Written by Coursera • Updated on Jun 11, 2022 Show
Build the e-commerce business of your dreams with help from this handy how-to guide.
Starting your own e-commerce business is an exciting venture, especially if you’ve dreamed about the freedom of being your own boss. If you are crafty or have a knack for selling, then the entrepreneurial route could be a great choice for you. Lifting a business off the ground is hard work. It requires business acumen, creativity, and discipline to take the necessary steps to put your idea out there. But it can be a very worthwhile and rewarding journey. Global e-commerce sales reached nearly $5.5 trillion in 2022, and according to the US Census Bureau, e-commerce accounted for 14.3 percent of total sales [1,2]. There is huge potential to profit from e-commerce. This article offers a step-by-step guide to starting your online business, including costs and tips for success. How to start an e-commerce businessE-commerce is on the rise, so you’ll need to consider how to stand out because everyone can use digital marketing for their business. Despite the competition, there is a bright future ahead for e-commerce entrepreneurs. Here’s how to get started. Step 1: Research e-commerce models and decide what to sellThe e-commerce space today is vast, with plenty of competition, so it is important to consider what your e-commerce business model will be. There are four basic types:
You can choose from one of the following delivery methods:
To find your niche, you’ll want to consider what type of product you want to sell, to whom, and how you will distribute it. Whether you sell your own hand-crafted products or source generic ones, you make all the decisions when you start a business—and you get to decide what works best. Step 2: Write a business planAfter you establish the foundation of your business, you’re ready to draft a business plan. This written document details your objectives and roadmap for finance, operations, and marketing. You can use it to get organized and be used to attract potential investors. Do some research to figure out the current competitors and market landscape for your product or service. Determine your target market and how you might sell to them. Plan the logistics, including when, where, and how you will proceed in the coming months. Step 3: Choose a business name and start building your brandNext, your business needs a name and brand identity. For those starting white label e-commerce businesses, the brand is especially crucial to the success of your business. Choosing a business name can be fun, but it requires a bit of strategic thinking. In addition to a unique yet uncomplicated name that clearly explains what your product is, you’ll also want to check if the web domain, social media handles, and legal name are available. Do your research to make sure it translates well across cultures, especially if you aim to go global. In building your brand, you’ll need to design a logo that will be placed on all packaging, website design, and marketing materials. Eventually, you may want to hire a designer who can translate your brand’s ethos into beautiful web visuals. Step 4: Register your businessBefore you begin selling, you’ll need to register your business by choosing a legal structure, applying for an employer identification number (EIN), and obtaining other permits and licenses specific to your chosen business model. Once you’ve decided on a business name, consult your local secretary of state’s website and U.S. Patent and Trademark Office to make sure your business name is available. You will need to choose your legal structure, a business entity type that will determine the legal and financial guidelines of your online business—typically, you can select from a general partnership, LLC, corporation, or sole proprietorship. Consider consulting a legal professional to ensure the right choice for your business. Next, you can apply for an EIN. Registering for this business tax ID can be done online for free from the IRS website. This nine-digit number allows you to separate your business finances from your personal finances. After receiving your EIN, check what other business licenses and permits you need to operate in your city and state. If your business is a general partnership or sole proprietorship, you won’t need to register with your state unless you file a DBA (“doing business as”). Many e-commerce businesses are home-based, so they don’t need as many licenses as brick-and-mortar stores, but you might need a home occupation permit that states your business doesn’t contribute to traffic or noise. Your business registration requirements will differ depending on your state, industry, and business type. Step 5: Create your e-commerce business websiteWith the paperwork signed and your business officially registered, the next step is to create an e-commerce website. The website is the “storefront” for your business for customers to arrive, browse, and place items in their shopping cart. Your business website and its functionality are critical to your success. To start, you’ll need a domain name that matches your business name. Then, you’ll select an e-commerce platform that suits your bandwidth for creating and maintaining the online store. The two most common types are all-inclusive software (like Shopify) and open-source platforms (like Magento), on which you will conduct business operations such as managing inventory, shipping orders, and more. Here are just a few e-commerce platforms to choose from:
