One day my neighbor shopkeeper asked me, will there be any physical retail store in the next 10-20 years?
Being a traditional shopkeeper for decades, I was blank with no answer to this question.
That was the point when I realized the need for and importance of digitized businesses in this global economy and was keen to know how to start eCommerce business.
May it be the dynamic business trends, changing customers’ preferences, market competition, or the arrival of the pandemic; all these kept on directing towards one common aspect i.e., starting an eCommerce business.
The fear of being setback or the shutting down of the retail stores is not only a threat for the local shopkeepers, rather big names with years of experience, renowned brands, and even startups, all are tensed with the same thought.
Ecommerce is the answer to this problem and eCommerce website development is the core solution. But we know, it is not an easy task to commence an eCommerce business with no prior technical knowledge and experience.
Before having an in-depth discussion, firstly let us focus on understanding what is eCommerce and the future of eCommerce business.
Why Ecommerce is Important?
Ecommerce is an online process by which services and goods are purchased and sold. The key benefit of an eCommerce startup is that marketers can make changes as well as can update their strategies as per their business requirements to have an extended customer base. Various applications and websites focus on eCommerce had made the shopping experience easy for the users. Businesses are keen to know how to set up an eCommerce business and get into the competition.
With the use of advanced technologies, eCommerce has experienced sudden growth and is about to gain more popularity in the coming time. There are some of the latest eCommerce trends that are ruling the markets such as the vast use of voice search, increased number of payment methods, AR, AI, subscriptions, and chatbots. These trends bring huge success to eCommerce businesses.
Ecommerce Global Market Statistics
As per the data, the mobile app eCommerce market has seen massive growth as the sales had surpassed approximately $3 trillion by the year 2020 which was just approximately $1 trillion in the year 2016.
Before switching to how to start an eCommerce business, it is required to get the market insights of how the eCommerce industry is working, what are the new trends in eCommerce app development, and many other related aspects so that you can have enough knowledge of this industry before entering in it.
Read Also: How Much Does An E-Commerce Website Cost?
How to Start an eCommerce Business?
Setting up a brick-and-mortar business and developing an e-commerce business are both entirely different concepts but still, the development process has certain similarities.
Following are the steps to starting an eCommerce business:
Step 1: Perform Market Research & Find the Niche
This is the first step in starting an eCommerce business that comprises performing in-depth market research. As per your business idea, you need to check what type of platform you need. This is the step to finalize what you will be doing i.e., dealing in services or products; working only on a digital platform or will involve a physical platform too, what all regulations and laws you need to abide by, and many other aspects.
Answers to all these questions will help you create a business plan. This step is the primary and the most significant one because it will help you to target your goals effectively. The key finding that matters the most is to find the niche for your business. The rise of the eCommerce sector is advantageous if you want to know how to start your eCommerce business. You also need to research the market competition so that you can learn how to gain a competitive edge in the eCommerce business.
Step 2: Choose an Adequate Name & Legal Structure
After completing the market research, the next important step while learning how to start an eCommerce website is to select a good name for it. You are required to select a name for the business that defines what exactly your business is about. To check the uniqueness of the name, it is essential to consult the Patent & Trademark Office and the state website’s local secretary. If the domain name is used by any other business, then you can go for some other name.
The next part is to select the legal structure of the business. Certain financial and legal implications are associated with eCommerce operations. You need to check which implications your business needs to abide by. You are also required to select the entity type for your business, may it be a corporation, general partnership, LLC, or a sole proprietorship. You need to check which option will suit you the best after analyzing the drawbacks and benefits of each entity. The web development company you choose can help you in understanding the legal structure of your eCommerce business.
Step 3: EIN Application
The next step you need to perform is to apply for the Employer Identification Number (EIN) to start an eCommerce business. Not all entities need an EIN. You can separate the business and personal finances with this 9-digit EIN. There are various ways by which you can get an EIN such as via call, fax, mail, or online. As you might be in the learning phase, you can hire an eCommerce development company that will take care of the development process of your eCommerce business.
Step 4: Getting the License for Business
After applying for the EIN, now there is a need to have a business license that can help the business to operate legally. Once you register the business, the next thing is to get the operating license. Similar to brick-and-mortar businesses, eCommerce businesses may also require a few permits and licenses to operate. These licenses and permits include safety & health permits, construction & building permits, tax, signage, trade, and environmental permits. To know about the exact requirements, you can check the government website as well.
Step 5: Select a Platform & Develop a Website
Once all the legal formalities and paperwork have been completed, the next most significant step in starting the eCommerce business is to choose a platform and then create a website for your business. In the online business, there is no need for choosing a location or developing a physical store. In an eCommerce business, all you need is to create a highly responsive and creative website.
For this, you can hire eCommerce web developers from an eCommerce development company who have enough experience in developing eCommerce websites. The website is called the face of any business. Therefore, it needs to be interesting enough to fetch users’ attention. While developing a website, the selection of a platform is highly important because it will be the key factor for any business growth and stability.
Numerous platforms help you to start your eCommerce business such as Shopify, WooCommerce, Squarespace, Magento, and many others. There are different add-ons, tools, and features that these platforms offer to help you to run and manage the business operations daily.
Step 6: Listing of Products
After having the successful eCommerce portal development, now it is time to list products on your website. Firstly, you need to consider how to source the products I.e., acquiring through distributors or manufacturing your products. All you need to list all the services and products on the website so that customers can visit, scroll, and select the products as per their requirements. All the products must be listed properly on the website to make it responsive.
