Online entrepreneur Pascal Culverhouse started www.electrictobacconist.co.uk in July 2013 while working for the family business. Two years later, his business is the leading online retailer of e-cigarettes in the UK. The London Economic asked the successful internet millionaire for his top three tips for online success…
What makes an online business successful?
The internet means that theoretically anyone could decide to become an entrepreneur, turn their bedroom into an office and launch the next big multi-million pound company. Yet the statistics on success are not good, with some even suggesting that 90% of new online businesses fail in their first 120 days. What separates the successes from the failures, and what can we learn from those that got it right?
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Be part of the next big thing
Every time that a new technology or trend comes along, there is a small window of opportunity in which startups and entrepreneurs with little funding are on a much more level playing field with giant corporations. This is because it’s much easier to take market share in a not-yet-contested market than it is to gain market share in environment where consumers have already decided on their favourite retailers and products. Though this phenomenon predates the digital age, the internet means that although this window is now smaller, at the same time that the rewards are exponentially greater.
In 2013, I setup an online business selling electronic cigarettes. Two years later, I turned over seven figures and became the number one online retailer of electronic cigarettes in the UK. I was savvy, or lucky, enough to get through the window of opportunity before it closed behind me. But while electronic cigarettes are no longer a big secret, who knows what might come along tomorrow? The trick is spotting the next big thing before anyone else does.
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Create a new take on something old
If you don’t happen to get hold of a unique product or service before it becomes common knowledge, then there is another route to success: finding a way to add new value to an existing product. The internet offers numerous possibilities for doing this, with online dating and electronic greeting card services such as Moonpig being two excellent examples of how you can take offline products or services and give them a digital makeover.
You don’t get any more mundane than the disposable razor. Yet the startup Dollar Shave Club had the bright idea of selling disposable razors on a subscription model, so that customers get a new one delivered just as an old one gets blunt, and the company is now worth $615 million. Suddenly those same disposable razors that everyone else has already been selling for years look a lot more exciting to the customers – and also the company’s founders.
Ed Tyson, a UK based entrepreneur, was working as a shelf-stacker in a local supermarket when he came up with the idea that would make him the president of two companies: selling screen protectors for mobile phones with a lifetime guarantee. Like the boys behind Dollar Shave Club, he wasn’t the first person to sell screen protectors or the first person to offer lifetime guarantees on a product, but he was the first person to put the two together into a winning business.
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Market yourself correctly
The first sale is the most difficult. Why should the customer visit your new and relatively unknown website, when they can probably simply buy what they are looking for risk-free from Amazon instead? It’s a question that you have to be able to answer if you are to have any hope of success at all in online sales.
Trust is something which takes years to build but can be broken in a moment. Get rich quick tactics like black-hat SEO and spammy sales letters may cause a short-term spike, but will eventually become an obstacle to meaningful growth. If you start to become known as a retailer that is not trustworthy, it could very well be the beginning of the end for your business.