Starting and running a successful e-commerce business can be a stressful venture if you have all your eggs in one basket. However, if you can reduce risk by diversifying your e-commerce business, it will lead to better long-term sustainability.
It’s expected that by 2026 e-commerce sales will reach $8.1 trillion, which means the opportunity is massive. Even getting a very small slice of the massive pie means you’ll have a successful e-commerce business. Continue reading to make this a reality by diversifying your venture.
Sell More Products
Products can go out of fashion quickly if a competitor provides a better version or it becomes obsolete altogether. For example, cassette players were no longer viable products once MP3 players took over the market.
Therefore, you need to diversify the amount of products that you are selling and here are a few ideas:
- More sizes: you can increase the number of sizes of the same product. This is an easy option since no detailed design thinking needs to go into the product. Let’s say you’re selling yoga mats, you can provide a small, medium, and large model.
- Colors: adding more colors to your lineup increases the number of people wanting to buy from you. For example, some colors could be used to target the female market – traditionally ones like pink and purple.
- Bundles: you can offer your current products as bundles to provide more value and choice for customers. These bundles are easy to create depending on the type of products that you have in your inventory.
Sell on More Platforms
You should consider selling your products on additional e-commerce platforms to get more customers. That’s because some customers only buy from a single platform, and you will need to actively sell there to find them.
Some top e-commerce platforms you should consider include Amazon, eBay, Walmart, Etsy, and Shopify. You can even use the same logistics company to sell products on every platform.
This approach reduces the risk because the rules, competition, and number of buyers on a single platform can change dramatically. However, if you sell on multiple platforms, it means your business is not reliant on the performance of a single one.
Also, it’s important to familiarize yourself with the different rules and best practices of each platform. This ensures that you can sell there with the best results since they differ a lot.
Use Multiple Marketing Platforms
You’ll need to use marketing channels to acquire new customers. However, to ensure that you are not too reliant on a single marketing channel, it’s a good idea to diversify. The multi-channel approach ensures that you can continue to generate customers when traffic from a single one dries up.
Here is a list of some marketing channels to can consider for diversifying your business:
- Email marketing: email is a great way to send multiple messages to the same prospect with the hopes of securing a sale. It takes more than a single message to get a sale in most cases, which is the reason why this medium provides one of the best ROI’s. However, the hard work is getting the prospect’s email in the first place.
- PPC: Pay Per Click marketing allows you to generate large amounts of traffic in a short period of time. That’s because you can spend a lot of money on the platform where you are buying PPC ads. The trick is ensuring that each PPC campaign is profitable.
- SEO: you can get traffic organically from the search engines by producing content. This process is slow to start but can snowball into a lot of regular traffic if you use highly searched keywords in the content.
- Video: you can use websites like YouTube to show off your video marketing material. This allows you to present product demonstrations and other tutorials.
- Social media: get your social media marketing campaigns right, and you can get viral posts that result in massive brand recognition. However, you may need to hire a professional for the best results.
Go After More Niches
Instead of expanding more and more products in a single niche, you can diversify your brand by branching out into several niches. This ensures that you can access a larger pool of customers after opening up your LLC.
However, it’s important to find niches that are related to one another so you can cross-sell products. This increases the number of sales for both businesses, and you can take advantage of existing knowledge.
For example, if you are selling gym equipment such as weights and resistance bands, you could also go into the clothing niche and sell sportswear. This is a great idea for diversifying your e-commerce business.
Acquiring customers from one branch of the business will expose them to other products you may not have considered but need. It’s your job to create effective marketing campaigns to sell them products in another niche.
Add More Funding Sources
Does your business rely on funding to grow? Then it’s a good idea to increase the number of funding sources so your business can continue to scale. This means that once one funding source dries up, you can rely on others to get the job done.
Some of the top business funding sources include:
- Crowdsourcing
- Banks
- Friends and family
- Angel investors
- Business investment companies
It’s important to get a good deal when acquiring a funding source. This means avoiding high-interest rates or giving away too much of your company. Also, look for additional perks such as expertise and help on how to run a business.
Final Thoughts
To summarize, diversifying your e-commerce business is a great idea to ensure that no single factor will eliminate a large portion of your revenue. By spreading the risk, you will essentially future-proof your business.
However, no matter how much diversification you do, you may find that the 80/20 rule still comes into effect, which means that the majority of your revenue will come from only 20% of your customers.
