Nothing beats the thrill of being your own boss and running your own business! Thankfully, the technical and digital advancements in recent years have made it quite easy to start and run your own e-commerce business.
If you believe becoming an entrepreneur is your calling but have no idea where to begin, we can help you out. Here is a step-by-step guide to how to start an ecommerce business from scratch.
What are the Basic Requirements Of E-Business?
Before we come to how to set up an ecommerce business, make sure you meet these basic requirements:
- You must know what you want to sell. Also, how are you planning to stand out among your competitors? If you don’t want your business to be lost in the vast sea of e-commerce ventures, you must bring something unique to the table.
- You must possess the ability to take risks, predict unforeseen hinderances and prepare in advance.
- Basic knowledge of sales, knowledge, customer service will come handy in running an e-commerce business.
- A working laptop or PC, a stable Internet connection and a budget to buy the various software and digital tools you may need to start and run your business.
- The right vendors to supply the products or raw materials at affordable rates.
Want to know more about what it takes to create your own ecommerce business? Let’s dig in a little deeper and discus the requirements in detail. You should also check out these ecommerce courses for a 360 degree learning experience.
How to Start an E-commerce Business from Scratch?
Here is a comprehensive, easy to follow guide on how to set up an e-commerce business.
1. Choose your niche
Before you move any further with your business idea, you need to be absolutely sure about what your niche is going to be. Consider factors like your area of expertise, marketable knowledge and skills while finding the right niche.
You will also have to think about other things like the type of product or service you want to sell and where do your skills or expertise fit in the market.
After all, how will you establish and run a successful business if you have no idea what kind of business you want? Do your research to learn more about the marketplace and your competitors in that niche.
A few things you may need to address while deciding upon your niche are:
- What will your business offer? Will you be dealing in products or services?
- Will your products be digital or physical?
- How do you plan to go about sourcing your products?
- Can you take care of the production single-handedly or do you need a team?
- What will the business model look like?
- What will be the USP of your business?
The e-commerce market has a lot of competition. You must have absolute clarity when it comes to your idea and vision if you want to succeed.
2. Do your research and study the competition
Here is the next step in the process of how to set up an ecommerce business. You can learn a lot by observing the top competitors in your niche. When studying a competitor for research purposes, ask yourself these questions:
- What methods do they use to reach their target audience?
- What stands out for you when you visit their website.
- What kind of business model do they have?
- What can you do differently to give you an edge over your competitors?
- Can your product or service fill any existing gaps in the market?
Other things that you need to research about are the trending products/services in your niche and look for in these products or services. The research will also help you understand the various barriers that may hinder your growth and progress so that you can be prepared in advance.
Also find out the areas where you need to invest like ads, marketing, software, equipment etc. This will help you manage how to start an ecommerce business and plan your budget as accurately as possible.
3. Have a business plan and choose your ecommerce business model
Now that you have picked your niche and completed your competitive research, you are ready to create your business plan. Remember, this plan is like a roadmap that will give shape all your business ideas and thoughts, bring them together, and help you stay on track as you move forward.
It will tell you what you should focus on, establish business goals, how to reach potential customers, etc. A business plan is also necessary if you are planning to approach investors and lenders in hopes of getting a business loan.
You’ll also have to decide what your business model will be. The 4 traditional business models are Business to consumer, business to business, consumer to business and consumer to consumer.
4. Get your EIN, licenses or clearance permits if needed
Getting the necessary licenses, permits and EIN is an important part of how to start an online ecommerce business.
An employee identification number or EIN can help in keeping personal and business finances separate. Although not all types of businesses need it, it may still be a good idea to get one.
Also, do a little research on whether your business requires any licenses or permits to run in your state. Without this step, your planning on how to build a successful ecommerce business will be incomplete. Start with going through the website of your local government to get a better idea of the legalities that need to be taken care of before you start your business.
A few types of permits and licenses you may require for your e-commerce business are sales tax permits, signage permits, construction or building permits, professional and trade licenses and health, safety and environmental permits.
5. Registering your business
Once you have finally chosen a business model, it’s time to officially register your e-commerce business. This is perhaps the first major step in your journey of becoming an entrepreneur.
6. Design your logo, work on your SEO and other components
Now that your business is legally registered, it’s time to begin the real work. At this stage of the whole how to start an online ecommerce business process, you must have selected a name for your business and registered a corresponding domain.
Now you have to decide upon a logo for your ecommerce business. The trick is to keep it simple yet catchy.
You also need to do a little research to understand more about SEO. This will help you structure your website and pages the right way so that they rank well on search engines.
7. Create your website
The next step in the process of how to set up an ecommerce business is setting up your website. Your website is like the face of your business.
When creating your website, keep in mind that this will be the first thing your customers are going to notice about your business. This is the platform they will use to connect with you.
Keep it simple and make sure the interface is user friendly so that your customers can find what they are looking for with ease.
Here’s what you should keep in mind while building your website:
- Make sure your website is easy to navigate.
- Be careful while creating your page copy and writing product descriptions.
- Make sure your website and content adhere to the latest SEO
8. Setup your store using e-commerce platforms
At this point, you must have a clear idea of how to open an ecommerce business and you must be almost ready for the big launch. But before you do that, you need to select a suitable platform and build your online store.
Do your research and find a platform that meets all your requirements. You can either select an all-in-one software like Shopify or go with an open-source platform like Magneto. An ideal platform will offer everything you need to market and sell your products in one place.
There are several platforms out there that let you do more than just create and launch your store. They allow you to customize your design, manage inventory, add your domain or purchase a domain, ship orders, and receive payments among other things.
