It’s never a bad idea to diversify your income when you’re self-employed or freelancing. Not only does it potentially bring in some extra money, but it can also alleviate some of the stress and uncertainty around client work. So why not find out how to set up an eCommerce side hustle and see if it’s right for you?
Like affiliate marketing, it’s a common recommendation for anyone looking to make more money online. But success usually requires a significant amount of time and effort, so it’s important to be realistic and not plan on a brand-new eCommerce side hustle covering all of your financial needs from day one.
At the same time, some freelancers have built six or seven figure incomes from developing their own eCommerce businesses. They are able to choose to focus on their own brands rather than working for clients, or expand their businesses to cover both areas with an income which doesn’t rely on continually bringing in more clients.
- Researching and choosing what to sell
- Picking an eCommerce business model
- Launching your eCommerce side hustle
- Growing and promoting your eCommerce business
- Top tips for starting an eCommerce side hustle
- Other freelance side hustles to earn extra income
Researching and choosing what to sell
You can build a successful eCommerce business selling digital downloads, physical products, courses and tuition, or even services like music lessons or personal training. Whether you’ve already got something in mind, or you’re looking for the right thing to offer, it’s important to do some research and see if there’s existing demand, tough competition already in that market, or any legal restrictions that need to be planned around.
Many freelancers will choose to offer something related to their core career. For instance, designers might branch into selling artwork, fashion or household items. The benefit is that you can cross-promote products, but as it’s an obvious option, you’ll also find a lot of competition. Finding a more unusual or ignored niche, which still has a good level of demand from customers, will mean you can stand out a lot more.
As with affiliate marketing, you can use a variety of free tools to check the number of people using search engines to look for a product, or who mention it on social media. For example, Google Trends, Answer The Public and Buzzsumo.
An important thing to consider is whether there’s a current trend which has grown quickly, but will potentially fade just as fast. Fidget spinners would have seemed a great opportunity in early 2021, but might not be a good plan for an eCommerce business in 2022.
You should also check out existing retailers in the space, and analyse their strengths and weaknesses. It’s highly unlikely you’ll make a lot of money by going head-to-head against an established online shop, so you need to find ways you can stand out and do things differently.
Some of the ways to stand out include:
- Developing or finding products with a unique benefit, price point or other stand out attributes
- Eliminating problems or pain points customers will have with current retailers
- Targeting a specific niche which isn’t being served well enough
- Marketing your business through a method which is being overlooked or ignored
The time you invest in research, whether that’s from data, checking reviews of your competitors, or speaking with typical customers, increases your chances of success in the future.
Picking an eCommerce business model
There are three key parts to picking an eCommerce business model for your new venture.
- Who you will sell to
- How you find your products
- The sales method you use
Broadly speaking, there are four main categories for how you can reach customers:
- B2B (Business-to-business): Retailing directly to other businesses
- B2C (Business-to-consumer): The most common method of eCommerce is for companies to sell to individual customers.
- C2C (Consumer-to-consumer): Aggregating products or services as a middle-man between suppliers and customers.
- C2B (Consumer-to-business): For example, freelance hiring websites which provide a pool of consumers able to offer services to businesses.
The majority of online stores will retail to consumers, particularly if you’re setting up an eCommerce side hustle. But don’t overlook opportunities to sell products or services to other businesses, as this can offer an easier sales process, with less need to promote and market your venture.
You also need to have something to sell, and there are various options available depending on the type of product or service you want to offer:
- Making it yourself: Perfect for small, handmade items.
- Manufacturing: You can order a number of products from an external manufacturer, but this does mean an upfront cost, and the need to store inventory.
- Arbitrage: It’s possible to buy wholesale, commercial or white label products and then retail them for a higher price. This often means you need to develop a brand that can sell items for a significant increase, whether that’s through marketing or targeting a particular niche.
- Drop shipping: A popular option is to partner with a company that makes and ships orders directly to a customer after they’ve ordered via your site. This means you don’t have any start-up costs, but your margin and revenue will be lower.
- Print-on-demand: Similar to drop shipping, many print-on-demand sites and services allow anyone to list their designs for t-shirts, fabrics or other products, with a split on the profits from any sales.
- Digital products: From online video classes and tuition to software, digital products are cost-effective to produce, but this can mean a lot of competition in popular niches.
Finally, you need to choose your sales platform and channels.
- Selling via existing eCommerce websites: From Amazon, eBay and Etsy to smaller aggregators, you’ll have an existing customer base, but a lot of competition.
- Using a turnkey solution for your eCommerce website: There are various simple solutions to set up an eCommerce website, with Shopify and Squarespace probably the most well-known. The advantage is that it’s easier to get a store up and running (although not always as simple as you might hope), but the fees can be substantial depending on the size of your business and the functionality you require.
- Building your own website: There are various eCommerce website solutions to choose from, depending on the size of your store, technical knowledge, and budget. For most side hustles, the free WooCommerce plugin for WordPress makes sense, although you’ll need some technical knowledge and patience to get the most from it. And other examples exist for larger stores (e.g. Magento), or there are different plugins for particular niches (for example Easy Digital Downloads for WordPress)
- Social Commerce: A rising trend has been for eCommerce sales directly through social media, whether that’s Facebook and Instagram, WhatsApp, or other platforms. This has some advantages, including removing the need for websites, but does mean you’re entirely at the mercy of a third-party platform, including if your account is removed for any reason.
In many cases, it makes sense to use multiple channels for your side hustle, allowing you to not only promote your brand and business through both a website, and an existing eCommerce or social media platform, but also have a back-up if one source of sales is removed, or becomes unprofitable.
