In the past decade, E-commerce has become quite popular. Thanks to technology, e-commerce was a risky business idea to threatening traditional brick-and-mortar stores. According to Statista, e-commerce will make up almost one-fifth of total retail sales by 2025, 24.5% of the total retail sales.
This is a good time as any to start an e-commerce business. It is a growing industry, which is future-proof. If you want to be a successful entrepreneur, an e-commerce business is the best way to go. But how does e-commerce work? We have put together this guide to help you begin your e-commerce business.
There are plenty of reasons you should begin selling online:
There are 2 billion digital buyers globally, with e-commerce sales accounting for 14.1% of retail sales worldwide.
Despite the current economic climate, this number will grow steadily and will reach 22% in 2023. E-commerce is a fast-growing industry with a lot of scopes.
Ecommerce stores are easy to set up. While setting up brick and mortar stores can be time-taking, e-commerce stores are easier to open. Setting up an e-commerce store is just as easy as having a website.
Platforms such as Shopify, BigCommerce, and Squarespace make this possible. They host your e-commerce store, handle all PCI compliance issues, and do all of the hard work for you. Marketplaces like Amazon and eBay are also a great way to sell your products online.
In the past, traditional retail was more expensive than online retail. With a storefront, inventory, and employees, you had to make a significant investment before you even sold your first product.
But now, with e-commerce, many of these costs have been eliminated. You can start small and build your way up. You can add new features to your website to increase sales as you grow.
You should sell online because you get better customer insights. Online selling gives you the ability to collect, measure, and act on customer data.
If you want a hyper-focused experience, you must own your consumer data. Online selling lets you track customer interactions to get actionable insights. This allows you to improve the customer experience constantly.
To start an e-commerce business, you need to have a website. That’s the first step in your process. If you have enough IT skills, you can do it yourself.
But if you don’t want to create your own e-commerce store or just don’t have the time for it, you can always order one.
The best thing about this is that some platforms offer a one-time payment for e-commerce website creation. This means that such stores will cost you anywhere from around $30 to $3,000 or more.
Others withdraw a significant amount of money from you permanently. Moreover, some of them charge interest. You can launch an e-commerce store with little to no money as well.
Starting your own e-commerce shop can be challenging, especially if you're a beginner. You can even begin with zero costs. But there's a catch to everything.
It's not an easy job to set up an online store, upload products, maintain them, market them and make sure they are shipped on time. In addition, you need to provide quality customer service and support.
It can all be very complicated. But do not worry; we are here to help you through the process. The following steps will help you to build your e-commerce business from scratch.
What product will you sell? You have to decide what to sell, and it's not always an easy task. It can also be hard to determine what to sell if you don't have a passion or a great product idea. There are many ways to go about choosing a product.
You want to start an e-commerce business, but you don’t know where to start. You must first choose a niche and thoroughly research it — this will tie in well with your interests.
Do not let available technology and resources force you to adapt to what they can do. Do not be sucked into the saturated markets. Choose a niche you are passionate about, even if it's different.
After you have figured out what you want to sell, you need to choose a business model. It is a plan of how your business will work.
To begin, you must define your business model. Who is your target customer? Do you want to sell to other companies, consumers, or both? Think about your business goals. You might want to create a business that sells to customers directly or through partners.
There are various types of e-commerce business models. We have mentioned the significant types of e-commerce business models below:
When it comes to inventory management and sourcing products, you have two options. Some people like the idea of making their own products in their garage, but others hate the idea of their garage full of boxes.
So, there are different types of e-commerce business models based on inventory management and revenue generation-
Choose whatever business model works for you. Remember, choose a convenient business model for you, not what everyone else is doing.
While the path to success may not be easy, a good strategy is essential. It starts with knowing your competitors. Know what they do well and what they could improve upon.
Identify the "pinhole" that you can use to differentiate yourself from the competition. Here are a few ways in which you can do market research-
You need to know your target audience before you plan to sell them anything, and you can start by analyzing their psychology and creating a buyer’s persona. You need to cater to that buyer’s persona. You're selling directly to customers on your website, but you have to get their attention first.
That is why it's crucial to know your target audience. You don't want to send the products that they won't buy.
If you have several competitors selling the same products as you do, distinguishing your brand from the others and drawing in customers can be challenging.
