Thinking of starting your own eCommerce business? There is no better time than now!
By 2021, the world is expected to have 2.14 billion online shoppers. eCommerce industry revenue is estimated to reach 563.4 billion dollars in 2025 in the U.S. Till 2040, around 95% of purchases will be made online.
Impressed? You must be!
Much of the cash flow is there! In order to take advantage of this growing market and get huge profits, you must begin your own e-commerce business. To create an online store there are many factors that require consideration. Check them out!
Steps to starting your own online store
Search products to sell online
The first task of creating a thriving e-commerce business is to take care of the products to sell.
If you know what to sell, then you are closer to the first good step. If not, get ready for one of the toughest stages, as one product idea is not enough. Also, assure that the selected products are selling as desired and giving you profitable results.
Below are the product types that online businesses sell:
- Physical products (electronic devices, clothing, food)
- Digital products (software, e-books, applications)
- Courses, webinars and more
Determine Your Ecommerce Business Type
Because you have decided about the services or products to sell, choose your eCommerce business type. Find out below the eCommerce business classifications
● Business to Customer (B2C)
It is the famous retailing model; here, the businesses directly sell to a particular user. This model offers significant savings. Example: Amazon.
● Business to Business (B2B)
This model takes care of the services or goods from one business to another. The B2B model usually has a lot of upfront costs. Example: General Electric
● Consumer to Consumer (C2C)
C2C is a model in which consumers sell services and goods among themselves. This type of online store allows customers to trade, buy and sell products concerning a membership fee paid to the website. Example: eBay
● Consumer to Business (C2B)
C2B is a model in which a consumer sells services or goods to businesses. This model is commonly used when customers are providing services to an organization. Example: UpWork
Explore eCommerce revenue models
If you want to make a profit without having to manage inventory or invest a lot of money, then dropshipping is your model. You just create a showcase and your supplier does the rest. It is an economic solution for startups.
If you are interested in having your warehouse track all customer orders and you have enough money to invest in warehouse stock, then a wholesale business model is an ideal choice.
If you want to sell a unique product that only you can offer, you have to choose a production model. In this model, you will need to send prototypes to the manufacturer under the contract that will manufacture the product. The manufacturer either ships the product directly to customers or ships the final product to your warehouse.
If you plan to regularly send your customers a box of merchandise (health and care, fashion, etc.), the Subscription model is best for your brand.
Choose a brand name and make a logo
Choosing a powerful eCommerce business brand gives you an edge over your competitors. However, it has a big impact on how your business is positioned in the market. It is not as easy as it sounds at first. If you are having trouble coming up with a unique company name, we recommend using automated tools powered by artificial intelligence.
Come up with a brand name that:
- Appeals to your target audience
- Matches your brand
- Short, simple, catchy and original
- Available as a domain name
Once you have chosen a unique name and registered the appropriate domain, it’s time to create a memorable logo. Make sure your business logo design:
- Conveys your brand message
- Defines your visual identity
- Looks good in black and white
- Distinguishes your brand from the competition
Make a business plan
You have a product to sell, a brand, and a logo design. At this point, you should have a pretty good idea of what your eCommerce business looks like. Now is the time to take a step back and write your business plan.
A business plan is a roadmap that helps describe the business. It is products/services, target market, initial budget, product sources, logistics, monthly costs, operating model, and the time it takes to break even. A well-written business plan can help you identify potential challenges, prioritize, and outline a strategy before starting a business.
When drawing up a business plan, there are several important points to consider:
- Be short and to the point
- Set realistic goals
- Know your audience
- Conduct a Strengths, Weaknesses, Opportunities, Threats (SWOT) analysis
- Invest time and effort in business analysis
- Consider different time frames
- Maintain the same tone and style
- Review your plan periodically
Create your own business legally
You should formally start your e-commerce business so that you can make money legally. At this stage, you need to go through all the registrations, permits and licenses required to run your e-commerce business. Typically, online businesses do not require as many licenses and permits as physical stores.
First, get your Employer Identification Number (EIN). It is a unique nine-digit security number that identifies your business process and allows you to open a commercial bank account and file documents. You have four options for applying for an EIN:
- Online (via the IRS (Internal Revenue Service) website)
- By fax
- By mail
- By phone
After you have applied for an EIN, you will need to apply for business licenses and permits. To obtain the general operating licenses required to start a business, it is best to familiarize yourself with your country’s e-commerce legislation. You can usually find this information online at your state government website.
Choose an eCommerce platform and create your online store
Marketplaces give you a very limited opportunity to showcase your brand’s presence and build loyalty as customers are loyal to the marketplaces and not your brand. It is also difficult to compete with other brands that sell similar products. And don’t forget that these marketplaces charge significant commissions to your business.
On the other hand, your eCommerce website gives you complete control over your business and the freedom to personalize and customize your store as you see fit. Love the idea of your online store? When starting an eCommerce site, you need to take care of many aspects. Site performance, security, scalability, functionality, SEO, payment options, etc are some of them.
Promote your online business
You have products for sale, you have created your online store and organized the ecommerce fulfillment software for orders. But this is not enough. No matter how good your products are or how convenient your store is, people will need to find them to shop there. This is where marketing comes in and helps drive traffic to your website. You can apply a variety of digital marketing tactics – social media advertising, email marketing, SEO, content marketing, and more.
The eCommerce business comes up with many advantages over brick-and-mortar stores. If it is challenging then it is profitable as well. Select your products or services wisely, check their viability, find out the right eCommerce platform, create an online store, sell or market to potential customers. If you are a pro, then, you can implement the mentioned steps by yourself, else you can hire Magento developer to do the same for you. It might take time, but the results are worth the wait. We believe that your roadmap is clear now. Start now!
Let us know if the mentioned tips helped you or not? Do share your experience with us! Thanks for reading!