Launching an E-Commerce Business in 2023: A Detailed Blueprint
An online retail business vends products, services, and transactions conducted over the internet. Initiating an e-commerce venture parallels starting any other company: drafting a business plan, securing licenses and permits, and establishing separate financial accounts. Additionally, selecting an e-commerce website builder, procuring products, and targeting online clientele are essential steps in this process.
Adhere to these six steps to launch your e-commerce enterprise.
1. Outline your e-commerce venture
Embarking on any business requires a refined concept. Online business concepts span from marketing physical or digital goods to offering professional services. Whichever path you take, clarifying your e-commerce strategy and drafting a business blueprint to define your market segment is essential.
This phase involves probing inquiries: How will you deliver your offerings to customers? What licenses or permissions are necessary? What initial expenses are involved, and how will you finance them? Your business plan should address these queries, serving as a guide for the upcoming phases.
2. Establishing your business
Once you’ve crystallized your e-commerce concept, the subsequent phase involves preparing your company for optimal performance.
This encompasses foundational tasks such as:
- Selecting a business structure. Each entity type offers distinct advantages and disadvantages. Seeking counsel from a legal professional can aid in identifying the most suitable option for your circumstances.
- Naming your business. Verify the availability of your chosen name through your local secretary of state’s website and the U.S. Patent and Trademark Office. Additionally, confirm the availability of your desired business domain name.
- Acquiring an employer identification number (EIN). Obtain a free EIN from the IRS through online channels or via mail, fax, or phone. While not mandatory for all businesses, an EIN facilitates the separation of personal and business finances.
- Establishing a business checking account. According to NerdWallet, maintaining a separate bank account specifically for business transactions is recommended for all business proprietors.
- Securing necessary licenses and permits mandated by your city or state. This typically involves obtaining a business license, and for service-based ventures, an occupational license may also be required. Refer to your local or state government website to discern the prerequisites pertinent to your locality.
3. Sourcing or developing the products or services you plan to offer.
For physical products, you’ll need to consider manufacturing or sourcing methods.
A crucial decision here is whether to maintain inventory by ordering products in bulk or opt for methods like dropshipping. Bulk ordering requires storage space and upfront capital but grants control over shipping, while dropshipping reduces overhead costs but relinquishes control over inventory and shipping logistics.
Other sourcing options include:
- White-labeling: Purchasing items in bulk from manufacturers and rebranding them with your company’s identity.
- Print-on-demand: Collaborating with third parties to print your designs on merchandise, functioning similarly to dropshipping.
- Retail arbitrage: Procuring discounted items from retail sellers and reselling them at a markup in your store.
For professional services, showcasing and detailing your offerings on your business website is key. However, determining pricing and managing client capacity per day or week is crucial even in this sector.
4. Establishing your e-commerce website
The simplest method to create a website involves utilizing an online store builder. These platforms guide you through the entire process, from purchasing a domain name to inventory management and payment processing.
Prominent e-commerce website builders such as Shopify, Squarespace, Square Online, and BigCommerce offer varied features. For smaller businesses or those testing the online market, free e-commerce website builders can be a good starting point. However, subscribing to access unlimited product listings and advanced tools like shipping label printing, order management, and sales analytics is often necessary.
Most of these platforms are designed to be user-friendly, catering even to individuals without web development experience. Additionally, they typically provide the option to hire professional designers or developers if you prefer not to build the website independently.
The ideal e-commerce platform aligns with your budget and proficiency level, offering the necessary tools to support your business’s growth.
5. Figure out order fulfillment
Order fulfillment involves delivering customers’ purchases to their hands, a process facilitated by most e-commerce website builders. These platforms often include shipping label printing, a crucial initial step in fulfillment. Additionally, some allow the incorporation of shipping costs into customers’ orders during checkout.
For those handling order fulfillment independently, researching shipping rates beforehand is advisable to estimate costs accurately. Seeking an online store builder equipped to streamline the shipping process or exploring shipping software providers like Shippo can be beneficial.
Considering the global reach of e-commerce, delineating regions where you won’t ship is important and should be clearly communicated on your website.
Alternatively, if managing order fulfillment seems daunting, outsourcing to an e-commerce fulfillment center or utilizing services like Fulfillment by Amazon are viable options. Fees for such services vary based on product size, shipping distance, and volume.
Understanding the intricacies of shipping, whether through leveraging technology or outsourcing, ensures smoother order fulfillment processes for your e-commerce venture.
6. Market your e-commerce business
Now that your online store is up and running, attracting customers becomes the next priority, ensuring they discover your products.
Your small-business marketing strategy might encompass:
- Omnichannel commerce: Listing products on third-party marketplaces like Amazon and Instagram. Some e-commerce website builders offer support for this.
- Influencer marketing: Collaborating with popular social media influencers to endorse your products.
- Social media engagement: Creating content or utilizing paid ads on platforms like Instagram, Facebook, or Twitter.
- SEO optimization: Fine-tuning your business website to rank better on search engines like Google.
- Email marketing: Sending targeted campaigns to both past and potential customers.
While many e-commerce website builders provide basic marketing features like creating social media ads or sending cart abandonment emails, investing in dedicated marketing software can elevate your strategies. These tools offer functionalities such as customizable email templates, in-depth campaign analytics, customer segmentation, and text messaging capabilities for a more sophisticated approach.
By leveraging a mix of these marketing strategies, whether through built-in features of e-commerce platforms or dedicated marketing software, you can expand your outreach and effectively engage with your audience, fostering growth for your online store.
Tips for starting an e-commerce business
Managing the transition into e-commerce can indeed be overwhelming, but here are some helpful tips to navigate this journey:
- Start Small: Begin with minimal overhead by using the free version of an e-commerce website builder, starting with a small inventory, or focusing on a couple of products. This approach reduces initial funding needs and allows flexibility for adjustments if your first attempt doesn’t yield the desired results. As your business gains momentum, you can upgrade to a more comprehensive e-commerce platform and broaden your product range.
- Nurture Customer Loyalty: Cultivate a loyal customer base by encouraging repeat purchases and leveraging satisfied customers as brand advocates. Establishing a strong brand presence on social media is beneficial, but gathering customer information allows for targeted marketing through strategies like email campaigns, text message promotions, or event notifications tailored to their region.
- Embrace Multichannel Selling: Explore various selling channels beyond just your website. Platforms like Amazon, Instagram, TikTok, and others might attract different customer segments. Initiate integrations on platforms where your target audience is most active and evaluate their performance. Consider physical selling opportunities at craft fairs, local shops, or industry events to connect with new customers and generate revenue.
Adapting to multichannel selling and prioritizing customer loyalty while starting modestly can pave the way for steady growth in your e-commerce business. It’s about finding the right balance between simplicity and expansion to create a successful online presence.