Are you looking to start an online business? If Ecommerce is your entity of choice, you can create your own Ecommerce business with proper planning and execution, as this industry is ripe with opportunity. That said, there’s a lot that goes into building an e-commerce business from the ground up and positioning it for success. Here’s what you need to know to get started.
What is an Ecommerce Business?
An Ecommerce business is an entity that conducts business online. Simply put, it allows consumers worldwide to shop online for goods and services so they won’t have to visit a physical store.
How to Start an Ecommerce Business
When you’re ready to get started, following these steps will help make the process more seamless.
1. Do Your Research
If you know what you want to sell, you can dive right into market research. Otherwise, you’ll need to ask yourself these questions to get clear on your niche and so you’ll know how to move forward:
- What items are you most interested in selling?
- Do you have expertise that would make certain offerings more ideal than others?
- Why do they pique your interest?
- Is there a demand for these products or services?
- How are competitors reaching customers?
- Do you have an idea of how you’ll market your offerings?
You may find that you have several ideas you want to consider, and that’s perfectly fine. However, you want to ask these vital questions and narrow down your list by identifying opportunities you’re most interested in with the highest demand since the competition will more than likely be fierce. Also, think about what you can offer to set yourself apart from the competition.
Once you have a concrete idea of what you’ll be selling, it’s time to dive into market research. There are many ways you can go about researching the industry and its competitors, but a SWOT analysis is one of the simpler options. SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. Take some time to perform this exercise before taking the next step.
2. Know Your Target Market
Next, you want to identify your target market or your ideal customer. Then, for your Ecommerce business to flourish, you’ll want to offer products or services that customers desire or that fill a void or remedy a solution to a pressing problem.
Take a moment to put yourself in the shoes of your ideal customer and ask these questions:
- How old are they?
- What do they crave?
- What are their most pressing desires?
- What are their pain points?
- How can you help them?
- Where do they live?
- Do they earn enough to afford what you’re offering?
- Will your product or service bring value to their lives?
Be sure to spend an ample amount of time on this exercise. You really want to take a deep dive into the mind of your prospects to ensure you understand their desires. Otherwise, you could end up with a product that gets minimum traction and a business that struggles to stay afloat.
3. Decide on a Product to Sell and How to Source It
Once you understand your target audience, move on to the fun part. It involves being crystal clear on the product you’ll sell and figuring out where it’ll be sourced.
At this point, you should have a solid idea of what you’ll be selling. But you want to iron out the kinks to confirm you have a viable offering with a competitive selling price that can enjoy growing profit margins for years to come. It’s equally important that your product or service isn’t just a temporary fad that won’t be in high demand in months or years to come.
You also need to determine how you’ll source the product. If you’re selling a digital product or service, what Ecommerce platform will you use? Otherwise, will you make your own products? Or will you need a manufacturer to create the product from scratch? There’s also a possibility that the product can be purchased through a wholesaler. Or you could work directly with a manufacturer or supplier to have it shipped directly to buyers as orders are placed, which frees up time for you to focus on marketing and other operations.
4. Create a Business Plan
It’s not necessary to write an extensive business plan that’s over 20 pages long unless you’ll be applying for funding with a lender that requires it. However, your plan should include some key details about your company, including:
- The industry you operate in
- A description of your products or services
- Marketing analysis
- Marketing strategy (i.e., social media marketing, email marketing, affiliate marketing, etc.)
- Financial plan
- Financial projections
- Plans for funding
- Employees and management (if applicable)
Your Ecommerce business plan should also outline how you’ll conduct operations on a day-to-day basis.
5. Register Your Ecommerce Business
Now, it’s time to decide on a business structure and name your company. There are four business structures to be aware of – sole proprietorship, partnerships (limited or general), limited liability companies (LLCs) and corporations (S-corp or C-corp). Consult with an attorney or CPA to determine which is best for your new Ecommerce business.
You’ll also need to register your business with the Secretary of State. But first, conduct a quick name search to confirm the name you want is available or if it’s already taken by another entity. You’ll also want to check online to confirm the domain name for your company is available. And don’t forget to apply for your employer identification number (EIN) at IRS.gov.
6. Get the Necessary Permits and Licenses
Check with your local government to inquire about permits or business licenses you may need to legally operate your Ecommerce store. Each area has different requirements, so you want to confirm you’re in compliance before launching your online store.
7. Fund Your Ecommerce Business
If you need a capital infusion to fund your new venture, consider an online lending platform. Most application process is simple, and you could receive a lending decision as soon as 24 hours.
8. Choose a Platform and Launch Your Business
Now that the research and registration phase is complete, you can begin building your business website or online storefront. There’s an assortment of Ecommerce platforms to choose from, so research your options to find an e-commerce space that works for your budget and fits your unique needs. It’s also best to evaluate the benefits and drawbacks of each to make an informed decision.
9. Market Your Ecommerce Business
The old adage, “build it and they will come,” doesn’t quite work in the world of Ecommerce. So, once your online store is up and running, you’ll need to market it consistently using the techniques outlined in the business plan you created earlier. That way, you’ll give yourself the best chance at creating a successful Ecommerce business that’s enjoyable to operate and grows over time.
