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Even before COVID-19, brick and mortar retailers in the Philippines have been competing against big e-commerce players such as Lazada and Shopee.
Gone are the days when Filipinos heavily relied on physical stores for needs.
In 2020, the eCommerce revenue in the country amounted to a staggering $3.55 billion, and 85.7% of internet users in the Philippines use shopping apps.1
Considering that, there is no denying that eCommerce has become a major force here.
Online shopping has become a necessity for all businesses and industries – whether it’s small stores, or major players like SM.
Unfortunately, many business owners don’t know where to start.
That’s why we’ve compiled this in-depth guide to help you get a better understanding of how to start an eCommerce business and make money online in the Philippines.
What is eCommerce?
Also referred to as Electronic commerce or Internet commerce, eCommerce involves the buying and selling of services and goods using the internet, including the transfer of money to perform transactions.
E-commerce is only possible because of the internet. Here, people can browse through products or services, and place orders using their computers, smartphones, tablets, or other smart devices.
The history of eCommerce can be traced back to 1994 when a man sold a Sting CD to his friend on NetMarket, an US retail platform.1
Since then, it has evolved dramatically. Now, it’s never been easier to search, discover, and purchase products or services through marketplaces and online retailers.
10 Types of eCommerce Business Models
When it comes to eCommerce, the first thing that comes to mind is a transaction that happens between a customer and a supplier.
Although this isn’t wrong, eCommerce is more than that. Learning the different types of eCommerce business models will allow you to see which one works best for your brand.
Business to business (B2B)
As its name implies, this model is when a company markets its services and products directly to other businesses.
One of the major characteristics of this business model is it has longer sales cycles and a high order value. It’s common for those who follow this model to have catalogs, as well as niche markets.
One example of a B2B e-commerce store is Alibaba.
Business to consumer (B2C)
This is the most popular business model when it comes to eCommerce. It involves selling services and products directly between businesses and customers with no middle person.
With this model, the need for a physical store can be eliminated. One example of this business model is ShopSM.
Customer to business (C2B)
When most people think of e-commerce, this model may slip their minds. However, it has been growing steadily in recent years.
This model involves customers selling services and goods to businesses. Some of the biggest customer-to-business examples in the Philippines include UpWork, as well as monetization strategies such as affiliate marketing, or Google AdSense.
Customer to customer (C2C)
This business model refers to consumers selling services and goods to other consumers.
This sale is usually facilitated by a third-party platform that oversees the transaction details to bring customers together.
An example of this business model is Carousel.
This business model involves public or government administrations conducting transactions with consumers or businesses online.
This is one of the most popular order fulfillment methods in eCommerce. It involves stores selling the product and passing the sales to a supplier who is in charge of shipping the order to customers.
Therefore, dropshipping stores do not need to keep stocks. One of the best dropshipping suppliers is AliExpress.
Wholesaling and warehousing
This eCommerce business model involves buying products in bulk and storing them in a warehouse.
Brands who go with this model are selling products in big volumes, and this usually goes hand in hand with B2B, instead of B2C.
Although the profit margin is low and the upfront investment needed is high, the large volume of sales makes up for it.
Private labeling & manufacturing
This eCommerce business model works for people who have a great product idea but don’t have the resources to build their own factory.
In this model, businesses work with manufacturers who produce products based on their specifications. Then, it can be sold online, and the order is fulfilled by the supplier.
One of the biggest private label manufacturers in the country is GoNutrients.
White label products are manufactured by a third party, but are sold by businesses with their own logo and branding.
The result is a product that seems like it was made by the business itself. This type of model is commonly used by the beauty, wellness, and fashion industries.
One of the biggest white label products in the world is Kylie Jenner’s makeup brand, which is produced by Seed Beauty, which is also responsible for ColourPop.
The subscription model delivers ongoing services or custom boxes filled with different products to consumers.
These are done at regular intervals, in exchange for regular payments from customers.
The biggest examples of subscription models in the country are Netflix and Spotify.
Choosing eCommerce Platforms: Online Store vs. Marketplace
You have two choices when it comes to eCommerce platforms – online store or marketplace.
What are the key differences between the two, and how do you know which platform will work best for your brand?
An online store can carry single or multiple brands or products. The inventory is owned by the website owner. With this type of eCommerce platform, there is no option to register as a seller.
On the other hand, a marketplace is an online platform that allows various sellers to offer products and services to customers.
The owner of the marketplace does not own the inventory. It is just a platform that connects buyers to sellers.
Two of the most common examples of marketplaces in the Philippines are Shopee and Lazada.
Differences between Marketplaces & Online Stores
Here are the major differences that set the two platforms apart. When contemplating between the two options, you need to factor in the aspects you value the most.
Keep in mind that you can always go with a hybrid approach by using both platforms.
When it comes to traffic, the marketplace is the clear winner since it allows you to connect with thousands or even millions of potential customers.
This way, you can bypass huge advertising and marketing costs and processes. Once you publish products at a marketplace, you can access potential customers and make a quick profit.
On the other hand, you need to invest in digital marketing to attract buyers when it comes to e-commerce stores like Shopify and WordPress.
The investment in an online store is higher so it will take some time to feel your cash flow coming.
Meanwhile, marketplaces only make revenue from a percentage of your transaction so you can enjoy a better profit margin.
It’s hard to make your branding stand out when it comes to online marketplaces because you have to follow a clear structure.
Online stores can give you more creative freedom.
It’s easy to set up your product with any online store. It can be quite difficult to do it in an online marketplace since they handle a lot of third-party vendors.
Pros & Cons of Online Stores and Marketplaces
To help you gain better insight into e-commerce platforms and marketplaces, here’s a look at the advantages and disadvantages below:
Pros of Online Stores
When you have an online store, you can enjoy more control over your entire sales process, especially when it comes to how you present your products.
With an online store, you will have the advantage of tailoring your business processes to suit your priorities.
Online stores allow you to have direct communication channels with your customers through calls, emails, or chat boxes.
These are all important to foster a stronger customer-business relationship that will make way for improved brand awareness and trust.
Ability to launch campaigns
It’s easy to integrate analytics in online stores. This way, you can gain more insight on the demographics of your audience and build a better buyer persona.
More repeat buyers
One of the biggest benefits of having an online store is that you can get direct access to past customers.
Through this, you can upsell other products and enjoy better ad targeting. By using strategies like email marketing, you can bring in more revenue.
Cons of Online Stores
Development takes time
Even though establishing online stores using platforms is easy, it is still recommended to work with a professional who knows the ins and outs of your chosen platform.
This way, you can maximize all its benefits.
Even the most well-designed online stores still need maintenance. If any bugs occur, you need to settle them.
You need SEO
Ensuring you stay on top of search engine results is challenging.
SEO is a time-consuming process that takes months, but it is essential when it comes to online stores.
Compared to marketplaces, you will pay a set fee per month with online store platforms. This can get more expensive depending on which features you want your website to have.
If you want a domain name, you will also need to pay an annual fee.
Pros of Online Marketplaces
Improved brand trust
Marketplaces are seen reputable by customers. That is why this can be the perfect solution for businesses who want to build brand trust.
When you go with marketplaces, you will be able to enjoy effective logistics since it’s easy to manage deliveries to buyers.
Integrating products with an online marketplace is very easy. All you have to do is make sure the photos are of great quality.
No maintenance issues
Platforms like Shopee and Lazada will take care of all bugs, security measures, and updates to ensure your customers have the best experience and encounter no issues.
You don’t need to spend much on development services as well.
Cons of Online Marketplaces
Because setting up a shop in an online marketplace is so easy, you will face a lot of competition, especially with other vendors that sell the same products at a similar price point.
This can make your potential to earn unstable.
You need to pay a commission
A lot of marketplaces charge their customers certain fees for sales. For example, Lazada charges 1% to 4% cross-border order value commission, or 2% commission.
Limited personalization feature
Marketplaces offer very limited chances to use your unique brand identity to your advantage. The possibilities for marketing campaigns are also small.
More than that, these customers don’t pay attention to your brand name which can result to low repeat buyers.
Best eCommerce Platforms for Building Online Stores in the Philippines
Here are 2 of the best eCommerce platforms you can use for your business in the Philippines:
Shopify is an e-commerce platform that allows you to build your store online and offline.