A common way to do this is to provide something extraordinary. Find high-quality goods to sell and compare vendors' prices.
When you're more knowledgeable about these products, you can set your business apart by providing the best price on high-quality products. How to find the right vendor?
Once you have chosen a vendor, it's time to set up inventory. After all, this will be the backbone of your E-commerce business. Before you start selling, make a careful decision about what inventory you want to sell.
You also need to keep enough stock in-house so you can keep up with the demand. But do not go overboard by buying things you don’t need. It will be your first inventory investment, so you need to be intelligent and innovative.
Shipping is another important aspect of setting up your online business. If you choose a dropshipping model, you don’t need to worry about inventory or shipping.
But if you choose other business models, you need to manage the inventory and shipping yourself. You have to plan the shipping costs as well. You’ll be surprised to see how many factors contribute to the cost of shipping.
Dependent on your sales volume, the number of items shipped, and the delivery speed chosen by the consumer, you may also have to pay for a variety of additional services.
A SWOT Analysis is a great way to get a better sense of your company’s SWOT:
Writing a SWOT analysis forces you to think about the future, and it will help you figure out where your company will be in the future. It is also an important part of developing a strategic plan to take your company there.
Strengths and weaknesses are how your company is at present. They may be difficult to change, but you can try. For example, company culture, reputation, customer list, geography, staff, partnerships, intellectual property, assets, etc.
On the other hand, opportunities and threats are your future. You cannot control them for the most part. It may be challenging to plan for them or deal with their consequences, but you can try.
The background study is just the starting point. A sketch of your business is needed next. Here are the things you should include in your business plan-
Write it all down, and let your style be professional and transparent.
Choose the right eCommerce platform for your business
There are plenty of e-commerce solutions in the market. When you’re new in this industry, it can become challenging to determine which website builder is your right option. You need to ask yourself a set of essential questions, such as:
You need to make some decisions when it comes to your eCommerce website. You need features, security, and functionalities that work for your business.
Spend some time researching which ones are best for you. Don't forget to build an eCommerce website from scratch or use a builder to simplify the process. Here is a list of the Best Website builders you can use.
A name is the first part of building a successful e-commerce site, which means it is essential to choose a name that reflects your business's scope and goal. Your business's legal name and website name should not be the same.
You can make it easier to manage by keeping them consistent, but they do not have to be the same. You must register your company first and make sure to address legal protections and tax benefits by incorporating.
Once you find the right name, get the domain before someone else does.
After choosing the e-commerce platform you wish to use, you need to set up an online store. The most important thing about having a shop is the design, which must be compatible with your industry and customer preferences.
For your web store, you'll want to consider the speed of the site, compatibility with different payment gateways, functions, feasibility with your business structure, your web developer skills, SEO-friendly features, and more before making any decisions.
There are many readymade themes available on Shopify and other website builder sites to use as a beginner.
Ecommerce products have a higher selling rate if you know how to add your products to the store the right way. While adding products, here are the things you should keep in mind:
Make sure you create definitive product categories and add relevant products to each. Adding product categories Collections to your e-commerce store gives your store an organized appearance, which can impress the visitors.
You'll want to find the most effective and efficient way to reach your potential customers as with any business. That means finding the channels where your customers are shopping for many retailers.
There are many avenues for e-commerce that can complement your in-house store as well as one another.
Marketing channels are a way to reach your customers. For most small businesses, direct selling is the best option. This is when you sell directly to customers online.
There are also other channels, such as those that involve manufacturers, wholesalers, and retailers. You need to choose which channels work best for your business and determine what type of marketing channel would work best for your company.
The design of your e-commerce store is the first thing that the customer will see before they make a purchase. It is vital to have a visually appealing design that will attract customers and buy your product.
Some of the things you should consider when designing your e-commerce store are:
There are other aspects to keep in mind while designing your e-commerce store, like how the design should be so intuitive that the customers can navigate through the site without any problems.
A good e-commerce store design should be responsive, which means that it displays well on any device and any screen size. It should also have a clean layout and use white space for more clarity and focus.
Designing the company identity of your eCommerce store is a process that you should take seriously. It can take time, but it's worth it in the end. You should keep a few things in mind while designing the company identity to make your business grow.
