Over the past decade, I’ve learned a lot about building e-commerce businesses. When I graduated from Ryerson, looking for ways to cover the rent, I wanted to establish an automated, passive source of income. My original goal was to make $1,000/month, but after only a few months of work, I started to realize the potential was much greater.
Fast forward to today and I’ve just built my third store, tuftandpaw.com, which specializes in modern cat furniture. Here is the process I use to validate my businesses with minimal risk:
Step 1: Find a niche with Google Keyword Planner
Google Keyword Planner allows you to type a phrase to see how many times it is searched on Google per month. It will also suggest related terms, enabling you to quickly go down a path to niches you’d never even considered. Start with a broad term about a topic you’re interested in and gradually narrow it down to a market you could reasonably compete in. You might start with “men’s clothing,” filter to “socks,” and then narrow it down, finally, to “unique compression socks.” The Internet is a big place – you’d be surprised how many people are searching for something very specific.
Step 2: Find photos of the ideal products you’d want to sell
After picking a niche, the next step is to find photos of about 20 different products you could imagine selling on your website. If you are focusing on unique compression socks, download photos of the best compression socks you can find around the web from existing stores. To be safe, it’s best to seek permission from the image owners. (People are usually amenable if there’s a chance you’ll help sell their product in the future.)
Step 3: Create a test store on Shopify
It shouldn’t take you longer than a day to set up your Shopify store. Using the product photos, create about 20 products in your store. The goal is to make it look real and operational. It’s important that the product descriptions be compelling, but the specific details should just be stand-ins for now.
Step 4: Drive traffic to your test store
The next step is to see if people will actually buy the products on your site. Sign up for a Google AdWords account – you can often even get a free $100 credit. Make an ad that will appear at the top of a search for your key search term (e.g. “compression socks for men”). Once you get a couple hundred visits to your website, this will confirm your product and website are resonating with potential customers. Your next threshold is to make at least one sale from every 100 visits. In the past, when people have made a purchase, I have issued refunds and offered discount codes for them to use once I’m officially up and running. However, to fulfill those orders, consider purchasing the product from another store with the customer’s address (more on “dropshipping” below).
Step 5: Replace test products with real products
Once you’ve validated that customers will actually buy what you’re selling, you will need to replace the test products with real ones you can actually ship. The easiest way to do this is by “dropshipping.” Dropshipping is an agreement with another seller or manufacturer that allows you to list their products, effectively making them your distributor. The other seller can also ship the products to your customers directly.
Step 6: Search engine optimization
Check out a great explanation of SEO from Reddit here. Basically, you want to figure out the keywords you want to rank for, build great content around those keywords, and then find reputable people who want to share or talk about your content on their websites. This is a slow process that usually takes six months or more. It’s the last step, and one you’ll continue to work at as the rest of your site grows.
Since graduating from Ryerson, I’ve been able to build three successful online businesses by following these exact steps. Jumping into the world of e-commerce might seem overwhelming, so be sure to follow a model that’s tried and true.
Jackson Cunningham (RTA ‘05) is the E-commerce Director at Wiivv and co-founder of several successful e-commerce stores.