Ecommerce is growing fast, around 20% a year since 2014, yet it only represents 14% of global retail commerce. Combined with the fact that COVID-19 forced consumers online, it’s safe to say ecommerce will continue to grow at a breakneck pace. At 14% of global retail commerce, the market is still in its infancy and the opportunity is huge. But online business is very different from traditional commerce.
Julian Fuchs is a successful ecommerce veteran with several thriving online businesses. Klaeny is a sustainable cleaning and washing product that aims to fight the microplastics epidemic facing the world. Currently in 15 countries and multi-million € revenue. Everjump is an innovative jump rope system with a digital personal trainer to customize your personal fitness goals. Launched in Germany, entering new markets every 2 months, and experiencing a steady double-digit month-over-month growth.
In addition to creating and operating his own businesses, he is an active entrepreneur in decentralized finance, where he has helped launch several projects, including a project whose market cap peaked at $300 million.
Julian has taken time out of his busy schedule to give some hard-fought advice that he learned through years of setbacks, failures, and successes.
“Let’s start big picture,” says Fuchs. “In business, there’s nothing quite like starting your own company from nothing and watching it grow. It’s yours and no one can take it from you. But make no mistake, creating a successful business is hard work and long hours. If you expect quick success, you are going to quickly quit.”
Fuchs’ second overall piece of advice is about planning versus execution. “Plan carefully, plan with as much detail and forethought as possible, but do not plan too long. Some people plan too little and some never stop,” says Fuchs. How do you know you’ve planned too little? Fuchs says that, “at a minimum complete the tasks I’m about to lay out and you’ll have enough planning.” How do you know you have planned too much? “I really think Reid Hoffman, LinkedIn co-founder, articulated it perfectly,” says Fuchs. “Reid said, “if you’re not embarrassed by the first version of your product, you’ve launched too late.””
Determine your niche
In the first phase of starting an ecommerce business, you’ll need to determine your product and how you are going to deliver it to consumers. “You’ve got to niche down,” says Fuchs.
“I’ve seen new ecommerce sites filled with hundreds of products across dozens of categories. You aren’t going to be the next Amazon. Especially at the beginning, you need to focus on one category and no more than a half-dozen products.”
Not only will you have to find a specific niche that you can specialize in, it must be one you are passionate about. “To be successful, you are going to spend a ton of time with this product. As for myself, and every other successful person I know, online or not, they all are strongly passionate about their product.”
You will also have to do a lot of market research on how you envision delivering the product to consumers. What is your business revenue model: dropshipping, wholesaling, manufacturing, subscription? Fuchs says, “for first-time entrepreneurs or first-time ecommerce businesses, I recommend dropshipping.” Dropshipping is the fastest to set up and requires the smallest up-front investment.
You will also need to think about your ecommerce platform, for example Shopify, BigCommerce, and WooCommerce. Or you could sell your product on a marketplace like Amazon or Etsy. Know the pros and cons of your own site versus a marketplace before you make a decision. In this phase you’ll research brand name, logo, and target audience. “There are many details like this you will have to research before you go any further,” says Fuchs.
“Market research, determining your niche, making your brand name and logo and all that can be quite fun. A big pitfall is neglecting the business plan,” warns Fuchs. “The business plan is essential. You will not succeed without one.” A business plan is a roadmap that clearly defines the goals of your business and how you will achieve them.
Every business is different, so every business plan will be different, but Fuchs says that, “the most important part of any business plan is the financial section. You must know how much money is going into the business, and how much the business must produce to break even and to be profitable.” Your budget will determine many of your options. A good business plan will help you find potential problems, identify priorities, and inform your post-launch strategy.
“You need to have a social media presence,” says Fuchs, “because people talking about and sharing things they like is the absolute best kind of marketing possible.” This kind of marketing, called word-of-mouth marketing, can be achieved through sites like Facebook, Instagram, or Twitter. “In my businesses, the best way to get people excited and talking about my product was through content creation,” says Fuchs. “The content shouldn’t focus too much on the product, but the lifestyle the product represents. Your content must be genuine too, it must come from a real place. Modern consumers can easily see through hollow attempts at pandering.”
Make sure your messaging resonates with your target audience and continue to check that it does. “At Klaeny, we really are focused on tackling the problem of microplastics. We have been for a while. Recently when John Oliver’s Last Week Tonight aired a segment on the major problem of plastics, I took it as a reassuring sign that my target audience cares too.