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Home Running A Business How To Start An E-commerce Business
Thinking about starting an e-commerce business? Whether you have an idea of what you’ll sell or not, there are some clear steps you can take to begin the process.
The global e-commerce growth rate for 2023 is 10.4%, and global e-commerce sales have reached $6.3 trillion. Starting an e-commerce business attracts many entrepreneurs because the startup costs can be lower than opening a brick-and-mortar store, thanks to options like dropshipping.
If you want to know how to start an e-commerce business, here are eight key steps to follow to get started.
First, you need to choose a product or category of products to sell. You can sell just about anything online these days, so you’ll need to narrow down your options. Start by brainstorming a list of products that would be great to sell direct-to-customer.
Some of the most popular items to sell in an e-commerce store include:
Don’t forget to research product options and pricing to determine where you’ll get your items from or what materials you need if you choose to make it. You can look into dropshipping, wholesaling, or partnering with a private manufacturer. Also, if you’re selling clothing, attending local trade shows can help you find vendors to source products from. Visit this post for more e-commerce business ideas.
Once you have a product idea that you’d like to sell, it’s important to validate your product idea by confirming whether people are actually interested in buying it. Look for e-commerce sales reports and stats from previous years for your specific product category.
You can also try sharing a poll on social media or creating a survey to see what people are interested in buying. Or check Google Trends for specific terms to see how often people are searching for certain products.
If there doesn’t seem to be enough demand for your product, this could be a potential red flag. However, it’s crucial that you also narrow down your audience and target market. Your e-commerce store may not appeal to everyone, and that’s okay.
Maybe you love animals and decide to create a pet accessories store. You can narrow down your niche even further by choosing only products that help dogs with anxiety, arthritis, or other medical challenges.
The next key step is to identify and research the competition. You’ll want to know who’s running e-commerce stores that sell products similar to yours. Choose about three to five top competitors and perform a competitive analysis.
A competitive analysis helps you determine advantages and barriers in the market based on what others are doing. How it works is you analyze each competitor to pinpoint their strengths and weaknesses. Do you notice a gap in the market that the other company is not serving? Have they made mistakes in the past that you want to avoid?
Also, looking at a competitor’s marketing strategies and pricing can be extremely helpful. You don’t have to copy these aspects exactly, but it can help you stir up your own creative ideas. Plus, you’ll be able to ensure customers are getting a competitive price.
Here are some additional factors to consider during your competitive analysis of other companies:
Once you know what products you’ll be selling and have performed necessary market research, you’ll want to start writing a business plan. A business plan is vital for laying out how your business will operate including your plans for marketing products and earning a profit.
Even if you’re new to e-commerce, you don’t want to just make things up as you go. A solid business plan can guide you through each stage of your business and help you avoid costly errors.
Start by determining a name and mission for your e-commerce business. Write an executive summary, which is just a few sentences explaining: what your business is, what products you’ll sell, and what your overall mission will be. Having a detailed and effective mission statement can even help you secure funding for your e-commerce business should you need it now or in the future.
Your business plan should also include a company description and explain how you’ll operate and sell your products online. Include details from your market analysis, as well as how you’ll source the products for your store.
Other features to include in your business plan are:
When you’re starting an e-commerce business, it can seem difficult to come up with financial transactions. However, this can be crucial in helping you identify startup and ongoing costs, as well as setting some realistic sales goals.
Branding is one step you don’t want to overlook or speed past when starting an e-commerce store. Think about the e-commerce businesses you interact with and what you like about those brands. Now, consider how factors like the logo, color scheme, and even website fonts encourage customers to engage with the brand.
Brainstorm some logos you like or consult with a marketing or branding expert to come up with a color scheme, fonts, and taglines for your unique brand. Don’t forget about social media either. You can start social media pages before you even launch your e-commerce website.
Once you have your basic branding elements in place, choose a few platforms that you think your target customer would be using and create your page. You can publish posts and videos about your upcoming store or even tease some of the products you’ll be selling. Also, realize that you don’t have to make social media content all about products and selling.
Many people like to follow pages for information or entertainment. You can still work these themes into your goal of getting more customers for social media. For example, one online clothing store tends to do well with social media because they have really creative content.
Some of their Instagram Reel videos show the model styling one of the outfits that can be found on the site to give viewers an idea of how it’s worn. Other Reels are just fun skits and short clips showing different people dressed in various clothing options sold on the site. This content is explicitly telling people to visit the website and buy, but it showcases the product and helps people become more comfortable with the brand overall.
Now, it’s finally time to start actually building the store online. There are many e-commerce platforms or content management systems you can choose from, including options like Shopify, WordPress, Wix, Big Commerce, and Squarespace.
At this stage, if you haven’t already, you’ll also need to purchase a domain name for your e-commerce website. Some e-commerce platforms help you choose and purchase a domain name during the setup process.
Here are some additional steps you’ll need to take to set up your store:
All of these steps have led us up to one huge moment: launching your e-commerce business! Test your store to make sure everything functions as expected, which you can do by placing some sample orders and see how they do. Also, be sure to check your website on a mobile phone and different devices to ensure that your site delivers a quality experience on each one.
Announce your e-commerce store launch on social media and consider even running a marketing campaign. You can publish a press release and offer different deals and offers during the week or build an email list and send limited-time coupons to boost sales.
Once your launch is over, it’s time to continue implementing different marketing strategies to grow your business and drive traffic to your store. There are many ways to market your products. Start building your social media following and encourage people to subscribe to your email list.
You can start sharing behind-the-scenes updates, promotions, and more with your email list. If your budget allows, you can look into paid advertising options, like pay-per-click ads and Facebook ads. Other marketing strategies include:
Starting an e-commerce store is no simple task, but it can end up being one of the best business moves you make. E-commerce is here to stay and starting an online store can teach you so much about marketing, sales, and customer service. These are invaluable skills that you can take anywhere you go as you continue on your entrepreneurial journey.
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Choncé is a personal finance freelance writer who enjoys writing about credit, business loans, debt management, and helping people achieve financial wellness. Having a background in journalism, she decided to dive deep into the world of content writing in 2013 after noticing many publications transitioning to digital formats. Considering herself a long-time personal finance enthusiast, Chonce’s work has been featured on sites like Business Insider, Lending Tree, Fox Business, RateGenius, and more.
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