Hello again! It's been awhile.
This is the second instalment of a series that will discuss running an e-commerce business in Latin America.
Part 1 is here: How To Start An E-Commerce Business In Latin America
The first post talked about the things you'll need to get your online store up and running, such as an appropriate niche, a platform like Woo Commerce or Shopify, payment gateways etc.
This post will talk about how you should approach marketing after your store goes live. After all, before people can buy from you, they have to know that you exist.
Let's get it going.
Assuming you've completed the steps outlined in part 1, you should already have an online store set up, a product(s) to sell and a Latin American country (or countries) to sell it in.
Your product should meet the following criteria:
1) Easy to import and/or manufacture for a low cost in your country of choice (preferably a small, lightweight product to save on shipping)
2) In-demand among middle/upper class Latinos between the ages of 20-40
3) Either cheaper or better quality than the competition
Your country of choice should meet the following criteria
1) Few import restrictions and/or low manufacturing costs (depending on if you want to import or manufacture/replicate your product domestically)
2) Reasonable credit card/e-commerce penetration (rules out many countries, unfortunately).
3) A semi-functional postal service
So, you have a product that has reasonable demand in your country or countries of choice, a sharp looking website a cool sounding name with a snappy logo and all your social media accounts set up.
Now for the hard part.
How do you reach potential customers?
A Few Words About Internet Marketing In Latin America
Since E-Commerce is a relatively new concept in Latin America, your target demographic must be younger folk (older people use the Internet less, won't know how to shop online and, even if they do, will often be too paranoid to give out their credit card information).
When thinking about how to promote your store on the web, it is important to remember that the Internet isn't used quite in the same way in Latin America as it is in the United States, Canada or Europe. For instance, if an American is looking for the best bakery in Anaheim, California, they are likely to use Google. And you can bet that the business has managed to rank 1st in Google for "Best Bakery In Anaheim" is laughing all the way to the bank.
In Latin America, however, people are more likely to ask a friend where a good bakery is, or simply go to the one closest to their house. They simply don't rely on Google for finding shit nearly as much as we do. For this reason, you'll find that the same keywords that are exceedingly valuable in English are largely useless in Spanish (at least for now) and are considerably easier to rank for.
What I'm trying to say here is to ignore Google Ads and SEO in the beginning stages of marketing your business. It may be prudent to try to rank for Spanish keywords in the future, but for now you just won't see much ROI coming out of this.
But, whereas Latin Americans don't use Google quite as much as Canadians, Americans, Europeans, etc, they use Facebook like maniacs.
Just take a look at this fucking graph.
Although, as you can see, the metrics this study used to draw its conclusion are a bit questionable, I can personally attest to the fact that people use social media down here (especially Facebook and Instagram) far more than my fellow Canadians.
Luckily for you, the demographic you'll need to be targeting for your online store is exactly the same group of people who use Facebook and Instagram the most. For this reason, it will help if your product is highly sharable on these platforms (health and fitness or fashion as opposed to sex toys or car engine components, for instance).
Your first 1000 Facebook Fans
While you might be tempted to throw money at Facebook ads right out of the gate or, even worse, pay for fake followers after putting up some content, I highly suggest you don't do this. While fake followers might give others the impression your page is more legitimate, these people will never engage or buy anything, so there is really no point. Especially when, for the same amount of money, you can get real followers who are actually interested in your stuff and will share it, thereby expanding your followers for you.
So, here is what you'll do instead.
On Facebook, find out who the influencers are in your country and industry, or in a laterally related industry (eg. supplements; fitness clothing). Ask people you meet in person as well - you'll be surprised to know how many rich kids will personally know people with popular Facebook or YouTube pages. Make a list of the influencers who have at the very least 50,000 follows and send them a message with your pitch. You can offer them money or free products in exchange for promoting your page in some way.
e.g. (their company's) fans can receive a 20% discount at (your company) by liking (your company's) Facebook page and subscribing to the email list. Have them request that their fans "like" your page
e.g. A video review of your product and their stamp of approval that your store is legit. Have them request that their fans "like" your page
You'll generally find that Latin American influencers are a lot more chill about doing this sort of thing. They're often less paranoid about you stealing their business if they're in the same industry, and will often accept less in terms of money or gifts in exchange for promoting your content.
Do this with 3 or 4 influencers and it should be enough to get the ball rolling (I did this exact thing when I started an online store and it worked much better than I expected).
***You can do this with Instagram, too.
If you choose influencers that have followers that would be interested in what your selling, after doing this, you should have around 1000 Facebook fans.
1000 to 5000 Facebook Fans
"1000 - 5000 Facebook fans? Vance, I here to make money, not to jerk off over how many fans I have!"
I know, I thought that too. But I soon discovered just how important social proof is in Latin America. In countries where people are hesitant to buy online in the first place, you need a solid fan base to lend legitimacy to your business. Only then will people eventually feel confident enough to buy from you. Keep in mind that your first sales will very likely be driven by social media, so neglect it at your own peril. In my experience, people only started buying from me once I reached 2000-3000 Facebook fans.
In order to get your fans well into the four-figure arena, you'll want to use Facebook ads. Now that you already have a solid organic fan base, these ads will get you more bang for your buck (people will be more inclined to engage with a page with 1000 followers than with 11).
