sales and shipping, and potentially have a lot of existing competition in your niche. So, you’ll need to ensure your products stand out in some way, often by optimising your listings, or paying for additional promotion.
- Turnkey eCommerce website platforms including Shopify, Squarespace and others. These are designed to help you get a retail site up and running more quickly, and generally offer integration with payment processors, delivery services and more. But you’ll still have to market and promote your new website, and platform fees can grow substantially if you want to add lots of additional functions to a standard shop.
- Building your own website doesn’t have to be experience, but it can be time-consuming if you’re not a developer or designer. Various solutions exist, including WooCommerce and Easy Digital Downloads for the WordPress platform, or Magento for much larger stores. The benefit is that you’re only required to pay for your domain and any website hosting, but the trade-off will be maintaining your website, including the design, updates, and any issues that occur.
- Social commerce has grown immensely over recent years, selling directly through platforms including Facebook, Instagram, WhatsApp and more. The benefit is that you can launch with as little as an Instagram profile, but the downside is that you’re entirely at the mercy of a third-party platform. So, your account could be deleted at any point.
Many eCommerce business owners tend to focus on their branding and design, sometimes to the exclusion of products and customer service. While beautiful logos and websites can certainly help, particularly if you’re selling high margin products to discerning customers, having the right items and reliable delivery are much more important.
You can always start with a social network profile, an Amazon listing, or a simple eCommerce website and invest more resources if your eCommerce business shows initial success.
Areas to test before you start marketing your business include the online checkout process and payments, the process for dealing with questions and complaints, making sure deliveries arrive on time and without damage, and that you have any available analytics and tracking in place.
There are a wide range of options for advertising and marketing your self-employed business. But if your checkout process is turning away customers, or is broken entirely, your investment will be wasted. The average rate of shoppers abandoning online carts with items already selected is around 69.99%, for reasons including shipping costs, slow delivery, or a complicated process.
If you’re new to eCommerce, then don’t underestimate the power of positive reviews to build trust in your business from potential new customers. Other useful routes to encourage sales are rewarding your existing purchases with loyalty rewards, referral schemes for recommendations, and providing helpful advice, information or upsells (for example, adding discounted consumables to a product purchases, such as spare filters for a vacuum cleaner, or bundling plectrums and a case with a new guitar).
What to do if you’re not making any sales
It’s estimated that around 50% of eCommerce stores never make a single sale, so it’s important not to panic if your attempt at an additional revenue stream doesn’t take off immediately. Most diversification and side hustles still require a significant amount of resources to become self-sustaining.
You should be able to refer back to your business plan, and assess whether you were too optimistic with the timescales or number of potential customers. You may need to allow extra time to build up awareness and trust in your eCommerce business, or to invest in distributing samples to get the ball rolling. And whether it’s to friends and family or online influencers, it can take a while before their referrals start to appear and generate customers.
It's also worth reassessing your products, prices, and competitors. Has a new rival launched something better, or are they running sales or discounts which are undercutting you?
Look at the data you’ve been able to collect so far, particularly for potential customers who have abandoned their purchase before it has been completed. If everyone is dropping out at the payment page, consider whether you’re offering the right options (the issue may be as simple as adding a Paypal option, or checking that credit cards are being accepted). Or you may need to offer cheaper delivery options, especially for low-cost items.
Optimise your product listings on your own website, and any third-party channels you’re using. You can create your own bespoke photography, descriptions, and details to stand out, especially when so many products for sale online include spelling mistakes or factual errors. Make sure you’re highlighting any unique selling points and benefits, and other supporting information.
And consider whether you’re advertising, marketing and promoting your business in the most effective way to reach the right customers. Switching from investing time in Twitter to sharing your products on Facebook, or creating some content to answer popular questions entered into Google might be all it takes to start making your first sales.
Even if your business is focused on eCommerce, visiting local or trade events in-person can also be hugely valuable, especially when you’re starting out. It’s easier for a customer to trust your website after they’ve met you and learnt about your passion for offering quality products.
And finally, if your eCommerce business hasn’t generated a sustainable or worthwhile income, there’s no shame in admitting it might not be the right option for you. Plenty of successful self-employed business people have experimented, failed, and switched to different approaches before settling on what works for them.
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