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How to Write a Solid eCommerce Business Plan

Updated: Oct 4





The first step for your e-commerce business is to plan what your business will do and how it will generate a profit. Some people are intimidated by creating a business plan, but we firmly believe that all e-commerce businesses need one. Even if you are funding the business yourself, writing a business plan will help clarify things and expose any issues that will need to be resolved before the business is launched. A well-written business plan will also play a vital role in obtaining funding from potential investors later down the line, should the business need to go down that route.


Let’s look at the 5 key elements of an e-commerce business plan.


Company Description

First, describe what the company is about and what its market space will look like. Will your business be a giant business-to-consumer retailer like Amazon or provide a business-to-business service? What is your goal for the company?


Revenue Model

E-commerce businesses can generate revenue in a number of different ways. The most common ways

include:

  • Selling products or services directly to consumers or businesses (as Amazon does)

  • Receiving payment from other companies for their advertisements on your site (Google does this with their advertising services)

  • Offering products or services via a paid subscription (like The New York Times)

  • Receiving payment on a transactional basis in return for providing a service (such as eBay)

  • Affiliate marketing, where a business receives money for directing customers to another business

Many businesses choose a combination of revenue models to maximize their profits.


Products and Services

Now, describe the products and/or services that your company will be providing. Include each item’s features and benefits. Describe things in terms of what problem the product will solve for the customer.

You should also consider the pricing strategy for each product and service as well. This may change after you do your competitive analysis, but it will give you a framework to start from.

Online pricing strategies usually take one of the following forms:

  • Completely free (for example, you might give away a report or sample to draw customers in)

  • “Freemium,” where part of the service is free but customers must pay for additional features (for example, paying a subscription fee to remove ads from a mobile app)

  • Fixed fees for each product and service

  • Selling different versions of a product at different price points to different markets

  • Bundling products together to provide better value for the customer (for example, buying a suite of software rather than just one program)

  • Dynamic pricing through auctions, flash sales, and last-minute deals (like last-minute vacation packages)

Competitive Analysis

The next step is to identify who your business’ competitors will be. Find out:

  • What their products and services are

  • How the products and services are marketed

  • What price point the products and services are offered at

  • What level of customization and personalisation do they offer.

  • The search engine keywords that they focus on

  • Additional selling features (such as free shipping, gift wrapping, etc.)

  • What types of relationships they build with customers

  • What makes them unique in the marketplace

Now you can identify the competitive advantage that your products and services will have. To do this, identify what problems the product will solve and why customers will choose your company over a competitor.


Organizational Strategy

Many e-commerce businesses are individual, entrepreneurial ventures. However, it’s worthwhile to consider how your business might grow and what resources you currently have on hand. This is also where you can outline what tasks will need to be done to keep the business running and where you will need support.


Marketing Strategy

Finally, consider how your business will be marketed. Online channels can include:

  • Search engine optimization and advertising

  • Social media (Facebook, Twitter, Pinterest, LinkedIn, YouTube, etc.)

  • Blogging

  • Newsletters

  • Mobile apps

As well, consider traditional offline channels such as:

  • Newspaper, television, and radio media

  • Trade shows and conferences

  • Mail-outs

  • Business directories

  • Word of mouth

Ideally, you should have a separate, more in-depth marketing plan for the business but this would give you a starting point.


If you have any questions or need help writing a solid business plan for your e-commerce store, feel free to send us an email at info@afwdigitalsolutions.com and we'll be happy to assist!

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