E-commerce is an efficient way to establish a business with lower overhead or running costs, as a physical store is not required.
Several companies have started their businesses with this strategy and then gradually transitioned to having physical stores as the businesses mature. If you are a budding entrepreneur and want to sell a product or service but lack startup capital or are unsure of your target audience response and would like to gain feedback before committing to a costly lease, then starting with an e-commerce setup is a sound strategy.
The benefits of “e-comm” have grown more than ever now during the pandemic. Several new businesses have sprung up, and even many established businesses that used to only operate in physical stores have shifted to online retail. This is due to the increasing digitalization of the world. Several of the largest economies globally have had to shift to a complete lockdown of physical spaces, which only left one medium for shopping or transactions – the internet!
A review of the global economies led by the United Nations Conference on Trade and Development reveals that the global retail e-trade significantly increased from 14% in 2019 to 17% in 2020. This bloom of digital retail, despite the economy as a whole slowing down and businesses going into recession, shows how e-commerce in our global economies has become more present and vital than ever. Whether it is a reselling or supplier chain like Amazon or a legacy chain like Macy’s that is both the producer and the supplier of its products, these merchants all have amazing e-commerce sites where most or all of their sales are through e-commerce.
If you are looking to start up an e-commerce setup to sell a product or service successfully, then this step-by-step guide is essential reading.
A Step-By-Step Guide to Starting an eCommerce Business
Starting an e-commerce setup may sound very easy, but there are a lot of technicalities to master. If you wish to make your e-commerce shop successful, you must start in a well-researched and systematic way.
Step 1: Do your market and product research
Just like you should not jump into a swimming pool before knowing how deep it is, jumping into the world of e-commerce without thoroughly researching it is not a good choice either. Research on the market area that your product or service will be a part of is vital. This research will make you aware of the dos and don’ts of the market you are planning to work in and give you a fair idea of what works and what does not. Apart from this, product research is even more critical.
Before entering the e-comm market, you should be aware and prepared for all the technicalities related to your product.
Some include:
- What exactly is your product or service going to offer?
- Is there enough demand for your product or service line in the market?
- Which stores are going to be your direct competition?
- Does your product or service offer something unique? If not, how can you attract consumers to your product/service and convince them to try out your product/service rather than the ones already in the market?
These questions are just a few examples of how encompassing your market and product research needs to be.
Step 2: Select a catchy and appropriate name
Your e-commerce page is going to represent your product/service and a portal to attract customers. You must choose a name that is unique to your business and represents your product/service/company in the best light possible. Before finalizing a name, make sure that another company does not have the same name as your business by consulting the U.S Patent and Trademark Office.
Step 3: Sort out the legalities of the e-commerce setup
Setting up an e-commerce business or company is a process that needs to be legal and “play by the rules.” Before starting up your site, it is vital that you first sort out the legal aspects. Such legalities include:
- Choose the legal structure of your business: From the various legal structures, namely sole proprietorship, partnership and Limited Liability Corporation (LLC), finalize one and complete the requirements accordingly. This structuring will play a significant role in the finances as well as the social value and reach of your site.
- Get an EIN: Even though it is not a requirement for all business entity types, it is beneficial to get an EIN before you start operating your setup. It will provide a separate identity for your business and will help in separating your business and personal expenses.
- Get a trading/business license or permit: For your business to operate smoothly and legally, getting a business permit from your state is crucial. If you try to operate your business without a legal permit, you are just inviting trouble.
Step 4: Select an e-commerce platform of your liking and create your website
Choose an e-commerce platform that allows room for creativity and the ability to execute your business plan. Platforms include giants like Shopify and WordPress utilizing the free e-comm plug-in Woo Commerce. Go for the one that you feel most comfortable with to start creating your website. Your website is going to be the place on the internet that will reflect what your business is, its product(s)/service(s) and all the values and ideas that your business stands for. This is the step you need to spend the most time on and try to perfect. The site will be your critical “make or break” until the first sales roll in. If users find the website or app hard to navigate, dull or overly complex, they can easily get distracted and move to other platforms and competitors.
Step 5: Advertise your product and setup
We cannot emphasize this enough. Market your product effectively. Go all out when it comes to promotion, follow all trends that you think go with your service and try to develop unique and catchy marketing strategies to position your nascent shop. There are thousands of e-comm sites online. The most successful ones find a way to stand out with creative and persistent marketing.
Take Your Shot
Starting a business is never easy, even if it’s on the internet and you don’t need to find a strategic “brick and mortar” location. Following the above steps can help anyone looking to start an e-comm site and make it successful in a highly competitive and crowded market.
If you would like guidance or further elaboration on any of these steps, click or tap here for a free consultation.
