There was a time when shopping online was simply a convenient luxury. Now, it is a necessity and a part of our daily lives. As a result, ecommerce businesses have skyrocketed and are projected to grow another 400% by the end of the decade! Not only are more and more consumers doing their shopping online, but more people are also looking to be their own boss and run their own business. Thanks to modern technology and the internet, this dream is becoming a reality for many.
If you are considering starting your own ecommerce business, you want to carefully consider the steps you need to take in order to be successful. Rather than looking to make a quick buck, you need to learn what it takes to build a scalable business that will be profitable in the long run. This quick guide will help you better understand how to approach the task of starting your own ecommerce business.
1. Decide Which Products You Want to Sell
The first step in starting an ecommerce business is figuring out what you plan to sell. This can often be the most difficult part of starting a business. If you don’t have a specific idea in mind, it’s good to think about specific items that will appeal to a specific audience. Think about things you, your friends, your coworkers, or your children would be interested in, and use this inspiration to help you think about what products you would like to sell in your store.
2. Research eCommerce Business Models
Growing an online business is an investment so it’s important to understand the different business models so you can choose the one that is right for you.
Dropshipping is the easiest way to start an online store and it has the lowest upfront cost. With this business model, you find suppliers for products you would like to sell. You then import those items into your online store. When a customer purchases one of your products, you place an order with your supplier and they ship the item directly to the customer.
Wholesalers buy products in bulk from manufacturers at a discounted price and then sell them online at retail prices. This is a great business model for entrepreneurs who want to build their own brands. This is more time consuming, however, as you are responsible for manufacturing, packaging, and shipping your products.
Private labeling means you are having products specifically manufactured for your business. Unlike the other business models, private labeling requires a significant upfront investment and you may even need to rent warehouse space to store your products.
3. Write a Business Plan
You’ve found your product, identified your business model, and sourced a supplier. Now it’s time to write your formal business plan. A business plan is like a roadmap for how you plan to operate and grow your business. It includes detailed information about how your business will operate as well as marketing strategies, competitive analysis, and a mission statement to show investors and employees the core values of your business.
4. Choose a Name and Logo for Your Online Store
You will need to come up with a name and logo for your business, and since your business is online, you will need to choose an appropriate domain name. Your name and logo should be something simple yet memorable. You also want to choose a domain name that is easy to remember and easy to spell.
5. Take Care of Business Basics
Before you can begin operating your ecommerce business, you will need to take care of some basic formalities. These include:
- Choosing a business structure
- Selecting a name and domain for your business
- Applying for a tax ID
- Opening a business checking account
- Getting necessary licenses or permits
6. Set Up Your Website
Your website will be your storefront. It’s where customers will learn about your business and browse your products. You can set up your website using an online store builder. These platforms walk you through every step of the process from buying a domain name to managing inventory and taking credit card payments. You can also pay a professional designer or developer if you don’t want to build the website yourself.