If your business is not on the Internet, then your business will be out of business.Bill Gates
There’s no better time than now to start an ecommerce business. Ecommerce is growing by leaps and bounds. Physical stores that temporarily closed might never open again. Online presence that used to be a luxury in the past is a necessity these days.
Let’s look at some statistics:
Impressed? You should be! That’s a lot of money flow. To take advantage of this growing market and not to miss out on massive profits, you should start your own ecommerce business today.
But how to start an ecommerce business? Our development company has 10+ years of experience in building ecommerce stores and working with online entrepreneurs at different stages of business growth. Let’s find out how to get into ecommerce and how to launch an online business that competes, drives sales, and generates profit.
The first thing to building a successful ecommerce business is to decide what products you want to sell. If you already know what you want to sell, then you’re one step closer to a good start. If not, prepare for one of the most difficult parts, as bearing in mind a product idea isn’t enough. You also need to make sure the product you opt for sells well enough to bring your business desired profit.
There are four main types of products online businesses sell:
Some best ecommerce business ideas start with market research. To choose the right product to sell online, you need to look at the unique value proposition (UVP), high margins, and ease of warehousing and shipping.
Here’s how to choose a product to sell in your ecommerce store:
Now that you’ve made the decision on which product or service to sell, you should determine the type of your future ecommerce business. Let’s take a look at the major ecommerce business classifications.
B2C is the most popular retail model in which business sells to individual users directly. This model offers considerable savings.
B2C examples: Amazon, Zappos, Target.
B2B model relates to providing goods or services from one business to another. This model generally requires more startup costs and presupposes complex supplier-vendor relationships. To find out how to get started in ecommerce, you may need to use B2B ecommerce consulting services.
B2B examples: General Electric, Benum, Quill.
C2C is the model where consumers are selling products and services among themselves. These ecommerce sites enable customers to trade, purchase, and sell goods in exchange for a membership fee paid to the site.
C2C examples: eBay, social media shops, freelancing websites.
C2B is the model, where the consumer sells goods or services to businesses. This model is typically used when consumers provide services to an organization.
C2B examples: UpWork, Shutterstock, Fiverr.
|Targets consumers||Targets businesses|
|Initiated by business||B2C (business-to-consumer)||B2B (business-to-business)|
|Initiated by consumer||C2C (consumer-to-consumer)||C2B (consumer-to-business)|
The next step is to figure out how to manage inventory and source goods. Let’s see which type of ecommerce business revenue model will suit you best.
Selecting a powerful brand name gives you an advantage over your competitors and has a great influence on your business’ positioning in the market. It is not as easy as it seems at first. Come up with a brand name that:
Insider tip: Use automated AI-powered tools if you have trouble coming up with a unique business name. Go to a business name generator app and type in the keywords that best describe your product. Based on that keyword, the generator will give you a list of possible business names and categorize them in different ways.
Once you’ve chosen a unique name and registered a corresponding domain, it’s high time to create a memorable logo. Make sure the design of your business’s logo:
If graphic design isn’t your cup of tea, hire a design agency to craft your business logo. There’s also a broad set of free logo tools available on the Internet that can help you to get started fast. Looka Logo Maker is a tool that combines your logo design preferences with AI to assist you in creating a custom logo tailored to your business needs.
You have your product to sell, brand name, and logo design. At this point, you should have a pretty good idea of what your ecommerce business looks like. Now is just a time to step back and write your business plan.
A business plan is a roadmap that helps to describe a business, its products/services, target market, startup budget, product sourcing, logistics, monthly expenses, operating model, and time to market. A perfectly written business plan can help you define potential hardships, determine what to prioritize, and map out your strategy before you launch a business.
There are a few major considerations to bear in mind to help you write a business plan:
How to set up an ecommerce business legally? You’ll need to get through all the registrations, permits, and licenses required to manage an ecommerce business. Generally, ecommerce businesses do not require as many licenses and permits as physical stores, unless you plan to sell alcohol online.
The US retailers should the EIN (Employer Identification Number) first. EIN is a unique nine-digit security number that identifies your business process and enables you to open a business bank account and file your paperwork. You have four options to apply for your EIN:
After you’ve applied for your EIN, you’ll need to apply for business licenses and permits. It’s better to check with your country’s ecommerce law to obtain general operating licenses needed to start a business. Typically, you can find this information online via your state government website.
When you are done with all the legal matters, the next thing is to select the best-suited sales channels. Share your products across social media like Instagram and Facebook. These social networks are free and can be used to showcase your products and promote them among subscribers.
There are some sales channels where you can easily sell your products to a wide audience such as Amazon, AliExpress, Etsy, and eBay. These marketplaces also can deliver insights into their high-demand product across categories.
There are many advantages to selling products via Amazon such as:
Marketplaces give you a very limited possibility to showcase your brand presence and increase loyalty as customers are loyal to marketplaces and not your brand. It is also challenging to compete with other brands that sell similar products. And don’t forget that those marketplaces charge you business with substantial fees.
On the other hand, your own ecommerce website gives you full control over your business and the freedom to personalize and customize your store as you wish. Love the idea of your own ecommerce store? When launching an ecommerce site you need to take care of many aspects such as site performance, security, scalability, functionality, SEO, payment options, and a lot more.
In this regard, your most important decision will be choosing an ecommerce solution that meets all your business requirements. The wrong choice of ecommerce platform can negatively affect the ongoing operations.
