We are living in the best of times to become an online entrepreneur. Realizing your dream of starting your own online store is not that tough. It is easier than you think.
Ecommerce platforms and new business models like dropshipping etc., offer opportunities for you to start a business at minimum upfront investments. Also, you have plenty of helpful resources, like our website, that can handhold you in building a business online.
So it is well within your reach to start an online store. And be a success. No EXPERIENCE NEEDED!!!
All you need is a good idea, lots of self-belief, a laptop, some money and you are good to go.
Not convinced? Stay with me for a few minutes as I share with you the secrets of building an online business. What do you need to open an online store? How to get customers? And answers to lot many questions which are critical to making a successful ecommece business.
STEP 1: IDENTIFY A NEED
Businesses endeavour to satiate the needs of people or solve a problem. So, you need to identify a need which your store will fulfil. And then think of how you can do it better and at a lower cost than your competitors. You may also think of offering a new product in the market.
Even if you wish to do the normal, like open a store that sells groceries or fashion items, you can always think of making it bigger and better. So think hard. Go to marketplaces to get inspiration. Talk to friends and family.
Google about your business idea. Check how many stores already do what you do. Visit the online stores to see their offerings and think how you can improve it. To identify a need or a problem, ask questions like-
- What is your customer’s main concern?
- What are the issues in existing market solutions?
- How can you solve it better?
- Why should they buy from your store?
STEP 2: UNDERSTAND THE ONLINE MARKETPLACE
The online marketplace is different from a physical or offline marketplace in many ways. The customer motivations are different. Here’s why people buy online-
The things that sell best in online marketplace are –
- Hard to find
STEP 3: Do Some BUSINESS PLANning
A lot of online entrepreneurs don’t create a business plan assuming that it’s only for big businesses. But it helps even small businesses.
Major benefits of a business plan are-
- Provides you with the big picture
- Helps you define your business goals and objectives
- Useful in obtaining loans and private funding
- Drives strategic focus
- Sets priorities
- Identify and address challenges
- Keeps you on track
What should be on your business plan?
- An overview of your business
- What you plan to sell?
- Who’s your target audience?
- Your marketing plan
- Your operations plan
- Your team
- Your financial forecast
- How will you measure your business performance?
Don’t get intimidated by writing a business plan. It’s a learning experience which will help you in future. Take the help of online resources on writing business plans. Start with a simple plan for your personal use. Later on, if required for bank loans or other funding, you can draw a more elaborate plan.
STEP 4: GIVE YOUR BUSINESS THE LEGAL SHAPE
Once your store is set, now you need to make it legally compliant. Ignorance is not an excuse for the law. Depending on the country of your operations, you need to follow the regulations and get necessary licenses.
- Register Business – Before you start an online business you have to register your business. The process is dependent on the country and state you live in. You will have to file your business under one of the below business types
- Sole proprietorship – You are the sole owner of the business and your personal assets are liable for business losses.
Limited Liable Company – Limited Liable Company is much safer than a sole proprietorship. With LLC you will have more control over profit sharing but are liable to pay both federal and state taxes.
Partnership – Partnership business incorporation is ideal if the business is run by 2 or more individuals. All individuals share profits and responsibilities as mentioned in the partnership document.
Corporation – Corporation registration is ideal for companies with many employees. It is more difficult to establish a corporation but with corporation shareholder’s, personal property is protected.
- Get Resale Permit – A Resale permit is a must for all retailers. The resale license helps you collect the sales tax from your customers and pass it on to the government. Depending on your state the procedure of application for reseller license is different. The cost is different. You can find the price by state using this link.
- Open a Business Checking Account – A business checking account helps you separate your business accounting from personal expenses. Once you have a business checking account you can use it for legal, taxes, accounting, and payments. You can select a business checking account using this guide by nerdwallet.
- Adhere to state and country regulations- Check the regulations related to your business. Get all the permissions and licenses required to operate in the business.
- Trade Names and Trademarks- Get your trade names and trademarks registered with the relevant authorities in your country of operations. You may need to check whether the trade names and trademarks you have decided is available or is already used by other businesses.
- Taxation Laws- Understand the laws applicable in your country of operations on your business as well as sales tax on products you are selling. Sales tax is applicable in the state in which the purchase is made.
- Create a return policy- Your store’s return policy is important. It informs customers on the rules and procedure to follow in case he is not satisfied with the product or receives a damaged one. To write a good return policy, read this post on 9 Tips on Creating an Ecommerce Return Policy
STEP 5: SET UP THE STORE
One of the biggest benefits of opening a store online is the minimum upfront investments required in comparison to a traditional store. You don’t need to rent a space. You don’t need furniture. And, neither a warehouse. Most of the ecommerce entrepreneurs start their business from home, garage or a coffee shop. But you would need a website. An ecommerce website to be more precise.
Now, how to build an online store?
You have two choices here. Website builders like Weebly, WordPress, Squarespace etc., and ecommerce platforms like Shopify, BigCommerce, Magento etc.
