Although eCommerce has been growing at a steady pace over the past two decades, the Covid-19 outbreak and the resulting lockdown imposed by the governments sent it skyrocketing.
Before the pandemic set in, shopping online had been convenience and luxury, but it has now become a necessity, almost the only means to purchase the basic daily needs like food and medicines in some instances.
The amount of interest in eCommerce is unprecedented today. Many people Including seasoned entrepreneurs, promising novices, and some plain daydreamers are dying to venture into eCommerce.
However, if you’re in it merely to make some quick bucks that’s all you’re going to get. To build a scalable and profitable eCommerce business, you have to envision it for the long run and build an asset that brings value to the market.
How to start an eCommerce Business?
If you are looking to set up a successful and scalable eCommerce business. these are the steps to follow;
- Research deep into eCommerce Business Models
- Commence eCommerce Niche Research
- Evaluate and validate the target market and product ideas
- Register your eCommerce Business & Brand Name
- Finalise your eCommerce Business Plan
- Create your eCommerce Site
- Attract Customers to your eCommerce site
Online retail is thriving. But, not all eCommerce businesses go about it the right way; hence, they struggle to get some traction. Don’t lose heart just because some fail to make it. Here, we provide you with a wealth of information and insights which you can use to set up your e-commerce store, protect yourself legally, get your finances in order, market and sell your product, and start scaling up your eCommerce operations.
Few things in life are more fulfilling than founding a business from nothing and watching it take root and flourish beyond your expectations. It’s the pride and joy of your heart, it’s your entrepreneurial feat, and it’s your mark on the world.
Building an eCommerce business involves more than picking a brand name, writing product listings, and starting to sell products online. Even the best business ideas can fall flat if you fail to drive enough traffic to your eCommerce site.
Step 01 - Research deep into eCommerce Business Models
Start your research with a clear idea as to what kind of information you should be delving into. Don’t just act on your gut feelings. Building an online business is an investment. Treat it as such.There isn’t a single business structure that works for all. Service-based businesses, software, digital product sales and physical products are but a few of zillion models out there.
Before you can determine what to sell online, you must understand the different business models for eCommerce. If you wish to turn a profit without investing heavily in your own merchandise, dropshipping or print on demand are better choices.
If you’ve set your heart on having your own warehouse full of merchandise, then you’re going to be investing upfront and working with a wholesaling or warehousing (retail) model. If you’re obsessed with a product idea which you believe to be unique or wish to sell your favourite product under your own brand, focus your research on manufacturing and white labelling.
You can also adopt a subscription model where you carefully curate a set of products or a single product to be delivered at regular intervals to your customers. And then there are subscriptions, where you carefully curate a set of products or a single product to be delivered at regular intervals to your customers.
If you specialise in an eCommerce business model where a single product is offered, you can supplement it with affiliate marketing, for related products. You can stay in control of the content marketing and branding on a focused product and throw the rest of your energy into driving sales by monetizing traffic.
Step 02 – Start eCommerce Niche Research
To win the hearts and earn the trust of your prospective shoppers, the quality of your online storefront is much more important than the number of products you’re selling there at any given time.
Don’t start out on a quest to become the next Amazon or the next Best Buy unless you have a massive budget. Also, remember Rome wasn’t built in a day. And these companies had been fledgeling ventures before they grew into massive eCommerce powerhouses.
Picking your niche is the most important step in embarking on your online business. Start this process by identifying successful companies already operating in this space. If the competition is too high, then, it won’t prove to be a profitable business; but, the complete absence of competition usually indicates that there’s no market, either. So,select a reasonably competitive business.
Avoid a too crowded niche, however, and shy away from anything dominated by major brands. If it’s difficult for you to make up your mind on this, delve further into what you want to do – the more specific you are, the less competition you are likely to face.
When you niche down, you’ll enjoy the benefit of having plenty of “shoulder” niches, related to what you do, but not identical. You can collaborate with business owners in those niches to cross-promote, become (or acquire) an affiliate, to develop your customer base.
Decide on a product category with a minimum of 1000 keywords and focus on a niche that performs well in social media.
Step 03 - Evaluate and validate target market and product ideas
Once you’ve identified a niche and business model, you may be tempted to start hunting for products to sell. But before you think about product ideas, think about personas. You can’t expect people to buy your product if you don’t know who you’re selling to.
Ask the right questions, Who are you? What does the store represent? Who are your ideal customers? You need to project a consistent brand image (a journey that starts with your brand name).
Fortunately, Facebook makes it relatively easy for us to discover your target audience online. Specifically, know exactly how many people you can target. Drill it down to get the numbers as specific as possible and learn your demographic segment in as much detail as possible.
Even if this appears too simple to miss, most entrepreneurs are at a loss if they’re asked how many people of their target audience is online. Go a little broader with your target audience, without narrowing it down and try to sell to those on the contours of your audience map as well.
Once you’ve identified the image you want to convey and the audience and customer groups you are going to be serving, it’s high time for you to come up with some product ideas.
Before you invest in a product, though, appraise it carefully. Even if you select a dropshipping model, you want to test it carefully and get a feel for the product yourself so you can learn about any potential problems and prepare customer service scripts to answer common questions.
Also, assess how viable your product idea is. Can your suppliers meet your pricing? What happens if your suppliers fail to do that? Is there a plan B?
Step 04 - Register Your Ecommerce Business & Brand Name
To launch a successful business, you need a brand that connects with your persona. Identifying your persona makes creating an eCommerce brand easier. But before you set up your store and get into the nuts and bolts of building a brand – there are some basic steps you’ll need to take.
Register Your Business: Pick a business name and register your company. Begin at the beginning.