Here are a few things you may consider while thinking how to start an ecommerce business. Specially at the time of choosing a platform to host your site, please consider:
- Look for platforms that offer useful features that will make it easier for you to set up your e-commerce stores.
- Make sure your platform supports your line of business.
- Make sure your website builder optimizes for mobile phones.
- Make sure your platform offers the support you need once your business starts scaling.
- Make sure your platform offers security and reliability
WooCommerce, Squarespace, Magneto, Shopify, BigCommerce and Wix are a few popular e-commerce platforms options.
9. Fix payment methods
The next thing you need to focus on in the process of how to start an online ecommerce business is fixing payment methods.
Congratulations! You are one step closer to making your first dollar through your business. But before you do that, you need to decide how you want to get paid. For the sake of your customers’’ convenience, it’s best to offer multiple payment methods.
A few payment options for you to choose from are:
- Digital wallets (PayPal)
- Credit cards and debit cards
- Bank transfers
- Buy now pay later options or EMI options
You will also need to decide upon a safe and secure payment getaway while considering factors like your location, business type, etc.
Wix Payments is a popular payment gateway option used by several U.S. based businesses. Alternatively, you may choose from third party plugins, consisting of more than 50 payment gateways worldwide.
10. List your products
Once you know how to build a successful ecommerce business, you must have chosen an e-commerce platform, created your website, and sourced/manufactured you’re the items you’ll be selling, it’s time to list your products. If you are selling services, all you have to do is describe and list them on your website.
In case you are selling products, you’ll have to consider the inventory and what will the startup costs look like. While listing your inventory on your store, think of the following
- Customer experience
- What will the process look like (beginning right from the customers purchasing the product to them receiving their orders)?
11. Marketing your products
An important part of the process of how to open an ecommerce business is forming and executing the right marketing strategy. Marketing is key to the success of your e-commerce business so make sure you do it right!
Since you have already researched your target audience, you must have an idea about the content you want to create and where you plan to run your ads.
Here are a few tips to help you plan out an effective marketing strategy:
- Use multiple channels to reach your customer base.
- Consider creating a blog. Don’t forget to promote your blog on multiple social media platforms.
- Take advantage of the marketing tools offered by your e-commerce platform.
- Optimize your website and content for SEO.
- Make the most of social media channels by posting content that is relevant to your niche and will speak to your target audience.
- Consider including tactics like Instagram marketing.
- Consider partnering with affiliate marketers.
- Make sure to use shoppable landing pages when promoting your products on various platforms.
- Consider investing in a customer relationship management platform.
- Set up an email list to have a direct line of commutation with interested customers.
12. Analyzing your performance
Once you have successfully figured out and executed the process of how to start an online ecommerce business, it’s time to focus on keeping the business up and running. For this, it is of utmost importance that you keep a track of your performance. This will help you figure out:
- What’s working and what’s not working
- Figure out your next move.
- Plan and forecast for inventory.
- Understand your customers and their needs and offer them a better experience.
- Figure out whether you need to make any changes in your marketing strategy.
- Leverage influencer marketing.
Customer feedbacks, surveys, and digital analytics tools are just a few of the many things that can help you analyze the performance of your business.
Tips To Set Up An Ecommerce Business
Now that you know how to set up an ecommerce business. Here are a few tips to help keep your e-commerce business up and running:
- Start simple and scale gradually. Start with offering fewer but top-quality products. As you move forward, you will have a much clear idea about how to grow and expand your business.
- Pay attention to repeat customers.
- Offer top-notch customer service and support.
- Pay attention to conversion optimization.
- Make sure to update your inventory frequently.
- Share your brand or business across multiple social media channels. This marketing technique is especially useful for new businesses and can be used to build excitement.
- Opt for multichannel selling to reach the maximum number of potential customers.
How To Open An Ecommerce Business – FAQs?
Q. What are the 3 types of e-commerce?
A. The 3 types of e-commerce business models are business to business (B2B), business to customer (B2C), and customer to customer (C2C).
Q. What are the disadvantages of e-commerce?
A. Now that you know how to build a successful ecommerce business, keep in mind that there are going to be a lot of hurdles and challenges along the way. Here are a few disadvantages of e-commerce:
- Site crashes and technical glitches may affect sales and business.
- E-commerce has become extremely competitive in recent years.
- Security issues can hamper business and make it harder to earn the customer’s trust
- Delays in shipments and delivery may cause you to lose your customers.
- Customers cannot try the product before buying. This may make it harder for them to trust the seller.
- Lack of privacy as the customer has to provide their private information.
Q. How much does it cost to build an online ecomm business?
A. By starting your business online, you save up on a lot of things that might have been unavoidable if you were opening a brick-and-mortar store. However, there are still a lot of things you need to invest in if you want your e-commerce business to run successfully.
The actual cost of starting an e-commerce business depends on the kind of business you are planning to start, the products/service you are planning to offer, the software or platform you choose for your business etc.
Other costs you may need to consider include permits and licenses, hosting and domain name, shipping and inventory, business insurance, marketing and advertising, and tools and software.
Q. What is difference between e-commerce and e-business?
A. E-business refers to all business that is conducted online whereas the term e-commerce is used for the process of buying and selling online.
Q. Can I run an ecommerce business from home?
A. Yes, it is possible to run an e-commerce business from home. Follow the step-by-step guide on how to build a successful ecommerce business given above to start your own e-comm business.
Q. Which is the best e-commerce platform?
A. Once you know how to set up an ecommerce business, selecting the best e-commerce platform depends on what you are selling and the kind of business you are running, among other things.
A few top e-commerce platforms that are trusted by thousands of e-commerce businesses are Shopify, Magneto, BigCommerce, WooCommerce, 3DCart and Wix.