Publications
Partners
- Running an e-commerce business can be a rewarding endeavour with very little start-up capital needed.
- However, people often underestimate the amount of work required and think e-commerce sites are easy to run.
- E-commerce expert Warrick Kernes shared some tips to run a successful online store.
- For more stories, visit the Tech and Trends homepage.
Running an e-commerce business is a potentially lucrative venture that requires relatively little money to get started, but many people are under the misconception that it's easy, said Warrick Kernes.
Kernes is a serial e-commerce entrepreneur and the CEO of Insaka eCommerce Academy, a platform that helps entrepreneurs achieve more success with selling online.
He said that Google searches may tell you that starting an e-commerce business that does drop shipping can be started with no money, but the reality is that starting any business requires time, effort, and investment, of money or yourself.
"If there was a business that you could start with no money and you would just be successful straightaway, then I haven't found that yet," he said.
While data on the number of online businesses that fail is scarce, said Kernes, he knows that a large proportion of people "take a few first steps of making a store", but then never make anything of it.
He said that people may think it's easy to start and then realise that more work is required to get going than he realised.
Despite this, Kernes said that e-commerce is "one of the few industries that are continuing to grow upwards".
Insaka has a Facebook community with over 36 000 members that provide resources and support to South Africans with an e-commerce store or who are looking to start a store.
He shared some tips about running a successful online business with News24.
Running a successful website
Kernes said there are two key metrics to look at to gauge the success of an online store: conversion rate and traffic.
Traffic refers to the amount of people that come to a website and the conversion rate is the proportion of people who visit the site who actually buy something.
Kernes said:
He said that driving a lot of people to the site without converting that traffic into sales is like trying to fill up a bucket that has holes in it.
"What a lot of people do is they go and get more traffic and they're just sending it like aimlessly to this website that's not converting."
He said that in the US, a good conversion rate is considered to be 5%, but a more realistic conversion rate in South Africa is around 1.5%.
"If you can double your conversion rate from like 0.5 to 1%. Then the following month, you will have doubled the sales even if you have the same amount of traffic."
He said that improving the conversion rate can be complicated and he has an entire webinar on the topic. It boils down to getting customers to the product they want to buy in as few clicks as possible.
He said that people are more likely to purchase the product when it wasn't a struggle to find it.
"With optimising conversion rate you want to remove any friction," said Kernes.
Running a successful business
Kernes said that many people are excellent at starting an e-commerce website, but struggle to run it as a business once it has taken off.
"Where a lot of people trip up, is managing their business," said Kernes.
He said that once the site takes off, people need to start thinking about managing cash flow, hiring people, and managing accounts which may mean they need to get an accountant.
"Not everybody understands how to run and grow a successful business, not just an e-commerce business, but a business."
He said that treating the e-commerce site as a business is important.
Search Engine Optimisation
Search Engine Optimisation (SEO) provides a way to make an e-commerce website more easily discoverable. It relates to improving certain technical elements of the website to improve the ranking that the site is given when terms are searched for online.
Kernes said that SEO can be boiled down into two concepts - relevance and authority.
READ MORE | Cyber attacks on e-commerce sites increased in 2022
Google treats certain websites as an authority, meaning that they are shown before others. Kernes said that having a link from a website with less authority linking to a website with more authority improves the authority of the smaller website.
Relevance refers to how the content on the website relates to the search term. For instance, Insaka has many mentions of e-commerce and is about e-commerce, meaning Google is likely to make it more discoverable when someone is searching for e-commerce.
"When you've got authority and relevance, that's when Google starts to show your websites organically to people when they search for it on its platform, which is the basics of SEO."
Trust
Kernes said that he teaches his premium students about the importance of building trust with business partners and with potential customers.
He said that building a good relationship with wholesalers is crucial as they have relationships with big brick-and-mortar retailers and to protect that, they don’t want to work with drop shippers.
He said that many wholesalers don’t want to work with drop shippers because there is nothing that the wholesaler can do if the drop shipper drops their prices below what the big retailers are charging.
The wholesalers need to know that they are not working with a "discount website who is going to drop prices to get some sales at the end of the month", said Kernes.
He added:
He also said building trust with customers is important.
The most basic measures to build trust are the trust elements in the footer of the page.
These include a returns policy, POPI compliance, privacy policy and shipping terms and conditions.
He also said that having good Google reviews and a personalised "About Us" page is important in building trust.