This platform offers one of the best foundations to run your business since it has all the tools you need in managing your storefront, showcasing products, engaging with different customers, and accepting payments.
There are also different templates provided, as well as other marketing tools. You can even customize your store through apps or codes.
With this hosting solution, you don’t need to install the software. You just need to pay monthly fees to be able to use it.
You can manage your store from anywhere as long as there’s Internet.
Shopify offers three plans for online stores. It also offers a 14-day trial.
The most affordable option is Basic Shopify for $29 or Php1,400 per month. Here are its features:
- Online store
- Unlimited products
- Two staff accounts
- 24/7 support
- Sales channels
- Four inventory locations
- Manual order creation
- Discount codes
- Free SSL certificates
- Abandoned cart recovery
- Gift cards
- 2% transaction fees
The next plan costs $79 or around Php4,000. Here are its features:
- Online store
- Unlimited products
- Five staff accounts
- 24/7 support
- Sales channels
- Five inventory locations
- Manual order creation
- Discount codes
- Standard reports
- Free SSL certificates
- Abandoned cart recovery
- Gift cards
- 1% transaction fees
Advanced Shopify costs $299 per month or Php15,156. Its features include:
- Online store
- Unlimited produces
- 15 staff accounts
- 24/7 support
- Sales channels
- Eight inventory locations
- Manual order creation
- Discount codes
- Free SSL certificates
- Abandoned cart recovery
- Gift cards
- Advanced reports
- 0.5% transaction fees
Shopify is one of the easiest platforms to use for eCommerce stores. Here are its advantages:
Even if you don’t have prior experience when it comes to eCommerce, you’ll be surprised at how easy it is to use.
This way, you can shift your focus more towards running your online business instead of dealing with bugs and other technical issues.
Great customer support
Shopify has a dedicated support team to cover all your needs. There will be someone to answer your questions through live chat, email, or calls.
The platform also has a huge community of individuals that help each other in the forums.
A big factor in the success of your online store is how it looks. Thankfully, Shopify has themes to give you a neat and clean aesthetic that will be appreciated by your customers.
There are also different options for various industries.
Shopify has an App Store where you can gain access to more than 1,000 apps and plug-ins to streamline your business processes especially when it comes to:
When more people see your store, you’ll have more sales. Shopify boasts many SEO additions as well as marketing tools that gets you more traffic.
Aside from that, you can also link your products to social media platforms such as Instagram and Facebook.
Despite its added benefit of being very simple, you can also take additional steps to customize your website if you are not satisfied with the theme.
Using the customizable website builder option, you can edit, move, and add content.
Full hosting platform
With Shopify, you don’t need to pay more money for hosting, maintenance, and other services.
Possibilities for Growth
Shopify is an amazing platform for stores that are looking to expand after some time. This makes it great for both small brands and large businesses.
Here are the different disadvantages of Shopify:
No hosting for email
Although Shopify offers web hosting, it does not have an option for email hosting. Because of this, there’s no option to have an email associated with your shop like firstname.lastname@example.org.
However, email forwarding can still be done through third-party hosting.
It’s hard to customize themes
Although there is an option to simply drag content around, it’s harder to customize other elements of the theme.
This is because Shopify has its own PHP language called Liquid. Because of this, most businesses on Shopify either stick to original themes or hire a professional to alter them based on their needs.
Rates are high
Although Shopify has tons of features, it comes with a price each month.
If you collect payment using third-party applications like Paypal, you need to pay fees for every transaction.
These fees could add up especially for small businesses.
WooCommerce is a plug-in for WordPress. This allows you to create and manage your online store in a simple way using a website built on WordPress.
Unlike Shopify, WooCommerce is free, and any brand can take advantage of its features without worrying about expensive fees.
However, you might need to pay for third-party applications and extensions to avail more exclusive features (such as payment gateways).
Here are the features you can enjoy if you go with WooCommerce:
- Easy store setup
- Payment and shipping options
- Flexible and secure payment options
- Order management
- Live shipping rates
- Automated tax calculations
- Extensive documentation
- Ability to list products on social media, and Google Shopping
It’s highly customizable
WooCommerce can work seamlessly with many themes, including default WordPress themes.
It’s also easy to edit any part of your website whether it’s the homepage layout or the buy button. This way, you can stand out.
You can also customize the currency, measurement units, and language based on your location.
If you want to encourage more people to purchase products, WooCommerce can help you through its product rating and reviews.
Here, customer feedback can be shown directly on your page.
WordPress sites are also easier to optimize for better SEO.
Content should go hand in hand with your website. With WooCommerce, you can publish blog posts to help you build a great brand.
Embedding made easy
This platform allows you to use short codes to add products to blog posts. You can also create landing pages that can go straight to the checkout page.
Here, you can also enable your customers to find whatever they want through tags and attributes.
In-depth inventory management
WooCommerce allows you to easily track your stocks. You can also get notifications for low stock products and hide out-of-stock items.
This platform also allows you to give your staff access to your eCommerce store so they can manage orders, and view reports without needing to be an admin.
Plug-ins take up too much memory
There are thousands of available plug-ins for WooCommerce.
Although this can be an advantage, it can take up too much memory which can affect your website’s overall performance.
Extensions come with a price
Although WooCommerce is free, as well as most of its add-ons and widgets, you need to pay monthly fees to install extensions and operate at optimum capacity.
All these hidden costs can add up to a huge amount.
It’s specific to WordPress
WooCommerce is only a plug-in. Considering this, it cannot be used in other sites that are not hosted by WordPress.
This can be an issue with businesses that want to use WooCommerce but cannot do it because they need to rebuild their website from scratch.
Best Online Marketplaces to Sell Products Online in the Philippines
Here are the top online marketplaces in the country:
This is the biggest online marketplace in the Philippines. It is also available in other parts of Southeast Asia like Thailand, Vietnam, Indonesia, and Malaysia.
The store has thousands of brands and a wide array of products to choose from. This platform also has a LazMall option for authenticated shops.
Lazada handles processes such as payment, shipping, and reclamations. This way, merchants can focus more on their goods. Lazada can be accessed through their website or app.
In 2016, Alibaba got the controlling stake in Lazada.
Lazada’s online presence is high, and it fosters trust from its customers. When you sell on Lazada, more people can see your products.
Great shipping and logistics
Fast and reliable shipping is a must when it comes to online marketplaces, and Lazada offers that.
Get new customers
Lazada gains thousands of new customers per day, and these people may not know your store specifically.
However, if they search for any product, they can notice your brand.
As a Lazada seller, you can create a shop on the platform that can be accessed by several staff accounts.
There is a commission fee
Although Lazada does not have an annual or registration fee, you still need to pay commission on each sale. This could fall between 1% to 4%.
Control is limited
Lazada focuses more on buyer satisfaction, instead of the seller.
This can be a deal-breaker for many merchants who do not like to be restricted especially when it comes to communication.
Even if you sell niche products, you will still face a lot of competition in Lazada since it has more than 155,000 local and international sellers, in addition to 3,000 established brands.
Shopee is an online selling platform that shares a lot of similarities with Lazada, but it is more focused on mobile instead of web experience.
This diverse online shop is also available in other Southeast Asian countries such as Thailand, Vietnam, Malaysia, Singapore, and Taiwan.
Shopee is popular for having the lowest prices compared to all online marketplaces. Therefore, it gets a lot of traffic.
When you become a seller on Shopee, you’ll have a huge audience.
Faster delivery to customers
Shopee is a very efficient online marketplace. If you become a seller, couriers can pick up the order immediately and ship it to your customer in 1-4 days. For orders from China, it can take 6-14 days.
Shopee only charges a 1% transaction fee for local sellers, and this is waived for those who participate in their coins cashback (CCB), and Free Shipping Special (FSS) programs.
Sellers are also charged 6 months after their first listing goes live.
For brands on Shopee Mall, the commission fee is higher. The value starts at 2% and can go up to 5% depending on the product.
Smaller audience than Lazada
Although Shopee is one of the biggest online marketplace platforms today, it still won’t give you as much exposure compared to Lazada.
No direct communication with buyers
Aside from reviews and comments, you won’t enjoy direct communication with your customers.
This lacking protection measure can hamper your selling experience especially when it comes to protecting your finances.
