Maria Peloponisiou~ 5 min Reading time | 26. Aug 2019
If you’re a creative type or you have a product or service that you’d love to sell, you may have thought about setting up a website to sell it online. Although the idea of starting a business may seem daunting at first, there are a lot of online tools that can help streamline the process. Wondering how to start an ecommerce business? Below are some basic steps to help you get started on the right track.
How do I start an ecommerce business?
The steps involved in starting an ecommerce business will depend quite a bit on what it is you’re selling, how you are selling it, and what platform you decide to use to sell it on. Is your business selling a digital product, such as a podcast or webinar? Are you selling physical products that you make yourself, or are you dropshipping? Some of these methods will require a lot of work before you can monetize your products, while others will be able to turn a profit faster. For example, sometimes people who offer a digital service, such as a podcast or blog, will create it as a hobby for a while and then monetize it if it gets traction. Some others may set up the same content as a digital webinar behind a paywall right away, and use marketing strategies to drive traffic to their website. Since there are so many different options, the first step is to decide exactly what it is you’re offering. Below are five steps to help you start off on the right foot:
1. Find your Niche
When you have figured out what you want to sell, try to think of any ways you can make it more specific. Is there a unique quality your product or service has that sets it apart from its more generic counterparts? The more specific what you’re selling is, the more likely it is to stand out and gain traction. One important thing to keep in mind is that it doesn’t have to be perfect right away. It can be easy to get caught up in this phase and never move on to marketing or selling for fear the product isn’t quite right yet. Fortunately, many ecommerce options don’t require a lot of initial capital, so as long as you have some money to set aside, remind yourself that you can afford to make mistakes.
2. Establish your Brand
Once you’ve discovered your niche, branding will be easier, since often the personality of a product or service dictates the branding around it. When you establish your brand, keep in mind what identity your products have and who they are marketed to. If you are selling cartoon-themed cupcakes, for example, you might decide to use a lot of bold, fun colours and designs to accentuate your brand. If you sell wellness advice, however, you may opt for more muted tones. If you’re dropshipping a range of products, then your brand identity alone is what needs to set you apart – so make sure you spend some time thinking about what your product identity is.
3. Create Your Online Store
There is a multitude of options available for sellers deciding on an online platform. It’s possible to create an online store using web hosting platforms like WordPress and Wix, but if you’re dropshipping or have a large range of products, a platform like Shopify might have more functionality geared towards your business type. Online marketplaces like Etsy may be the route to go if you’re selling a handmade product, or you might decide that eBay fits your brand identity better. Once you’ve decided on a platform, build your online store using the brand identity you’ve created. Most platforms make the design process user-friendly, but you could always look into some professional advice if you’re unsure.
4. Attract Customers with Marketing
Once you have your store set up, it’s time to let people know it’s there! There are lots of free and paid marketing options online, but the best first step is to make business social media accounts for your brand. If your company has a Facebook, Instagram, and Twitter account, it’s way easier for the word of mouth to spread about your product or service, and it will help make your company seem more authentic and professional. Facebook and Instagram business accounts also offer free analytics, so you can see which of your posts perform well over time—useful knowledge if you want to start creating paid ads.
5. Do Invoicing and Accounting
Once you’re attracting customers and drawing in revenue, it’s important to start tracking your sales and expenses using accounting software for ecommerce businesses. Even if you’re not making a lot of money at first, developing some knowledge of basic accounting practices will help you organize your finances later when they get more complicated. If you end up needing to create invoices, accounting software will help you create ones that match your brand. Most importantly, if your ecommerce business takes off, you’ll need to declare your income and pay taxes on it, which means you’ll need to have kept records of your sales and expenses.
How much does it cost to start an ecommerce business?
The costs involved in starting an ecommerce business vary depending on what online subscriptions you need to get it going, and whether or not you need inventory. If you’re selling a digital product or dropshipping, you may not have a lot of up-front expenses, but if you’re selling something you make from home, you may need to put more money down upfront. Subscriptions to digital platforms can vary widely, all the way from free up to hundreds of dollars per month, depending on which one you choose. Usually, there will be at least some nominal monthly costs you’ll end up having to incur – so it’s a good idea to have some money set aside to help you out, even if you think you will be able to use mostly free services.
Do I need a business license to start an online store?
If you’re only selling online in small amounts, you may not need a business license—but if you plan on trying to expand quickly, it’s a good idea to get one. Most governments require you to pay income tax after you reach a certain threshold of sales, and you may also be required to add sales tax to your goods or services as well. It’s important to do some research to find out what the income cutoff points are for these taxes, as you can face fines and penalties if you don’t observe these laws.
Ecommerce is often tempting for people who want a quick way to make money, but in reality, it requires a lot of time and careful planning to be successful. If you want to make your idea work, take it one step at a time, and be patient. Soon you might find yourself well on your way to being an ecommerce entrepreneur!