Table of Contents
- Step 1: Decide on Your Product/Service
- Step 2: Decide the Platform for Your E-Commerce Site
- Step 3: Start Your Business Planning
- Step 4: Setting up Your Website
- Step 5: Legalize Your Online Business
While an online business opens up a huge market and offers access to millions of buyers everywhere, the competition can also be formidable. Irrespective of the product or service you are selling, there will be hundreds of online retailers selling a similar product or idea.
The key to success, then, is to determine what differentiates your product or service from what your competitors have to offer. Next, you need to find a niche where your product will stand out amongst the sea of alternatives. For example, if you are selling t-shirts, ensure that they are unique and original compared to the thousands of others available in the market.
Even if the product you are selling is not unique, make your expertise the selling point. For instance, if you’re selling nutritional supplements, your venture will be more valuable if you also have a degree in nutrition.
The first step in setting up an online business is to decide whether you will build your own e-commerce website, create a platform or use a third-party platform. Using an e-commerce site is the most direct way in which you can start an online business, as opposed to using a third-party platform or selling through other online marketplaces like eBay, Etsy, Amazon, etc. The biggest plus of building your own e-commerce site is that you can sell your products and services directly without involving a middleman.
The biggest advantage of hosting your own e-commerce site is that you have complete control over the store. You can customize each and every aspect of the site and the store, right down to its look and feel. However, this flexibility can also make the process complicated.
The most important aspect of setting up your e-commerce site is to deliver the best user experience. Not only is the design of the website a critical part of the user experience, you must also ensure that the shopping cart software you’re using is suitable for your business. Be sure to check out various shopping cart options like X-Cart, Shopify and others before deciding on the best one for your online business.
Depending on your specific business idea, you may or may not need to build the website from scratch. This holds true especially if your business is in its early stages. You don’t require any knowledge of coding or HTML to set up the e-commerce site. You can make use of Shopify or Squarespace for no-fuss templates that allow you to set up your website quickly and easily.
There are several third-party e-commerce marketplaces available today, like Amazon, eBay, Fiverr and Airbnb, among others. Building your business via one of these e-commerce marketplaces is much simpler, since you don’t need to create your own website. With a wide variety of existing templates to choose from, the website is just one fewer wheel to re-invent. However, you will end up having to pay for the e-commerce platform. While some of the websites tend to charge by the number of products you list, others such as Airbnb charge a fee when you take a booking.
Using a third-party marketplace and having your customers visit your site to buy your product or service has its pros and cons. For instance, if you want to rent out your property, using the Airbnb platform makes it easier for people to find you if they search for lodging in the specific area.
However, this model also makes it that much easier for buyers to compare the various other alternatives. Which, in turn, makes it all the more important to differentiate yourself. For example, if you are using Etsy to sell handmade lamps, a potential customer can find thousands of sellers offering similar products when they search for handmade lamps on the site.
If you are making use of a third-party e-commerce platform, focus on the quality of images you are using on your page. Using high-quality product images can help your page and its listings stand out. Customers usually look at the images used on the site and form an opinion about the value of your products or services.
Ensure that the marketplace you are considering reaches your target audience. The “one platform fits all” concept does not work for all kinds of businesses. Do your homework and decide on the one that works best for your business. If you are selling second-hand novels, make sure that you select a platform that attracts customers who are looking to buy second-hand books.
Don’t limit business planning to the early stages of your venture alone; be sure to do it regularly. Begin with a lean business plan, which is quick and easy to follow and filters your idea down to its basics. Next, do a market and SWOT analysis to be sure there is a lucrative market for your product. The analyses will also help you identify the nature of your competitors.
Identify the costs involved in starting your business and chalk out a plan to fund the venture. Even if you decide to run an online business as a side hustle, it is a good idea to plan the sales and business metrics that you must track, so that you can be sure your business is headed in the right direction. You must review these metrics on a regular basis and compare the actual sales with the projected numbers. You can use automated tools like Quickbooks to handle all your finance-related information.
You should start by deciding on a name for your business and registering it as a domain name. You might want to execute these two steps together; it’s a tedious and painful process to choose a name and then find out it belongs to another business. There are many advantages of having the same domain name as your company name. To start with, it will help your audience find you easily when they search online. It also works well when naming your storefront if you make use of an online platform such as Amazon or eBay.
There are many advantages of building your own website. If you have the right in-house talent, you can have your tech team build the website for you. You also have the option of hiring a web design firm. If you’re using the web to sell products like clothes or cosmetics, or even services like design or consulting, you can make use of an existing platform. You can also use a templated e-commerce option to prevent building the website from scratch.
However, no matter which option you choose, you can start with an MVP (minimum viable product) website. This essentially means you don’t have to build the perfect website right at the beginning. You can test your product or service using a simple, low-cost website first.
When you build your website, be sure to design it in a mobile-friendly manner. If your e-commerce website is not optimized for mobile devices, your customers may not have a great experience trying to locate you via their phones. In other words, it becomes difficult for new customers to find you naturally.
Poor quality, badly-lit or carelessly composed images on your website do not help build credibility for your business. Irrespective of what you are selling – whether they are products, services, experiences or ideas – high-quality images make all the difference.
If you are selling products on your site, you can either hire a freelance photographer to take high-quality pictures or invest in equipment that allows you to take professional photos. If you are on a budget and cannot afford a professional photographer, you can look for amateurs or photography students looking to build their portfolios. While weighing out your different options, keep in mind that it is a good idea to stay away from standard stock photographs.
While you may not have factored blogging into your marketing plan, it helps to think of it as an option. If you are building your website from scratch or making use of a template, ensure that the website can accommodate a blog without major rebuilding.
You could consider monetizing your e-commerce website via affiliate partnerships and on-site advertisements. If you plan to include third-party advertisements on your website, do it very slowly. Keep this in mind especially if your website is minimalistic, as too many ads may distract the customer from the products you are actually selling.
Once you launch your website, you can either make use of Google Analytics or check if your third-party platform gives you monthly information on how your e-commerce website is performing. You can make use of this data to test changes on your site that may have an impact on your sales.
Whether your business is a regular brick-and-mortar store or an online one, you need to ensure it follows the law. Broadly, the same rules are applicable to both types of businesses; however, there are some minor differences.
The main difference between starting an online business and an in-person venture is the law. Protection of your customers’ personal information is crucial, as is following other intellectual and privacy regulations. It is a good idea to understand the laws involved in starting an online business before you dive in.
You must decide the legal structure of your online business. Many businesses decide on an LLC; however, you must do your homework and choose the type of company that best suits your requirements. You also need to ensure that your business is set up according to the regulations stipulated by your state.
If you are setting up an online business, it’s highly possible that you are running it from your home. This makes you eligible for tax deductions. You may, however, need to pay income tax on your venture. So, before you actually start your online business, a good idea is to consult with your attorney and ensure that you are covered.
Familiarize yourself with the sales tax requirements of your state. The main thing is to ensure that the correct sales tax is collected automatically on basis of the customers’ location; this can be done smoothly if your shopping cart software is designed properly.
Finally, starting an online business is very much like starting a brick-and-mortar one. Just like a physical business that meets face-to-face customers, an online venture requires careful planning, market analysis and a thorough understanding of tax and other legal obligations. However, no matter how carefully-scripted your plan is, it can only work if you set up an efficient e-commerce website. Now that you’ve walked through the process of setting up, it’s time to dive in and then sit back, relax and admire the business you’ve created.