When choosing a payment gateway for your e-commerce website, you need to think about what features you need and your budget. There are many different payment gateways out there, so it can be tough to find one that fits your needs.
There are many features that a payment gateway should have, including:
The most popular e-commerce payment gateways are PayPal, Stripe, and Authorize.net. Each one has its benefits and drawbacks that you should consider before deciding.
When you have your products, suppliers, and website ready, it's time to launch your e-commerce store. But here is a checklist you can follow before your website goes live-
Pay attention to every detail before you launch the store. The above-mentioned are all the crucial elements you should think of before going live.
After you've created an attractive storefront, it's time to let everyone know about it. If customers don't know your products exist, they'll never buy them. Since you're a new online business, you need to make sure that everyone knows about your site. How can you attract the target audience? By marketing your business.
You’ve spent a lot of time and money building your e-commerce business. Now it’s time to market your business so that you can start turning a profit. Your first step is to promote your e-commerce business to potential customers. Here is how you can do it-
Email marketing is one of the best ways to build your email list, increase conversions, and expand your business.
Building an effective email marketing strategy for your e-commerce business requires a keen understanding of the best market to your target audience.
This course will teach you how to build an email list, segment your list based on behavior, design effective email campaigns, and measure the effectiveness of your campaigns.
Another way of attracting more clients to your website is to run paid advertisements. Thanks to Google Ads and Social media, you have many ways to reach your audience.
There are other paid ads options. We will get into it in the next section.
Social media is a tool for great online marketing. If you are thinking of building an e-commerce site, introduce your brand on social media. You can do social media marketing by using platforms like Instagram, Facebook, Twitter, and Youtube. Here are some ways to promote your brand.
SEO is the key to your website’s success. Your social media marketing and Google ads won’t get you anywhere if you don’t optimize them. Find an SEO expert to help you, but make sure you understand what they’re doing so you can make the most of it. Both on-page Search engine optimization and technical search engine optimization are necessary to improve your website rankings.
Excellent customer service is a way to set yourself apart from more prominent online competitors who can consistently beat you on price. You need to pay attention to customer grievances and solve it as soon as possible.
Having a Live chat feature on your e-commerce website can be a tremendous problem solver. 95% of consumers value getting their issue completely resolved over a fast response time.
And 52% are more likely to stay loyal to a company offering live messaging support. Improved customer service can help you retain customers. You can also build a customer base by offering subscription services or loyalty programs.
While having an e-commerce website is a must for business, having an app is like a cherry on top. There is a saying, “If it can’t fit inside a phone, it can’t be in the future.” Having your own app solidifies your position in the market. Moreover, apps make 3X times more sales than websites!
Building an app is easier than you think. Many people believe that you need to know how to code to build an app, but this is not true.
Nowadays, easy-to-use software allows almost anyone to create a stunning app for their business, including e-commerce functionality. All you have to do is choose a template, write your content and upload images and videos.
Yes, starting an E-commerce business is profitable. Amazon has 49% of all US e-commerce. This shows that an e-commerce business can be a success you just need to be patient. You probably won’t see any profits rolling in the first year. But you should focus, build, launch, and grow.
No, starting your own e-commerce business is not hard. You just need to figure out what you are selling, who you are selling to, where you are selling and how to source your products. Anyone with a laptop and internet can start an e-commerce business.
First, you need to find a niche in the e-commerce market. Then decide what you are going to sell. The next step is determining how to sell it, which means selecting a business model.
After choosing the product, you need to do market research and find suppliers as well. Finally, build your website and launch your business.
Make sure you start with an executive summary, it mostly describes to the stakeholders what the business plan will contain.
Next, describe your business with Company Motto, Brand voice, Mission statement, Values etc. The next section should have detailed market research and your take on it. Finally, outline the legal and financial details.
Learn more: How to write an e-commerce business plan
Shopify is the best e-commerce platform for any e-commerce business regarding functionality and efficiency. But Squarespace is the best choice for small businesses.
Starting your own e-commerce business isn't easy, but it is exciting. It can be challenging to learn the ropes of choosing products and marketing them to your target audience.
You should constantly improve your business and change as the market changes. Ecommerce Business Blueprint is different for various types of e-commerce businesses.
We hope the article helped you learn how to start your own e-commerce business.