After testing a few different strategies, I found that by far the cheapest and fastest way to grow your following through Facebook Ads is by holding a giveaway, and by listing your ad strategy as "post engagement" (website clicks are too expensive and probably won't convert, instead drive people to your website indirectly through Facebook interactions).
It works like this.
- Create a post with a flashy photo of one of your products (and some cool accessories, or whatever, just make it worth sharing)
- Enter to win a free _______! (post a link to the product on your website as well)
- Just follow these steps to be eligible
- Like our Facebook page
- Share this photo on your wall
- Tag two friends in the comment section
- We'll announce the winner to our followers on (date) **A week later is a good time to announce the winner.
Then, pay to promote the post through Facebook Ads, $5 a day for a week, i.e until you announce the winner. Assuming there is interest in your product, this should produce pretty good results.
Here are some of my early stats of an ad exactly like the one above (in Spanish, of course).
After this ad ran I had +/- 2000 additional fans.
It might look impressive enough (I don't know a lot about Facebook Ads so I'm not really sure), but in reality this ad led to a whopping one sale. But that's OK, we're not talking about sales yet, we're talking about gaining a fanbase. Right now, you're building the foundation which will give people the confidence to buy from you.
Mix all of the above in with a few boost posts of product links, discount codes on the first purchase to people who like your page/sign up for your email list etc, and you will have build yourself a solid following of interested people in less than a month.
What About Instagram and Other Methods of Advertising?
Instagram ads are run through Facebook Ad manager, so any ad you create for Facebook you can run on Instagram as well. The value of Instagram in terms of sales will depend on what your business is. If you're targeting women, particularly in fashion or cosmetics, it will be of more value to you than if you are selling to (non-gay) men. You can use a program to buy Instagram followers if you're so inclined. If not, just pay for an occasional ad and utilize local hashtags on your photos to gain exposure. On Facebook, you can also publish the same giveaway strategy I mentioned earlier to gain more Instagram followers (i.e "Follow our Instagram to win"; "Winner will be announced on Instagram".
Believe it or not, many people will buy products from a company's Instagram page by contacting the owner (you) through WhatsApp to facilitate a bank transfer, accompanied by a Instagram screenshot of the product they want.
The other, aforementioned obvious option is Google Ads and SEO. Again, I don't recommend focusing on these strategies at the start - for me, it wasn't worth it. I'm sure there is tons of potential here, but I haven't figured out how to leverage it.
Word of mouth can also work here, but only if your business is partly physical.
Let me explain.
Once you've collected a good number of fans, you'll soon notice that the number 1 question you'll get is "Where is your store located?" (Donde queda la tienda?; De que país son?). The fact that a store targeting a Latin American country can be 100% online hasn't quite caught on to people here, so they will assume that you'll have a store in whatever country you're advertising in. Or, if you're advertising in multiple countries, they'll ask what country you're located in. Like I said before, people here aren't entirely comfortable with buying on the Internet. The same customer who would easily drop $200 or $300 on your products in a physical store may never buy from you online.
It's a shitty thing to get around. You'll notice a ton of abandoned carts and a horrid conversion rate when you start trying to sell online in LATAM (Part 4 of this series will talk about how to get sales).
But there is a potential solution.
If you're renting an office in a big city or have an apartment with your products in it, you can always set up a sort of "pop-up store" and have people come by who are interested. I know, I know. It sounds rogue as fuck, but it can actually work pretty well. If you have cool shit, word will get out and you can make some initial cash sales (Another option is to try to get your products in local stores, I may talk more about this in a future post).
Obviously you're going to want to be extremely careful if you do this. Only run it out of your apartment if you have a doorman, and demand that any customers leave their IDs at the door with him before coming in.
In Latin America, there are these small mall/plaza type things that will let you rent a small store space/office for a few hundred a month. They look kind of like this.
As long as you have the cash, even as a foreigner, you can usually find a way to rent one of these as an office in most big Latin American cities. You could low-key do cash sales out of something like this, but if you're too obvious or ostentatious, you'll either get robbed or shut down. If you want to go this route, hire a local you know to run things while you make your presence scare. Foreigners will attract unwanted attention doing something like this, as you might imagine.
I realize we're almost in crazy territory now. Just to be clear, I don't suggest you do this unless you have a trustworthy local as a business partner. Even then, it is likely to be more trouble than it's worth.
tl;dr: Focus your advertising on Facebook when starting out.
I guess I could have just said that and saved ya'll a lot of time.
That's about it for Part 2: aka my little introduction about how to market an e-commerce business in Latin America. Even if you don't plan to relocate here, these tips can help out with expanding your business to a rapidly growing e-commerce market.
I realize most of what I said here probably isn't rocket science to anyone with experience in e-commerce, but I hope at least opened people's eyes to another option for earning an income for anyone who wants to live in Latin America.
I'm new to this game myself, but my little Shopify venture has been picking up sales each month (we're talking small numbers, but the potential is decent assuming I don't fuck it up). Just thought I'd create a little series to share it with ya'll and help out anyone who wants to travel down the same path.
Here are a few more to look forward to in the coming weeks:
Dropshipping or Private Label: What Kind Of E-commerce Store is Best for Latin America?
E-Commerce In Latin America: How To Make Sales
See you real soon,