After you’ve selected an e-commerce platform, you can move forward with building, customizing, and launching your online store. You’ll decide on the template design, create a wireframe, add your product inventory, and write out descriptions to introduce your business. Step 6: Source and develop your products or servicesOnce you’ve set up a prototype of your website, you can begin to add your product names, descriptions, and photos. You’ll also need to obtain your products, whether that means you go into production to develop them or source them from a wholesaler. If you are a craftsperson, you’ll want to produce enough inventory to last the first few months. That might mean creating one of each color and size of a clothing line, or twenty of each ceramic pot. This number will vary depending on your labor bandwidth and your marketing strategy, like how much traffic you’re driving to your website’s launch. Then, you’ll need to arrange logistics such as branded packaging, warehousing, inventory management, and shipping. Step 7: Launch and market your businessCongrats! Once you have successfully launched the business, you can begin monitoring your metrics and key performance indicators (KPIs) as your business grows. Continue to experiment with different types of digital marketing to drive traffic to your brand. Amid the inventory management, logistics, and marketing, you’ll want to ensure that your shipping and fulfillment go smoothly for every customer. It is wise to prepare contingency plans in case anything goes wrong. How much does it cost to start an e-commerce business?Starting up your own e-commerce business is an investment that can reap generous profits, especially if a large consumer base connects with your brand. It also requires time: it can take up to two years to get an online business off the ground and start earning a profit. Here are some upfront costs to consider:
Generally, there are fewer costs associated with e-commerce than brick and mortar. With rent prices and inflation escalating, and a behavioral shift in the way consumers shop, e-commerce might just deliver a higher return on investment (ROI). Going online has many attractive benefits and a bright future for anyone interested in starting a business. The initial start-up can cost up to tens of thousands of dollars. New business owners can choose to self-fund, rely on support from friends and family, or take on loans. Tips for starting an e-commerce businessThe journey to creating a successful e-commerce business requires motivation, strategy, passion, and a stroke of luck. Starting a business can feel similar to the birth of a child—hard work, but extraordinarily rewarding. Here are some tips when you’re just starting out:
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Article sources1. Shopify. “Global Ecommerce Sales (2020–2025), https://www.shopify.com/blog/global-ecommerce-sales#:~:text=Global%20ecommerce%20sales%20are%20expected,increasingly%20lucrative%20option%20for%20businesses.” Accessed June 10, 2022. 2. US Department of Commerce. “US Census Bureau News, https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf.” Accessed June 10, 2022. 3. US Small Business Administration. “How to Set a Marketing Budget that Fits your Business Goals and Provides a High Return on Investment, https://www.sba.gov/taxonomy/term/15051?page=37.” Accessed June 10, 2022. 4. Boldist. “Planning Your Ecommerce Digital Marketing Budget, https://boldist.co/marketing-strategy/ecommerce-digital-marketing-budget/.” Accessed June 10, 2022. 5. Semrush. “What Ecommerce Trends Will Define 2022?, https://www.semrush.com/blog/ecommerce-trends-2022/.” Accessed June 10, 2022. Written by Coursera • Updated on Jun 11, 2022 This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals. What major factors are responsible for eSix factors in ecommerce success:. Regulation of product pricing. It's natural for customers to compare prices between brands. ... . Maintaining high quality products. ... . Improving store accessibility. ... . Making a wonderful first impression. ... . Securing your shipments. ... . Taking advantage of m-commerce.. What is success for a new eSuccessful e-commerce businesses will be those that invest in supporting customers from browsing to returns by making each experience as personalized, seamless and secure as possible.
How do you implement E8 Ways to Implement an Effective E-commerce Omnichannel Strategy. Plan it out. ... . Embrace all possible channels in the customer journey. ... . Decide which customer segments you to focus on for a personalized experience. ... . Make every touchpoint a shopping haven. ... . Maintain a consistent brand image. ... . Invest in customer care service.. How a firm can be more successful in adopting eThe key to running a successful e-commerce business is to know your target audience well – including what they like, how much money they earn (and have to spend), where they hang out online, as well as what they value in terms of delivery, customer service and add-ons. Also, your venture shouldn't be too broad.
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