In a website builder, you first build a website and then customize it as per your requirements. You need to acquire and integrate eCommerce elements like the shopping cart, payment systems, cart abandonment solutions and marketing automation etc. To build a store using website builders, it would need deep knowledge of web technologies.
On the other hand, an ecommerce platform offers you with all the features you need to run a store in one place. Such platforms allow you to build a store in quick time. And with minimal or no technical knowledge. All you need to do is to subscribe to their plans and you are set to build your store.
I would suggest using an ecommerce platform to build your store. It’s fast. It’s convenient. And it needs little technical proficiency.
The more time you spend building a store, the less time you’ll have to focus on other aspects of the business. An ecommerce platform will give you more time to focus on things that really matter.
But before you get into choosing an ecommerce platform for your business, you would need a domain name. A domain name is the name of your store. It is the address to find your store. The domain name will be the identity of your business. People will know your business by its domain name. And so, you need to select your domain name carefully. More for businesses that are only online. Businesses that are already established in the physical world, normally carry their store to the online world. Like Walmart’s domain name is walmart.com.
Decide a name – Once you register a business and have a got your legal documents in a place, you have to decide a brand/domain name for your online clothing store. The domain name should be easy to remember and should ideally have a top-level TLD like .com. Read: How to pick a profitable name for your online store
Here are a few tips on selecting a domain name for your business-
- Go with a ‘.com’ name. Also, buy other domain names like ‘.net’, ‘.biz’ and a country-specific name like ‘.co.uk’, ‘co.in’ etc., where your business is operating.
- Use a simple, short and easy-to-remember name. Your domain name must tell the nature of your business.
- Try to use a keyword relevant to your business. Say for store selling shoes, using ‘shoe’ or ‘shoes’ in your domain name.
The next step is to choose an ecommerce platform.
The marketplace offers a range of choices in ecommerce platforms covering a wide range of budget and business needs. You have excellent choices like Shopify, BigCommerce, Volusion, and Magento etc. Please read my post on 7 Best E-commerce Platforms For 2018 to get a quick snapshot of the options available in the market.
Also, I have reviewed in depth 3 of my favourite platforms here-
I have also done a feature-wise comparison of two of the most popular ecommerce platforms which you can use to find the right platform for your store. Here’s the comparison between Shopify and BigCommerce- Shopify vs BigCommerce comparison: Making the right choice
Readers and my clients regularly ask me, “ How to choose the best ecommerce platform for my business?” I have answered this question in detail here – Ultimate Guide: How to choose the best eCommerce platform?
Generally, all platforms offer a free trial. So, I would suggest to you to opt for a free trial, play around with its various features before buying it.
Buy a plan for your chosen platform, brand it with your logo and other branding assets. Upload products, setup checkout process, integrate payments, set up cart abandonment process etc., and your store is ready to go.
To build an effective category page, read my post on 9 Simple Ecommerce Category Page Best Practices To Increase Sales
While setting up the checkout process for your store, remember to read my post on 11 Top E-commerce Checkout Best Practices To Boost Conversions
To improve your website navigation and thereby user experience read my post on 9 Best Practices To Improve Your Ecommerce Site Navigation
STEP 6: FIND A FULFILLMENT PARTNER
How do you plan to manage inventory and ship products?
On your own? You may decide to manage the delivery on your own initially. But sooner or later, you would need a reliable fulfilment partner to take care of the shipping aspects of your business.
According to a study by Capgemini, outsourcing warehousing and shipping to a third party logistics provider results in-
- 11% reduction in logistics costs
- 6% reduction in inventory costs
Amazon has set very high standards for delivery. It has become the gold mark in shipping and delivery. And that has raised customer expectations very high. Ecommerce stores, big and small, all are now judged by Amazon’s benchmark. And therefore you need an experienced fulfilment partner to prepare and ship your orders.
A Fulfillment company will take care of:
- Warehousing or storage of products
- Packing of orders
- Labelling the orders
- Collaborate with carriers for shipping
- Communicate order status to the customer
- Collect payments and transfer it to your account
This will also spare you time to focus on other critical aspects of business like marketing and customer service.
Here are some of the key capabilities, you must look in a fulfilment partner-
- Experience: Look for a fulfilment company that has experience doing shipping for ecommerce businesses. Also, pick someone that offers complete services in warehousing, packaging, and shipping.
- Presence: Your partner must have warehousing facilities and distribution network in the area of your service.
- Scalability: Your partner must offer you scalability in operations at times when there is increase/decrease in sales. The company should be capable to handle a large volume of deliveries.
- Technology: Look for a partner who has the tech infrastructure to integrate with your website so that all orders are automatically updated in their system. Manually compiling order details and then sending to your partner will cause losing time and resources.
STEP 7: PROMOTE YOUR STORE
Once you’ve built your online store, it’s time to promote it and drive customers to your website. Here are a few cost-effective, online ways to attract customers to your store-
Promote Your Store Among Family & Friends
Yes, first promote your store among people around you. Make a list of family members, friends, neighbours, office colleagues, and acquaintances etc. Send them text messages and email with a short description of your store and a link to it. Request them to promote your business on their social media accounts.
