Launching a Shopify business?
Do you dream of becoming financially independent? Do you want to walk away from your day-to-day job? Do you want to do something more fulfilling? Are you thinking of launching your own business?
If you answered yes to any of these questions, then you are not alone. Thousands of people have launched Shopify stores in an attempt to live a more fulfilled life.
They want autonomy. They want to be there own boss. They want to see if they have what it takes. They don’t want to look back with regret.
For the majority of people, success does not come quick or easy. In fact, 90% of online businesses fail. That’s a staggering percentage. Launching a Shopify store takes more than just guts and determination – it takes a whole lot of planning and execution.
There are so many things to consider before you launch an online store, but if you do a good job preparing it will make your post-launch experience much more positive.
In this post, I’ll cover the most important things to consider when launching your Shopify store. I’ll cover the risks as well as strategies to overcome them. After a careful read, you may begin to rethink your plans, but hopefully, you can walk away from this post feeling empowered to get started.
The Building Blocks
Picking a Company Name
Whatever product you decide to sell online, you’ll want to ensure that your company name fits well (more on selecting the product below). This means that you should pick a name that consumers in your space will connect with. Below are a couple of example strategies you can use to pick a business name and some examples that I think are pretty good.
(1) One approach in selecting a name is to make a play on words that represents the product (e.g., Skullcandy).
(2) Another strategy is to select a location name or point of interest that connects well with your product or mission (e.g., Cotopaxi).
(3) Another really good option is to simply tell consumers exactly what you do (e.g., CampSaver.com).
A very important thing to consider when choosing a name is the URL or website address you will use for your shop. It can be quite tricky to find a URL that matches the exact name that you want to use. Start looking at available domains as you consider potential shop names. You can check the availability of domains by visiting any of these sites – GoDaddy, Name.com, or Instant Domain Search.
Selecting a Platform
As the title of this post implies, I would recommend that you build your shop using Shopify. This is for good reason. Shopify is a great platform for people who do not have a lot of technical or coding skills.
Shopify also provides a lot of easy to use templates and a ton of valuable apps (such as Mochi). They can assist you with your website, marketing, inventory management, payment processing, and so much more.
With that being said, there are of course a lot of other great platforms out there. Here is a brief list of some of the most popular non-Shopify platforms: BigCommerce, 3dcart, WooCommerce, Volusion, Prestashop, Weebly, SquareSpace, Magento, and Wix.
To learn all about these other platforms, check out our post – The Ultimate List of eCommerce Platforms and Online Marketplaces.
Deciding on the Team
Deciding on the makeup of your team is another critical point to consider. Are you going to tackle this business as a lone wolf or are you going to run with a pack? Both approaches have their pros and cons and what you decide to do is highly dependent on your personality and the type of worker you are.
Are you a hustler that can make things happen quickly on your own? Can you be self-motivated and self-critical enough to push for your goals? Do you feel comfortable launching into something and building the team as tasks become too much to handle?
If you answered yes to these questions, then maybe you are a lone wolf who can start your Shopify store without anyone at your side. But, if you answered no to any of these questions you may consider selling somebody else on the idea of getting involved and joining your pack.
Here is a list of similar questions (just worded differently) that will help you identify the need for a co-founder. Am I the type of person that needs a partner to bounce ideas off? Do I need someone to hold me accountable or to motivate me? Do I feel hesitant to launch into something alone?
Either approach is fine – just make sure it’s right for you.
If you are going to select someone to join you, be sure that you are on the same page. This means that you have the same understanding of how the business will run, what your goals are, and how you will handle the rough patches along the way. Getting into business with someone is very similar to getting married, so you really want to make sure you know them and trust them.
Another aspect of the team to consider is your “extended team”. This will include having a good accountant, a good attorney, good suppliers, and potentially a good outsourced marketing team (if that’s the path you decide to take – more on this below). Take the time to evaluate your extended team before you hire them, as they too will have a big impact on your business.
Get Your Mind Right
Now, I want to cover a few things that every entrepreneur needs to ponder on, whether they are launching a Shopify store or something else entirely.
Before starting a business, you must ask yourself these three (3) questions.
(1) Am I actually ready to make this commitment of time, energy, and money?
(2) Do I understand what this will take and what will be expected of me?
(3) Do I understand why 90% of businesses fail and what I need to do to succeed?
It’s very important not to get overly romantic about your Shopify store. The idea of being an entrepreneur is exciting, but remember that it won’t always be fun. Don’t let your imagination run wild. Keep your expectations in check and be rational.
For sure, please do not quit your job. If you plan on making this a lifestyle business rather than just a side hustle, it will take a lot of time.