Pick Your Store’s Name: The name of your site and the legal name of your business don’t have to be necessarily the same but keeping them consistent yields some benefits. Make sure whatever you select matches your niche – you don’t want to rush to pick a brand name at the last name. Don’t pick one that runs completely counter to your niche unless your intended brand value is humour.
Obtain Your Business Licenses: If you don’t know what kind of licenses you should obtain and/or how to obtain them, you can find plenty of free resources online to guide you. Also, ask around and look actively for mentors. They can spare a great deal of trouble for you.
Apply for Business Licenses and Permits: Operating an online store does not exclude you from needing certain business licenses and permits. Check with your city, district, county, and state to see what sorts of sales tax licenses or home business licenses you need and get them approved before you commence operating.
Find the Right Suppliers: You’ll face a lot of competition selling products online, so it’s in your best interest to find the best quality and best prices for the products you sell or materials you use to manufacture your products. Search around until you find a supplier you want to do business with, in the long run – this includes your eCommerce software (your “shopping cart”). Consider the scalability factor from the very start.
Create your Logo: Don’t obsess with the logo creation way too much but ensure that it is not in use by another company in your niche. Logo design doesn’t have to be 100% original.
Picture your brand: Ponder the colours of your brand, the imagery you’ll use, and the typeface or fonts you’ll employ carefully. If you’ve got the budget, you might want to hire a marketing firm to craft a design brief for your company. If not, you can create your own. Just keep it consistent and read marketing tips designed to help boost your brand.
Step 05- Register Your Ecommerce Business & Brand Name
Now that you’ve figured out your target market, product niche and brand name, you must have a reasonably solid idea as to how your business will look like. Here, step back and put your business plan on paper and ascertain your start-up budget and monthly expenses.
The most vital aspect of a business is the financial one. Figure out your break-even point, both in unit sales and duration (in months). Any real business is an investment of resources. Your role as the founder and owner of a business is to take resources and run a profit.
It’s unfortunate that many entrepreneurs take projecting their revenue and expenses for granted. If you don’t care to compute your profit margin, you’re highly unlikely to succeed. The business planning phase is also when you want to crystallise the details such as your staff, product sourcing, logistics and marketing budget. Make sure you understand all the available financial resources available to you.
Step 06 - Create your eCommerce Site
Once you’re officially an eCommerce business owner, the next step is to register your domain name and any redirect URLs that might be relevant. You’re going to need the design info you finalised in the last step now when you finally get your eCommerce site built.
Whatever design you select also has to be compatible with the eCommerce software you use. There are literally hundreds of eCommerce shopping cart platforms. Picking the right eCommerce software is not easy. You need to carefully appraise things like loading speed, features, compatibility with different payment gateways, compatibility with your business structure, your web developers’ skills, SEO-friendly features, and more. We recommend you consider ShopOnCloud, our dynamic and innovative but highly affordable eCommerce solution.
If you’re enamoured of the idea of having your own digital real estate, make sure your eCommerce platform can scale with you. ShopOnCloud promises seamless shopping and limitless scalability for your business. Setting up your eCommerce site is much more than adding your products and content. You need to get your email marketing and automation set up as well.
This is important to set up before you receive traffic. Email marketing is indispensable for driving conversions. Create coupons, thank you emails, and upsells so you can turn visitors into shoppers. You also have to pay attention to customer support.
Step 07 - Attract Customers to your eCommerce site
There are great eCommerce success stories, but they rarely shed enough light on the painstaking efforts by the founders to grow the business. Just because you build it, there’s little guarantee people will flock to your eCommerce site. You must market your store. Features that support Search Engine Optimisation (SEO) are instrumental in driving the discoverability of your eCommerce site on major search engines.
SEO is alive and well and keeps evolving. You should keep keywords and search terms in mind on each page of your site, in your URLs, and in your ad campaigns. You also need to think about driving traffic to your site. The best eCommerce sites invest significantly in online marketing. If you don’t have the funds, get creative. Subscribe to marketing newsletters or listen to digital marketing podcasts to keep tabs on the digital marketing industry and collect your fill of marketing tips.
Decide whether you want to use sponsored content, social media, pay-per-click ads, or a combination of strategies. How will you monitor what campaigns are driving traffic to your store? If marketing your site seems overwhelming, you may have to hire help.
Your site isn’t the only thing you need to drive traffic to. The product(s) you select also must be included in your marketing budget. Don’t lose the forest for trees. Your mission is to sell products, not drive traffic. To sell products, you have to think beyond your site and look for expansion areas.
No matter what and how you decide to sell, the first step is to create an email list. Set up an opt-in freebie on your website, launch a social media campaign to gain subscribers, or run a giveaway where the entry ‘fee’ is your customer’s email address.
Hosting a giveaway is a go-to marketing tactic to draw in traffic and subscribers quickly. Giveaways have the extra benefit of driving your brand presence and product visibility. Building an email list gives you a group of hot leads to work with, making the sales process much easier and more effective.
Emailing coupons and valuable content to your consumers helps to keep your brand on top of their mind, drive sales, and earn credibility. Keep your emails interesting – ask for your customers’ input often, including reviews. Respond quickly to customer service and product quality issues, and work on building relationships.
On your site, look at how and where the traffic flows. Are your product pages targeted to your persona? Are you losing potential customers in the same place? If you’re driving traffic to your store but little is selling, plug the leaks in your sales funnel by carefully analysing and optimizing each page and taking a closer look at your product listings. Use analytics to help with this task. There are tools that allow you to monitor and optimize every step of the sales process. Get and set them up.
You can also offer bloggers in your niche a free sample of your product in exchange for reviews. Attach a card with each product that asks for a candid review and provides contact information for your company (email is enough, where you don’t have a dedicated customer service hotline).