The ecommerce industry is one of the fastest-growing industries in recent years. As technology continues to advance, more and more people are turning to the digital world to find unique and worthwhile business opportunities.
However, stepping foot into the business world is nothing short of terrifying. This is especially true if you’re a rookie business owner. Thus, it takes a lot of courage for aspiring entrepreneurs to finally and officially put in the work to start their journey to establishing a successful online business.
But what does it exactly take to start an ecommerce business? To give you a better idea, here is a brief overview of the ecommerce industry and a comprehensive guide on how to start a business online.
The State of the Ecommerce Industry
Ecommerce refers to the transaction of selling and buying digital products, goods, and services through online platforms. Today, the industry caters to all business shapes and sizes. Massive retailers such as Amazon dominate the space. However, there are also ecommerce platforms such as Shopify and Woocommere which made it possible and significantly easier for small businesses and entrepreneurs to start selling online.
Through this, the ecommerce industry experienced exponential growth in the past few years. According to recent reports, online businesses and ecommerce transactions accounted for 11.2% ($154.5 billion) of the total US retail sales in 2019. By 2021, the number rose to a whopping $870 billion and showed a growth of more than 50%.
Globally, there are approximately 26 million online stores and ecommerce businesses and the number continues to rise every single day. The latest data show that online retail sales amounted to roughly $4.9 trillion in the world in 2021. This total is even expected to continuously grow over the next three to five years, amounting to an estimated $7.4 trillion in total global sales by the year 2025.
How To Start An Ecommerce Business: Step-by-Step Guide
As online retail becomes a more and more lucrative option for aspiring business enthusiasts, now is the best time to know what it takes and how to start a foolproof business online.
Step #1: Learn about the different ecommerce business models
With the current state and projected future of the ecommerce industry, it can be extremely enticing to start a business online immediately. However, stepping into the world of ecommerce as an entrepreneur should never be a spur-of-the-moment or spontaneous decision. Instead, it should always start with rigorous and tedious research for you to understand what exactly are you getting yourself into. This includes the basic principles of online selling, the important elements of an ecommerce website, as well as the dynamics of the ecommerce industry.
However, one of the first things that you should learn about is the different ecommerce business models. Familiarize yourself with each business model and decide which one best fits your style as an entrepreneur, skills, and most importantly your resources. Generally, your choice of business model would serve as a framework or guide on how your ecommerce business would operate, especially in the first few years.
Some of the popular ecommerce business models include:
- Drop shipping
- White labeling
- Affiliate marketing
- Wholesaling or Warehousing
- Private labeling or manufacturing
Step #2: Identify your business niche, product, and target market
Some say that the key to establishing a successful business is to find a specific problem and create a solution for it. While this is technically true, the truth is that it is so difficult to find a completely specific problem as well as create a completely unique solution for it.
Determining your business niche and target market is one of the most crucial steps in creating a foolproof ecommerce business. One of the biggest mistakes that rookie entrepreneurs make is thinking that they can just sell anything and everything. Unfortunately, that is not the case, particularly in the ecommerce industry where competition is significantly tight.
Choosing a business niche is not all about your interests or passion. In order to have a profitable online store, it is important to consider the demand for a commodity and the competition surrounding it. The general rule of thumb is to avoid niches that are extremely competitive or already dominated by a major brand or business. But at the same time, there is no security in choosing a niche with absolutely no competition. Therefore, the idea most business people follow is that there is no competition because there is little to no demand for the product or service in the market.
Ideally, establishing your business niche would also allow you to determine your target markets. This would also make it easier for you to come up with product ideas to sell or create in the future.
Step #3: Register your business and build your brand
To officially start your electronic commerce business, the next thing you need to do is to legally register your business and create your company. Registering your business provides you with the necessary legal protections and tax benefits that can financially secure yourself and your business. To do this, the first step is to determine your store’s name and submit all necessary requirements, permits, and licenses.
Once your online store is officially listed and registered, you can start operating and building your brand on different online platforms and digital channels. With your company name on hand, start investing in your business’s logo, style, tone, and aesthetics. The way you design and present your business on social media platforms and your ecommerce store would be one of the primary ways potential customers would come across and interact with your brand. Try to be appealing and relatable to your target audience in order to get the most engagement and generate valuable leads.
Step #4: Come up with a final business plan
At this point, your ecommerce business is nearly ready to take off. You’re officially registered and you have your brand’s logo that you can put on every item you are selling. However, it is best to not get overly excited and launch your online business without finalizing your plans for the near future and determining the long-term goals of your business. More importantly, this step pushes you to put into writing how you plan to achieve your goals in order to grow your business. This takes into account important aspects of business such as finance management, inventory management, human resources, and the like.
Step #5: Create your ecommerce website and start marketing
To complete your ecommerce business, the last step is to create your ecommerce website and start advertising and marketing on every digital channel possible. When it comes to online stores, one of the most important things to consider is the user interface (UI) and the user experience (UX) design.
Both UI and UX shape how a potential customer interacts with your store. So a poorly designed UI and UX can easily turn customers away and prevent any transaction from pushing through. To prevent this from happening, it’s best to invest in website developers that can help ensure that your online store is easy to navigate.
Your digital marketing strategies would play a crucial role in increasing your online traction and boosting traffic to your website. To increase the possibility of sales, it’s important to implement effective marketing tactics such as search engine optimization and email marketing. Utilize a variety of marketing tools and strategies to gauge the most effective marketing campaign for your specific target market or audience.
Are you thinking of starting an ecommerce business of your own? We can help! Sidekicks is an on-demand virtual company and we’re eager to help visionaries and entrepreneurs like you. Get a free ebook and learn more about how we can help you by signing up for our newsletter. We also offer a free 30-minute consultation if you prefer something more personal.