Facebook is one of the biggest social media platforms today. In 2020, nearly 76 million Filipinos are on Facebook.3
This huge audience makes Facebook marketplace one of the biggest platforms to sell products.
Facebook Marketplace Pros
It simplifies selling
One of the biggest advantages of Facebook marketplace is it simplifies eCommerce.
You can easily post ads and sell products even if you haven’t had experience in eCommerce before. If you already have a Facebook account, you won’t experience any learning curve.
The audience potential is huge
With millions of daily users, Facebook marketplace is the ultimate platform for sellers who want to reach more audiences.
Facebook marketplace is also set up by location, so people are more inclined to purchase bigger products because they won’t have to worry about huge delivery fees.
Facebook keeps sellers and buyers connected in a way that’s impossible to do with Lazada and Shopee through messenger chats.
This way, you can build local connections easily.
Facebook does not charge sellers, which can be a great plus for small business owners.
Facebook Marketplace Cons
It doesn’t vet buyers
Unlike Shopee’s ShopeeMall or Lazada’s LazMall, Facebook has no way of verifying products or sellers.
Because of this, a lot of people think that the Facebook marketplace is filled with scammers.
How to Start an eCommerce Business in the Philippines [Step-by-Step]
Starting an eCommerce business in the Philippines is possible whatever your background is, or whether you have had entrepreneurial experience.
Keep in mind that starting businesses can be challenging, and your best bet to avoid issues is to be prepared.
Here is a useful sequence of steps you can take to make sure your eCommerce business takes off.
Following this proven plan will allow you to attract more customers.
Step 1: Choose a Product
Choosing a product may seem like an easy step, but it can make or break your eCommerce business.
Finding a product or service to sell is a huge challenge entrepreneurs face. With eCommerce, it seems like you can sell any product there is.
Thankfully, there are ways to help you find products with high potentials.
Finding profitable niches for eCommerce
When it comes to eCommerce, the competition is fiercer than ever. One secret in choosing the right product to sell is to look outside the box and focus on niches.
This will enable you to sell services or goods to specific customers.
By focusing on niches, you can quickly scale your business because your product is unique and bridges a gap in the market.
For instance, did you know there are maze-shaped baking pans so everyone can get a corner brownie slice?
Or did you know you can get pen adhesives, so you never lose pens again?
What is an eCommerce Niche?
An eCommerce niche is a segment of an industry that offers one-of-a-kind products. For instance, menstrual care products are a broad category.
One of its niches is sustainable period products. If you want to narrow it down even more, the options include cotton pads and tampons, menstrual cups, period panties, and menstrual discs.
Why is it important to find a niche for your eCommerce Business?
There are thousands of eCommerce businesses in the Philippines, and making your brand stand out is easier said than done.
Here are some reasons why you need to find your niche.
You’ll have fewer competitors
Unlike commodity stores that deal with immensely high competition, finding an eCommerce niche will limit your competitors.
Admittedly, it’s hard to create unique products that set itself apart from the competition, but this effort will be rewarded when you become an industry expert in your niche.
It’s easier to find customers
Most likely, thousands of people are searching the internet for a product that tailors to a specific need. Instead of serving millions of people at once, you can sell targeted products.
Not only will this make it easier for you to find more customers and build their loyalty, but you’ll also spend less on ads.
You don’t have to deal with tons of inventory
One of the downsides of dropshipping and selling commodities is you have to rent out a large space to store products.
Serving a niche product means you don’t have to spend thousands of pesos on managing and storing your inventory because all your SKUs are limited.
It’s easier to stand out
Because niche products are very specific, your customers are more likely to spread the word about it with their peers. It will also be easier for you to ride on trends.
How to find your niche
Struggling to decide what your eCommerce niche will be? Use these tips below.
Look at trends
Riding the upward trajectory of a trend will do wonders for your eCommerce business.
You can use the traditional observation method or open Google Trends to see which products and categories people are searching for.
You can also conduct keyword research using Google Keyword Planner. This will give you an insight into the volume of demand, based on the number of people searching for the product in Google Search.
Remember your passion
Although you can sell products in a niche you don’t know about, it’s better to go with a niche you have knowledge on.
If you go with a niche you picked randomly, you’ll eventually get tired and lose interest. By following this tip, you can position your marketing strategies easier.
Talk to people
There’s nothing quite like a good conversation to help you brainstorm for more ideas.
For instance, if you love cycling, you can talk to someone who has the same hobby as you and ask them about what products they wish existed.
Do not target oversaturated niches
If you go with a niche that already has intense competition, you’ll be fighting an uphill battle.
Keep in mind that all those businesses already have stronger SEO and/or social media following, and potentially even better pricing.
If you find a niche that has a high search volume, and little advertising and competition, that’s an opportunity you can take.
It also helps to look at the leading niche brands in your industry and find the strengths and weaknesses of their products.
With that information, reimagine the products you are interested in selling. For example, you can position your eCommerce business to be more transparent and focused on creating authentic experiences.
Top eCommerce Niche Examples in the Philippines
We’ve rounded up some examples of eCommerce niches to inspire you.
We are fortunate to live in a time where digital innovations are becoming cheaper and more effective.
You can run a store dedicated to niche gadgets that help make people’s lives easier. This can include:
- Ergonomic computer accessories
- Portable blenders
- Solar-powered devices
By 2027, the Philippine skincare market is expected to grow to a staggering $2 billion.4 You can focus on clean products that are cruelty-free, and vegan.
Skincare products for men are also a niche that’s worth exploring. Other examples include:
- Make up for Morena skin
- Lightweight face oils
- Beard oils
Subscription boxes are a great way to get your customers to stay with your brand for months or even years.
Although subscription boxes are usually common in the skincare industry, you can apply this strategy to any niche such as:
- Filipino craft beers
- Philippine-grown coffee beans
- Single-origin chocolate
- Imported wines
- Keto-friendly desserts
This product category is timeless because people always want their pets to be safe and healthy.
Selling niche products geared towards dogs, cats, and other pets can be very promising. Here are some examples of products you can sell:
- LED collars
- Pet raincoats
- Travel bags
- Novelty pet beds
Tips for Choosing a Product
Here are some useful criteria to follow when choosing a product:
It’s better to go with products that you can sell throughout the year.
For instance, if you want to sell Halloween decorations, that will only be profitable from October to November.
Small and lightweight
If you want to make storage and shipping easier, start by choosing products that are lightweight.
This way, you won’t have to spend much on storage fees, and you can even offer free shipping without losing a huge amount of money.
Simple to make
Products that are complex to make can make way for more challenges, which equals to more money spent.
Keep the manufacturing process as simple as possible without affecting the product’s quality.
The only realistic way to make money from your eCommerce business is to choose products that have a good profit margin.
Low production cost products that have a high value will ensure that you will have funds for marketing, staff, storage, and other expenses.
Step 2: Market Research
Market research involves finding out the viability of a new product or service through research.
This way, you can determine who your target market is, and get feedback from people about their interest in your eCommerce business.
Determine Market & Product Viability
This step will allow you to find out whether it will make financial sense to start your eCommerce business.
Market viability involves getting to know the potential of a market.
To conduct this analysis, factor in the following things and determine which markets do not have the potential to be profitable.
Is there room for more market growth? Can the market accommodate new brands?
Can the audience afford to buy products?
Which brands are the biggest players in the market? How can you compete with them? Do they have specific strengths and weaknesses?
On the other hand, product viability refers to the potential of your product, including how interesting it will be when viewed by potential buyers.
Keep in mind these factors when considering your product viability and eliminate products that have a low-profit margin and demand.
Is your market interested in the product enough for you to shell out money to build a business around it?
Is it possible to sell the product in a way that will allow you to generate good returns and is competitive with other businesses?
Now that you are done evaluating your product and market viability, you should conduct a SWOT analysis.
This stands for Strengths, Weaknesses, Opportunities, and Threats.
The strengths and weaknesses are the internal factors of your eCommerce business.
Meanwhile, opportunities and threats give light to external factors.
These are the factors that distinguish your eCommerce business from your competitors. It could be your potential customer base, your unique offers, or your brand image.
Use your strengths to determine your Unique Selling Proposition or USP to get you ahead of your competition.
