E-commerce is on everyone’s ears, and interest in it is growing every year. But this is not surprising, because selling, buying, and advertising on the Internet are much more convenient, easier, and often cheaper than offline. The main thing is to understand how it all works, and what you need to do to be successful in your e-Commerce niche. But how do you start an eCommerce business? If you’re not sure where to start, don’t worry. The first thing you can do is to contact IT Delight professionals who can do everything to make your e-commerce platform the most successful. Also, keep reading our article. Today you will learn what e-commerce is, and how it changes the lives of contemporaries. Why business is so eager for the Internet and how exactly you can become a part of online commerce in today’s realities? Let’s not waste time, let’s dive deeper into the details.
What Is An ECommerce Business?
ECommerce is an area of the economy in which advertising, promotion, trade, and financial transactions are conducted directly on the Internet. That is, from the point of view of business owners, manufacturers, and suppliers, e-commerce is the promotion and provision of their goods or services via the Internet. And from the point of view of buyers, it means browsing, choosing, comparing, and ordering. So, if you are interested in online commerce, you have decided to work in this direction, first of all, you need to take several steps, which we will talk about in more detail.
How To Start An ECommerce Business In 5 Steps
Step 1: Niche selection and research
So where to start? You need to figure out what your product or service will be. Choose something that inspires you, and chances are there’s someone out there who will love them just as much. Think about who your ideal customer would be. The value of your offer is the main thing to start with. To determine the value of the offer, you need to study the potential target audience in detail. Understand what she needs. Then it will be clear how to make your offer as attractive as possible. Then analyze what your competitors are doing, what you would do differently, and what they might be missing.
The profitability of e-commerce depends on the choice of niche. This is a responsible and difficult step, due to the variety of options and the risk of losing money. There are hundreds, maybe even thousands of niches, but you need one that will bring income and interest you. An assessment of its main features will help to choose such a niche:
- Demand level. If there are few buyers in a niche, then it makes no sense to start a business in it;
- Personal interest. Before choosing a niche, it is useful to look at it as a hobby.
- The marginality of goods. Margin is the difference between the cost of the product and the price at which you sell it.
- Competition. Wherever there is income, there will be competitors, the main thing is to be able to compete with them.
- Dropshipping is a good way to start selling online without the extra costs of renting warehouses, arranging delivery, etc.
Step 2: Business name selection and choosing a legal structure
An important point will be the choice of the name of your online store. Naming is a creative task, so it is impossible to derive a universal formula for solving it. To simplify your task and not choose a frankly bad name, follow the recommendations:
- The simpler the better. If you want consumers to recognize a store, its name must be remembered quickly;
- When planning a name for a company, it is important to think about its future as well. Will the selected name lose its relevance after several scaling steps;
- One of the biggest challenges today is coming up with a name that no one else has used before. Hundreds of millions of domains are registered on the Internet, and millions of stores are open in cities;
- The chosen name should look nice on paper/screen. He will often be seen for just one moment, so it must be recognized immediately. Typography, colors, and logo will help with this.
The choice of the legal form of doing business is another of the most important points for any novice entrepreneur who wants to open his e-commerce business. It directly depends on:
- Simplicity and convenience of doing business;
- Future business expenses associated with the payment of taxes, and hence profit;
- The degree and frequency of control by state bodies;
- The number, frequency, and complexity of reporting that will need to be submitted to various government agencies;
- The need to maintain an accountant;
- Many other important points on which future success will depend.
Step 3: Apply for an EIN
No matter what kind of business you have, it is usually necessary to obtain an EIN. It will be useful to separate your personal and business finances. You can apply for a single number through the EIN Assistant on the IRS website, but there are other ways to get an employer identification number. This can be done by mail and even by phone.
Either way, it’s a fairly quick, free, and simple process that has several advantages:
- You will be able to file tax returns with the IRS;
- You will be able to maintain corporate protection;
- You can prevent identity theft;
- You will be able to open bank accounts for business;
- Increasing the creditworthiness of the business.
Step 4: Obtain business permits and licenses
For you to legally conduct your business activities, you need to obtain a license and all permissions for an online store. As a rule, if an e-commerce business operates online, then the owner does not need to issue as many business licenses and permits as conventional stores. Some other types of business licenses and permits you may need include:
- Professional and trade licenses;
- Sales Tax Authorization;
- Permits for occupational health, safety, and environmental protection;
- Signage permits, etc.
Step 5: Choose an e-commerce platform and create your website
Before an entrepreneur decides to open his online store, in addition to the dilemma of choosing a niche, the question of choosing the most optimal platform on which an online store will be created is also a separate issue. Naturally, the overall success of online trading will depend on the quality of the decision made. It is at this stage that it is determined how you will develop, what opportunities will be in promotion, how customers will feel on the site, how you will expand your business, etc.
Many consider Magento to be the best platform for creating an online store. Its advantages:
- Open source;
- A stable and reliable structure that guarantees the smooth operation of the website;
- It is easy to manage and configure;
- It has a lot of functions like search, directory management, billing, and so on;
- All functions can be customized to your own needs or completely replaced by others.
Final Thoughts
Congratulations, you are ready to launch your online store. Starting an e-commerce business is both challenging and extremely exciting and profitable. And the steps that we have described to you in today’s article will help you at the start of your online store. Contact an experienced developer who could help you bring your idea to life!
