How to start

Starting an e-commerce business can be quite lucrative as it involves all the benefits of having a business without the added setup costs of a brick-and-mortar store. Some people love the idea of spending hours behind the counter displaying products to customers, while others want to spend their time elsewhere.

What is an e-commerce business?
E-commerce businesses are online stores that sell products or services to customers. As an e-commerce business owner, you can choose the platform you want to use to run your business. You can also customize your website using themes and plugins, which help you add features like payment processing, inventory management, shipping, and more. Steps to starting an e-commerce business:

Find your e-commerce business niche
The first step to starting an e-commerce business is to find a niche. Whether you want to sell beauty products, handmade items, or clothes, your niche is your area of expertise.

What is a Niche?
A niche is a market segment that you can target with your products and services. Your niche includes the people who are likely to buy from you. But it’s also so much more than that.

Niches are essentially a subset of the entire market. So you’re selling something that appeals to a smaller group of people than the entire market. For example, if you sell kids’ clothing, your niche is children, but your market could be anyone who has kids or buys clothes for kids.

People who are in niches are more passionate about what they do and buy. They’re more likely to spend money on what they want because they feel strongly about it instead of just buying something because they need it. Think about how many people watch sports regularly versus how many people only watch when their favorite team is playing in the Super Bowl or World Series. That’s passion versus interest — which audience would be easier to sell to?

Choose a business name and a business structure
Business name
Your business name must be unique so no one else can use it. Your name should be simple and easy to remember. You can use your own name, or you can choose a name that describes what your business does.

For example, if you want to sell bikes and accessories, you could call your business ‘Zippy Bikes.’ You need to register your business name if you trade with a business name that is different from your own (first and last) names.

Business structure
You need to decide what legal structure best suits the needs of your business. The most common structures are:

Sole traders – this is the easiest structure for a small business with one owner. Owners are personally liable for all debts and other liabilities of the business.

Partnerships – two or more people who carry on a business in common with a view to making a profit. Partners are personally liable for all debts and other liabilities of the partnership.

Companies – are separate legal entities owned by shareholders and managed by directors. The company structure provides limited liability protection for its owners (shareholders). Each state has its own rules governing how companies operate, which must be followed by directors and shareholders (owners).

Get EIN (employer identification number)
An employer identification number (EIN) is a tax identification number that’s required for your business to pay employees and file business tax returns. It’s also known as a federal tax ID number.

The IRS issues EINs and uses them to identify the tax accounts of employers and certain others who have no employees. The IRS uses EINs to identify taxpayers who are required to file various business tax returns, e.g., employment, excise, alcohol, tobacco, and firearms.

EINs are used by employers, sole proprietors, corporations, partnerships, nonprofit associations, trusts, estates of decedents, government agencies, certain individuals, and other business entities.

Business permits and licenses are required to start an e-commerce business. They are usually issued by the government. Business permits and licenses are important because they help the government know what type of businesses are operating in their jurisdiction and also to ensure that certain standards and rules are met.

Get business permits and licenses
A business license is a permit that allows a company or individual to conduct business within a certain jurisdiction. The license is most often issued by the local government but can also be issued state or federal level. Most licenses require renewal on an annual basis, though some licenses can be valid for up to five years.

In order to obtain a business license, an application must be submitted to the local governing authority, such as a city hall or county courthouse. Some of the information that may need to be included on the application include:

The name or names of the individuals who own the business
The address of the business
The type of business (for example, an e-commerce business)
Whether or not you plan on hiring employees
You can create a website or use an e-commerce platform
You can create an online store in two ways: build your own website or use the services of a third-party e-commerce platform. If you want to do it yourself, you should find out how to make a website and get yourself familiar with web design and coding languages. You can also hire a web developer or designer to build your website for you.

Create your website
A website is a great way to showcase your products, connect with your customers and learn about their needs. It can also help you reach more people, grow your business and work more efficiently.

Your website should include:
Useful information about the products or services you sell– make sure it’s easy for customers to find what they’re looking for, including prices, photos, and descriptions.

Contact information– so customers can easily get in touch with you by phone, email, or social media. You may want to include a contact form.

Details about any special offers, discounts, or promotions you’re running – Information about how a customer can pay (for example, credit card, direct debit, or cash). Privacy policies and other important legal information (for example, terms and conditions).

When you create a website, there are four steps you should follow:

Choose a domain name
Register this domain name
Choose your web hosting package
Install the WordPress on your website
If you follow these steps, it will be easy for you to create a website for your business.

If you decide to use an e-commerce platform, there are several different services you can use. Some of them are more flexible than others, and some have different features that may be useful for your business. Here are some of the best e-commerce platforms:

Shopify – Recommended for beginners
WooCommerce – Recommended if you’re using WordPress
Volusion – Great features, but not the most beginner-friendly platform
Ecwid – Recommended for beginners and small businesses
Squarespace – Not an e-commerce focused platform, but it has powerful features for selling online
Magento – Highly customizable but not recommended for beginners

Source or develop your products
When you’re developing your own products, you’ll need to do a lot of research and product development, and you may want to hire employees to help with this. If you’re selling someone else’s stuff, you’ll still need to design a website, set up marketing tools, and deal with customers. But you won’t have to worry about inventories or shipping products.

Where can you source your product?
Sourcing products can be difficult when you’re first starting out, but there are options from all over the world available to entrepreneurs. Here are a few:

Overseas manufacturers: You can find thousands of manufacturers that specialize in all kinds of products online. Trade sites like Alibaba and Global Sources are good places for finding suppliers. The downside is that it’s hard to know if the manufacturer is legitimate or if the quality is any good before you buy samples or place an order.

Domestic wholesalers: If the thought of dealing with an overseas company makes you nervous, there are plenty of domestic suppliers that sell products wholesale that they manufacture themselves or import from abroad and then sell on at wholesale prices. Look for ones that specialize in wholesale drop shipping — where they provide all the inventory and shipping services for their customers — so that you don’t have to.

Market your business
Marketing your e-commerce business doesn’t have to cost a lot of money. Effective marketing strategies for e-commerce businesses don’t require a big budget or even a lot of time — and that’s great news for bootstrapping entrepreneurs who are short on both.

To get started, try these free and low-cost marketing ideas:

Start a blog (or revamp your existing one)
Blogging regularly can help you improve your SEO, build trust with customers and get new visitors to your site. And it’s pretty easy to get started. If you already have a blog, take some time to rework the categories so people can find your posts more easily.

Build an email list
Email is still one of the most effective marketing tools out there, and it’s easy to start building a list if you haven’t already. Use an app like Hello Bar or OptinMonster to collect emails from visitors directly on your site so you can follow up with them later. Existing customers also make excellent targets for email marketing campaigns. You can offer them special discounts or other rewards in exchange for their contact information — just make sure you’re complying with all anti-spam regulations in the process.

Use social media to promote your e-commerce business
Posting on social media can help you connect with customers and learn more about who they are and what they want from your business. You can also use social media to create a conversation around your brand and show off new products or promotions.

Build relationships with influencers in your industry
Influencers with a large following can play a big role in promoting your products or services. They may have their own blog where they talk about their favorite products or their own YouTube channel where they do product reviews (called “unboxing videos”). Look for the influencers in your industry who seem to be most popular with your target customers — those are the ones you could partner with most effectively.

Starting an e-commerce store can be a very lucrative business opportunity. It’s time to think outside the box, but if you are thinking about starting your own online store, then follow the above steps to start an e-commerce business.