Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
These days, starting an ecommerce business is relatively simple. Growing that business into a successful online store with solid revenues, however, can be challenging. To effectively scale an ecommerce company, you generally need to take a proactive, multi-pronged approach. You need to not only find customers and bring them to your site, but also encourage them to make a purchase, plus come back for repeat visits.If you’re ready to take your ecommerce business to the next level, read on. Below are some simple, effective actions you can take to grow your company, especially if it's still in the early stages.
10 Tips for Growing an Ecommerce Business
Below are 10 proven ecommerce business growth strategies to try.
1. Build Your Email List
Email marketing can be an effective tool for an ecommerce business. To build your email list, consider including an opt-in email capture form on your site, as well as during checkout. You might incentivize sign-ups by offering a bonus, such as a discount code or free shipping, in return.The key to successful email marketing is to deliver quality content. If it looks like spam to you, it’s going to look like spam to everyone else. You’ll want to make sure that every email is unique and that your customers feel like they are getting an opportunity every time they open up one of your emails. Try to personalize the content and offer a mix of articles, videos, tips, and special offers.
2. Encourage Repeat Business
While bringing new customers to your site is essential to your company’s success, it’s equally important to retain the customers you already have. Consider offering incentives not just to new customers but also to returning ones. You might also want to start a loyalty program to get your customers excited about visiting your site regularly. Another way to encourage repeat business is to send personalized emails to prior customers that include recommendations of products that go well with the ones they’ve already purchased.
3. Make Your Site Mobile Friendly
The web is increasingly being accessed by mobile devices rather than computers and laptops. Designing your website to be mobile friendly ensures that your pages perform well on all devices. If you used Squarespace or Wordpress to make your website, chances are your ecommerce site is already mobile friendly. However, it can be a good idea to check. You can go to Google’s Mobile-Friendly page to test how easily a visitor can use your page on a mobile device.
4. Run Limited-Time Promotions
How many times have you filled up a shopping cart on an ecommerce site and then abandoned it completely? When you did commit to a sale, was it because of a promotion that was ending that day? Limited-time promotions can be a great way to encourage shoppers to hit the “place your order” button.The best promotion idea will depend on the type of merchandise you sell, but common ones include: free shipping, free give with purchase, a discount (like 20% off), and buy one get one free (BOGO).
5. Offer Excellent Customer Service
Customers who have a poor customer service experience will likely take their business to a competitor. Those who have a positive shopping experience, on the other hand, will probably want to shop with you again. It’s not hard to give good service and the financial rewards can be well worth the added time and effort. Consider offering customer service on multiple channels — by phone, live chat on your website, SMS, email, and via social media.
6. Master Ecommerce SEO
What searches do you want your site to show up on? How do you want new customers to find you? Understanding and taking advantage of search engine optimization (SEO) can help your site beat out the competition on Google search results.If you’re new to the world of SEO, sites like Semrush offer guides that can help you get more organic traffic to your site. If you’d rather outsource the job, you may be able to find an affordable SEO pro on a freelance website like Fiverr or Upwork.
7. Encourage Customers to Leave Reviews
Positive reviews are known to increase conversions. Consider asking customers to review your business or service right after checkout, perhaps with a clickable star-rating window. To encourage product reviews, follow up with customers via email and ask them to submit a review of their purchase. You might even offer an incentive, such as a discount for a future purchase, in return for leaving an honest review. You might also search sites like TrustPilot for reviews of your products and include them in your review listing.
8. Market Campaigns Toward Lost Customers
Consider using social media to market ads to customers that have visited your site but didn’t make a purchase. Or, if you were able to get their email when they visited your ecommerce company, you can email them to remind them they still have items in their cart.
9. Offer International Shipping
If you limit your reach to just U.S. customers, you’re limiting your company’s sales potential. Consider offering free shipping to anywhere in the world — you may be surprised where your sales start coming from. If it’s not feasible for you to offer free global shipping, consider giving shoppers information about any extra costs involved in international shipping upfront, so they know what to expect when they check out.
