How to Start an e-Commerce Business
Starting an e-commerce business is an exciting yet daunting challenge but one that can prove to be exceptionally rewarding if you get it right. Of course, getting it right requires you to make the right decisions along the way and that begins with understanding how to start an e-commerce business.
The process is nothing that takes place overnight because it takes time but if you follow each step correctly then you will certainly give your e-commerce business the chance to become a success.
There are many steps to start an e-commerce business but they can each be taken in their own time because understanding them and getting them right is vital to the end goal – a fully-functioning, profiting online store.
So, what is the startup methodology of an e-commerce business?
Begin by Researching the Basics
Research is the first critical step and one that you should take very seriously. Starting an e-commerce business that is based on an “it could work” attitude is not the way forward. You need to invest time into making sure that your idea will actually work and that there is an audience out there for it. When it comes to business, there is not a “one size fits all” structure because businesses come in many different shapes and sizes.
When it comes to e-commerce, there are different business models. There is the model that is focused on you owning and storing your own physical products and there is dropshipping. Both are extremely different and effective in their own ways. Before we delve into the models, a consideration of your budget is important as that could determine the model you opt for.
Consider your Budget
This is not something you can be laid-back about when it comes to business. The reality of it is that any business requires money and some need more than others. Do you have lots of capital with which you can your site, purchase your stock and even purchase a warehouse to store it all in? Along with that, do you have the budget to pay people to maintain your website, pick your stock, process orders and deal with customers? If you have that kind of budget available then you have the option of having your own physical business. However, if you are working with a slim budget, you might need to think about a different business model where you keep your costs at an absolute minimum. Dropshipping is a feasible option here.
E-commerce business models
Now that you have your budget in mind, it is time to consider available business models. As touched upon already, you can either choose to fill your premises with products or you can choose the dropshipping method, so which one will it be?
If you opt to have all of your own products housed in your own premises then you are going to need to invest heavily but this will put you in control of every aspect of your business. You will need to source products, manage your inventory, handle complaints and queries and deal with your accounts on a level that has a number of income sources and outgoings.
If that option is not for you and you want to turn a profit without having to handle your product or invest heavily, then dropshipping is an ideal choice. Working with this option, you can sell products via a website or a specific platform and then pay a fee for doing so. You can use dropshipping to sell products in specific niches or you can even sell your own branded items. Whatever you choose to do, you can take a more hands-off approach because all you need to do is advertise your products, encourage orders and then let your dropshipper take care of the rest.
So, dropshipping v Holding your own stock, what will it be?
Begin your Niche Research
It is all too easy to think that you can do it all and offer hundreds or thousands of products that fall under a huge array of categories. This simply means that you are almost diluting your worth and potential because that puts you in competition with some of the biggest retail players in the world. However, if you want to create a profitable eCommerce store then you are going to need to pick a niche to begin with. There is nothing stopping you from growing your business or branching out in time but right now, focusing on a niche is where you need to begin.
Start by identifying what successful companies already operate in this niche while also making sure that each area is competitive. While you don’t want to worry about competitors just yet, if the niche does not have a lot of competition then it usually indicates that there is no market there. In contrast to this, you also don’t want to choose an overcrowded market, especially if major brands or businesses are dominating these markets.
You should look for a niche that has product categories that have a minimum of 1,000 keywords as well as an increased level of interaction on social media.
What Platform will you use?
As an online store, you have several options when it comes to choosing the platform that you use. You can opt to create your own, fully functioning website or you can choose to use one of the ready made platforms.
Your own website will take time and money to create and maintain, while you will need to register a domain name and take care of the particulars that come with creating your own website. Yes, this will look great and you will look like a professional business but then you have to think about marketing it and taking your website from obscurity and thrusting it into the limelight. This can take time and effort, which is fine if you have a lot of both. There are platforms that offer an off-the-shelf option, meaning that all you need to do is upload your product images and descriptions. However, if you go down this route you will need to consider many things that could be vital to the success of your online store including the speed, its features, compatibility and SEO among other things.
Whether you have chosen to dropship or not, you can still choose to use platforms such as Amazon Marketplace or even eBay. They offer you a ready-made solution with access to millions of customers. It will be competitive and tough but it can help you to hit the ground running with very little effort.
The platform you choose is ultimately defined by a number of factors such as budget, whether you want to take a hands on approach and simplicity.
Establish your Brand and promote products
Choosing your business model and its platform are just the first steps to take, you still need to build a brand. Therefore, you are going to need to consider the name of your business, the colours, logo and the channels that you use to market it. If you are going to stand above competitors and prove to customers that you are right for them,a lot of work that has to go into building a brand and reaching the right audience. Moreso, once your brand gathers momentum, you are going to have to continuously market your products.
Of course, driving traffic to your website is important but selling products is even more important. This all falls under your marketing campaign and your budget. You can reach your audience by creating email lists created from subscribers or you can start to generate interest via social media such as Facebook, Instagram or Twitter. You can create giveaways or special promotions that offer them a discount. These are marketing tactics that are proven to increase traffic and subscribers quickly and efficiently. Once you begin to increase customers, your business and brand will become more visible and that means that you can begin work with your current customers while also reaching out to new customers.
Taking Care of Your Customers
Finally, even with the very best products or eye-catching website, without customers a business will fail. So, you need to make sure that you make the most of the latest tools and analytics that make it possible for you to use data to get results. Identify the most popular products, the behaviour of your customers and what attracts them to your brand, business and your products.
Starting an e-commerce business is an exciting challenge but there are many steps and challenges that you have to go through the entire process, ticking off each box as you progress.