3 ways to test market viability before you scale your eCommerce business

Starting a business is never risk-free, but small to medium enterprises (SMEs) can mitigate risk by entering the eCommerce arena armed with research. Market viability offers eCommerce businesses a critical way to explore their target market before making investments while identifying what works (and what doesn’t).

Unlike traditional brick-and-mortar industries, your eCommerce business won’t depend on local consumers. But that also means facing global competition.

You can stand up to the competition and scale your eCommerce business by following three steps for testing market viability.

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1. Get to know your target market

The vastness of an eCommerce world means almost unlimited audience potential. And the pandemic has accelerated the shift to buying online instead of in-person—faster than ever before. Online sales are projected to total over 22 percent of all retail sales by 2023, up from just 14 percent in 2019. But with the sheer number of options for shopping on the internet, how do you make sure you reach the right customers at the right time?

There are a few ways you can identify your exact audience and better understand them. These tools make it possible to stand out from the crowd and scale your eCommerce business.

• Look at SEO insights. Search engine optimization helps eCommerce businesses understand what their audience is searching for. To test whether or not your business will generate traffic, conduct Google searches of similar products or services and see what types of results come up. Finding the terminology your potential customers use will help you pinpoint the best strategy for creating an online presence.

• Research current trends. Tools like Google trends can provide information on the popularity of a product or service and when and where people are searching for it. Using it to investigate sales will help an eCommerce business discover the demand for a product they intend to market.
  
  
• Get feedback from your consumers. To enter the eCommerce world as a competitive business, talk to the people who will use your product or service. Creating something simple and effective, like social media polls, offer immediate feedback for exploring your market viability.

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2. Understand the competition you’ll face as you scale your eCommerce business

Every SME should conduct market research to assess your competitors’ strengths and weaknesses. With this data, you can tap into existing sales trends. Analyzing the market does not have to be overly complex. Searching online about products and services similar to your own and documenting patterns that you see, for example, is a simple way to gather valuable learnings. At a minimum, business owners should:

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• Explore the best price point. You can make your product an enticing option for consumers by setting a price that competes with the existing market.
  
  
• Identify online tactics that work (and ones that don’t). Take note if you come across something that stands out, like a steller website. Take inspiration from what works, and ditch what doesn’t.
  
  
• Find your niche. While investigating your competition, remember the value of providing something unique. Be on the lookout for a fresh angle you can use to scale your eCommerce business.

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3. Perform a “smoke test”

Once you’ve identified your audience, explored whether it’s a viable market for your product, and addressed the competition, you can test demand. A smoke test is an excellent method of trialing your product before officially offering it. This tactic provides an assessment of desirability that will help you know whether you’re on the right track and gives you the confidence to hit the ground running.

Streaming services like Netflix tested their products by offering a free sign-up period, which acts as a way to scope out whether or not a full launch will be successful. A similar tactic can be just as effective on a smaller scale. For example, eCommerce businesses can list a product for pre-order before it’s ready for sale. The number of pre-orders will let you know if there is true demand or if you’re better off pivoting to a different approach (and refunding any orders placed).

Another example is creating a few separate listings on a big e-commerce site, like Amazon or eBay, and putting them in competition. The one that performs the best is the one you pursue.

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Want to scale internationally?

As you continue to use market viability to explore and scale your eCommerce business, you may find yourself ready to dip into the international market. If so, working with a cross-border global payment partner like Lian Lian Global can help protect you and your consumers.

Start growing your eCommerce business today with a cross-border growth partner.

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