Also, ask them to give feedback on your store.
Search Engine Optimization
Search Engine Optimization (SEO) is a marketing technique to get customers from search engines. What do you do when you need to buy a product or service? You go online, use a search engine and type in a keyword or a phrase. Depending on your search, the engine shows you pages of results with each page containing links to websites providing the desired products. I searched for ‘shopping shoes in USA’ and I got these results-
You need to optimize your website as per the search engine’s rules to get your website ranked.
SEO is a complex process. It takes time to optimize your website. You need to create useful and relevant content. Do some link building. But SEO is worth the efforts as it offers many benefits like-
- Results are low cost and permanent
- Increase in traffic
- You meet people at the right time when they are looking for your products and therefore chances of buying from your store are high.
- Helps in branding as you get visibility in search results
- Helps you compete with other stores that are doing SEO
- Better RoI than paid ads
If you have the budget then you can use online advertising to drive customers to your store. You can make use of 3 types of ads in Google to promote your store-
- Search Ads- Search engines not only showcases relevant websites in results but also ads that are relevant to the searches. When I searched for ‘Sports shoes in the USA’, the search engine also showed me PPC ads-
To have your ad appear in search results, you need to pay for the search engines. You will be charged an amount each time a user clicks on your ad.
- Displays Ads- Google allows you to put ads (text and banner) on Gmail and its network of 2 million websites and 650,000 mobile apps.
- Video ads- These ads are shown on YouTube. The ads appear in between videos. You pay as per the number of views of your ads.
Click here to get a deeper understanding of Google Adwords.
Social Media Marketing
Promoting your store on social media sites like Facebook, Twitter and Instagram etc., is also a great way to drive customers. These sites have millions of users who can be your target audience. So it helps to reach out to these people and introduce your business. You can use both free and paid marketing techniques to promote your store on social media.
The free technique involves creating your account, posting good content that’s relevant to your users and business and engaging with your users. Paid marketing involves using different types of ads to promote your business.
STEP 8: BUILD ENGAGEMENT WITH YOUR VISITORS
Its given. Not everyone who visits your store will buy your products. Also, people who buy from you need to be engaged so that they repeatedly shop from your store.
Once you start getting a sizeable and regular traffic to your store, it’s time to put an engagement process in your store. There will be 3 types of visitors to your stores-
- Visitors who spent some time on your website and left
There will be a significant number of visitors who will come, check a few pages and then leave your store. These shoppers may be at the very early stage of buying, who are not yet ready to buy. They are mostly collecting information like prices and the choices available for the desired products.
For such visitors, you can enable-
- Subscriptions to your newsletters or blogs
- Request them to create an account with you with incentives like discount coupons
- Target them with remarketing. Remarketing shows ads to people who’ve visited your store and left without buying anything. Remarketing helps you reconnect with them by showing relevant ads on their different devices. Learn more about remarketing here.
- Visitors who bought from your store
Visitors who have bought from your store needs to be engaged too. Remember, it’s expensive to get a new customer than to sell again to an existing customer. Also, loyal customers act as brand ambassadors. Here’s how to engage with them-
- Collect their email id at the time of purchase. Motivate them to open an account with a clear incentive like faster checkout or discount on next purchase.
- Regularly send emails to them. You can talk about new products, festival discounts, company information, share blogs and other etc., in your emails.
- Personalize their experience. Greet them with their first name on their next visit. Recommend products based on their past buying history. Read this post 25+ Best Ecommerce Personalization Tips and Tools to Get You Started
- Visitors who selected products but left the site midway
Also called cart abandonments in ecommerce. Here are the reasons behind cart abandonment-
To solve this I have written a detailed post on Stop Losing Sales: 10 Quick Sure Fixes To Reduce Cart Abandonment.
STEP 9: MEASURE YOUR STORE PERFORMANCE
The beauty of online business is that you get good data on the performance of your business.
Most ecommerce platforms offer analytics and reports that will give you data on-
- Visitors- Traffic, Time Spent, Pages Visited, Bounce Rate etc.
- Sales- Number of Products sold, Revenue earned, Revenue per product etc.
- Customers- Age, Gender, Location
- Devices- Desktop, Tablet, Mobile
Keep an eye on your analytics. It’s not just the numbers that matter. More important is the insights gained from it. It can highlight what’s working and what’s not. This will help you tweak your strategy and boost your performance.
OVER TO YOU
Building an online store is rewarding. It gives you the freedom to be your own boss. Gain financial dependence. And, once settled, time to live life on your own terms.
And it’s easier than you think. This article shows exactly how to do it. You can do it!
Keep Learning –
- How to Take Your E-commerce Business from $0 to $1 Million
- 10 Lessons You Can Learn from 10 E-commerce Success Stories
- How To Start Online Store Without Money
- How To Start Online Store Without Inventory
- 7 Things To Know Before You Start An Online Store