How To Start An Ecommerce Business: The Quick Guide

In 2020, 23.3 Billion U.S. Dollars was the value of the food and beverage industry. There were also online retail sales Business in the United States. Online shopping in India will amount to USD 67 billion by 2021.

These statistics show that artisans and skilled entrepreneurs should seize this opportunity. This is the best time to open an online shop and create a unique eCommerce business model.

This eCommerce guide will show you the steps necessary to create your first eCommerce business model.

An Overview of eCommerce

No matter their size, eCommerce businesses all have one thing in common: They sell goods and services online. Digital transactions are the foundation of eCommerce business models. Ecommerce businesses do not require a physical presence.

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Their activities depend mainly on the type of business they are in. We’ll soon be discussing the five main types of eCommerce businesses.

Different types of eCommerce Businesses

There are six main eCommerce business models.

1. B2C A company that sells or services its products directly to consumers
2. B2B (Business to Business) refers to when a company interacts with other businesses and markets its products. B2B eCommerce can be divided into two parts: vertical and horizontal.
3. B2G This is how a company markets their products and services to the government.
4. B2B2C (Business to Business to Consumer) is a business that sells products to another company before selling them to consumers. A wholesale distributor might sell merchandise to retailers, who then sell it to the end customers.
5. Consumer-to-Consumer (C2C) is a model where consumers sell their products or services directly to consumers. This can be done via third-party marketplaces or websites that facilitate the transaction.
6. C customer to business (C2B) model is where customers sell goods and services directly to businesses. Some websites permit individuals (contractors or freelancers) to share work or other services.

Research your Idea, Create a Business Plan & Define a Budget

If they want their eCommerce platforms to be different from others, every company must follow a set of steps.

#1 Find Product Opportunities

This step is unnecessary if you are a creator. You already know the product you want to market. As an entrepreneur, you must know the products or services you intend to offer. Although this sounds daunting, there are ways to make it easier.

Keep reading, and you will find some clues.

#2 Get to know the competition and create a business plan

Businesses must keep up with the competitive market. These tips will help you create your business plan.

• Unique solutions for your market problems
• Your customers will be convinced that you are better than your competitors.
• Superior conceptually (e.g. sales and marketing) as well as visually (UX/UI).
• Provide high-quality services and products, and compile positive customer reviews.

#3 Lay out your online store

It’s time to get down to the basics. To start an eCommerce company, you will need a name and a logo. This is the domain name. It should be chosen according to the appropriate criteria.

Understanding the structure and components of a website is key to creating a successful one. It would be best to focus on SEO, content, visual aspects and navigation. Also, you need to meet UI/UX requirements.

Be patient when designing product pages, and write informative and relevant descriptions. High-quality images can slow down your site’s loading speeds, so remember to ensure they are significant.

#4 Choose Your Shipping, Sales, & Marketing Methods

Your online store launch is only a matter of time. First, make sure your store is equipped with sales, shipping, and marketing tools. It would help if you also considered the basics of eCommerce metrics such as KPIs or CVR.

That’s all. You’ve done it. Your eCommerce website can be launched. After launching your eCommerce website, you need to market it. Without prospects, how can an eCommerce business survive?

About eCommerce Platforms; Pros & Cons

Online shops use eCommerce platforms to manage merchants’ orders and their sellers’ needs. To improve their online presence, some even hire a Magento developer company.

We examine the two most popular eCommerce platforms, Shopify and WooCommerce.

Shopify

Shopify allows you to manage all your commerce from one location.

Pros:

• It is simple to use
• +100 attractive themes
• Affordable
• Free 14-day trial
• Numerous strengthening features
• Support available 24/7
• Optimized SEO

Cons:

• Some templates are more expensive than others, and Shopify has advanced options.
• The platform restricts design customization.
• Each sale is subject to a transaction charge.
• Marketing automation is something other than what it can help with.

WooCommerce

WooCommerce is an eCommerce plugin for WordPress. It allows for the creation and management of online shops with sufficient flexibility.

Pros:

• WooCommerce offers flexibility; it is excellent for physical products and downloadable files.
• You have endless customization options, unlimited plugins and a vast selection of themes.
• Increased security. Regular updates make it impossible for hackers to attack your site.
• Larger community with +4.5 million members distributed across multiple forums with many posts, guides and other resources

Cons:

• WooCommerce can’t be used on sites that don’t conform to WordPress’s requirements.
• Although WooCommerce can be downloaded and installed free, you will need to pay additional for specific extensions essential for a website’s success.
• You are in control of the platform’s speed and technical maintenance. There are many things that you can do yourself, even though there are many plugins available.

What is the cost of starting an ecommerce business?

You must first consider your budget and all expenses associated with your eCommerce journey. These are the most expensive costs:

• Permits and licenses for business: This can vary depending on your business type, where you are located, and what products you sell. It can range from $50 to hundreds.
• Hosting, domain name and eCommerce platform. Shopify, for example, will cost $29 per month for the basic plan and $79 for the regular plan.
• Product inventory and Shipping: These are your most important and strategic expenses. You want enough products to sell but want to keep all items from being unsold or returned.
• Marketing: In the beginning, you should spend more on marketing and advertising.
• Human Resources: Your business’s size and growth rate will determine how many employees you need.

