eCommerce Business

How To Start an eCommerce Business: 10 Steps To Get You Started

Starting an eCommerce business can be an exciting, but daunting, challenge. It’s not just getting your products and business ideas out to customers but also creating a stable business model with the necessary development and marketing tools. A search engine can source step-by-step tutorials for entrepreneurs and start-ups, but some crucial information can be missed out. This guide ensures you know how to make a successful eCommerce business.

With 87% of households making online purchases in 2020, there’s never been a better time to take on an eCommerce business. Customers are turning to online shopping to reach businesses, whether they’re seeking services and software for their small businesses or products for their personal use. 

Regardless of what you intend to sell, it’s likely your target market is already online and engaging with other eCommerce businesses across a range of platforms.

Nonetheless, before you get to selling, there are plenty of other aspects of your eCommerce business that need planning and setting up. For example, if you want to use a CMS platform, like WordPress, to build your own website to sell your products from, you should take the time to plan and set this up. 

Skipping important stages early on can lead to delays and issues in the future, as you realise the structure isn’t there to support you. Thoroughly thinking through your online business model, its aims and values, and what it needs to flourish can help your eCommerce business stand out and have a great launch.

Steps to set up an eCommerce business

Creating your eCommerce business from scratch, for example, by starting to sell on Etsy, eBay, Amazon, or Shopify, doesn’t happen overnight. Although you might have the business idea, setting up your online business to effectively distribute and produce your products, attract a customer base, and retain their interest takes time. 

Likewise, there are certain processes required to ensure your start-up business follows legislation and keeps to industrial standards for the safety and security of your business and clients.

 

 

By following our ten steps, you’ll make sure that your eCommerce business idea is thought through, fulfilling specific customer needs and completing the necessary processes. Hopefully, this will make you aware of aspects of your online business you may not have remembered, ensuring they’re used to structure your eCommerce business plan. 

Once these steps are completed, you’ll be in a good position to launch your eCommerce business and reach your customers.

1. Choose your niche

Your eCommerce business idea should be niche – a customer need that currently isn’t being fulfilled. The more unique your niche, the less competition you’ll have and the more products you can sell to customers. This may be based on your expertise in a certain field or specific skills, recognising where these could be used in the lives of customers. Alternatively, it may be based on something previously seen but adapted to be used by a new customer base.

Consider the format of your product and how customers will use it. Each customer base has different preferences regarding the products they use and buy and drawing on these can help develop your niche. What your products look like will vary depending on whether you’re creating a one-time purchase that can be reused or a product that can be repeatedly bought. These factors influence the eCommerce industry your online business will fit into. 

2. Do your research

Once you’ve decided on the customer needs you want to create solutions for, you need to know what other online businesses in the same field are doing. There’s no point creating the same product as another company, putting yourself in direct competition with them. For example, if lots of other online businesses are selling print-on-demand t-shirts, it’s probably best to sell a product that isn’t being sold by lots of other eCommerce businesses.

Also, it can be useful to research their business strategies, what social media marketing they use, and who they’re targeting. You can learn from others, shaping your own eCommerce business model.

            

Research is also important for noticing what isn’t currently available in your eCommerce industry. Filling these gaps with your business and expertise gives you access to a wide customer base. This isn’t just regarding the products being sold but also the platforms that aren’t currently being used to reach customers or company values that aren’t being displayed. Having this research helps build your eCommerce business and keep it running in the future.

3. Choose your product and target market

As an eCommerce business, you need to have a range of products that you plan on selling. Start creating a more detailed plan of your products and how they fit into your niche. Although you may have loads of product ideas, narrow them down to a couple of new products. This helps to focus your efforts on developing high-quality products that customers will buy. As your online business grows, your product range can expand to include new products.

As you’re working on your products, remember your target market. The design features and functions of your products should appeal to them and adapt to their needs. Creating customer personas can give you an idea of the demographics of your target audience, along with when and how they would use your product. This information is important in developing your product, as well as strategising your eCommerce marketing to best reach the target audience.

