So you’ve heard there’s a lot of money to be made in e-commerce. You’ve decided to give it a shot, and start your own e-commerce business. After all, many companies are making millions. Smaller stores are generating enough income for people to quit their day jobs.
You want in on this!
Of course you do!
But how do you get started? That’s what I’m here to help you figure out.
I’ve been working in this industry since 1998. That’s a REALLY long time when it comes to e-commerce…the web was still such a baby then. So I want to share with you what I feel like you need to do before opening an online store.
Most of all, keep in mind that you’re starting a business. No matter how big or small you want to be, it’s still a business, just like every other entrepreneurial journey for hundreds of years. Yes, yours will be online. But basic principles of business are no different than they always have been.
5 Steps to Your Own E-Commerce Business
- What To Sell?
- Choose a Shopping Cart
- Branding Your Business
- Your Social Media Profiles
- Build and Launch Your Store
Step 1. What Will You Sell?
If you’re going to have an e-commerce business, you’re obviously planning to sell products. What will they be? Can you get them, market them, sell them, and ship them efficiently? Do you have an expertise in them, or if not, can you become an expert?
Many people decide to start with a niche that isn’t easy to compete in. They choose it because they like the idea of the products. For example, my husband and I started an online toy store about the time we started having children.. We loved the idea of bringing educational toys to the market, using them to help children like ours grow and develop.
Guess what? The educational toy market is super-saturated,
If I had to do it again, I would DEFINITELY research the product market before deciding what kind of store I wanted to open!
Here are the things to consider while you’re deciding what to sell.
How much competition is there?
Can you open your e-commerce business and not just be another me-too? How many other business sell the exact same items you sell? If there are many, how will you differentiate yourself?
Don’t only consider web stores either. Is there a lot of local competition in many markets? So many people shop online these days, but very few (if any) do so exclusively!
Where will you find your products?
Are the products you want to sell easy to source? Are they already available in your country, or do they have to be imported? Are there markets where you can find new products in your industry?
Here’s something else to think about: do the products you want to sell even exist? If you can think of a new product that doesn’t exist, get it manufactured at a reasonable cost, you’ll already have a leg up on the competition (if there even is any competition)!
Also consider what you’ll do as you move forward in time. Styles and trends change. Make sure you’ll be able to add new products to your line to continue people’s interest in your products in the future.
How much profit can your e-commerce business make?
Another consideration is how much profit you can make from your sales. The rise of party sellers on Amazon has driven many niches to be so competitive in pricing that many companies are being priced out of the market.
Foreign companies, especially those in China, can often sell the same item or a less-expensive knock-off on Amazon. They may even be able to ship it to a US customer cheaper than you can! For real. Amazon even kicks these companies off the platform some times, and they just re-form or re-brand and start again.
Bottom line, make sure that your cost of goods sold plus your labor/time leaves enough room for you to still make money when you complete a sale
Step 2: Choose a Shopping Cart and/or Hosting Company
There are so many different companies that offer shopping cart software these days that is can be overwhelming to try and choose one.
Some carts are somewhat more one-size-fits-all. The lack of customization and advanced features, however, means that they are often a lot simpler. Some examples are Shopify or WooCommerce. With these, you can always start with the basics and add on features down the road with plug-ins.
Other carts are very robust. They have advanced features, like multiple-tiered pricing or search faceting, built right in. They can be programmed to do exactly what you want, no matter how complex or unusual your needs. The trade-off is that these carts, such as Magento Enterprise or Miva Merchant, come with a higher price tag and are more complex to learn.
If you’re going to be a one-person company at the beginning, and don’t have a lot of technical expertise and/or budget, start small. You can replatform to a more advanced system later.
However, if you’re going into an industry with competitors who have advanced features, you may need those to compete. Make sure you have the resources you need – technical people to handle the site, a budget to cover costs, and time to learn how to use it or train your staff.
