Choose the best platform for your needs, then source your items, select a payment processor, and register a business bank account.
Starting an internet store entails more than just creating a website. You must also identify your target consumer, source your items, and take steps to formalise your firm. Starting small — for example, providing only a few things at a start — might help you get your e-commerce firm up and operating quickly.
Here are seven measures to consider before launching your online business.
1. Optimise your business concept
Who are your clients, and what do you offer for sale? Answering these questions beforehand can help you narrow your e-commerce company idea and select the appropriate technologies.
Try developing a business plan to help you outline your concept further. In addition to establishing your goods and target audience, this method may assist you in delving into additional issues, such as:
- What are your rivals’ names?
- How do you intend to deliver items to customers?
- Is a licence or permission required?
- How much will it cost you to run your company?
- How much should you charge to break even or make a profit?
Even if you want to create a tiny online business, such as an Etsy shop where you’ll offer a few handicrafts each month, consider your competition and your target clients. This data may assist you with everything from creating more efficient product listings to determining which social media channels to promote on.
2. Select a platform for your online business.
Once you’ve decided on a business idea, it’s time to look for a virtual storefront. You may use an e-commerce website builder to construct your own website, complete with a unique domain name and design. You may also create your store on a third-party marketplace such as Amazon, Etsy, or Depop.
Here’s how to make your decision.
Builders of e-commerce websites
Best for: Online stores that wish to build a strong, distinct brand through their own website.
These tools assist you in creating a stand-alone e-commerce website that is not tied to any specific marketplace. Shopify, Squarespace, and Square Online are all popular solutions. Consider renting a shop on Main Street with your own address, signs, and interior space to customise.
On the one hand, creating your store this way provides you greater control over the appearance and feel of your website, and it’s possible that you’ll save money on transaction costs. To compete with vendors throughout the web, you may need to invest more on marketing and advertising.
There are a few free e-commerce website builders available, and premium solutions typically range from $25 to $30 each month.
Marketplaces run by other parties
Best for: Online stores ready to pay higher costs and forego certain branding chances in return for greater client access.
Websites such as Amazon, Etsy, Depop, Poshmark, and eBay are examples of third-party markets. You may create a storefront and list items on your preferred platform, and when customers visit the site to look for a specific sort of product, they may come across yours. Consider renting a booth at a farmers market or a kiosk at a craft show.
On the one side, these marketplaces already have devoted buyers, so your main competition will be other vendors on the platform. On the other hand, your business will most likely resemble other stores on your selected marketplace. In exchange for offering so much infrastructure, these locations typically demand higher transaction costs.
Look for an e-commerce platform that allows you to take appointment reservations, motivate consumers to fill out intake forms, and send them reminders if you offer services rather than physical things.
3. Find items for your store.
Now that you’ve settled on the design of your business, it’s time to stock its (virtual) shelves.
If you want to produce your own stuff or market old items, this may be quite simple – your listings will be limited by how much you can create or what you locate at estate sales each month, for example.
However, if you offer produced items, you will have additional alternatives to explore.
If you are willing to maintain inventory on hand, you have the following options:
- Wholesaling is the practise of purchasing items in bulk from industrial suppliers and reselling them in smaller amounts. You may look for wholesale items online, but going to trade events and wholesale marketplaces can help you narrow down your options.
- White-labeling is the practise of purchasing generic items from manufacturers and then branding them with your own logo.
- Retail arbitrage is the practise of purchasing retail products at deep discounts and reselling them at full price.
If you do not want to bother with inventory management, consider the following:
- Dropshipping is a popular internet business model, but it may be challenging to compete in. Dropshippers choose items from manufacturers or wholesalers to offer in their stores. When a customer puts an order, the dropshipper forwards it to the dropshipping provider. The supplier then sends the product to the consumer; the dropshipper never handles it.
- Print-on-demand, often known as dropshipping. Services for printing on demand Print your artwork on commonplace items such as T-shirts and coffee mugs. When a consumer purchases a product, the print-on-demand provider manufactures and distributes it.
4. Choose a payment processor
It’s time to go back to your online shopping cart.
Your customers must be able to pay for their goods, most likely with debit or credit cards. This is known as payment processing. In exchange for its services, your payment processor should take about 3% of your sales.
Payment processing and costs are most likely integrated into the overall transaction cost if you launch an online store on a third-party marketplace like Amazon.
If you use an e-commerce website builder, you’ll most likely be able to select a built-in payment processing solution — for example, Shopify defaults to Shopify Payments, while Squarespace provides Stripe. The payment processor will automatically deduct a portion of each transaction in addition to the monthly subscription charge for the website builder, if you have one.
You may select your own payment processor on several e-commerce sites. The more you intend to sell, the more you stand to gain by searching around for the best credit card processing rates.
5. Explore shipping.
Consider how you’ll transport things from their source to your consumers, whether that’s your basement or a warehouse.
Many online shop builders include shipping label printing, and some even provide discounts with certain shipping firms. They may also automatically offer tracking information to your consumers. Some also provide dynamic shipping rates at checkout, which means they calculate the cost of shipping based on the client’s address and then pass that cost on to the consumer.
Choosing an e-commerce platform with shipping capabilities might assist alleviate the stress of manually handling shipment.
If you prefer to handle your own shipment, keep in mind that shipping rates are often dictated by how much your product weighs and how far it travels. The larger it is and the further it travels, the more you will pay. Research shipping costs ahead of time and include them in your pricing.
6. Formalise your company
When opening an internet company, it’s critical to keep your business and personal funds distinct. Even if you just sell a few items, you’ll need to know how much money your company generates when it comes time to submit your taxes.
At this time, important considerations include:
- Selecting a company structure, such as an LLC or a sole proprietorship. A sole proprietorship requires no initial setup, but it is crucial to understand what it is and how your business revenue will be taxed.
- Establishing a company checking account. This is something you can do for free online. NerdWallet suggests that all business owners, no matter how little, establish a bank account devoted to their company.
- Evaluating whether you require any licences or permissions. A business licence may be required. If you provide specific services, you may also require an occupational licence. Check the website of your state or local government for requirements.
7. Start your online store.
It’s time for your grand opening: launch your website and sell your first few things.
If you create extensive listings on a third-party marketplace, orders may begin to pour in as customers discover them. However, if you decide to develop your own website, you may need to devote more time and resources to internet marketing.
Many e-commerce website builders include marketing tools that allow you to publish social media posts and adverts, as well as send emails to your consumers. Consider investing in digital marketing tools if you need additional help as your firm expands.
