An e-commerce business sells its products or services online. These can range from very small ventures like Etsy shops and medium-sized businesses like fashion retailers to billion-dollar enterprises such as online marketplaces.
To get started with an online business, all you need is the right strategy to enter the field and reach a broader, global customer base with minimal overhead costs. If you are planning to start an e-commerce business, here are the basic things you should learn about, which we have covered in this blog post:
- Steps to Launch an E-Commerce Business
- Tips for Managing Your Online Business
- Some common questions about ecommerce business
How to Start an Ecommerce Business?
Many ecommerce success stories read like dreams. Some, like Amazon, revolutionized the market for once and all with unique product offerings. The brand started by selling only books but then began offering a wide range of products across various categories. Others, like Alibaba, focused on outstanding customer service, logistics, or other value-added services that enhanced the customer experience. By streamlining trade between businesses and building a robust platform, they became a global powerhouses. These are truly inspiring tales of how innovation and customer focus can transform an idea into an empire.
Then there’s the case of Warby Parker, which disrupted the eyewear industry with a direct-to-consumer model and a strong emphasis on affordable, stylish glasses. By cutting out traditional retail markups and offering home try-ons, Warby Parker captured a new generation of consumers’ hearts (and vision).
While it’s a good idea to take inspiration, it’s also important to recognize that each success story follows its unique path. They did not simply copy others. Even when they used existing products or something commonly available, they found a unique way to access or present them. The key lesson is to focus on what you can offer that others cannot.
Here is the course of action you have to follow while starting an ecommerce business:
Research about your business idea and Validate Your Idea
Finding a product to sell is the first big step in setting up an online store. It can often be the trickiest part, as it involves figuring out what products will really catch the interest of your target customers. To start, you should explore different strategies to find products that meet market demands and stand out from the competition. Tools like industry reports, social media trends, and keyword research can help you spot what products are trendy.
Once you’ve got a potential product, the next step is to make sure it’s a good idea. This means testing it out to see if people actually want it. You can do this by running surveys, analyzing data on similar products, and maybe launching a small batch to see how it performs. Learning from successful entrepreneurs, like how they use A/B testing or pre-launch campaigns, can give you a better idea of whether your product will fly.
What if my products are readily available in the market?
If you are planning to sell existing products, there are certain things that you can do to gain a competitive advantage:
- Start checking out reviews for products similar to what you want to sell. Look at feedback on big retail sites, forums, and social media to get a wide range of opinions.
- As you read through the reviews, jot down any common complaints or issues. For example, if people keep saying their glassware breaks easily or is hard to clean, those are key problems to note.
- Once you have a list of complaints, see if any issues keep popping up. If a lot of people are unhappy about the same things, that’s a major red flag.
- Next, look into ways to solve these problems. For example, if there is an existing skincare product but it is overpriced or irritating to the skin you can offer a hypoallergic and affordable skincare product.
- Figure out if it’s worth the investment. Will the extra cost of making the higher selling price cover shatterproof glasses? Make sure you can still make a profit after covering these costs.
Research Your Competition
Before opening your online store, it’s wise to get a good look at your competition. One simple way to do this is by browsing online marketplaces for products in the categories you’re interested in. This will give you insight into what’s already out there.
When you examine the product features and benefits that competitors are offering, you can understand what customers value and what you might need to include in your own products. Along with this, you can also find out what unique selling point you need to leave your competitor behind.
The next step is to check out the price ranges for similar items to know about market rates so your pricing is competitive.
Don’t forget to read customer reviews of these products. It’s a very crucial step as it reveals common complaints of your target audience or what features they are loving.
The more thorough your research, the better you’ll be able to position your product and increase your chances of success in the ecommerce space.
Figure out where to source products from
After validating your idea, you’ll need to figure out how to get your hands on the products. There are a few options here:
Dropshipping
Dropshipping is an online selling method that allows you to sell products without holding inventory, reducing upfront costs. However, this approach can impact product quality and shipping speed.
Direct-to-consumer (DTC) purchasing
Online sellers can also choose DTC purchasing by partnering with manufacturers to create custom products in bulk and sell them directly to customers. This is a very profitable business but often takes up higher investment and coordination.
Working with manufacturers
Print-on-demand is another option for selling custom-designed products without holding inventory. But it’s a less riskier than DTC to offer personalized items to your customers as you don’t purchase items in bulk and have to manage stock.