Identifying your weaknesses will enable you to improve your business. When you learn how to control your weak areas, your eCommerce business will grow.
This can include your lack of capital, low brand value, and lack of staff, among many others.
This refers to all the factors you can use to your advantage.
You must train yourself to develop a good eye to catch these opportunities so you can have more edge.
Threats involve outside factors that can impact your eCommerce business adversely.
It can include supply problems, new laws, and market requirements, among many others.
Competitive Market Analysis
Doing a competitive analysis allows you to identify your major and minor competitors and understand what their strengths and weaknesses are in comparison to your brand.
After conducting this analysis, you can find new ways to refine your current strategy and be ahead of the game.
More than that, a competitive market analysis will also give you an understanding of what your customers want.
Some questions you need to ask on your competitive market analysis:
- What products and services do my competitors offer?
- Are their products and services aimed at the same target market?
- Do these businesses cater to the same areas?
- Are your competitors profitable or scaling down?
- What marketing and promotional strategies do they use?
- What are their positive and negative characteristics according to their customers?
- How do they stand in terms of quality, price, brand image, name recognition, location, convenience, and other factors?
After you’ve answered all those questions, it’s time to see how your company fares compared to those brands. Try to assess whether:
- You have a competitive advantage. If yes, what are those?
- How do your customers rate your services and products?
- How can you set yourself apart from the market?
Identify your Target Audience
When you’re starting an eCommerce business, you need to invest a lot of money, time, and resources into it.
However, all those efforts will be in vain if you don’t target the right customers. Knowing who your customers are will serve as the foundation of your sales and marketing strategies.
Creating a profile of your target audience is key. It is your duty to understand who they are and what they care about. Ask questions like:
- What are their age range, job title, location, and other demographic information?
- What are their attitudes, behaviors, personality types, lifestyle preferences, and other psychographic information?
- What is their preferred mode of communication?
- What websites and apps do they often use?
- What are their most common pain points?
For instance, if you want to sell vegan protein bars, your target audience may look like this:
- Age range: 17-35 years old
- Gender: 50% male, 50% female
The psychographic information of your audience could be:
- Those who are transitioning to become fully vegan
- People who want to eat healthier and sustainable snacks
- Loves to be in nature
- Loyal to brands that are transparent since it reflects their values
Their challenges could include:
- Don’t have time to prepare healthy snacks
- Limited budget
- Wants a snack that can easily be thrown in the bag
Their preferred channels are:
- Supplement reviews on YouTube
- Vegan accounts on Instagram
- Health Gurus on Instagram
- Easy recipes on Facebook
The content types that they love can include:
- Short educational videos
- Informational blog posts
Winning Product Criteria
You may have decided to start an eCommerce business, but you’re confused about which products you should sell.
To help you determine the best product, you can use the different winning product criteria.
When you first thought of your idea, did you commend yourself for thinking of a great concept?
This is exactly what the wow factor means, but that’s not all.
When your product resonates with you and your customers, it will be successful.
People are willing to try it
Your product premise is the reason why you think your services or product will become successful.
For instance, if you want to sell vegan and cruelty-free lipsticks that are transfer-proof, your premise is that people want a lipstick that doesn’t need to be reapplied every time they put on a face mask.
Do your target customers agree with this idea?
People feel connected with it
People are passionate about the niches they are interested in, and your customers should be passionate about your product or service.
When they care about your eCommerce business, they will not hesitate to talk about it to their friends.
For example, expectant mothers are passionate about shopping for the best baby products.
It does not have many technical challenges
Simple products win every time. The more complex your product is, your customers may run into technical difficulties with it.
The benefits can be quickly felt
People must understand how your product can benefit them by seeing it or reading about it for the first time.
Consumers don’t like products that are hard to understand.
Before you put all your ideas into motion, you need to know whether there’s a need for your product or service in your target customers.
This will enable you to predict the profitability of your eCommerce business.
It will also enable you to gain an understanding of how you can meet the demand of your target market and solve their pain points.
So how can you do this?
Write down assumptions
First, write down your business goals, and assumptions. Address questions such as:
- What differentiates your product from others?
- Who is your target audience and what are your assumptions about them?
Assess market size
Estimate how big the market is, and the share you can capture with your eCommerce business.
Assess how many units you want to sell per month and year, and what percentage of the market you can hold.
Interviews are an amazing way to learn about the potential of your products.
You can do this yourself or hire a firm to do it for you. It can come in the form of:
- Online survey
- Focus groups
- Simply talking to someone
Ask customers what their needs, preferences, and products they currently love. Then, align this with your assumptions.
Remember to always be open to feedback and see it as an opportunity to make your offer better.
After you’ve concluded that your idea has potential, you’re ready to test it. Beta testing is one of the most popular methods.
It involves your product being tested by real users so you can identify its problems.
On the other hand, alpha testing is when employees test your product in a staged setting to eliminate bugs and issues before it is made available online.
Step 3: Setting up the Business
Setting up your business involves many tasks. To make sure you won’t get overwhelmed, we have outlined each task below.
Although not all businesses start with a business plan, this important document has helped so many entrepreneurs understand how to position their brand well.
A business plan is a document that contains information about your business, products, how you can earn money, its financing and operation models, its leadership structures, and other details that are needed for it to succeed.
One of the biggest challenges you will face is determining your brand name, which will also be the name of your website, and all social media pages.
Your brand name has a major impact on your eCommerce business so make sure to choose a memorable one. As much as possible, keep it short and simple.
Creating a business logo
Once you’ve created a brand name, it’s time to tackle your logo. This will be present in all your branding materials.
This important image will be the face of your eCommerce business, and it also symbolizes your brand’s personality.
Business registration is one of the most important parts of setting up your eCommerce business.
Here are the corresponding fees per territorial scope.
- Barangay: Php200
- City/Municipality: Php500
- Regional: Php1,000
- National: Php5,000
Head over to your local barangay with your DTI certificate of registration, two valid IDs, and proof of address.
Then, claim your business clearance.
Visit your city hall or municipal office with your barangay clearance, DTI certificate of registration, proof of address, and two valid IDs to get your mayor’s permit.
Bureau of Internal Revenue or BIR
All businesses must be registered with BIR. Those that fail to do so can be closed for no less than five days, and this closure won’t be lifted unless you comply with their requirements.
A business that earns less than Php250,000 annually will not be taxed.
For single proprietor online businesses, download the BIR form 1901 and fill it up. Then, bring the following requirements to your respective revenue district office or RDO:
- Barangay business clearance
- Photocopy of mayor’s permit
- DTI Certificate of registration
- Government-issued ID
After you pay the Pho500 fee, you can claim your Certificate of Registration. You may also be tasked to attend a seminar where you can learn about filing your taxes.
The next step is to purchase and register your books of account where you will keep your transactions.
Finally, secure your Authority to Print (ATP) so you can print receipts and commercial invoices.
Choosing a Business Model
A huge part of your success lies in your business model since it will influence key decisions such as your pricing strategy, cost of operating, price of marketing, and initial set up cost, among many others.
To recap, the different business models listed above include:
- Business to business (B2B)
- Business to consumer (B2C)
- Customer to business (C2B)
- Customer to customer (C2C)
- Government eCommerce
- Wholesaling and warehousing
- Private labeling and manufacturing
- White labeling
Finding Suppliers & Sourcing Products
A lot of entrepreneurs are creatives – it seems most people do well in thinking about the idea and developing brand image. One of the first brick walls that you will hit is maybe finding a good supplier or sourcing your products. The truth is good products are not as easy to find as you think.
What is a manufacturer?
Manufacturers are businesses that produce raw materials or finished goods. These goods are sold to consumers, retailers, wholesalers, and other manufacturers.
It’s very common for manufacturers to focus on one product type that they have already mastered. For instance, you may find a supplier that only works on t-shirt printing.
Then, you need to find another manufacturer for your boxes. It’s common for eCommerce businesses to have more than one manufacturer.
Should you go with local or international suppliers?
Figuring out whether you want to source your products in the Philippines or abroad is essential. If you have an overseas manufacturer, it is recommended to have a backup local manufacturer.
This way, you have a plan B in case your overseas orders are incorrect, held at customs, or late.
Typically, most eCommerce businesses source products from Asian countries such as China because it is cheaper.