Rome was not built in a day and neither was any successful business.
Another very important thing to consider is whether or not you have a unique value proposition. If you can’t differentiate yourself either through your product or service expertise then perhaps you should reconsider (more on unique value propositions below).
Remember, any startup or entrepreneurial venture is going to take a lot of hustle. You’re going to have to commit time and money. You’re going to have to sacrifice. You’re going to be tired. Things are going to get hard.
If the sound of these challenges gets you excited rather than discouraged, then keep on reading my friend.
Pick Your Product
Before you can launch your Shopify store, you will need to choose a product. Duh! But how do you go about doing this? Here are a few things to consider.
Finding a Niche
What exactly is a niche and why is it important? One of the worst things you can do when launching a product is to expect that everyone will want it. Businesses that try to make everyone their customers soon discover that nobody is their customer.
It’s much easier to market and sell a product that is specifically tailored to a small group of similar people or businesses. There will be less competition and you can become an expert in your niche.
For example, if you want to launch a sock company, it’s probably not wise to create generic, white cotton socks. These types of socks can be found everywhere and are extremely inexpensive. Instead, it would be much more prudent to launch a sock company focused on a specific type of person with a specific need. Such as socks designed for long-distance runners, figure skaters, or astronauts. I don’t know what these types of people need in regards to socks, but if you can fill that niche it will give you a better chance at success then competing with every other sock company.
Offer Something Unique
In tandem with servicing a particular niche, you also need to find a unique product or a unique approach to distributing that product. This will allow you to set yourself apart from the competition and convert more sales.
Going back to the sock example – perhaps you could create a sock tailor-made to support astronauts arches while they are in space. I don’t know if this is a real problem, but it could be and you could cash in on it!
Or perhaps you need to create a subscription service for astronauts because they tend to go through their socks faster than people who stay on earth. Again, this is a made-up business idea, but it demonstrates how thinking outside the box can help you establish your Shopify store as unique and as the go-to-shop for a particular set of consumers.
Doing Something You Know Well
Your chances of succeeding increase exponentially if you get involved in something you already know well. If you have experience with a product, industry, or customer segment you already have a leg up on the competition.
Launching a store in an industry you know little about leaves you vulnerable to short-sightedness. Check out the matrix below for the different types of information availability.
The worst place to launch a business is an industry where you don’t even know the things that you don’t know. But, building a business in a space in which you already have expertise gives you a competitive edge.
The best position to find yourself in is known knowns and known unknowns. This only happens when you’ve spent real time in an industry.
Another benefit of launching a Shopify store in a segment that you know well is that expertise leads to passion. One thing that certainly helps you stay motivated and confident is your passion. But passion often follows experience, not the other way around.
According to a lot of research, the development of expertise (rare and valuable skills) leads to far greater career satisfaction and then slowly develops into a passion.
Build a business based on something you already feel confident in and you’ll find the passion to push through the tough times.
Generating a Profit
A critical component of any successful business is the ability to generate income. Without you will certainly fail. Revenue is one thing but profit is entirely different.
Perhaps you have the ability to drive conversions on your site, either through stellar marketing, an interesting product, or being the low cost leader. Yet, if you don’t have anything left over after all of your bills (rent, technology, marketing, employees, inventory, etc…) you won’t have a successful business.
The simple formulas for calculating your potential profitability look like this:
Revenue – Expenses = Profit
Revenue = #Units Sold x Selling Price
Profit Margin = Profit / Revenue
Make sure that whatever product you settle on can provide a reasonable profit margin.
What is a good profit margin for an eCommerce business?
According to a number of online sources, 40% is the average eCommerce profit margin. Start with this number as your benchmark. When you run the numbers for your business (the total revenue you think you can generate and the total expenses it will take to do so) see how close you get to 40%.
If you are well above 40% take a second look at the reasonableness of your pricing and your expenses.
Taking the time to understand your financial numbers, particularly your profit margin, will help you avoid the mistake of focusing solely on revenue and not your bottom line.
Testing Things Out
Before you launch a company you should test everything. Identify your potential customer base and get their opinion. Use surveys, mock advertisements, content marketing, and focus groups to determine if a real opportunity exists.
If you start a Shopify store based on an untested idea, you run a real risk of failing quickly and painfully. Test everything from your product, to your marketing, to your sales, to your customer support. Then let the results guide your path.
Testing everything at a small level, before you put too much time or money into it, will help you know what works and what doesn’t. This will save you a ton of time and a ton of money. It will allow you to learn quickly and have a better chance of success.