Wholesale
You can also choose to purchase products in bulk directly from manufacturers or distributors. This method is somewhat like direct-to-consumer purchasing, but you generally buy larger quantities (wholesale). While wholesale can provide lower per-unit costs, you might have less control over the final pricing compared to buying directly from manufacturers or creating your own products.
Reselling
Reselling is another way of ecommerce; you might probably have heard about it in trending reels as well. This type of selling involves buying products from other retailers and selling them online, often at a higher price. This approach requires you to find products that you can sell profitably while managing inventory and customer expectations.
Handmade
Some online businesses are also thriving by selling handmade products, such as custom jewelry or artisanal crafts. This option is great as there is low competition for you as you are offering unique, and personalized products that may not be readily available in the market. However, it often comes with production limitations, such as time constraints and the need for specialized skills or tools.
Subscription Boxes
You can also offer subscription where you will curate a collection of products/services and deliver them to customers on a recurring basis. This approach can create a steady revenue stream and foster customer loyalty, but it requires careful planning to maintain variety and quality in your offering.
Product licensing
You can also sell through product licensing. This model involves obtaining the rights to sell products featuring well-known brands or characters. This can provide a significant market advantage due to the popularity of these brands. However, it also involves negotiating licensing agreements and adhering to brand guidelines.
Choose a selling channel
There are several ways you can sell products online, each has its unique advantages. One of the most famous methods is through your own website, using platforms like Shopify, WooCommerce, or Magento.
When you choose to sell through your own website, you have full control over branding, pricing, customer data, and user experience. Ecommerce builders such as Shopify Plus allow you to create a customized shopping experience for your customers.
And if momentarily you cannot afford the resources, time and skills to create your own website there is another you can sell. Leverage online marketplaces such as Amazon, eBay, Etsy, Alibaba, or Walmart Marketplace. These platforms provide access to a large customer base and established traffic, making it easier to reach a wide audience without investing heavily in marketing.
Social media platforms, including Facebook Shops, Instagram Shopping, Pinterest, and TikTok Shopping, also support online selling. These platforms enable direct engagement with customers and smooth integration with social media marketing, helping you to promote your products and interact with your audience all at once.
Selling through Email Marketing
Email marketing is another effective way to sell your products directly through email. Using this approach, you have high control over the content. This makes it easy for you to target specific customer segments with personalized offers and promotions.
Mobile apps like Depop and Poshmark are great for reaching niche communities. They’re especially popular for fashion and lifestyle items, giving you another way to sell your stuff online.
Subscription box services
Subscription box services like Cratejoy are a cool way to sell because they give you regular income and help you build a loyal customer base with their subscription model. This works great for businesses that offer themed, curated, or seasonal products.
For B2B sales, marketplaces like Alibaba and ThomasNet are great. They connect businesses with other businesses, facilitating bulk sales and large transactions. These platforms are excellent for companies looking to expand their wholesale operations.
Finally, other platforms like Google Shopping, Craigslist, and OfferUp provide additional sales channels to reach a wider audience. These options can complement your primary selling strategies and help you tap into different markets.
Choose a logo and name and set up your online store
Choose a name and logo. While products or services may be the core of a business, the brand identity, encapsulated in the logo and name, is the foundation upon which it’s built.
Your first impression matters. That’s why you should choose a strong logo and name to create a memorable first impression. They establish the core values, personality, and image of your business. A professional logo and a well-chosen name can significantly enhance your business’s perceived credibility.
In short, they are the face of your company and play a pivotal role in building a strong brand presence online.
Add Products/Create Product Catalogue
After deciding where you want to sell, it’s time to set your business up. This includes listing your products; you can either do it manually or use systems with templates and spreadsheets to manage your inventory in bulk.
If you are planning to start your ecommerce business on an online marketplace, getting notices from the customers would be quite a challenge as there is already abundant offering out there. That’s why you have to get your product offering right. Here are some tips which can help you craft competitive product listings:
- Be descriptive and make sure to enlist all the critical information to help your customers be informed of what unique you are offering or if you have what they are looking for.
- Ensure that your listing is complete and accurate, as ignoring this can lead to negative customer feedback or returns.
- Think like a customer, and figure out what phrases, words or offering a customer might be looking for and frame your product according to it.