However, there are also eCommerce brands that prefer local suppliers. In the end, it all comes down to who can give you the best products and services.
How to Find Manufacturers and Suppliers for your eCommerce Business
Product sourcing refers to the process of attaining stocks to sell. Here are the steps to finding products for your online store.
When sourcing products, make sure to do your research. Some of the most popular websites where you can find manufacturers include:
You can also use Google shortcuts to your advantage by searching product name + manufacturer or distributor.
Another way to find a good manufacturer is through referrals. Always ask questions in different networks.
After you finalize your list of manufacturers, contact them, and ask for quotes and minimum order quantities or MOQ.
In this step, do not forget to ask questions such as:
- Can they make custom orders?
- Are they willing to grant you exclusivity?
- Do they have a defect policy?
- How ethical and sustainable is the company?
- How much does the shipping cost?
- How much is the cost per unit?
- Are their lead times up to your standards?
Make your choice
After you get to know your list of manufacturers, you need to pick the best one. Always go with a company that is responsive.
If you go with a slow manufacturer that can’t deliver your samples just because it’s the cheapest option, you’ll eventually lose money.
Talk about samples
After you’ve chosen a manufacturer, it’s time to communicate your design. A lot of manufacturers already have products that you can add your label to.
If you have the budget, go with a manufacturer that has a product development initiative. Although this can get expensive, this will ensure that you will have a unique product.
Before placing your first full order, test the samples. This may take weeks or months depending on what your product is.
Although it may get a little frustrating when your product is not done right, it is still not recommended to rush this step.
For example, if you want to sell coffee mugs, but the colors are not right, you need to talk to your manufacturer to fix the mistake.
Quality control is essential.
So, if you’re not 100% happy with the sample, do not let the production process start.
Decide on your shipping and product delivery methods
Shipping out orders is a huge part of your journey as an eCommerce business owner.
Keep in mind that customers love brands who deliver their orders fast.
More than that, if your packages are mishandled, it will reflect badly on your business.
Thankfully, there are tons of courier and delivery services in the country that accommodate international delivery, national delivery, and same-day delivery.
Most popular delivery services in the Philippines
We’ve rounded up a list of delivery services to choose from below.
This service is available in Metro Manila and Cebu. All you need to do is set up deliveries on the Grab app, and you’re all set.
They make same-day deliveries possible by SUV, car, or motorcycle, depending on the weight and size of your package.
If your eCommerce business focuses on delivering large products like appliances from Metro Manila to nearby areas or vice versa, this is a great option. They also accept cash on delivery.
This service only charges Php60, plus Php6 for every kilometer.
This up-and-coming service is a good option if you are delivering within the Metro Manila area, as well as nearby provinces.
Angkas has diversified its services to include motorcycle delivery in Metro Manila and Cebu.
This is perfect if you’re delivering small items. All you need is to book it on the Angkas app.
For large goods delivered to any point in Luzon, this is your best and cheapest bet. Truck deliveries start at Php190.
This is one of the most trusted delivery services in the Philippines. They offer national delivery, and international delivery in selected locations such as Canada, the US, and Australia, among many others.
They also have a cash-on-delivery option. LBC branches are easy to find, and its main downside is longer waiting times especially for orders going to Mindanao and other islands.
eCommerce business owners are advised to become part of the LBC SoShop program to enjoy perks and benefits.
If you plan on shipping items abroad, DHL is a great choice since it can deliver to 220 countries. The rates depend on the weight of the package, and it can get quite expensive.
One of the fastest-growing delivery services today, and the same service used by Lazada and Shopee, J&T express offers affordable rates depending on the location.
You can drop off your package in J&T branches nationwide, book through the app, or become part of their VIP program.
This courier offers nationwide and international shipping at affordable rates. You can choose between air, land, and sea freight.
Their international service covers 250 countries, and they also have over-the-phone booking and online booking.
This affordable courier has 400 branches in the Philippines, and they also offer international shipping to Guam, Canada, and the US.
However, they don’t have an online booking and you must drop off your package in their branch.
This Singapore-based courier is already making a name for itself in the Philippines.
They offer nationwide delivery, and corporate accounts feature that allows business owners like you to schedule deliveries ahead of time.
They can also accommodate cash on delivery, and SM Malls pickup.
Step 4: Set up your Sales Channels
Now is the perfect time to turn your vision into reality. Your sales channel refers to how your products will be available in the market. Here’s how to set it up.
Setup your Online Store
1. Set up your domain
Start by ensuring your domain name is available since that will be the address for your website. Ideally, your domain name should be the same as your store.
The suffix of your store should be “.com,” but you can also get creative with it and try “.co” or “.ph.” Do not use “.org” since that is reserved for non-profits and other similar organizations.
The platforms you can use for your domain name include:
2. Choose a platform
There are many available platforms you can use to set up your sales channels. Take time to browse these options and compare their different features.
That said, you can choose more than one sales channel for your eCommerce business.
How to build an Online Store Using Shopify
Shopify is one of the world’s most popular eCommerce platforms. It’s a great choice for newbies because of its intuitive design and affordable rates.
Here’s how to set up your Shopify store:
To start, go with the free 14-day trial so you can have ample time to build your site.
Upon starting this trial, you will be asked for your store name which will also become your URL (storename.myshopify.com).
This cannot be changed, but you can buy a custom domain for it (storename.com).
Customize your website design
After starting your free trial, you will have a simple dashboard. Just select the theme of your choice to customize your website.
With more than 100 templates that can be tweaked, you can exercise your creativity.
Get your high-definition photos ready because it’s time to add your products. Go to “Products,” and select “Add Product” to make your first listing.
During this step, you need to write the product title and description. Make sure to keep the description informative since that is where customers learn about your product.
Keep your target audience in mind when writing this and anticipate the questions they may have about your product.
The description should also be easy to scan. To do this, write in bullet lists, and short paragraphs.
Don’t forget to upload good photos, 3D models, GIFs, or videos. Then, set the price.
If you have different variants of the same product, you can also set that up. Each variant can have its own price, image, and inventory.
Set up inventory
Whatever business model you are using, you can set up your inventory on Shopify.
You also have the option to continue selling out-of-stock products, or mark items as “sold out” if you cannot replenish your stocks easily.
On Shopify’s shipping section, enter the shipping rates in your area, or set a specific fee for each product.
Edit the search engine listing preview
Here, you need to customize how your website will appear on search engine results.
This will also do wonders for your business’ discoverability. This is the perfect place to sprinkle in keywords.
Add payment details
Shopify makes receiving payments easy. Go to “Settings” and select “Payment” to choose your preferred payment method.
After your free trial ends, you can get your own domain on Shopify through GoDaddy.
Now, you’re ready to hit the publish button. Once your site goes live, people can start ordering.
How to build an Online Store Using WooCommerce
Setting up your online store using WooCommerce is not as hard as you think. Here’s how to turn your WordPress into an eCommerce store using this plugin.
Get your domain
Before you set up your WooCommerce online store, you need to get two things in order. First is your domain name, and the second is your web hosting.
Now that you’ve got your domain in order and you’ve paid your hosting fee, you’re ready to install WordPress on your hosting account.
For instance, if the web hosting of your choice is BlueHost, all you need to do is head over to your user panel and select the “Install WordPress” icon.
The next step is to install the WooCommerce plugin, which is free. Just click your WordPress dashboard, select plugins, and click add new. Then, look for WooCommerce or type it in the search field.
Click the install button and activate it. Once it is activated, there will be a WooCommerce option on the left sidebar.
Select it and fill up the setup information. This includes store details like your industry, product types, and business details.
Install your theme
WooCommerce works with all WordPress themes by default. This is awesome news for eCommerce business owners who have already picked a good theme.
However, you can also choose special themes optimized for WooCommerce. These themes already have pre-set styles that will make your online store more seamless.
One free example of this theme is called Storefront.
Setup payment gateways
Accepting online payments in your eCommerce business is easy. Head over to WooCommerce, then Settings, and then Payments.
From here, you can choose from the options. One of the most popular ones is PayPal. Don’t forget to select your currency options.
Once you’ve set up your payment gateways, you can also enable tax rates and calculations by selecting WooCommerce, then Settings, and then General.
Add shipping details
For eCommerce businesses that sell products, you need to set up shipping.