4. Validate your product

With strong product ideas and a target audience, start talking to others about your eCommerce business. Getting feedback from other people can show whether your concept is worth pursuing or if it needs reworking. It’s also a good way of gauging how much people would be willing to pay for your product and other features they would find useful with it. Other types of product validation also include meeting market-based and product-based criteria.

A. Market-based criteria

Your ability to sell products as a successful eCommerce business depends on your target market being interested. Market-based criteria assess how trends affect your target audience, along with the impact of other existing businesses in the industry on your buyers. These criteria help determine if your eCommerce business will gain sustained and stable interest from your target market, regularly sell products, and generate consistent revenue.  

Similarly, factors such as how easy it is for your market to find your small business and purchase from it will shape how many orders you receive. Being an eCommerce business opens up your market reach to a wider range of customers. However, if you’re unable to deliver to some regions or postage takes a significant amount of time, this may affect the demand for your products. Changing your business model can resolve some of these issues if needed.

B. Product-based criteria

On the other hand, validation for your business model can be determined through product factors. These look at your type of product, considering its style and reusability and how these appeal to customers. Products that have to be replaced regularly allow for repeat purchases to be anticipated by your business. Alternatively, your online business may be more inclined to use subscription services for more durable or non-physical products, such as software or services.

Other criteria to think about include whether your product will be prone to seasonal buying, leading to higher and lower revenue periods. In this situation, you need to anticipate how your business will sustain itself through the different seasons, potentially looking at pricing. Regulations surrounding your products also must be included in your business plans and preparation to ensure your business is compliant with eCommerce industry standards.

 

5. Decide how you’ll get your product

Having a great business model will only get you so far if you haven’t considered how you’re going to source materials and develop your products. Whatever you sell, you need to ensure you can constantly restock it without delays. After all, your business can’t make a profit if it has nothing available to sell. Stocking your products is an essential part of preparing your own eCommerce business, with several ways to obtain your product or the raw materials needed.

1. Make it

This route is often taken by local small businesses, making their products from scratch out of the materials they source. Making your product gives you the most control over the result and allows you more freedom in making changes to its design or features when expanding your range. Handmade products are often seen as high-quality and desirable, which may help with reaching your target market alongside allowing you to charge more when you sell products. 

Nonetheless, making it yourself can be time-consuming and requires the know-how and input from you. This can be difficult to scale up as your business expands, as selling more products demands that you make more. As you have to source the materials, your profit margins may be small with your revenue paying to make more products. Making your own products works on a local scale or with a brick-and-mortar store but may not be practical to sell online further afield.

2. Manufacture it

If looking to sell products in larger quantities, working with a manufacturer may be a suitable solution. Manufacturers tend to work on bulk orders, making it more cost-effective for larger eCommerce businesses. They also have more skills and tools to create a wider range of products, enabling your designs to include features that you wouldn’t be able to make. This option still gives you control over the design of your product, replicating it on a large scale.

 

 

However, finding the right manufacturer for you may take some time, having to work with them to decide what’s possible for your product and create an achievable design. There may well be limitations on your specifications and trying multiple manufacturers can create upfront business costs. Even when you have a prototype, manufacturing bulk orders can add to your spending while your eCommerce business is still building up a customer base to generate income. 

3. Purchase wholesale and resell

One of the easier ways of sourcing your products is by purchasing them wholesale from manufacturers or suppliers. This can be cost-effective as you can resell your products for significantly more than their wholesale prices. There are also online directories to help connect you to vendors who sell wholesale products, making it easier to find and build relationships with them. Purchasing wholesale removes a lot of responsibility from you for making the product.

Yet, for some eCommerce businesses, this may have been part of the attraction. Buying wholesale means you’ve little control over most aspects surrounding your product. This includes the design and features, alongside how much you buy and sell it for, impacting your profit margins. Also, reselling products adds additional steps to your processes before reaching customers, including ordering and shipping from your product vendor before you can sell online.

