The Checklist for Starting Your Own eCommerce Business
It has become easier than ever to start your own ecommerce business thanks to the proliferation of online storefront providers such as Shopify. And with global ecommerce expected to grow steadily over the next 5 years – and by around 21% just in 2019 alone – there’s no better time than now to get started with your ecommerce idea!
Starting an ecommerce business is easier than starting a brick-and-mortar retail business in many ways. There are considerably fewer startup costs with an ecommerce business. You don’t necessarily need to worry about a physical storefront location and all the costs associated with it.
However, there are still several critical steps that every aspiring online entrepreneur needs to be aware of before the ecommerce business itself goes live. These can include everything from the initial conceptualization phase of your unique product and the marketing phase to the basics like your business’ name and registering your domain. In this checklist, you’ll find the basic steps needed to get your ecommerce business up and running.
Your first step will be obvious:
- Choose a name for your
- The uniqueness of your ecommerce product or service starts with the uniqueness of your business name. Choose a name that people will stick in people’s memories and stand out among your competition.
The next step is related to the first step, and should be done in the same time frame:
- Register your business
with the government
- Before you start your online presence, it’s best to make sure that the business name you’ve chosen isn’t already taken by someone else. If you’re in the US, your state’s small business administration should have a function for searching their database for a business name. If nothing comes up when you search for your business name, it’s free for the taking!
- Make sure to do plenty of research on the different kinds of US businesses you can register as. The most common options are a sole proprietorship (with you as the sole operator and employee), a partnership, and LLC (limited liability corporation), and a regular corporation. Choose the type of business that’s best for you.
Now that you’ve got a business name and type nailed down, it’s time to create your online presence with your website.
- Register your domain name
and build a website
- When it comes to registering your online domain, you have to first make sure that your desired domain name is available. If your exact business name isn’t available for your URL, you should choose a URL that is very similar to your business name so potential customers can easily find you.
- There are several providers of domain names, and you can expect to pay between $10 and $15 per year on average for your domain.
If your business is going to require licensing and permits, acquiring those is going to be your next step, or should at least be one of the beginning steps you take, since you will not be legally allowed to conduct your business in your state if you don’t have the required documentation:
- Acquire business licenses,
permits, and an EIN
- The licenses and permits required will vary depending on what state, county and city you live in. Check with your local business administration authorities for this information.
- An EIN (Employer Identification Number) is needed for tax purposes and usually also to open a business bank account. You can get a federal EIN number from the IRS via online application.
After those first four steps, your next move will involve actually getting your ecommerce operation started!
If you plan on selling one or more products, it’s important to understand your potential market. The recent success of small ecommerce businesses means that you may have a lot of competition to contend with. The most successful ecommerce startups are able to find a niche market with very little competition. This is where your innovation and creativity come into play!
- Create your product and your brand
This can likely be one of the most difficult steps in the process, and will require a significant amount of product research. Jungle Scout is a great example of an online tool that will help you sift through the mountains of products and product data available online, and it can be installed as either a browser extension or a standalone web app.
You’ll ideally want to offer a product which is:
- Affordable, with an ideal average retail price of $40, and lucrative, with an average of around 300 monthly sales to start with the largest margins possible. This will require price-performance calculations on your part.
- Marketable all year round as much as possible – products which are season-specific won’t sell as much
- Competitive – you’re bound to have some competition no matter what product you’re offering, but if your top competition only has a couple hundred product reviews, you have room to move into the market
- Shippable – the larger your product, the more it will cost you for shipping and handling
- Trending – if you jump on a trend early enough, you will be in a better position to make a great market entrance, especially if you have a great story behind your brand!
Once you’ve got a good idea for your product, the next and final step in this first checklist is to successfully market your product. The best product won’t sell if people can’t find it or hear about it.
- Marketing and selling your product
An ecommerce business is naturally going to use the internet and social media as a primary marketing resource because of how easy it is to convert interested clicks to sales.
- Social media advertising should be aimed towards your target demographic and focused on the social media platform which your target demographic uses most, and on which you can best present your product or service.
- Engage social media influencers among your target audience. Give them a free sample of your product, or take the straightforward path and pay them to talk or post about your product if they like it.
- Optimize your website and online store. Between 65% and 75% of visitors to your site will leave without making a purchase. A well-optimized website and online store will function properly and quickly, and will have clear-cut link paths leading towards a purchase.
At this point, you will have set a solid foundation for your ecommerce business, and the sky’s the limit!
It’s important to understand that success is not guaranteed, even with this checklist. Research has shown that anywhere between 80% and 97% of ecommerce startups eventually fail. Around half of online stores on Shopify never make a sale.
But don’t let this discourage you – the failure rate of all businesses is around 90%, so in comparison, your chances with an ecommerce business are just as good (if not better), and your initial costs will still be relatively lower than a non-internet-based business.
If you have a great idea and can successfully market it to your target demographic, it’s fully possible to be one of the success stories. Good luck, and happy selling!
Image credit: eCommerce Business via kan_chana/Shutterstock