To do this, select WooCommerce, then Settings, and click Shipping. You can set different shipping zones, offer free delivery, or set fixed shipping prices.
If you follow the dropshipping business model, make sure to install WooCommerce dropshipping.
Get your store ready
After setting up the nitty-gritty details of your eCommerce business, you are finally ready to start building your store.
First, create pages like Home Page, About page, Contact Page, and a FAQs section. Other pages such as checkout and cart are already taken care of.
Now, you can finally add products. To do this, click WooCommerce, Select Add Products, and Start with a template.
Alternatively, you can just select Products, and Add New. Here, you will need to fill out the product name, product description, and data section. The data section also includes parameters like:
- Linked products
- Shipping (weight, dimensions, cost)
- General (pricing and taxes)
Do not forget to fill out the short description on the product page, product category, and product tags.
You also need to upload photos for the product image, and gallery. Once done, click Publish.
Tweak your website
Thankfully, it’s easy to tweak your online store if you’re not satisfied with how it looks. To do this, visit your domain name + /shop (e.g. storeph.com/shop).
Select the customize button in the header. From here, you can decide whether or not you want a sidebar or add a copy your visitors will love.
Before you publish your website and make it go live, make sure you are satisfied with your Shop, Cart, and Checkout pages.
You can make these pages full width by clicking Widgets, then Sidebar. This way, buyers can finalize their orders without any distractions.
Add more plugins and extensions
If you want to make your online shop more impressive, you can explore free and paid plugins and extensions such as:
- Facebook for WooCommerce
- Payment Gateways
- Shipping extensions
- WooCommerce Subscriptions
- Accounting Extensions
- Yoast SEO
- iThemes Security
Publish your website
Although the level of difficulty in setting up your eCommerce business with WordPress and WooCommerce isn’t high, it may take a while to set everything up.
Setup Merchant Accounts on Online Marketplaces (Lazada, Shopee, & Facebook Marketplace)
Depending on your business model, you may want to focus on setting up merchant accounts on Facebook Marketplace, Lazada, and Shopee in addition to your online store.
Here’s how to do it.
Lazada is so popular in the Philippines mostly because they offer cash on delivery for any goods. You can practically sell anything on this platform, except these things:
- Weapons of any sort
- Pirated or harmful software
- Foods that do not comply with food regulations
- Anything that portrays vulgarity
- Obscene images
- Telecommunication equipment
- Toxic items and chemicals
- Prohibited gaming and gambling products
- Liquids with more than 20CL
- Products bigger than 300x300x300cm
Let’s dive straight into how to set up your merchant account here:
Sign up as a seller
Head to Lazada.com.ph and select the “Sell on Lazada” option on the upper-middle part of the website. This will take you to another page where you can find the “Sell on Lazada” option.
The first option is to become a LazMall seller where you can enjoy a higher search ranking. Another option is to become a Lazada marketplace seller to enjoy no commissions.
If you want to sell vegetables and fruits, you can sign up as a Lazada Fresh Seller. Here, you can also sell desserts, meats, pastries, bread, and other ready-to-eat and ready-to-cook products.
The last option is LazGlobal Seller for those based in other countries.
Lazada corporate sellers need the following documents:
- BIR Certificate of registration
- DTI/SEC business registration certificate
- Copy of BIR Form 2303 (Certificate of Registration)
- Bank information
If you want to be a LazMall seller, you need to submit the following requirements:
- BIR Certificate of registration
- DTI/SEC business registration certificate
- Brand information
- Marketing materials
- Corporate information
- Bank information
Meanwhile, individual Lazada sellers must be at least 18 years old and should be active members of the Online Microsellers Marketing Cooperative.
Whatever type of seller you want to register as, make sure to take clear photos of your IDs and documents.
You also need to prepare your bank information so you can receive payments.
Even if you don’t have prior eCommerce experience, there’s no need to worry because Lazada gives their sellers free training.
This will allow you to know the ins and outs of the platform and ways to use them to your advantage. The training session will also teach you important lessons like:
- Optimizing product content
- Implementing sales promotions
- How to handle traffic
Activate your account
Open your email account and check the email sent by Lazada. Follow the steps to verify your account. After this, you can start selling.
After uploading at least five products, you can begin your journey as a Lazada seller. Make sure to complete all the details including:
- Product description
- HD image
Shopee has been growing steadily since 2015, but the pandemic immensely fast-tracked its growth.
Now one of the most popular platforms in Southeast Asia, becoming a Shopee seller will definitely take your eCommerce business to new heights.
In this platform, you can become a Shopee Mall seller, a Preferred seller, an Overseas Seller, or a Marketplace seller.
Shopee mall sellers are official distributors and brands that are members of the exclusive Shopee mall. They offer authentic and licensed products.
Preferred sellers are businesses awarded with the “Preferred” label.
To qualify for this invitation-only program, you need to have impeccable customer service and ratings. Overseas sellers are those based outside the country.
Lastly, Marketplace sellers are online retailers that buy wholesale unbranded products and sell them for a profit on Shopee.
The requirements to become a Shopee seller include:
- BIR Form 2303
- Mayor’s Permit
- SEC/DTI business registration certificate
- Collection invoice and receipt
- Trademark/IP certification for brand owners
- Official distribution license or authorization for official distributors
If you want to become a marketplace seller, SEC or DTI registration is not a requirement.
Now that you know the requirements, you are ready to learn how to become a Shopee seller.
Sign up for a seller account
Access Shopee.com or open the Shopee mobile app which is available on Google Play Store and App Store.
On the app, click the “Me” tab on the bottom. For the website, select the “Sign up” option on the home page.
Then, create an account and input your email address, Facebook, Phone number, or Google account. Then, verify it through your sign-up method.
Set up your account
First, set up your Shopee wallet before you can accept orders and payment. This can be accessed on the Profile menu option, on the Start Selling Tab.
Choose “Seller Balance,” and fill up the information needed on “Create Wallet Pin.” The verification will be sent to your phone number.
Remember that the name on your Shopee Pay account should be the same on your birth certificate or passport.
You also need to set up your pickup address. To do this, click the “Me” tab, and choose “account settings.” Then, click “My address” and fill out the information needed.
After setting up your account, you can start listing your products. Make sure that the products are not part of the platform’s prohibited list of products.
To start uploading products, go to “My Shop” and click “Add new products.” Then, upload images.
For every product, you can upload up to nine photos. Make sure to provide information such as:
- Shipping fee
You can also toggle the used or brand new option and add hashtags. Save it and click publish.
Edit shipping options
All new Shopee sellers need to enable their shipping options. To do this, head over to “My Shop” and select “My Shipping.”
Next, select your preferred shipping options, and click save.
You also need to go to all your products and update the weight, packaging size, as well as the courier and shipping fee.
After you complete all the steps needed above, you can finally start earning money.
This is one of the most convenient shopping destinations where people in your area can discover and buy items. Aside from location, the products can also be filtered by category or price.
In Facebook Marketplace, you can list items in these categories:
- Clothing and accessories
- Home and garden
Before you learn how to become a Facebook marketplace seller, you need to be prepared in answering questions in a timely manner.
Expect to receive a lot of questions from interested buyers, or those who have already purchased from you.
Considering this, you need to know communication templates.
The prohibited items on Facebook marketplace include:
- Anything that’s not a physical product
- Services like house cleaning
- Photos and descriptions that don’t match
- Healthcare items like first aid kids and thermometers
- Before and after photos
Set up your Facebook Marketplace account
If you are already on Facebook, you can access Facebook marketplace on the left side of your homepage.
eCommerce Customer Service
One way to let your eCommerce business become more competitive is to offer amazing customer service.
Customer service refers to how your online business gives assistance to potential and current customers.
This could include helping them assess their options, resolve issues, or give instructions on how to use a product.
In today’s hypercompetitive business landscape, customer service is a must-have. Statistics even prove that 95% of consumers view customer service as something important for brand loyalty.5
Of course, having customer service is not enough. After all, having bad customer service is even worse than not offering it.
Here are some ways you can step up your brand’s customer service.
Keep in mind that all tips listed below boil down to one thing: always put your customers first.
When you implement these strategies, you’ll be able to set up your eCommerce business for long-term growth.