10. Partner with Influencers
You may be able to significantly expand your ecommerce business’s reach by partnering with influencers who have thousands of followers (and possibly more). You might want to reach out to influencers who focus on your industry and help them create content that can lead to sales. You’ll need to offer them payment (such as a fee or commission) for their work and effort, but if they have a large audience, it may be well worth their price.
Which Strategies Are Right for Your Ecommerce Business?
You may want to start with the skills and tools you already have, and build from there. Consider which growth strategies you and your team can implement on your own. Once you’ve reached your limits, you may want to bring in outside contractors who have the expertise you lack. The return on your investment may more than cover any initial costs. Recommended: Ecommerce Business Loans & Financing Options
Are There Any Downsides to Growing Your Ecommerce Business?
While ecommerce growth is good, rapid growth isn’t always good. If you grow too quickly, you may not be able to maintain quality control or even fulfill large purchase orders. This can lead to disappointed customers, negative reviews, and, potentially, the downward spiral of your business. Rapid growth could also push your employees to exhaustion, reduce their morale, and cause people to quit. The key to healthy e-commerce growth is to make sure you don’t damage what you already have as you expand. Steady, predictable growth can often be healthier than an overnight explosion.
Funding Ecommerce Business Growth
There are a number of different ways to get financing for ecommerce business growth. Here are some you may want to consider.
Business Loans
There are many types of small business loans. Banks typically offer the lowest rates and best terms but tend to have strict qualification criteria. If your ecommerce business is less than two years old, you may have better luck getting a loan through an online lender. Also known as alternative lenders, these companies tend to have more flexible qualification criteria and are faster to fund than banks. However, they typically charge higher rates.
Out of Pocket
Funding ecommerce business growth out of pocket may not be the fastest route to expansion. However, it can be beneficial because it means you won’t have extensive loans and monthly payments that bog you down, especially if you run into bumps along the way. Once income becomes consistent and predictable, though, you may want to venture away from bootstrapping.
Cash Advances
If your ecommerce business has high credit card sales volume and you need funding quickly, you might look into a merchant cash advance (MCA). With this type of financing, you receive funds as a lump sum upfront from an MCA provider and repay the advance from future sales. Typically, the lender will automatically deduct a portion of your credit card sales, usually each business day. MCAs are generally easy to qualify for but costs typically run significantly higher than traditional small business loans.
Small Business Grants
There are a variety of government, nonprofit, and private entities that offer small business grants. You may be able to qualify for a grant if your business meets certain requirements (such as being a woman-, minority-, or veteran-owned business). Unlike loans, grants do not need to be paid back. However, competition for this type of funding tends to be stiff. Recommended: Small Business Grants for Women
Equipment Financing
There are also loans specifically for buying equipment, such as computers you might use in your e-commerce business. With equipment financing, the equipment itself acts as collateral for the loan, which keeps the interest rate low and your other assets (either business or personal) safe. You would typically get a quote for the equipment you’d like to buy, and a lender would then front you all or a large portion of the cost.
Business Credit Cards
If you need a way to cover dips in cash flow, you might consider a business credit card. If you can qualify for a business card with a 0% introductory annual percentage rate (APR), you can spend for a predetermined period without interest. If you pay off your balance before the end of the introductory period (which may be a year-plus), you don’t have to pay any interest at all. A business credit card can also help you build business credit, which can allow you to access loans with low rates and attractive terms in the future.
The Takeaway
There’s no one way to grow an ecommerce company, but proven strategies include email marketing, making sure your site is SEO- and mobile-friendly, running time-sensitive promotions, and giving excellent customer service. Once you’re in a rhythm and are seeing the results of your labor, you may want to leverage a small business loan to help your business reach the next level in its growth journey.If you’re curious about what type of small business loan your ecommerce business might qualify for, Lantern by SoFi can help. With our easy-to-use online lending tool, you can review and compare small business loans that meet your company’s needs and qualifications without any obligation and just one short application.
Frequently Asked Questions
What are some tips for growing an ecommerce business?
How can you receive funding for an ecommerce business?
How do you scale a small ecommerce business?
Photo credit: iStock/FreshSplash
LCSB0223006
About the Author
Lauren Ward
Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