Need help in deciding on an ecommerce platform? Check out our video guide and make the right decision for your business.
When your website is ready to start taking orders, don’t forget to test the site performance to make sure the process is smooth and user-friendly for your customers.
After you set up an online store, make sure you’re able to fulfill the orders that come in. Order fulfillment means storing, packing, and shipping your products on time, which you can do either in-house or with the help of a third-party company.
To provide an excellent customer experience, you should have a reliable shipping system set in place. Here are some popular solutions to help you ship your products in an effective way:
Ecommerce fulfillment costs will vary per order and depend on the type of product, order complexity, product size and weight, delivery speed, and sales volume.
You have products to sell, an ecommerce store to maintain, and order fulfillment to organize. But it’s not enough. No matter how great your products are or how user-friendly your store is, people will need to find it to shop there. That’s where marketing comes in to help drive traffic to your website. There’s a variety of digital marketing tactics you might decide to apply – social media ads, email marketing, SEO, content marketing, and more.
Social media is the perfect way to expand your brand’s reach. In fact, social media marketing is one of the top ecommerce trends to build a community around your brand, which will eventually drive more traffic for less cost.
Create social media profiles for your brand on Facebook, Instagram, and Pinterest and create engaging content that your target audience would like to check. Launch Facebook and Instagram ads campaigns to scale quickly. Don’t forget to set up your conversion pixels to track sales.
Email marketing is a game-changer in marketing. It helps to inform, update, and remind your current and potential customers of your brand-related news, be it a new product collection or a sales season. You’ll also find email marketing useful to reduce the cart abandonment rate. Our Finnish apparel & fashion client, Marimekko, sends personalized emails to notify customers about the products they added to their shopping cart but never purchased.
Investing in SEO is one of the cheapest marketing strategies yielding long-term results. To get your website to rank high in Google search results, you should accurately identify the keywords that customers are using to find your goods. You should also optimize the technical aspect of your website. For instance, compressing images, optimizing the store back-end processes, and adding a sitemap has made a Swiss glassware brand, Glassmania, organically reach top positions on search engines.
Content marketing is a rising trend that can help you to establish your brand as an authority in your industry. Write engaging, informative, and relevant articles to answer the questions your customers are searching for.
Now that we’ve looked into how to start an ecommerce business from scratch, you must be interested in one more essential aspect – cost. Apparently, building an online presence can save you much money in comparison to a physical store, e.g. rent, furniture, shop assistants, and more. But if you ask how to start ecommerce without money, we’re here to disappoint you.
Just like any retail business, you’ll need at least a few hundred bucks to invest in strong online presence. Your costs will depend significantly on the type of ecommerce business you’re launching, the platform you select, hosting provider, stores functionality, marketing expenses, how you’re going to manufacture your products, and more.
Given the aforementioned factors, we recommend considering the following costs:
Related article: Ecommerce Development Cost: Set the Right Budget for Your Project
As a final recap, we’d like to give you a few tips on how to start a successful ecommerce business and keep it growing.
Online shoppers aren’t interested in an item anymore. Customers want to experience the brand, to relate to it, to identify with it. Brands that meet this need and invest in customer experience (CX) can expect an 80% increase in revenue and a 5x higher customer retention rate. Outstanding CX starts with an easy-to-navigate website and ends with free shipping and a convenient ecommerce return policy.
So don’t miss out on the possibility to earn more. Make your customer a king and sell more.
The average ecommerce conversion rate is 2%. That means if at least 2% of your website visitors buy from your store, you should be more than happy. But conversion doesn’t happen alone: you need to optimize for it. Strategies to boost your conversion rates are similar to those of optimizing CX, plus using promotions: simplifying the checkout process, offer competitive pricing, provide promocodes and launch private sales, etc. And some best ecommerce tools, like Google Tag Manager and HotJar, will help you track the conversion progress.
You’ve got about 0.05 seconds to get your website visitor on the hook. That’s how long it takes them to form an opinion about your website. So you’d better optimize your website speed. Improve your store search and filtering. Create appealing, functional product detail pages (PDPs). Add some essential ecommerce website features, including breadcrumbs and a user-friendly menu.
Overall, optimize your store for an easy search and purchasing experience.
You might have seen many guides on how to start your own ecommerce business. Some suggest selling on social media. Others offer their services to build a custom website. Others make you move to marketplaces. But the key to success is combining multiple sales channels and delivering a unified, consistent CX across platforms. In the end, you’ll benefit more from selling products on your own website, engaging with your audience on Facebook and Instagram, and sending personalized emails to drive sales, etc.
Starting an ecommerce business from scratch is as exciting as it is challenging. At the end of the day, you need to study a ton about finding a product, researching business models and plans, deciding on the brand name, obtaining all the necessary permits, building an ecommerce store, and choosing the marketing strategies if you want your business to be successful.
Going through all the steps to create an ecommerce business can feel like you’re climbing up the mountain, but there’s no bigger reward that ascending to the top. There are multiple benefits of starting your own online business instead of a brick-and-mortar one. The initial investment is much lower, your online store can operate 24/7 and has global exposure.
If you feel like you’re set adrift, especially in the technical aspect of starting an ecommerce business, we’re here to help. Hire ecommerce developers with Elogic no matter your chosen platform and get your store built in no time.