Find Your Suppliers
Right in line with profit margin and product selection is finding the right supplier(s) for your product or inventory. Just like accountants and lawyers, your suppliers are part of your extended team. Here are three (3) key characteristics to look for in a supplier:
Can they deliver on time, every time? It can be easy to become lax with your suppliers when you’re business isn’t moving very quickly. But this can be a trap. When you’re sales are humming along at a good clip, you absolutely need a supplier who can consistently deliver on time and on budget.
You also need to consider the locations of the supplier. Shipping from overseas may be a cheaper option, but what if you want to buy smaller quantities and work off of a just-in-time model? It may be more convenient and even more cost-effective to work with a local supplier.
Trust but verify – don’t be afraid to ask for an intro to other customers that the supplier has worked with. You want to get a realistic understanding of what it’s like to work with and rely on your supplier before you sign a purchase order. At the least, you should check out reviews of the supplier on any website they are affiliated with.
The affordability of your suppliers is a big component of your profit margin. In order to maintain a successful eCommerce operation, it is vital that you effectively manage the cost of your suppliers. Quality is very important, but you’ve got to balance quality with financial sustainability.
Overseas suppliers are often cheaper than domestic suppliers, while still providing a broad range of products and services. There are risks, of course, working with overseas suppliers; such as language barriers, holiday differences, exchange rates, and working cultures. If you decide to look overseas do your research and try to get the advice of people who have done it before.
When working to find suppliers that are affordable, you should definitely price shop. Get quotes from multiple sources and remember that you can always negotiate prices and terms.
Last but certainly not least, you need to find a supplier you can trust. This means that your supplier doesn’t skimp on quality, they are transparent about their process and schedules, and they don’t charge you hidden fees. You can do yourself a big favor by coming into the negotiations as knowledgeable as possible about current market rates and expectations.
What is Dropshipping?
Dropshipping is another very popular option for working with suppliers. Dropshipping is a business model where your store doesn’t hold the inventory it sells. Rather, when a customer buys a product online, it is shipped from a third-party directly to the customer. With a dropshipping model, you would never actually see or handle the products you are selling.
Dropshipping is a great way to get started quickly, with lower upfront costs. There are a number of positive benefits to using a dropshipping model, such as a lower initial investment, the time to market is shorter, reduced overhead costs and your working capital is not tied up in inventory.
There are also a number of negatives to dropshipping, such as lower profit margins, inventory management issues, and relying on the quality of service and care of your third parties.
Each founder must decide for themselves what makes the most sense for their business – dropshipping or managing inventory internally. For more on dropshipping check out this post from Shopify titled Understanding Dropshipping.
Build Your Store
Once you’ve thought through the product strategy and potential costs of your business, it’s time to get started. Shopify offers a wide range of templates or “themes” for your storefront that are easy to work with and configure. You can even use a 14-day free trial as you build your store and experiment with different layouts and designs.
The importance of design for your Shopify store cannot be overstated. Your design must connect with your consumer segment and make your site easy for them to navigate. Provide visitors to your site with enough information to feel comfortable making a purchase, but don’t overwhelm them with endless paragraphs.
Using high quality, well-fitted images and graphics is a must. If you’re familiar with a good design software such as Adobe Illustrator that is a big plus, but there are other ways to ensure you have the right style of images and graphics on your site.
For editing images, graphics, social media posts, and even emails you can check out Canva. It’s super easy to use and their basic plan is free forever.
Consider Your Marketing Strategy
It’s not going to be enough just to build a Shopify store and hope that customers start showing up. If you don’t prepare to market your store, then prepare to fail.
So you need to ask yourself, how can I consistently drive traffic to my Shopify store?
There are a million different ways to promote your Shopify store, but most businesses need a good mix of marketing channels. Here are some of the most proven methods for getting the word out.
Content marketing is the creation of online material that is related to your product and will be interesting to your target customer segment. Examples of content include blog posts, YouTube videos, ebooks, infographics, and webinars.
When producing material for a content marketing strategy, be sure to focus on information or topics that will be interesting or helpful for your customers. Content is often produces in the form of how-to articles, lists, or long-form blog posts such as the one you’re reading right now.
Use social media and/or paid marketing to promote your content and build an audience.
Social media is a great way to get in front of potential customers, who are looking for content related to your product. There are a number of social media strategies that can be used to effectively promote your Shopify store.
Build a Following
Whether you are on Instagram, Facebook, Twitter, or any other social platform you should focus on building a following. Some stores have a good experience selling directly from these platforms, but others use them as a way to build a community or an audience that will purchase from them down the line.
