Launching an e-commerce business can be a lucrative venture, but only if the right foundations are in place. However, these very foundations, along with a myriad of decisions that need to be made, are what dissuade most people from taking the leap.
According to Statista, in 2021, worldwide retail e-commerce sales reached close to $4.9 trillion. But it doesn’t end there, this amount is forecasted to grow by 50 percent over the next four years. It could reach as much as $7.4 trillion by the year 2025.
How To Start An E-commerce Business
An e-commerce business is a business that offers services, goods, and funds all across the internet. They tend to vary in size. They are as massive as online retail giant
Amazon and as minuscule as an Etsy craft store.
Depending on your aspirations, starting an e-commerce store can be cost-effective because it offers a wide variety of benefits. To begin with, you don’t have to worry about leasing or buying a brick-and-mortar location. It’s this affordability and flexibility that allows entrepreneurs to take on this opportunity.
So are you ready to start your e-commerce business? Take a look at the following steps to guide you on your way.
1. Study The E-commerce Space and Select Your Niche.
After taking the time to research and discover what e-commerce area you want to focus on, it’s time to decide what exactly you will be offering. Are you going to sell services or products? If you decide on selling products, will they be in physical or digital form? Where will you get these products? This is also the time to determine what type of business model you are going to adopt. Will it be single products, packages, or subscriptions?
You will also need to consider the processes such as getting the final product to the end customer. What will that look like?
These questions are critical in order to begin formulating your business plan. It will also give you the opportunity to create specific goals and the means to reach them. This will also help you discover your niche.
2. Choose Your Business Name
Once you have finalized your business plan, it’s time to choose your business name. The key is to choose a name that is distinctive and that it clearly communicates what your business does. In order to stay out of legal trouble, you can consult the U.S. Patent and Trademark Office to make sure you don’t claim a business name that has already been used by another company.
Website development can be incredibly costly, so it’s best to make sure your business domain name is available. If it is being used, consider coming up with a different business name.
3. Choose Your Legal Structure
The type of business entity you choose will have some legal and financial implications tied to it. Currently, your choices include sole proprietorship, general partnership, LLC, or a corporation. There are pros and cons for all of these so it is best if you consult with an attorney for advice that is specific to your particular business.
4. Apply For An EIN
Although not all business types are required to have an EIN, it can prove very useful in order to separate your business from your personal finances.
An EIN, also known as an Employer Identification Number, or Federal Employer Identification Number, is a nine-digit number that is assigned by the IRS to businesses in the US for identification purposes.
You can apply for an EIN number directly from the IRS for free. This can be done online, by fax, by mail, or by phone. If you decide to apply for this business tax ID online, you can get this EIN number instantly.
5. Get Business Permits and Licenses
Once you have applied for your EIN, the next step is to acquire any permits or business licenses as required to operate legally in your city and state. If you have established yourself as a general partnership or sole proprietorship, then there is no need to register your business with the state. For other business types, you will need to register with your state in order to receive a general operating license.
6. Choose An E-commerce Platform and Launch Your Website
Your website is the face of your business. It is what your customers will see first before they choose to browse and ultimately purchase from your website. You want your domain name to be a close match to your business name.
After this, you will need to choose an e-commerce platform. You could go with an “all-in-one” software such as Shopify or an “open-source platform” such as Magento. Whichever you choose, know that your e-commerce platform will be the foundation on which you will build and grow your online store.
7. Source Your Products
As mentioned previously you can create your own products, and source them directly from distributors, or if you are a consultant selling your own services, you simply have to describe what services you offer on your website.
8. Market Your Business
This is the last step of the process. You can use a variety of marketing strategies to get started. You can use Google ads, social media ads, and even word-of-mouth. This is just the beginning.
It’s also a good time to optimize your business website for SEO and take full advantage of all the marketing tools available for you within your e-commerce platform. As you start to receive orders, keep track of what marketing strategies are working and which are not. Make the appropriate adjustments and changes to find what is best for your business.
Take These Steps To Launch Your E-commerce Business
If you want to launch a successful e-commerce business, you need to follow these aforementioned steps and make the necessary investments. By doing so, you will be able to reach customers worldwide, 24/7, all at a fraction of the cost of running a brick-and-mortar operation.