How to Start an eCommerce Business (The Right Way)

You are currently viewing How to Start an eCommerce Business (The Right Way)
How to Start an eCommerce Business

The eCommerce business industry quickly replaces bricks and mortar stores because of the rise in digital buyers. eCommerce has become an indispensable component of the global retail framework. 

In 2020, over two billion people purchased goods and services, and e-retail sales exceeded $4.2 trillion. The ongoing digitalization of modern life and the constant increase in digital buyers means that potential entrepreneurs need to consider eCommerce. 

Nonetheless, starting an eCommerce business differs from starting a brick-and-mortar store and requires these crucial steps outlined below.

Research the eCommerce Industry and Identify a Perfect Niche

Market research and competitor analysis are crucial when launching a successful eCommerce business. In addition, since eCommerce allows you to reach customers over a wide geographic area, you should research extensively to identify a business model to reach and attract the most customers. 

Through comprehensive competitor analysis, you will discover better products to sell to give you a competitive edge. In addition, researching top competitors in your niche will avoid dropshipping mistakes that entrepreneurs make when choosing products. Then, based on your marketing knowledge and research results, choose a suitable niche.

Pick a Business Name and Legal Structure

A business name is integral to a brand’s growth and market perception, meaning that it can make or break your eCommerce business. In addition, through a name, you can communicate your business strategy to key stakeholders. 

Choose a business name that is unique and communicate your business niche. Ensure that another business does not take the business name from running a search with the U.S. Patent and Trademark Office. Consider using a business name generator since naming a store can be challenging. A good business name should be simple, original, creative, and able to distinguish your business from others.

Apply for EIN, Licenses, and Business Permits

Even though an employee identification number (EIN) is not mandatory for all businesses, having one for your eCommerce business will help keep separate personal and business finances. 

Through the IRS, you can apply for EIN. Every state requires businesses to have permits and licenses to operate, but they might be similar to those required to operate a brick and mortar store. You can find the business permit you need for your eCommerce business from the local government website, such as professional and trade licenses, sales tax permits, signage permits, and health and safety and environmental permits.

Choose and Create an eCommerce Platform and Software.

A website is an essential tool for eCommerce businesses, as it allows you to sell physical goods, services, and digital products over the internet. In addition, eCommerce businesses can use their websites to process orders, manage shipping and logistics, accept payments, and provide customer service. 

Develop a website with a domain that matches your business logo and choose a suitable eCommerce platform. An eCommerce platform supports customization and launching of online store aspects, such as domain and design, management of inventory, and receiving payments. 

Choose one of the reputable software development companies to design software that will allow you to track and manage inventory, track sales, offer discounts, and fulfill and ship orders.

Develop or Source Your Chosen Products

You can start putting together the actual product range based on research findings. If you plan to sell physical products, you should discover cost-saving means of making or obtaining them and shipping the orders to your target market. 

The available model for running an eCommerce business that focuses on selling physical products includes making them, manufacturing them, purchasing wholesale and reselling, offering digitally, and dropshipping them. Using research findings and market analysis results, you should know the levels of inventory that you need to launch your eCommerce business successfully.

Adopt Extensive Marketing Strategies

eCommerce marketing involves adopting different eCommerce digital marketing strategies that aim to increase online sales. Since eCommerce businesses operate on an online platform, prioritize marketing efforts that promote the electronic selling of products and services. 

Based on your target market, you should know the ads and the platforms to use. A new eCommerce needs extensive marketing to attract new customers; hence, the need to use multiple channels, such as blogs, social media outlets, Instagram marketing, landing pages, and partnering with affiliate marketers.

The Bottom Line

The eCommerce business industry continues to grow with the continued digitization of modern life and the increase in digital buyers. Compared to brick and mortar stores, eCommerce businesses require lower initiation investment and can reach a wide market and operate 24/7. However, to successfully launch an eCommerce business, you need to have a platform, apply for the permits and licenses, and market your business brand and products.

How to Start an eCommerce Business

eCommerce FAQs

Passionate advocate for digital inclusivity, leading the charge at Understanding eCommerce to provide web accessibility solutions for businesses and organizations. Committed to making the online world accessible to all.