Social media is a great way to interact with people and get them interested in what you’re doing. Share helpful content, tips, and information related to your product or store. You can also use social to promote the content that you create on your blog or Youtube channel.
One strategy is to become involved in groups or forums where people are discussing topics related to your product. Examples include Facebook groups, Reddit forums, topics on Quora, or hashtags on Twitter and Instagram. The goal is to become a positive member of the group, who contributes useful information in a helpful manner.
You should definitely avoid spamming groups and blatantly promoting your shop. This type of activity will cause people to be annoyed and they may begin to ignore you or even block you from participating.
Paid Promotion on Social
While social media is a great platform for connecting with a lot of people quickly, it’s also a very crowded, competitive environment. Often times online stores find it necessary to use paid promotion on social to really get the word out.
In the case of Facebook pages, even if you have thousands of followers, only a few hundred may see any given post that you publish. This means that you will actually have to pay money just to ensure that all of your followers are seeing your post.
Most social platforms allow you to choose a goal when using paid promotions, such as clicks, visits to your website, purchases, or even new followers. As with everything you should experiment and see what works best. Overall you want to focus on accomplishing a good Return on Investment (ROI) for your social media spending.
The objective of SEO, or Search Engine Optimization, is to rank high on search engines results for topics related to your Shopify store. If you were selling astronaut socks, you may work to rank for words such as “Astronaut socks” or “Footcare in space”.
Most SEO is focused on ranking in Google searches because Google is the number one search engine on the planet. Outside of the Google headquarters, nobody knows exactly how their search engine algorithm works, but we do know some of the more important aspects.
Here are some of the most important things to remember when working on your SEO strategy.
(1) Backlinks – Google relies on other websites to inform their algorithm of a website’s value or quality. They do this by ranking sites higher, when other sites provide links for their audience to visit that site. Reach out to related sites and blogs to see if they would be willing to link back to your site.
(2) Keywords – Google will scan your site to understand its content and topic. Using words that are related to your product throughout the site will help your site rank higher.
(3) Comprehensive, In-depth Content – Google ranks sites higher when they consistently produce high-quality content. This usually means long-form blog posts of 2,000 words or more on topics related to your store’s product categories.
For a really in-depth look at SEO for your Shopify store, check out this post from Backlinko called The Definitive Guide To SEO In 2019.
Paid advertising is exactly what it sounds like, paying to advertise your Shopify store or products. Online the two largest channels for paid advertising are Google and Facebook. If you have a unique customer segment that is better accessed through other channels, you should certainly promote your store there.
Offline paid advertising is usually found in newspapers, magazines, billboards, radio, and television. Again, be sure to know who your customers are and where it makes sense to connect with them.
Influencers are people with large followings on platforms such as social media, blogs, or even podcasts. Influencers usually focus on a particular topic that they are experts in or share insights from experts on that topic.
They are a good channel to use for marketing purposes, because they have large audiences of people who are interested in a narrow topic. To find people in your industry who have large followings you can ask customers where they go for information or you can use a service to find and pay influencers to market for you.
Another option for promoting your Shopify store is offline events, such as conferences and speaking engagements. Again you need to find events that are relevant to your Shopify store and that will attract people who are truly potential customers.
Most industries have annual, national conferences where enthusiasts gather from around the country. Additionally, you should be able to find local groups or events that are interested in your product category. If you can’t find a local event, you may consider launching your own. You can use services like Meetup or Eventbrite to promote your event and track those who plan on attending.
A very helpful book to learn how to promote a new business is Traction: How Any Startup Can Achieve Explosive Customer Growth by Gabriel Weinberg and Justin Mares.
Tools for Shopify Stores
Once you have your Shopify store up and running, you will find an unending list of tasks that you need to accomplish. You’ll be managing inventory and suppliers, sales and marketing, packaging and fulfillment, and a whole host of one-off tasks.
Before long you may begin to feel overwhelmed – especially if you have chosen the lone wolf approach. Fortunately, Shopify offers a powerful app platform for Shopify store owners to quickly procure and setup some very helpful applications.
You certainly won’t need every app available on the Shopify app store, but you’ll want to take a serious look at what is available. Using quality apps that solve specific challenges will be a game-changer for you and your Shopify store.
Over to You
Now that I’ve walked you through this extensive list of things to consider before launching a Shopify store, it’s up to you to decide what’s next. For some of you, this list may have increased your desire to launch something of your own. I sincerely hope that is the case. I also hope that this post will guide you in the steps you need to take before you fully commit.
If you have further questions or if I’ve left anything majorly important out of this post, please let me know. You can comment in the section below and I’ll be sure to respond.
Now go get started and best of luck to you!