In our Startup2021 series, we're helping aspiring entrepreneurs navigate the new business climate of the COVID-19 era. Each week, we'll share an in-depth look at one step you can take toward launching your business in 2021.
The e-commerce industry is only growing, especially amidst the COVID-19 pandemic, when consumers are searching for more convenient ways to shop. The e-commerce retail sales in 2021 are at about $4.9 trillion and are projected to increase to $6.8 trillion in the next two years. This is a perfect time for entrepreneurs to launch sustainable and profitable e-commerce businesses. Here are a few tips on how to start an e-commerce business.
How to start an e-commerce business
Research business models
Every business will adopt its own structure, so take the time to research each one and find what works best for what you want to accomplish. Some business structures include service-based business, software, digital product sales, and physical products.
Choose your products
The best way to choose what you’re going to sell is by determining what niche market you want to sell in. If you find products within a specific category, rather than a broader one (e.g., Amazon Marketplace), you will find less competition. Once you find that space, you can search for products and pick those that you believe will sell.
Define target market
One of the first steps should be determining the ideal customer. What type of people will want to invest in what you have to offer? You need to determine your target market in order to create a sustainable and effective business plan.
Register your business
There are a lot of steps involved in this process such as choosing a name for your business, obtaining licenses, getting an employer identification number (EIN), etc. It’s best to check with your state to see what licenses you are required to obtain.
[Read more: Startup 2021: How to Register Your New Business]
Finalize your e-commerce business plan
There are additional details you need to consider when creating your business plan, such as how to manage financial decisions, track inventory, and maintain your shop. You’ll also need to determine the visuals of your brand (e.g., logo and aesthetic) and how you will market your brand.
Create your e-commerce shop
The best way to begin acquiring customers is by choosing a shopping platform they already use, such as Etsy or Shopify. Research to find which platform has the features you need.
[Read more: How to Build a Mobile-Friendly E-Commerce Website]
One of the first steps should be determining the ideal customer. What type of people will want to invest in what you have to offer?
Choosing the best e-commerce platform
In the digital age, it’s nearly impossible to be a competitor in certain markets without an online store that is available to consumers. Deciding which platform to use can be tricky, but keeping a few things in mind, such as pricing and technological requirements, will help you choose the one that’s right for you.
Each type of platform has a different policy on licensure and maintenance. Some platforms have an upfront fee that gets renewed annually, while others offer a monthly subscription fee. The prices are determined by features and who is in control of the source code. Ultimately, you’ll want to ensure that the platform you choose will support you as you continue to grow and achieve your goals.
[Read: Growing Your E-Commerce Business]
Types of e-commerce platforms
Traditional e-commerce platform
You are required to purchase a license fee and renew it every year. Your development team and IT will need to build your shop within the platform and customize it to your liking.
Open-source e-commerce platform
This type of platform comes with the freedom to customize just about anything, as long as you have access to the source code and are capable of developing the codes to include certain features.
Cloud e-commerce platform
Businesses can host their sites on cloud servers to store information, applications, and other data, which provide large storage space for growing businesses. These platforms typically come with lower costs and have a simplified interface.
SaaS e-commerce platform
Software-as-a-Service (SaaS) platforms require businesses to pay a monthly fee that covers the use of servers, maintenance, security and upgrades. The host provider will take care of these things; however, this means there are no customizations available to you.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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