4. Dropship it

By removing your business from the middle of the shipping process, dropshipping is more efficient in getting your products from the supplier to customers. Using a dropshipping platform means that when customers place an order, your business facilitates credit card and PayPal payments for customer shopping carts before sending the order to the supplier. The supplier then directly ships the product to the customer, so your business isn’t involved in deliveries.

 

 

This process can be automated with the use of dropshipping software and apps. But this gives you very little control over the products you sell and relies on your business having access to a customer base that wants to buy these products. Nonetheless, this method is less risky for a start-up, as no upfront costs are required to purchase inventory in advance. Instead, all product orders are placed when customers purchase a product through your eCommerce site.

5. Offer it digitally

Products don’t have to be physical objects – digital content, courses, and services can be sold as products by bloggers, entrepreneurs, and your eCommerce business. This can be easier to create and have ownership over, as well as being simpler to deliver to customers via a download or link. 

Generally, digital products are also cheaper to make, giving you larger profit margins and lower upfront costs. They’re ideal for start-ups and when scaling up your eCommerce business. 

Nevertheless, customers may be less willing to pay for expensive digital products. Providing free trials or a subscription service to your product may be a way of retaining interest and providing your product at a lower price to customers. Tracking what your customers engage with most can help you tailor your digital products to your market and learn from experimenting with what you create. These can be offered in combination with other product ranges or on their own.

6. Write your business plan

Knowing where your business is heading can help keep you focused and ensure the steps you’re taking are worthwhile to achieve your goals. Writing out a business plan can also be used to get support from others and encourage them to invest by setting out the basic information for your business. For this to work, you need to have a detailed idea of the strategies you’re going to use and how your products are going to attract customers to your business. 

 

 

There are business plan templates available online that guide you step-by-step through the information to include. This should cover your approach to logistics and business operations, alongside marketing ideas, your niche product ranges, and how you intend to finance this. Your business plan defines your priorities and the brand image you use in your online marketing. Keep your business plan clear and concise while covering all aspects of your business. 

7. Pick your business name and legal structure

A central part of the brand image you create will be your business name. Consider how it relates to your values and products, along with what impression it creates on potential customers. This should be related to your domain name, so using a domain checker can help show what options are available to you. Use a search engine to find other businesses with similar names as your potential business name or a domain name that may affect your market success. 

Once you have a name, you need to register this to become an eCommerce business. How you register will influence the legal structure of your business and how it runs. You may wish to speak to legal services to get a better idea of what each one entails and how this impacts what you can and can’t do. The licence you need may change as your eCommerce business looks to expand, so you should be aware of the following legal structures:

• • Sole proprietorship: this means there’s no distinction between you as the owner and the business itself. So you don’t have to register it. Instead, your business will be associated with your individual name. Under this structure, you can hire other employees. However, as the owner, you hold all responsibility for profits and losses.

 

 

• • General partnership: if your business is run by two or more partners, it’s likely you’ll opt for a general partnership. This divides the responsibility of profits and losses equally between the partners while only being taxed once. You may want to create a written agreement between the partners, but this is not a legal necessity.

• • LLC: limited liability companies are specific to the US, offering protection to business owners from debts and liabilities. This structure is a hybrid solution offering some features of being a corporation while, in other situations, acting as a general partnership. You need to know which features these are and what’s expected of owners.

• • Corporation: generally used by larger businesses, corporations are a company or group legally acting as a single entity and reducing the liability of individuals within it. These need to be registered and may fall into different legal categories depending on what your business does as well as the number of business owners. 

8. Apply for your UTR, permits, and licences

Getting all your licences and permits in shape doesn’t have to be difficult. Make sure you know which ones are needed for your business based on your niche products, your target market, or your industry. These ensure your business is functioning legally and to a high standard, showing that you care about your products and their effects on your customers. This also verifies your expertise in your field, helping customers trust your business and purchase your products.

In particular, check if your business will need permits for signage, sales tax, or health and safety. Likewise, professional and trade licences are needed for specific industries. To ensure you have all bases covered, look up what permits and licences other similar businesses in your field have. You may not need all the same ones, but it may bring to your attention other licences to investigate and ways of keeping your business secure and safe for everyone. 

