The ecommerce business industry is exploding. We all know that due to the Covid-19 pandemic, many stores around the world are temporarily closed and may never open again.
Shopping online used to be a convenience and a luxury, now – it’s a necessity. Ecommerce has been growing for a while, and the numbers below don’t account for the recent events leading to an increase in ecommerce sales.
We all can agree that the amount of interest in ecommerce right now is unprecedented and it will keep growing.
A lot of folks want to know how to start an ecommerce business. Your goal is should be a scalable, profitable business that lasts. You must have a long-term vision for building an asset that brings true value to the market.
Here is a quick step-by-step guide on how to start an e-commerce business:
Online retail is a booming business. There’s nothing more rewarding than starting a business from nothing and watching it grow. You build it up and no one can take it from you.
Building an ecommerce business takes more than choosing a brand name, writing product listings, and starting to sell products online. Even the best business ideas can fail if you aren’t driving enough traffic to your site.
Step 1: Research Ecommerce Business Models
Beginning your research is the first critical step. Don’t operate off of a hunch. Growing any online business is an investment. Treat it as such.
There isn’t a single business structure that works for everyone.
Before you can decide on what to sell online, you need to understand the different business models available. It’s not rocket science, but it does impact your business structure.
If you want to turn a profit without touching your product or investing heavily at the start, dropshipping or print on demand is a smart choice.
If you like the idea of having your own warehouse full of goodies, you’re investing more up front and working with a wholesaling or warehousing (retail) model.
The eCommerce business model that attracts the most is a single product category. You can control the content marketing and branding on a focused product and focus the rest of your energy on driving sales by monetizing traffic.
Also, you will have to decide where to sell. Do you want to start your own online store on Shopify or do you want to sell on Amazon? Of course, you can do both, but marketing will be different.
Step 2: Start Ecommerce Niche Research
Unless you have a massive budget, you can’t be the next Best Buy or Amazon. You have to niche down to run a profitable eCommerce store.
Choosing your niche is the most important step in opening your online business. Start this process by identifying successful companies already working in this space.
Make sure that the area is competitive – an absence of competition usually indicates that there’s no market.
Don’t pick an overly crowded niche, however, and skip anything dominated by major brands. If you’re having trouble with this, drill down further on what you want to do – the more specific you are, the less competition you are likely to face.
Pick a product category with a minimum of 1000 keywords and focus on a niche that does well in social media.
Step 3: Validate Target Market and Product Ideas
Now that you’ve identified a niche and business model, you might be tempted to start hunting for products to sell.
Don’t! Before you think about product ideas, think about personas. You can’t expect people to buy your product if you don’t know who you’re selling to.
Who are you? What does the store represent? Who are your ideal customers? You need to project a consistent brand image (a journey that starts with your brand name).
Fortunately, Facebook makes it relatively easy for us to find your target audience online. Specifically, know exactly how many people you can target. You can drill down to get very focused numbers and detailed demographics.
You can’t build a business if your target audience is only 100K people. You have to go beyond and extend your audience.
Once you’ve identified the image you want to project and the customer you are catering to, it’s time to come up with product ideas. I suggest starting with one – you’ll invest less at the start, and if you want to offer more you can test the waters with affiliate marketing. If you’re not 100% sure what to sell, you can use affiliate marketing to validate your idea.
Before you invest in the product, though, evaluate it carefully. Even if you choose a dropshipping model, you want to test it carefully and get a feel for the product yourself so you can identify any potential problems and prepare customer service scripts to answer common questions.
Part of validating your idea is to determine the viability of it. Can you suppliers that meet your pricing? What happens if your supplier falls through is there a backup option?
Step 4: Register Your Ecommerce Business & Brand Name
If you want to start a successful business, you need a brand that connects with your persona. Identifying your persona makes building an ecommerce brand easier. You might avoid girlie colors and images if you are selling products to corporate businesswomen interested in living a sustainable life.
Choose a business name and register your company. There are legal protections and tax benefits for incorporating.
The name of your site and the legal name of your business don’t need to be identical, but keeping them consistent has its benefits. Make sure whatever you choose fits your niche.
You’ll also need an Employer Identification Number (EIN) to open a business bank account and file your business taxes next April, even if you don’t plan on having any employees. Your EIN is a bit like your business’ social security number: it’s a unique number that identifies your business and helps you file important paperwork.
Operating an online store does not exclude you from needing certain business licenses and permits. Check with your city, county, and state to see what sorts of sales tax licenses or home business licenses you need, and get those approved before you start operating.
You’ll have a lot of competition selling products online, so it’s in your best interest to find the best quality and best prices for the products you sell or materials you use to create your products. Webex Studios can help you with your ecommerce software (your “shopping cart”). Think scalable from the start.
Make sure to use a Logo. Logo design doesn’t have to be terribly original, however it must identify your company and brand. You must make sure to use consistent colors for your brand, the fonts must be consistent too. In other words, it´s not just a logo creation, you have to create a consistent brand identity to accomplish a lasting effect on your customers to boost your brand. We can help you with your marketing strategy.
Step 5: Finalize Your Ecommerce Business Plan
By now you should have a great idea of what your business will look like. You have your target market, your product niche and your brand name.
Now is a good time to step back and put your business plan on paper and determine your startup budget, loan needs and monthly expenses.
The most important aspect of a business is the financial one. Figure out your break-even point, both in unit sales and duration (in months).
If you can’t figure out your profit margin, you will fail.
The business planning phase is also when you want to iron out details like your staff, product sourcing, logistics and marketing budget.
Step 6: Create Your Online Store
Once you’re officially an ecommerce business owner, you need to register your domain name and any redirect URLs that might be relevant. You’re going to need the design info you settled on in the last step now, when you finally build your store.
Whatever design you chose needs to be compatible with your ecommerce software, too.
There are literally hundreds of ecommerce shopping cart platforms. Choosing the right ecommerce software is not easy. You need to carefully evaluate things like loading speed, features, compatibility with different payment gateways, compatibility with your business structure, your web development agency, SEO-friendly features, and more. We can help you with your online store, don´t hesitate to contact us.
Step 7: Attracting Customers to Your Ecommerce Store
The sad true is that just by creating and setting an ecommerce store, your potential customers won´t come to you.
You need to market your store.
When you chose your cart, I told you to think about search engine friendly features because you need to think about driving traffic to your site.
The best ecommerce sites invest heavily in online marketing. If you don´t have to money to spend on marketing, you must follow and learn all the marketing tricks out there.
Will you use sponsored content, social media, pay-per-click ads, or a combination of strategies? How will you monitor what campaigns are driving traffic to your store? If marketing your site seems overwhelming, you can hire us to do it for you.
Your mission is to sell products, not drive traffic. To sell products, you must think beyond your site and look for expansion areas.
No matter what and how you decide to sell, the first step is to create an email list.
Providing consumers with coupons and content via email helps to keep your brand on their mind, boost sales, and establish credibility. Keep your emails interesting – ask for your customers’ input often, including reviews. Respond quickly to customer service and product quality issues, and work on building relationships. No sales interaction is about the first sale; focus on you next sale.
If you have any related questions or would like to get an estimate on setting you ecommerce business, don´t hesitate to contact us.