Starting an e-commerce business is a great way to earn a living or bring in extra income. If you own a brick-and-mortar store, an e-commerce shop adds to your revenue and gives customers another option for purchasing your products.
Although there are some challenges in setting up an e-commerce business, opening an online store can be very rewarding.
Steps to Starting an E-Commerce Store
With an e-commerce marketplace that is virtually infinite, it can be challenging to establish a presence that makes an impact. Before you commit to a launch, taking time to understand e-commerce models, select and research your niche, setting up a company, and finally distributing your products or services should take some time if you want to make an impact.
Understand e-commerce models
Generally, you can understand e-commerce models as:
- B2C (business-to-consumer): You will sell your business’ products or services directly to a customer.
- B2B (business-to-business): Your business’ products and services are sold to other businesses.
- C2C (consumer-to-consumer): C2C businesses are typically online marketplaces, where your business connects buyers to sellers.
- C2B (consumer-to-business): Affiliate businesses earn revenue by connecting the consumers to the right businesses, usually by offering your expertise as an influencer or expert on what customers will want.
Knowing your ecommerce model will help you connect to the communities and networks that share similar challenges and opportunities, as you start to understand your business’ place in the market.
Identify & research your market
Once you know the type of ecommerce model that matches your business, you can hone in on the exact market that will be interested in your product. Look in communities that include your target market to understand their pain points: these can help you provide the solutions that they will need.
Research your competition
How does your competition sell its products and services? What do they do differently from other competitors in the space? Which online marketing channels do they use? Which social channels? Do they use phone or print materials?
Network to setup conversations with either vendors or customers in the space to see what they like and don’t like about your competition. Helping you define what types of services and products your competitors are already providing can help you discover your key differentiators and help you build a consistent marketing message.
Write a business plan
A business plan is vital to your e-commerce store’s success. The business plan sets out your business goals, your mission and vision, how you operate and what activities you’ll prioritize. It sets a roadmap for growth, gives you a benchmark to measure your progress against and allows you to evaluate your ideas to determine which have the best chances of success. It’s worth it to take the time to ask yourself important questions about what you want your business to be, what your goals are, and how you’ll deal with obstacles.
Take care of the details
The details matter. You need a business name—one that’s memorable and easy for customers—and a registered domain. You’ll also need a logo and an e-commerce site with captivating product descriptions and search engine optimization. Take the time to finalize these details before launching your online store. Be prepared to make revisions to your business and website as you learn about what works and what doesn’t.
Select and test an ecommerce platform
As you speak with similar businesses that share your ecommerce model, ask about their preferred ecommerce platforms. Many modern platforms not only cover tools to manage inventory, report revenue, and handle shipping details, but can also help you market your business to expand your reach. A platform can also integrate with your preferred business credit cards, so you can get a real-time look at your finances, including costs.
If you find a specific platform isn’t helping you maximize your business’ potential, try adjusting your settings and experimenting to find the right setup.
What are the Challenges Faced by E-Commerce Businesses?
Like all businesses there are challenges faced by ecommerce business owners. Here are a few of the issues you might face when starting an online retail business.
Higher customer expectations
With an increasing number of customers using online shopping, more e-commerce businesses are looking to attract shoppers’ loyalty.
This means customers are now looking for special deals or an enhanced experience when choosing where to spend their money. Consumers often look for perks like free returns, free shipping, easy-to-navigate websites, timely customer service options, easy pay options, and personalized shopping experiences.
Increased customer options
These days, customers have many more options for making online purchases. They can go with big online retailers that offer fast shipping from sellers around the world or opt for local e-commerce businesses that provide locally sourced goods and focus on sustainability.
They can also shop through online marketplaces, rather than going to a merchant’s website. Additionally, they are no longer limited to buying only within their country. It’s easy to buy from e-commerce stores that ship internationally.
With so many options, your online store will need to stand out.
Difficulty attracting customers
With consumers having high expectations and so many options, it’s difficult to attract new customers.
Adding to the complexity is that customers now learn about products and brands from many sources, including social media, online search, influencers, and online advertisements.
If you want to attract consumers, you’ll have to figure out where your customers are when they make purchasing decisions, who they trust to guide them in those decisions, and how to be at the top of their mind.
Being profitable in the long-term
Having a sustainable business means you need to make money. It’s tempting to offer the lowest price and give away as many perks as possible, but that may not be profitable in the long-term.
E-commerce retailers must reduce their overhead, keep shipping costs low, cut inventory costs and minimize returned orders if they want to survive in the long term.
Choosing the right technology
Technology is constantly changing, which means people starting an e-commerce business have to be willing to research to find out what works best for their products and services.
You may need separate technology solutions to help manage your content, keep track of inventory, integrate with other tech, create a seamless buying experience for your customers, and works efficiently for you.
E-commerce Start-up Guide: How to Grow a Profitable Online Store
Whether you want to start your e-commerce business to earn a living, bring in extra money or increase sales for your brick-and-mortar shop, there are important steps to take. Following the tips in this article and being mindful of the challenges you’ll face will help you in opening up an online store.
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This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. It should not be regarded as comprehensive or a substitute for professional advice.