A unique taxpayer reference (UTR) will also be necessary for your new business. This is issued by HMRC when a new business is set up and is used for all tax-related purposes. To get this number, register your business with Companies House (incorporated). Then, within two weeks, your business’s UTR should be posted to your company address. If you don’t receive your UTR in the post, request it online via the HMRC website.

9. Create your online store

With the preparation done, find an eCommerce platform and create your online store. Different options provide various features and functionality. Work out what suits your products and customers best, experimenting with presentation, style, and product descriptions in your eCommerce store. This builds your brand image to create a cohesive online shopping experience for your customers. Even the wording creates the brand voice for your business.

Keep your eCommerce store simple, providing a straightforward customer journey from your landing pages to when they input PayPal or credit card details during checkout. Product pages should be signposted in relevant areas of your online store. This improves the online shopping user experience of your eCommerce website, reducing frustration and churn. Also, you don’t need to use every website builder functionality unless it helps your customers.

10. Market your new business

With everything set up and ready to go, the only thing left is to tell people about it. There are various marketing strategies and digital marketing tools to reach your customer base and tell them about your new products. This includes using social media, affiliate marketing, creating content, or sending out email marketing. These direct customers towards your eCommerce site, introducing them to your brand and the niche products relevant to them.

 

 

Also, using search engine optimisation (SEO) on your website can improve your product page visibility on search engine results pages. When users search for terms related to your business, SEO makes your links appear higher up the list. Once your business makes an impression on your target audience, customer relationship management and digital marketing can be used to encourage repeat customers through brand loyalty.

How to stay on top of your eCommerce business

Once your eCommerce business is up and running, there’s still work to do to ensure it keeps gaining customers and selling products. Not only are there the behind-the-scenes tasks that ensure products are produced and delivered on time, payments are made, and business admin is completed, but this also includes consistently improving your customer experience. 

This moves your customers through the marketing funnel, from attracting them to them becoming brand advocates. 

Regularly practising the following steps can help keep your brand on-trend and relevant to the current market. They also allow you to review your progress regularly, recognising which elements of your business are flourishing and where extra support is needed. 

The below steps can also be useful when planning to upscale your eCommerce business, showing where growth is happening and how to continue encouraging this. These steps focus primarily on helping customers make more purchases.

1. Provide excellent customer service

For 80% of customers, the experience they have with a business is just as important as the products or services provided. This makes your customer service a key part of securing customer conversions and building brand loyalty. 

Customer service covers any action that your business does to support and help users of your eCommerce website or those who have purchased from your business. Improving this can transform customer opinions of your business.

Using a chatbot function can help customers to ask questions and be directed to areas of your website that answer FAQs. Alternatively, this can lead customers to content from your bloggers and self-service articles to help customers resolve their queries about your new products. Having contact details for live representatives from your business can also provide instant support for customers, sharing their expertise and dealing with complex customer cases. 

2. Concentrate on conversion optimisation

Gaining conversions is essential for keeping your business in profit, and tracking your conversion rate should be one of your key performance indicators (KPIs). The more conversions you receive, the better your business is doing at reaching your target market with your advertising campaigns and providing them with relevant products. 

Optimising this can either look like attracting more customers to your business or increasing the order size of existing customers. 

Tracking your customers, the marketing strategies they most engage with, and how they find your website can provide some valuable insight into how you can optimise your conversions. Alternatively, promoting certain products, collaborating with influencers, or holding sales can encourage potential buyers to purchase your products. However, this may only benefit your sales in the short term and not necessarily lead to the ongoing optimisation of your conversions. 

3. Work on optimising the store

A difficult eCommerce store to navigate will experience churn and not make the conversions it might otherwise make. By analysing customer data and demographics, you can highlight where most customers leave your eCommerce site and why. 

Improving these areas can make your web layout more intuitive, so customers need less support in making purchases. This can optimise your store to provide customers with a great experience of your eCommerce business and products. 

