Ecommerce is big business. Estimates put the total number of ecommerce companies somewhere between 2 million and 3 million, according to PipeCandy. There is no wonder why: more and more consumers are beginning to shop online, and ecommerce is a sector which offers opportunities to easily start a business with very little investment required. Although ecommerce businesses such as dropshipping on Amazon can be a nice side hustle or part-time gig, these can also be developed into major businesses generating significant profits.
Is 2020 going to be the year that you start an online business? If you’re looking to establish your own ecommerce business, read this guide to get started.
Choose Your Platform
The first thing you will need to decide is which platform you are going to use to run your ecommerce business. This will define everything you do as a business. For example, Amazon marketing systems are distinct from other kinds of ecommerce businesses, so you need to define your platform before anything else.
There are broadly two approaches: building your own website to sell your products, or using a platform like Amazon to sell your products. There are pros and cons to each approach: building your own website means you have complete creative control, but it is also more difficult to create and you need to drive traffic to your site. If you’re selling on Amazon on the other hand, you need to fit within the platform’s rules and format, but you’ll have a ready cache of visitors to tap into.
Identify Your Niche
As mentioned, the ecommerce market is huge. This means a lot of opportunity for customers, but also a lot of competition. In order to stand out from the competition, it is essential that you identify your niche. Having a very broad business covering various categories and no real focus is extremely difficult to market. In order to be successful, you need to choose your niche, and become an expert in this area. When choosing your niche you should go for products which are in demand, otherwise you will struggle to get sales. You should also consider your own interests — this will hopefully be something you work on for a long time — so follow your passions!
Identify Your Target Market
Another important step before you embark on your ecommerce business is to know your target market. Your target market will determine a range of factors in how you run your business, from product development and price points to marketing strategy. If you don’t know who your target market is, start by making an “avatar” of your ideal customer. Think about that customer as an individual and describe as much about them as you can — age, gender, profession, geographical location, lifestyle, shopping habits and so on.
Name Your Business
Of course, every business needs a name! In ecommerce, your business name is usually the same as your store name, so you want to make this a strong name which reflects your brand. It is important that it’s something which relates to your niche, although it does not need to be overly literal. For example, if you sell car parts you don’t need to name your business “Joe’s Car Parts”, but it should be something auto-related. Also be sure to tie your business name back to your target market, and ensure it is something which will appeal to them.
Get Your Legalities in Order
Before you can do anything with your business, you’ll need to make sure you sort out all of the legal paperwork. Even for a fully online ecommerce company, these requirements are the same as if you were to set up a brick-and-mortar business. They will vary depending on your location, but generally you will need to register your business with the relevant government body, and acquire the necessary business licences. Once you launch your business, you will also need to make sure you report on income and profits to your relevant tax department.
Find the Right Suppliers
Depending on the type of store you have, the process for finding suppliers for your products will vary greatly. If you are planning on becoming an Amazon FBA seller, you will have a different relationship with your suppliers compared to if you are packing and shipping all the goods yourself. In all cases, having the right products — best quality for the best price — is essential, so consult with as many suppliers as possible to find the right ones.
Formalise Your Marketing Strategy
Marketing is critical to any business, and ecommerce is no exception. You must have a marketing strategy laid out formally to know how you will market your business and attract customers. If you will be selling on a third party platform, this should include how you will optimise your listings in order to rank well in search results. In all cases, you will want to have visual elements like a logo confirmed, as well as digital marketing outreach tactics.