If you’re starting out small, you may not even need a shopping cart! You can sell on Amazon or Etsy or eBay without having to run your own website. You’ll still have to manage your catalog and sales through those platforms, but the savings in costs and time may make a marketplace more ideal than your own ecommerce website.
Finally, a note on hosting. Some shopping carts are tied to their hosts; if you choose the cart you have to be hosted with that same company. Others can be hosted by many different companies. In that case, you’ll also need to do some research on the available hosting companies to find out which ones meet your budget while still providing the level of service you expect.
Step 3: Branding Your E-commerce Business
Of course, your company is going to need a name!
And a logo!
And maybe a tagline. And a color scheme. And so much more.
In short you need a brand.
What’s a brand? Well, it’s all of the things described above, and then some. Choose a name and make sure there’s a suitable website domain available that matches. (It doesn’t have to be exact. If you choose to make your store “Hippo Home Decor”, and “hippo.com” is taken, you can go with “shophippo.com” or “hippohomedecor.com or whatever.) You should also check social media sites, such as Facebook and Instagram, and make sure the account names you want are also available.
Next, you need a memorable logo. Something that can potentially become instantly recognizable if your brand grows enough. Nike has its swoosh. FedEx has its whitespace arrow. What will you have?
What colors will you use in your logo and branding? Color evokes emotion. What do you want people to feel when they see your logo or visit your website? Hungry? Stylish? Smart? Color plays into that a lot. So do fonts. If you don’t have an eye for design, hire one. There are so may good logo designers you can find online!
A brand is more than just visual elements, too. It’s also how your audience perceives your business. Professional. Fun. Affordable. Classy. Sporty. Your messaging should reinforce these concepts. Finally, it can also incorporate specific ideals your company maintains. For example, Chick-Fil-A and Hobby Lobby have a religious focus and therefore aren’t open on Sundays. Zappos is known for their bending-over-backwards customer service. In fact, supposedly they once stayed on a service phone call for six hours!
Step 4: Snag Your Social Media Profiles
Social media can be overwhelming. Unless you have a marketing team partially or completely devoted to social media, it’s good to start smart. One or two sites, max. However, and here’s what I’m getting at in this section: RESERVE YOUR ACCOUNTS NOW!
Don’t assume that six months down the road when you’re ready to start marketing on Instagram, that your desired username will still be available just because it’s available now. Go through all the social media sites you may EVER want to use. Create accounts, and save the passwords so you can get back in later, in the future, when you decide you want to.
Every social media site, you say?
Yes! Every single one!
Pinterest, Facebook, Twitter, Instagram, Snapchat. Plus video sites like Vimeo and YouTube. And photo sites like Flickr. Anywhere you think you may want an account at any time in the future, you want to make it now. Before someone else takes it, and parks it, or spoofs it, or simply uses it for another purpose unrelated to your brand.
You don’t have to build them all out. Just claim the names to start with, and save the passwords so you don’t lose access in the future.
Step 5: Build and Launch Your Store!
Once you’ve got a name and a logo and a website domain and your social media accounts, all that remains is to launch your store! Of course, that’s a whole process that may be easy or it may be hard, depending on your approach.
If you’re building a website, you also have to list your items. But there’s a lot more configuration with a shopping cart than there is with a marketplace.
You may also have other software to configure. You may need order management software and/or inventory management systems. All of this depends on the size of your business. If you expect to start small, you can likely get away without these items for now. If your business grows to the point that you have multiple people managing different aspects, you may need it. These systems also become important if you’re selling inventoried goods (where you are limited in how many you can sell) or multiple platforms, or if you’re taking backorders or pre-orders that can’t ship right away.
An e-commerce business sounds easy right?
Ha ha! Of course not. Each of these steps can be broken down into many tasks, lots of them critical before you can even make your first online sale. But the overall process isn’t complicated; it just has a lot of details and steps.
Choose wisely and this may be the best decision of your life by starting an e-commerce business!