 

Don’t forget to evaluate your eCommerce store’s appearance on different devices. Mobile commerce is increasing, and product pages that aren’t optimised for mobile won’t be attracting these customers. 

You may also want to consider improving your product descriptions for shoppers using voice assistants or other IoT devices. Ensure that wherever customers find your products, they have the same experience through the use of omnichannel marketing and selling.

4. Frequently update your inventory

Interest in your products may ebb and flow in their popularity depending on whether they’re on trend or in season. Updating your inventory helps keep customers engaged and purchasing your products, giving you a more consistent incoming revenue. This can be as simple as varying the design, ingredients, or shape of your product while keeping the overall specification the same. Or you can add new ranges and different products that are in keeping with your brand.

By watching sales metrics, you can identify the best-selling products, as well as special editions or personalisations that appeal to your customer base demographics. This data can inform your inventory to reintroduce popular ranges and learn what products your customers want from you. Similarly, experimenting with new inventory can provide insights into what your customers want, shaping your inventory and eCommerce marketing strategy to create conversions.

How can RingCentral help you start your eCommerce business?

Creating an eCommerce business from scratch is a lot easier when you have the right tools at your disposal. RingCentral helps start-ups by providing them with the software to connect with others effectively, whether this is with potential customers, investors, or employees. This software has many applications and options for new businesses, integrating with their eCommerce website and supporting them as they launch their products and branding. 

 

 

• Communication

RingCentral MVPTM provides your business with messaging, video, and phone communications. Reaching the people you need is made simple. These three products work seamlessly together or individually, suiting the communication requirements of your business. The RingCentral network can connect you to those within your company as well as external contacts, inviting them to calls, scheduling video meetings, and messaging within teams.

Communication features included in RingCentral MVP allow you to send and receive documents from team members, easily transferring to a call when needed. The app is accessible from mobile or desktop, suiting remote working environments by allowing you to connect from anywhere globally. By using secure VoIP connections, you experience 99.9% uptime to ensure your high-quality calls and messages are received at all hours of the day.

• Customer experience

RingCentral provides the communications needed to give your customers a great experience of your business. From connecting customers to the appropriate members of your support team and scheduling video meetings with clients to simplifying omnichannel messaging, RingCentral has it covered. This efficiently allows you to resolve customer queries, whatever platform they’re found on so that your customers can get back to using your products. 

These customer engagement products are compliant with international standards, and all messaging is secured with encryption. Wherever your business is based, you can be sure you’re providing high-quality communications while keeping customer data safe. RingCentral communications integrate with your other software, improving your onsite customer messaging as well as working across the various platforms your customers use to reach your business.

• Enterprise solutions

Whether you’re a start-up or an enterprise business, RingCentral provides support for your eCommerce business by bringing your communications and apps onto one platform. This makes it easier for you to manage what’s going on in your departments and teams, alongside keeping an eye on customer communications. With real-time analytics of your system usage, service quality, and chosen KPIs, you can keep track of communications activity from one place.

 

 

With features that make the RingCentral app easily scalable, your network can grow in line with your business expansion. Users can be added to your company and systems adjusted to forward and redirect calls according to your needs. Setting up a call centre for your business takes moments due to the intuitive API. Different communication plans are available, tailored to your usage and the features required to run your business effectively at a larger scale. 

• Resources

Articles and content created by bloggers are added to the RingCentral site constantly, providing greater insight into how to best use RingCentral products and expertise in running your eCommerce business. Specific resources assist businesses with remote workforces, highlighting how this benefits the individuals and the overall enterprise. These resources keep businesses updated on current trends and new features for the eCommerce industry.

RingCentral also hosts webinars and events, again creating learning opportunities for business owners to optimise their eCommerce business structure. Tutorials exhibit how the app is used in different scenarios and can benefit the needs of your customers. Past events and webinars are also available to be viewed on-demand, allowing you to reflect and review what was covered on previous occasions, applying it to your business. 

Originally published Jun 17, 2022