Take reviews seriously
A lot of consumers feel like they are talking to a void when they deliver feedback to a brand.
Keep in mind that these people have taken time and effort to give you their peace of mind so even if their feedback is negative, you should acknowledge it and find a way to change your shopping experience.
Every time you receive negative feedback, reach out to that customer to make things right. Let them understand how much you value their opinion.
In time, these people can turn into your supporters. For instance, you can send them free products or offer them a discount.
Create a FAQs section
It can be very tiresome to answer the same questions over and over again. If people ask the same questions about your brand, you can add those to a dedicated page on your website.
When you anticipate customer questions, you are one step into becoming successful.
Don’t hesitate to be personal
Don’t have the resources but still want to make your customers feel cherished? One way you can do this is to write out thank you notes on every order.
Although it can take a lot of work, it will benefit you in the long run. When people order again, acknowledge, and thank them for their ongoing support.
Prioritize your response time
Convenience and speed should always go hand in hand when it comes to eCommerce businesses. Customers who shop online expect fast answers.
If you are a bigger brand, dedicate staff members or a team to answer queries on different channels like email.
If you want to take the extra mile, you can set up a dedicated customer support email, as well as a chat box on your website.
When you serve your customers consistently, they will improve their brand trust.
Measure and optimize
Your first customer service strategy won’t probably be your final one. eCommerce businesses need to be more proactive in improving their current processes.
Make sure to evaluate your busiest hours, trending topics in your industry, and customer response. By tracking all these elements, you can make way for better customer service strategy.
Remember that first impression lasts
When your customer has a negative experience with your eCommerce business, they will hold power over your reputation by sharing their experience to peers.
All it takes is a small lapse to ruin your relationship with your customer so make sure to keep all your business processes strong and organized.
Step 5: Promote your eCommerce Business
A lot of people make the mistake of equating a brand to a logo. Although your logo is an important part of your brand, it does not capture your entire brand image.
Your eCommerce business should have a strong branding strategy since it enables you to develop a stronger relationship with your customers.
When you have a strong brand, you will be the one to define how you want customers to remember you.
Additionally, a strong brand will allow you to set yourself apart from fierce competitors even though you sell similar products with the same price points.
By building your brand identity, people will associate positive emotions with your products and your brand itself.
Take Nike for example. The athletic brand aced its branding strategy and has become one of the biggest sports brands in the world.
They transformed their branding strategy to cater to fitness and lifestyle, instead of simply focusing on athletes.
Their inspirational advertisements also do wonders to motivate average athletes to strive to become winners.
But how exactly can you improve your branding? Here are some tips:
Be clear about your values
Values refer to what you and your audiences hold dear. Values are meant to guide your eCommerce business on everything you do. So how do you know your values?
First, ask yourself what you want your customers to say about you. Do you want to be seen as a fun brand? or do you want to lean more towards being a luxury brand?
Then, assess your top priorities to pinpoint what is important for your brand.
For example, if you want to make waves in the sustainable fashion scene, your priorities can include transparency, helping local seamstresses, and producing less waste.
Finally, look at what the top brands in your niche are doing. It also helps to examine the brands you look up to and find out what they are doing that make you develop an emotional connection to them.
Develop your brand voice
Branding is not just about images. A big part of your brand identity is having a distinct, and recognizable brand voice.
But what exactly is a brand voice?
This refers to how you talk to your audience. The most common examples of brand voices include:
- Helpful and supportive
- Warm and funny
Throughout all your sales channels, your voice must be consistent so that your target audience won’t be confused.
When you ace your brand voice, your brand will be more humanized.
Set up your brand visuals
Brand visuals refer to the symbols that are linked with your eCommerce business.
It includes your logo or the face of your brand. The most common logos include pictorial marks or abstract images that capture the essence of your brand.
One example is Apple. Another type of logo is wordmark which features your brand name. One of the most popular examples of this logo is Coca-Cola.
There are many more types of logos. The important thing to remember is to ensure that your logo is clean and memorable.
Another visual element of your brand is typography. Fonts greatly affect the perception of people about your brand. For fonts, you can use:
- Serif fonts, if you want to stay classic and conventional
- Sans serif fonts, for simplicity and trustworthiness
- Display fonts, for originality and boldness
- Handwritten fonts, for quirkiness and personality
- Script fonts, for creativity and fluidity
You also need to choose your brand color or colors. Brand recognition increases by a staggering 80% when you use color effectively. Here are some colors and the feelings they evoke.
- Black for intelligence, glamour, and power
- Red for passion, romance, and love
- Green for nature, tranquility, and fertility
- Pink for romance, femininity, and warmth
- Blue for loyalty, security, and sophistication
Create diverse content
Without great content, you would remain stagnant. Prioritize creating great content that is related to your industry or niche.
For example, if you own a clothing brand, you can focus on styling-related content. Here are some content types you should consider:
- Videos such as product demos, blogs, case studies, or explainer videos
- Podcasts for customers who prefer listening over reading. You can also sponsor a podcast relevant to your niche
- Comparisons to compare your products with those offered by competitors
- Infographics to break down large content into easily digestible chunks
Share your story
Every successful eCommerce business leverages the power of good storytelling.
Make your target audience the hero of your story, and chances are, your brand will resonate with them. You should also weave your unique brand story into your content.
Thankfully, this is easy to do by setting up a dedicated “About Us” page where you can share the origin story of your brand.
You can also post press releases or incorporate your story and brand values in your captions.
Harness the power of social media
Examine where your target audience spends most of their time – are they on Instagram, Facebook, TikTok, or Twitter?
If you don’t have the resources to focus on all platforms, dedicate your time and energy to the most relevant ones.
Social media is an amazing tool for building your brand.
For instance, Instagram does wonders to build eCommerce brands because it gets high engagement and allows you to post compelling content.
Short texts, memes, and art usually draw high engagement. You can also post photos of customers using your product.
Make sure to give customers an incentive so they would want to share your brand on their social media page.
Keep in mind that what works for one store may not work for the other so don’t feel disappointed if your first social media strategy does not work.
Customer Acquisition Strategies
Winning over customers is the goal of every eCommerce brand.
Unfortunately, sales can be very unpredictable for new businesses, and catching the attention of potential customers can feel like a shot in the dark.
This is where customer acquisition comes into play. This process refers to persuading more people to buy from your brand in a way that does not happen by chance. Customer acquisition has different stages. This includes:
Before you can exercise any customer acquisition strategy, you need to clearly define who your target audience is first. If you fail to do this, you will only lose time and money.
Here are some useful strategies you can use to acquire more customers.
Most people search for products on Google, and other search engines. Therefore, you need to do keyword research to help your website climb in Google rankings.
When you appear on the first page, more potential customers will know about your brand.
However, keep in mind that SEO is a long-term strategy that needs consistent and constant learning because Google and other search engines are prone to change.
Old-school marketing will always be relevant. Whether you want to publish an advertisement on a radio station, TV, or magazine you can reach more people.
This is also an amazing strategy for local businesses that want to target specific audiences.
Sending out regular emails to your subscriber list is an incredible way to target customers and encourage repeat buyers.
eCommerce businesses that fail to prioritize their email list miss the opportunity to generate leads and retarget their audience.
If there is useful information that sits deep in your blog or Instagram page, repurpose that content. For instance, you can turn a blog post into an infographic and post it on your Instagram page.
If you have allotted money for your marketing budget, one quick way to gain the trust of many people at once is to partner with influencers who will promote your product to their followers.
Whether you partner with vloggers, Instagram personalities, or viral TikTok users, you can ride on their brand image to leverage your brand.
If you have a limited budget, you can go with referral programs. This involves releasing unique codes for every influencer that will grant their followers exclusive discounts to your brand.
In return, they get a commission for every purchase made using their code.
Use paid advertising
This is one of the best ways to get new people to follow your brand. Running ads will give you a measurable result, and it will enable you to make the most out of your budget.
These ads will only charge you per impression using a cost per one thousand impressions or CPM metric.
Although Google and Facebook ads have a learning curve, their advantages still outweigh their disadvantages.
Build a community around your brand
If you want your organic traffic to skyrocket, you need to build your social media pages.
One of the strengths of Instagram is it allows you to cultivate thousands, and even millions of people to feel a connection towards your brand.