Step 7: Marketing of the Ecommerce Portal/Business
From all the above steps, you have successfully learned about how to commence an eCommerce business. After listing the services and products on the website, it is essential to market the eCommerce business. Marketing is the core to fetch the attention of potential customers and increase the customer base. Market the eCommerce business is a must-to-do step that needs utmost consideration.
The company you hire for the web development solutions can suggest you various marketing strategies. There are strategies such as word-of-mouth, sponsored ads, social media ads, Google ads, etc. that can be used to promote the business and have a good user base. Various online marketing tools can be advantageous for marketing and promoting the platform. Once the business starts making money and is on the growing stage then you need to check upon the marketing tactics as with time it needs to be changed to work in favour of the business growth.
Once you have learned how to start an eCommerce business, you must do it efficiently. In the next section, we will share some tips for starting an eCommerce business.
Tips to Start an Ecommerce Business
While starting your eCommerce business, you might be under stress and would need assistance. So, here are some of the tips to start your eCommerce business and help you attain huge success & growth:
1. Start Simple
While starting the eCommerce business, it is advised that you must remain simple and convenient while launching your website. The product listing, adding to cart, site browsing, and other things should be highly user-friendly and simple to understand. You must hire a retail eCommerce development company that can understand your business purpose & develop a website accordingly.
2. Use Multiple Channels
Another useful tip for starting your business is to use multiple channels for your eCommerce business. You must share the business on several platforms like Twitter, Instagram, Facebook, etc. These social media channels are extremely powerful when it comes to promoting a newly established business or website. Businesses also emphasize these types of early marketing ways as they are free of cost and highly effective as they create excitement among users about the services and products soon to be launched.
Read Also: How to Develop an eCommerce App like Amazon?
3. Go for Multi-channel Selling
When you start your eCommerce business on a small scale then to extend the reach among the users it is essential to opt for multi-channel selling. Sites like Amazon, eBay, Flipkart, etc. are some of those giant platforms that help small eCommerce businesses to grow rapidly because they already have a huge customer base. Thus, multichannel selling will help you to cover every corner of the market rather than focusing on only one specific market.
There is a set of consumers who prefer online shopping but prefer buying from certain particular eCommerce platforms which they think are too reliable. Therefore, being on these platforms is necessary for businesses to mark their availability among an extended consumer base. However, the primary focus is to maintain the personal website or eCommerce platform while commencing with the business as these large platforms can only bring you sales but would not establish your business as a brand. Hence, it is necessary to hire a web development company that can provide reliable and efficient retail eCommerce development services to help start your business.
Cost Affecting Factors to Start an eCommerce Business
While starting an eCommerce business, the primary aspect for consideration is the budget or the total cost. Certain factors can impact the overall cost to start eCommerce business. It all depends upon the type of business you are starting.
It is difficult to determine like how much does it cost to start an ecommerce business, because the factors keep on fluctuating with the change in the business requirements and the type of business. But following are some of the factors that remain the same such as:
Permits & Licenses
Depending upon the product, service, location, or type of business, there are certain permits and licenses one needs to obtain to start an eCommerce business. The eCommerce development company can help you to identify all business licenses you need to acquire. There is a cost incurred on the purchase of these licenses and permits.
Getting a Domain Name & Hosting
There are certain charges one needs to pay to get the required domain name. There is also a fixed amount you need to pay monthly or yearly for hosting.
The downloading of an open-source platform is free of cost but still, there are certain charges for other associated factors. Costs related to the add-on, eCommerce website developers fees, etc. are some of the factors that can impact the overall cost of eCommerce website development. There are platforms like Shopify, WooCommerce, etc. that offer more advanced tools, features, and add-ons with some specific charges.
Processing of Payments
It is essential to collaborate with a payment processor to accept online payments. In certain eCommerce solutions, it is included within the platform. However, in a few others, you might need its integration into the required system. A fixed percentage will be charged on every transaction. Thus, it impacts the cost of starting an eCommerce business.
Shipping and Inventory
As per your business type, there is a cost of inventory and shipping. Other than your initial investment, the cost is a continuous process that will be incurred now and then. Also, you need to pay high attention to the quantity of inventory and the shipping partner. As both these factors can affect your decided budget for the eCommerce business.
Advertising & Marketing
While you think about how to set up an eCommerce business, there is one mandatory aspect that needs huge emphasis i.e., advertising and marketing. In the initial phase, it might be difficult to correctly estimate but this factor can affect the cost by a huge percentage. With time, to promote your eCommerce business, there would be a need for certain promotional activities that will cost you a good amount.
The Future of Ecommerce Business
The changing business needs and the advancement of eCommerce business seem too exciting. Every year, there is an increase in the percentage of businesses going online. The biggest advantage of selling anywhere and everywhere is attracting traditional businesses to change their work with digitalization. Ecommerce not only offers a platform to trade globally but is also helpful in creating rich brand experiences. In short, the future of eCommerce is highly lucrative with huge convenience for both buyers as well as merchants.
Starting an e-commerce business has its benefits and numerous advantages. Compared to brick-and-mortar businesses, it is much more cost-effective, rapid development, 24*7 working, border-less transactions, faster payments, and easy to manage.
To make your eCommerce business an internet success story, you are required to hire a good eCommerce development company that can help you get a creative, unique, user-friendly, and responsive platform to start your business. Developing a user-friendly experience for the customers not only improves your rankings but also helps to increase sales too.
SemiDot Infotech is a leading eCommerce development company that has years of experience in creating eCommerce websites. The expert eCommerce developers will build an interactive platform to help scale your business.