With everything from efiling of the necessary paperwork to the enormous number of virtual business tools with low learning curves, the internet has made it far easier to start a business. Even brands that are already up-and-running see nothing but open doors into the world of ecommerce, where entry seems to be just as easy.
It’s generally less expensive to sell on ecommerce than it is to open a store, too, which means entry to ecommerce can appear deceptively straightforward and economical. There is still risk involved, however, as well as plenty of money to lose if a brand doesn’t look at its entry to ecommerce strategically.
Strategy, of course, starts with a plan. That plan has to be flexible, too, because you’ll get feedback and data early on that will indicate whether your plan was the best route or not. That’s normal. Reviewing data and adjusting your course is what strategy really is, and in ecommerce, those adjustments tend to be more dynamic to make.
To compare tomorrow’s numbers with today’s expectations, you will need a business plan that spells it all out. This plan will be your benchmark, and is how you know what to adjust later.
To get started in ecommerce, you specifically need an ecommerce business plan. Even brands that have an existing, overall business plan require an ecommerce business plan to get their online strategy figured out, to foresee potential roadblocks, and to identify what will be needed in resources. By crafting an ecommerce plan, all stakeholders stay accountable.
Keep reading to learn how to put your ecommerce business plan together.
Things to Keep in Mind Before Writing an Ecommerce Business Plan
There are some things to keep in mind before writing your ecommerce business plan, and some apply even more to ecommerce than they ever did to standard business plans.
- Know your audience. In ecommerce, this means knowing where your audience “hangs out,” including what marketplaces they tend to shop on. Knowing your audience is more dynamic in ecommerce because of the humongous data available to brands on every level. You can learn what your audience likes to click on, how long they spend on certain pages, what they search for, who they follow, and so much more.
- Set clear goals. This is true whenever you set goals or KPIs. To deliver on your plan, you need to clarify what your ecommerce goals are. For example, set goals for each ecommerce channel you plan to sell on.
- Invest your time wisely. There are parts of your ecommerce business plan that will require a lot of research, and they will take time. Be prepared to spend the necessary time on these pieces.
- Keep the “meat” of your plan to-the-point. As much as we can digress into flowery paragraphs about our brand vision and hopes, your ecommerce business plan should be to-the-point. Any additional documents you believe could be valuable to stakeholders can be added as appendices.
Finally: Outline Your Ecommerce Business Plan
There are few things more intimidating than a blank page, especially with the promise to deliver a business plan that will define your whole brand in ecommerce.
Fortunately, starting with a plan outline is a great hack to get you organizing (and writing) your thoughts more quickly.
Here’s a sample ecommerce business plan outline that you can use or adapt to your needs:
- Executive summary
- Company overview
- Market analysis
- Products and data management
- Channels and delivery
- Marketing plan
- Financial plan
Once you have your outline set, you’re ready to start filling it in.
Next: Filling Out Your Ecommerce Business Plan
The sections from the outline above are broken down here to give you some pointers. Take a look and jot down any notes on concepts that you want to be sure to include in your own plan.
Executive Summary and Company Overview
Both the executive summary and the company overview will come pretty naturally to you, which is helpful to build momentum as you start drafting your ecommerce business plan.
The executive summary will essentially be a snapshot of your company overview and the high points of the KPIs you expect the ecommerce plan to deliver.
The company overview should answer several questions. There’s a caveat, though—you have to answer each in the context of ecommerce, specifically. (Just add “in ecommerce” to the end of each question if you think you’ll veer off into non-ecommerce business goals.)
- What does your brand do now?
- What vision does your brand have for what it WANTS to do?
- How would you describe your product offering?
- How would you differentiate your offering from competitors’ offerings?
- Who do you sell to?
- Who do you WANT to sell to?
- What marketing do you plan to reach customers through?
- What is your current state of revenue?
- What do you WANT to earn in revenue?
- Who will be involved in each part of this ecommerce business plan?