When this happens, they will share your content with their network, and in turn, more people will know about your brand.
Step 6: Scale your eCommerce Business
You can’t say your eCommerce business is successful without having the numbers to back up your claim.
There are tons of Key Performance Indicators or KPIs you can track and measure. This includes:
Average order value
This is the amount your customers usually spend on a single order from your website.
Customer lifetime value
You shouldn’t view your customers by purchase. Instead, take a big picture approach and see how much revenue you make over the course of your brand-customer relationship.
This refers to the number of customers that purchase from your brand after visiting your website and viewing your products.
This is the profit you earn on top of the cost of your goods.
Knowing this KPI will help you track your growth properly and gain an insight into how much your eCommerce business is growing.
Cart abandonment and checkout abandonment rates
This is the percentage of customers that add one or more items to their cart, but don’t go through with the purchase.
Make sure to know the items added to the cart, their values, and how long the items stay in their cart.
Aside from the cart abandonment rate, you should also measure the checkout abandonment rate.
This refers to the customers that initiate the checkout process but decide not to purchase.
This user experience KPI will help you know how to give your customers the best experience.
When you know the device they are using, you can tailor your user experience to their device.
This is the percentage of website visitors that leave your site after they see one page. If your bounce rate is high, you may need to do adjustments to your landing page.
Your website speed and the loading time of your pages, especially cart and checkout, are vital if you want to close a sale.
Keep in mind that a good customer experience should be the core of your eCommerce business.
Other KPIs you can measure include:
- New and returning visitors to your website
- Mobile site traffic
- Sources of traffic
- Average time visitors spend on your website
- ROAS (Return on Ad Spend)
- Average time on your website or landing page
- Email subscribers and email open rate
Analytics and KPIs must be assessed over time so you can identify patterns and trends, as well as identify your lapses, and capitalize on opportunities.
How to Scale your eCommerce Business
Everybody dreams to earn millions through their eCommerce business, but that won’t happen if you don’t scale your business.
If your brand is stuck in a rut, or you want to increase its momentum, we’ve gathered the things you can do to scale your business to make way for continued growth.
Invest in SEO
It can take months to see results with SEO, and that is why a lot of brands do not take it seriously.
However, having a good SEO strategy will enable you to scale your brand by bringing in more organic traffic.
More than that, it also ensures that you are not reliant on expensive paid ads that can take a toll on your budget.
Don’t be afraid to hire help
When you first start out your business, you may be dealing with a limited budget. As a result, you’re doing everything.
But as your store grows and you generate more revenue, you should think about hiring capable employees.
Offloading tasks to your staff will ensure you don’t get burnt out. Although you can still be heavily involved in your business, having someone to rely on will be helpful in your brand’s overall productivity.
Some of the tasks you can outsource include:
- Graphic design
- Content marketing
- Administrative tasks
- Packing orders
- Customer support
- Virtual assistant
You guessed it right – you need money to scale your business.
Whether your growth plan involves adding more equipment, increasing your SKUs, hiring more staff, or automating your services, you need to get money to invest.
Do not forget about customer support
Although delegating tasks is recommended, you still need to be involved in customer support to ensure that it’s being done right.
When you ace this, you will stand out from your competition and your eCommerce business will be able to scale itself.
Implement customer retention strategies
The major challenge of eCommerce stores is finding new customers. One thing you can do is focus on customer retention.
One surefire way you can do this is to encourage website visitors to create an account on your website to make repurchasing easy.
You can also start a customer loyalty program to encourage them to repurchase more often. The reward will act as a motivator so they can earn points that correspond to a reward.
Another way to boost customer retention is to ramp up your email marketing. Email is one of the best mediums to foster a strong customer-brand relationship.
Make sure your email contains valuable and useful information, or else it will never be opened.
Use technology to your advantage
If you want an inexpensive method to scale your eCommerce business, you need to invest in technology.
For instance, automating some of your processes will help you save time and money by minimizing the need for manual labor.
Ace your marketing campaign
It’s impossible to grow any brand without the help of marketing.
Even if your sales are skyrocketing, you still need to think of a strong marketing strategy because pretty soon, word-of-mouth advertising will fizzle out.
With a good marketing campaign and a strong digital presence, you can sustain high sales.
eCommerce Business Checklist
Building your eCommerce business can seem overwhelming.
We’ve compiled the ultimate eCommerce checklist to help you start your business in no time.
Pick a product to sell
You can’t possibly start your business without selling anything.
Do extensive research and dive into market trends, and emerging niches to find the best product.
Choose a business model
Your business can either be one of the following:
- Corporation (or OPC – One-Person Corporation)
- Sole Proprietorship
Once you’re done choosing your business structure, it’s time to pick the best business model for your brand. Your choices include:
- Business to business (B2B)
- Business to consumer (B2C)
- Customer to business (C2B)
- Customer to customer (C2C)
- Government eCommerce
- Wholesaling and warehousing
- Private labeling and manufacturing
- White labeling
Think of your business name
After you figure out what you want to sell, think of a business name that is memorable and unique. Make sure to register it!
Anyone who says eCommerce is not a competitive landscape has never tried it before. To stand out from other brands, try to see what their strengths and weaknesses are.
Know who your target audience is
Identifying your target audience can either make or break your business.
Before you get your idea running, you must have a clear understanding of the psychographics and demographics of your target audience.
Source your products
Where will your products come from? If you’re an artisan, where will you source your materials?
Finding a reliable supplier is one of the most daunting tasks of building an eCommerce business. Make sure not to rush this process.
Only commit to a supplier if you are 100% satisfied.
Setup Sales Channels (website or marketplaces)
Ideally, your business and domain name should be the same.
Building your website is now easier than ever thanks to eCommerce websites like Shopify and WordPress, and platforms like Lazada, Shopee, and Facebook Marketplace.
List your products
After you’ve sourced your products and got your site ready, it’s time to examine where your target audience shops the most.
When uploading your products, the images should be appealing. Do not forget to write a compelling product description.
Market your eCommerce business
Unless you’re a celebrity, posting once about your business is not enough.
You need to utilize social media channels, and SEO to ensure your brand reaches more people.
Plan your content
Regularly posting informative content such as news articles, blog posts, videos, photos, customer experience, and infographics will help build your brand identity and improve people’s trust in your products.
Once your eCommerce business is up and running, you need to analyze KPIs to determine its success and spot new opportunities for growth.
Some of the most important KPIs you need to measure include:
- Average order value
- Customer lifetime value
- Conversion rate
- Gross margin
- Cart abandonment and checkout abandonment rates
- Device type
- Site Speed
Tips to Succeed in eCommerce in the Philippines
eCommerce is a landscape that is constantly changing.
Although eCommerce in the Philippines is expected to grow even more, you will only become successful if you do it the right way.
Follow these tips below:
Don’t rush your launch
We get it – the idea of launching your eCommerce business after months of hard work is rewarding.
However, don’t make the mistake of launching it before it’s ready. Forcing your launch will only make way for mistakes.
Instead, only do the big reveal once you’ve ironed out all the details and you’ve laid out the groundwork in areas such as:
- Paid advertising (Facebook Ads, Google Ads, etc…)
- Content marketing
Think like a customer
Training yourself to think like a customer is amazing for your brand, especially if your business revolves around an industry you are passionate about.
However, remember that you and your customer may want different things.
Before launching your eCommerce business, take time to test every single element of your product.
This does not only include the product itself, but also the packaging, the instructional guide, and even the bubble wrap.
Try everything before selling it. This way, you can find out what’s not working and replace it before launching.
Always oversee social media
Even if you are working with a social media management team, you need to be hands-on with your social media accounts since it is the lifeline of your business.
Being involved with this aspect of your business will enable you to gain more insight into what type of content your customers like.
Remember to sell experiences, not products
Instead of focusing on trying to sell your product, you can differentiate your eCommerce business by switching your angle on customer experience.
Tell your customers how your product can change their lives. Remember – people are always on the market for experiences.
If your eCommerce business is not mobile-friendly, you will be left behind by your competition.
Collecting information about your customer and building dedicated databases is recommended especially if you want something to guide you on future product launches.
Don’t fear change
Technology will change. Trends will change. The wants and needs of customers will change.
So, if you want to remain relevant, you need to evolve as well.