What is the cost of starting an e-commerce company?

Now that you’ve seen all the steps in starting an e-commerce company, you might still be curious about the cost. You’ll save a lot of money by starting your online business. This includes rent, property insurance and furniture.

Although starting an e-commerce company on a limited budget may be more accessible, costs will still be involved. It takes a lot of work to estimate the cost of creating an e-commerce company. The type of ecommerce business, platform and method you use to source your products will all impact how much it costs to start.

This is why you should consider carefully how much you can afford to start your journey and keep track of every expense. Consider the following:

• Permits and business licenses: Prices for licensing and permits can vary depending on the entity type, location, and the product or service you are selling. Some states have low fees, ranging from $10 to $50, while others charge hundreds for incorporation.
• Ecommerce software: While it might be free to download an Open-Source platform, there are additional costs (developer fees and hosting, add-ons etc.). You can find the most basic options for an all-inclusive platform at a low price ($12 per month, Square Online Store, for instance). Shopify Advanced caps at $300 per month for more advanced solutions.
• Domain name and hosting: Many e-commerce platforms will offer hosting or domain names as part of their platform. Some will also allow you to buy your domain name directly through them. You can expect to pay between $1 and $15 per year for domain registration and $30 per month for hosting.
• Payment processing: You will need to use a payment processor such as Stripe or Square to accept online payments. Some e-commerce solutions include payment processing as part of their platform. Others will let you integrate with your preferred system. You’ll generally pay 2.9% plus $0.30 for each transaction made at your store.
• Shipping and inventory: Prices for shipping and inventory can vary depending on the product you sell. Your initial stock investment will likely be the most expensive of all our discussed costs. When starting your business, you must be careful about purchasing inventory. You want to sell only a few products that you can sell. Shipping costs will vary depending on how many products you sell, which shipping service you use, what size the products are and what shipping options you offer your customers.
• Marketing and advertising: It’s safe to allocate about 6% to 7% of your gross income for marketing and advertising. This can be hard to estimate when you are just starting, so it’s important to use all your marketing and advertising opportunities. Once you know what works best for your ecommerce business, you can begin exploring paid advertising options.

Additional costs for equipment, company insurance, consultants, and other items may be incurred.

Roxanne King, owner and operator of The Holistic Mama, explains that although it is tempting to opt for cheaper ecommerce builders and other tools than necessary, additional fees are not unavoidable. Some are well worth the investment. King, for example, uses Shopify’s different apps, such as an auto-ship feature or up-sell popups, that she believes are worth the extra $50 per month.

How to start an e-commerce company

Starting an e-commerce company can be overwhelming, just like any other business venture. You’ll be able to access a wide range of business owners and entrepreneurs who are willing to share their best practices and tips to help you get started. Roxanne King, founder of The Holistic Mama shared three of her secrets to success when we spoke with her.

1. Start with the basics

King, a well-known blogger on healthy living, began refining and creating her own natural skincare products in 2011 after a difficult pregnancy and years of using preservative-laden products. King started selling her homemade cleansers online and gave them away as gifts a few years later.

She credits her modest start to her success. She was able refine her selling and shipping processes before moving onto larger-scale selling. Shopify eventually became a more useful and secure platform.

2. Multichannel sharing of your business

King attributes her “accidentally” opening her shop two years ago with helping her business grow. She recommends that others start a blog as well.

She said, “I had so many people following me that I was able to offer a product for my first time,”

This is a great way to share your brand or business on social media channels such as Facebook, Instagram, Twitter and Snapchat. It’s especially useful if you are just starting an e-commerce company. These types of early marketing are completely free and can be used for hints or to build excitement about new launches and product announcements.

3. Invest in multichannel selling

King’s Holistic Mama products can now be found at Whole Foods and on her expanded website. As a third-party seller, she also sells some of her products through Amazon. Small-business owners that have their own website but sell on Amazon are often seen as competitors. They simply cover every market corner.

King stated that Amazon is only a small percentage of my sales but that it is important because some people shop exclusively on Amazon.

Selling through an Amazon seller can provide many benefits, such as the ability to predict how popular your product will be, lower shipping costs if you use Fulfillment By Amazon frequently, and the built-in trust factor, which often facilitates customers purchasing on Amazon’s marketplace. While some consumers remain skeptical about online shopping, they can trust that Amazon-vetted sellers will deliver their order on time.

While it is important to have your own store and vision when starting an ecommerce business, you should also consider using larger platforms to increase your sales and brand recognition.

The bottom line

E-commerce is a better option than a brick-and mortar business. The initial investment is lower, your store can be open 24 hours a days, 7 days a week for customers across the country, or the world, if you are willing to ship internationally. E-commerce is also easier and cheaper to expand if necessary. This makes it a worthwhile venture for entrepreneurs.

An eCommerce business requires a significantly lower initial investment than a brick-and-mortar store. You can start small or large, but having a solid online presence with the right strategies is crucial.

We hope you found this eCommerce business guide helpful. You will only be able to do some of it. To succeed, automate your work using the most recent tools and technologies.

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