From selling motorcycles via Facebook groups and messages, to investing in a bespoke website and marketing to build an online retail empire, the best solution will be the one that works for your idea and business. Plus, it’s generally better to start small and grow over time once you gain some traction and sales, rather than going all-in at the start.
If you’re looking for help to develop a website, whether it’s on a turnkey solution or a bespoke platform, then choosing the right experts and developers is important. Even freelancers can be tempted to outsource work to the cheapest supplier, and then be left frustrated with an unfinished or broken shop. It’s better and more cost effective to choose based on previous work, reviews, and referrals from places including our own Creative Freelancers UK Facebook group.
Launching your eCommerce side hustle
Whichever route you take to attract customers, there are some things which you need to have in place to ensure the best chance of success and making a return on your time and investment.
Many people get hung up on choosing a name and logo, but while these can be useful to differentiate your business, it’s more important to get the processes right behind the scenes. Ensuring that you have a slick ordering and shipping process, queries and returns are handled appropriately, and that you’ve allowed for areas like customer service will make a bigger difference to ongoing sales.
Make sure you test how everything works, and rope in friends, family, or some initial customers to run through everything. And be gracious when you receive constructive criticism.
It’s easier and cheaper to change your logo than realising your online checkout confuses people, or that your customer complaints are going to an email account you’ve forgotten about.
And it’s also simpler to invest in advertising and marketing to grow an eCommerce side hustle which works for the majority of people visiting it. If a good number of people who visit your business end up buying, you can increase volumes with marketing and advertising. But if you barely make a sale from hundreds or thousands of visitors, then there may be a problem elsewhere that needs fixing first.
An average rate for shoppers abandoning purchases they’ve already selected is around 69.99%, for reasons including shipping costs, slow delivery, or a complicated checkout process. It’s important to schedule time to regularly review your eCommerce business and monitor whether your prices are too high (or low), and where product listings or the sales process can be improved.
Growing and promoting your eCommerce business
There are estimates that around 50% of eCommerce stores never make a single sale, and it’s certainly believable when many are rushed out to generate a passive income with no plans or resources to grow over time.
Overnight success is possible, but it’s also relatively rare. Most eCommerce side hustles are built up over months and years to a level where they bring in a significant, and sustainable, income.
There are a wide range of ways to promote and market your eCommerce business, and it can be overwhelming to try and make them all work at once. A better approach is to list out the options and tactics, and then test the ones which are likely to fit with your audience and personal approach.
If you’re a freelance writer or marketer who enjoys sharing on social media, then a ‘build in public’ approach can attract a lot of interest as you describe your eCommerce journey. Or you may prefer to concentrate on a long-term SEO and content-driven approach which allows you to build a brand through amazing product descriptions and customer guides. For those with big personalities that love the camera, you could invest in creating content for YouTube or TikTok.
But you also need to be prepared that your preferred choices aren’t right for attracting customers, so it’s important to regularly track and analyse the results of your promotion and marketing. There’s no point in crafting amazing images for Instagram, if all of your actual sales are coming from Google. The biggest challenge is to balance allowing time for your audience to grow, without spending too much effort on a channel which isn’t currently working.
The area that many freelancers ignore or struggle with for an eCommerce business tends to be advertising, as it can seem expensive and off-putting when you’re not naturally data and financially-driven. But there are lots of powerful tools available to boost your business, particularly around remarketing and retargeting people who have visited your business but not made a purchase. All of the major platforms offer guides to ad options, including Google, Facebook, Twitter, Pinterest, TikTok and more.
And while it’s easy to get caught up in the fun of posting on social media, or tracking the data from your first ad campaign, don’t overlook the basics to grow your eCommerce business.
- Customer reviews build social proof and trust.
- Email subscribers are valuable potential customers already willing to share their addresses.
- Reward existing customers to encourage loyalty and repeat purchases
- Encourage referrals through discounts for friends and family
There are a huge range of books, websites and more offering advice on how to build an eCommerce business. The key thing is to be open-minded but sceptical, and to test and measure whatever you’re introducing or changing. What worked for Nike, Patagonia, or Zappos might not be appropriate for your business or customers. But you might get one or two ideas that could be tweaked to work in your particular niche.
Top tips for starting an eCommerce side hustle
The options available to anyone starting an eCommerce side hustle can feel a little overwhelming, but you don’t have to try to cover everything in one go. And many can be reduced down to some relatively concise tips.
- Start simple: Don’t try to do everything at once. Starting small and simple allows you to add more complexity as you grow.
- Basic plans and research are better than nothing: A simple plan on a single page of a notepad will help you decide where to start, what to do initially, and most importantly, what to ignore for the time being.
- Be prepared to adapt and change: Your initial plan will evolve and change over time, even after you’ve found an eCommerce side hustle that works.
- Multichannel sales and marketing are a safety net: Focusing on one sales platform and marketing allows you to concentrate your efforts. But if you lose access, having one or two back-ups will mean you’re still able to earn an income.
- Test and measure: Understand what works for your business, and adapt accordingly based on sales and revenue.
- Automate and outsource where it makes sense: There are large areas of eCommerce which can either be automated (for example, email responses to customers), or outsourced (design, marketing, web development).
- Empower your customers to promote your business: Customers want to feel good about the fact they’ve bought a great product or service. And they often want to share that with friends, family and their online connections. So why not encourage and help them?
- Don’t ignore the basics: Product descriptions and images, customer reviews, improving the buying process and checkout system, or adding tax and shipping details aren’t always fun. But they’ll often make a bigger difference to your income than an Instagram photo or funny tweet.
Other freelance side hustles to earn extra income
Looking for ways to earn extra income alongside your self-employed or freelance career? Why not check out some of our other guides to bring in some extra money?