It’s easier than ever to start your own business, but you have to do so the right way. You likely shop online, and so do millions of other consumers. You can take advantage of this fact (and convenience) by starting an e-commerce business.
Let’s go over how to start an e-commerce business.
What is an e-commerce business?
Essentially, you’ll sell products online rather than set up a traditional brick-and-mortar location. To make the most of this trend and its possibilities, you need to know what you’re doing.
Step 1: Decide what you’ll sell
Just as there are millions of consumers shopping online, there are millions of products you can sell online. The first hurdle to cross in regards to building your e-commerce business is what you’ll sell. Your product should be something you use yourself or one you’re passionate about.
Focus on popular products, ones you can sell on your own, and ones that have longevity. Do as much in-depth research as possible, to better set yourself up for success.
Step 2: Determine how you’ll procure your product
Next, you need to determine how you’ll obtain your product so you can sell it to your customers. Your options include dropshipping, buying wholesale and either making or manufacturing the product.
Sourcing your product will require a great deal of research on your part. Focus on reputable companies, stellar reviews, return policies and guarantees/warranties. Remember, the quality and look of your product is a direct reflection of your business, your brand and your reputation.
Step 3: get a sense of the competition
Chances are, yours won’t be the only business selling your specific product. Check out the competition to see what they’re doing and how they do it. Check out their reviews to better understand what customers like and what they don’t like.
As you get a lay of the land, try to think of what will set your business apart from others in your industry. Even if you sell the same product, your company culture, values, prices and the like are what set you apart.
Step 4: Decide on a business name
You know the name of your product, but do you know the name of your e-commerce business? Choosing the right product name requires more homework, as you don’t want to use a name already taken.
For the best results, conduct a corporate name search. Using another business’s name can open you up to a lawsuit, which is the last thing you want. Try to think of a unique, creative name that’s also reflective of your individual brand. Once you’ve thought of the perfect name you can stick with, register it.
How you register your business name depends on your corporate structure. For instance, if you set your e-commerce business up as a corporation or an LLC, the name records automatically.
Step 5: Secure your domain name and website
You may not have a physical location, but you still need a site for your business. It’s just going to be a different kind of site. Secure your business domain and website, preferably using your business name as the domain name.
You can set up your website on your own, but you may have better results by employing a professional site developer. Using an experienced web developer is a good idea because a professional will know how to set up your online store the right way. You want a layout that’s aesthetically appealing, easy to navigate and secure.
Step 6: Have a well-thought-out business plan
For your business to stand the best chance of success, you have to plan for achievement. Think about your target audience, your goal, conduct a market analysis and devise your marketing plan. Be sure to map out the financial aspects of your business, such as how much you’ll spend and the prices you’ll set.
Have a financial advisor look over your plan to let you know whether it makes for a good investment. Know where you can compromise and where you need to remain rigid in operating your company.
Step 7: Apply for licenses and permits
Just because your business is online doesn’t mean you don’t need licenses and permits. Your state, city and county may have specific requirements regarding those permits and licenses. Do some research to see what you need, how to get it and how much you may need to pay. Be sure to note if any licenses or permits require renewal in the years to come.
Step 8: Get an Employer Identification Number
You want to keep your business finances separate from your personal assets. To do that, you need an Employer Identification Number. You’ll also need this number when it’s time to file your taxes.
Speaking of taxes, sit down with an accountant to understand what your first commercial tax bill will likely look like. Neglecting to act early could result in you owing the IRS more than you bargained for.
By laying the proper groundwork, you stand a better chance of your e-commerce business succeeding.