Your market analysis should also be specific to ecommerce. You don’t care who sells to the same distributor. You don’t care who else is on the shelf with you at the local retailer. You want to know who else is selling on ecommerce with the same D2C and marketplace models that you want to dominate.
The first section of your ecommerce business plan (including the executive summary, company overview and market analysis) is essentially the summary of what opportunity there is for your brand if the plan is executed successfully. This means you should include key points in your market analysis like the number of competitors, their size, their presence on different channel(s), and what problems they solve for customers, because these are the details that will ultimately determine what opportunities you have.
You want to solve the same or similar problems as your competition, but you also want to get your message to consumers in a more compelling way. That’s how you win them over. Perhaps you’ll do that with lower prices, better fulfillment or enhanced shopping experiences. You’ll only know which strategy to focus on once you have the market analysis complete.
Products and Data Management
Outlining your products is one of the easier steps in your ecommerce business plan. Where your strategic skills really ramp up is in the “data management” piece thereafter.
Ecommerce requires an intricate web of product data for multiple channels. That includes everything from essential product data like SKUs and descriptions to enhanced data like product videos and photos. It’s because your ecommerce strategy involves multiple channels (of both sales and engagement) that this product data question needs to be hashed out.
For example, if you plan on selling on Amazon and Walmart.com, those two platforms have unique search algorithms. This means your keyword strategy should be adjusted accordingly. They will also have different character limits and field requirements on product listings. What’s more, the landscape of your competition on each marketplace might be different, which will further adjust your strategic use of product data.
To map out your product data strategy in your ecommerce plan, do your homework on the data requirements and opportunities on each channel. Then, identify the product information management software (PIM) you want to use to manage the aggregating, optimizing, and exporting of that product data once you’re ready to put the plan in action.
Channels and Delivery
Take the sales channels you identified in the section above and list them out in this section of your plan, along with your rationale to set up shop there plus your goals on each. Then, list out any marketing channels you plan to use. Finally, list out any other customer service channels or other platforms where you plan to have contact with consumers.
This “delivery” portion of your plan refers to the delivery of your mission, and more specifically to the fulfillment of orders. This will generate a long list of accountable employees, vendors and other partners who you’ll also want to include in your plan. Next to each of them, list out the key accountabilities and any KPIs that fall under each party’s responsibility.
This is where your ecommerce business plan will differentiate significantly from any existing business plan you have. In ecommerce, getting word out about your brand is based solely on digital channels.
Detail the marketing plan for your ecommerce presence here. Where will you be advertising and interacting with consumers? How will you get their attention there? What will happen once you do?
Write in an additional accountability for you (or someone you designate) to keep on top of changing marketing trends, too, such as the ever-relevant switch to mobile marketing. These changes will require adjustments to your plan over time.
The financial part of your business plan will include a sales forecast, income statement, cash flow statement and balance sheet.
If you really want to make this plan as ecommerce-specific as possible, these reports should reflect only your income from ecommerce sales.
Even if your brand doesn’t need a financial plan to “jazz up” potential investors or request a bank loan, these numbers will provide you with a crucial benchmark to refer to later. It’s far better to recognize when changes are needed than to shell out funds toward a plan that’s not working.
Even for brands that have an existing business plan, an ecommerce business plan is a central tool to ensure the launch into ecommerce is successful. It sets standards to measure success by, it maps out accountabilities and KPIs, and it spells out exactly where and how that brand will reach its target audience.
Once drafted your ecommerce business plan should be shared with all stakeholders. Have every player on the field read it and understand it. Getting everyone aligned behind this plan will make it more efficient and will help keep teams agile when adjustments are needed.
Amber Engine is a software company passionate about ecommerce. The company’s fast and simple PIM software gets sellers, distributors and brands to Amazon and other online marketplaces in weeks instead of months.
The following blog was written by guest author Alex Borzo, a content contributor at Amber Engine, a software company passionate about eCommerce. The company’s fast and simple PIM software gets sellers, distributors and brands to Amazon and other online marketplaces in weeks instead of months.