It’s time for marketing
There are many ways you can draw the attention of your audience and convert them into buyers. Following are some of the most preferred ways to do it:
- To drive traffic and conversions, consider running PPC campaigns. This includes options like sponsored products and sponsored brands, especially if you’re part of an enrolled brand.
- Send your target audience emails about seasonal deals, digital coupons and the latest collection. You can also email them about when the “out of stock” products are back in stock.
- Social media marketing can be quite effective in promoting your products.
- Use upselling and cross-selling to show your customers what alternatives they have got based on what they are liked, or viewed in the past.
- Write blogs to grow a loyal audience.
Add Customer Review Section
It’s best to employ user-generated content as social proof to establish trust among the users. In case you are building your own website, never miss on this section as it really crafts your perception in customers’ minds.
Tips for running your online business
Many newcomers in ecommerce are prone to making mistakes. Picking the wrong product to sell is the most common one. If you are totally new to this experience make sure you choose products that can be good candidates. By good candidates, we mean:
- Customers may find them affordable
- Their shelf life is long
- They are easy to pack and ship
- They have branding potential
On the other hand, there are products that may not be right to choose if you don’t possess that much experience and expertise, and these are:
- Highly competitive products
- Electronic products
- Patented products
- Restricted products
- Perishables products, especially food items
- Heavy products as they are costly to ship
- Products with less margin
Establish your brand image
Initially, you should focus on experimenting with product ideas and assessing what’s best for you. After you gain some traction, you must register your brand and consider branding. It can require some investment, but it also helps in winning customers in the long run.
Make a solid fulfillment strategy
When you build your online business you have to think about how you will handle the storage, shipping and returns part. In the beginning, some businesses may place their items at home or garage, but as your business grows,, you should switch to third-party solutions to take care of the fulfilment processes. Here are some tips that beginners must follow to streamline the process:
- Start out with a few products so that it’s easy to manage your initial fulfilment operations.
- Use a reliable inventory management system to prevent stockouts or overstocks.
- Organize your storage area in a way that it’s easy to retrieve the products.
- Select the right packing material.
- Use shipping labels properly.
- Include diverse shipping methods to meet customer preferences.
- Choose carriers that are known for delivering on time.
- Keep customers informed about order status and delivery updates.
- Make sure you have an easy return policy for the customers.
- Address your customer inquiries efficiently.
- Constantly monitor your key performance indicators to check if there is room for improvement.
- Research different 3PL companies to find the best fit for your business.
- Compare pricing structures and services offered by different providers.
- Outline your specific fulfillment needs to find a suitable partner.
Optimize your user experience
Employ A/B testing to try out different value propositions and offers to choose the best titles and descriptions for your products. A/B testing goes like comparing product image placements CTAs to figure out the most effective combination. It can also include testing different checkout flows, payment options, and shipping information. All this can reduce your cart adandonment significantly. Fine-tuning your UX can lead to increased conversions, improved user satisfaction, and reduced bounce rate considerably.
FAQs
- How much does it cost to start an ecommerce business?
There are various factors that determine the cost of building an ecommerce website. This blog addresses all your cost-related queries effectively:
- How do I start e-commerce?
The main course towards starting an ecommerce business is to find a product, choose an online selling point, create your business plan, set goals, create an efficient fulfillment strategy, launch your business and monitor your performance.
- Is it easy to start e-commerce?
It can be a different experience for different people; however, being unique has been a key ingredient for success for many businesses.
- What are the three types of e-commerce?
E-commerce can be Business-to-Business (B2B), Business-to-Consumer (B2C), Consumer-to-Consumer (C2C), Consumer-to-Business (C2B), Business-to-Administration (B2A), and Consumer-to-Administration (C2A).
- Which is the best eCommerce platform?
The best ecommerce platforms depend upon the goals of your business; however, there is a lot of buzz around Shopify Plus. If your current platform is limiting your growth, Shopify Plus can be a perfect solution. To know more about the e-commerce platform, ping us and get a free quote.
- Can I create an eCommerce website for free?
Yes, there are many e-commerce builders with drag-and-drop functionality where you can design your e-commerce website easily. However, it is recommended to have an expert by your side, as they possess years of experience and know how to customize and optimize the main elements of e-commerce, such as the storefront, navigation, checkout, and payment gateways, etc.