Ecommerce is expanding exponentially globally. It is not only giving stiff competition to the brick and mortar stores but also edging past them. They have become the preferred shopping mode during the current COVID-19 pandemic. Some of the key steps in how to start an eCommerce business are as follows:
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Research Your Ecommerce Niche
The first step in how to start an e-commerce business starts with researching the niche and products. Brainstorm on what you want to offer to the customers. Whether you will be selling products, services, or both. How will you source the products you want to sell? You need to be thorough in your market research. You must answer questions like who is your customer? What does the business represent? How will you cater to and satisfy your customers? Initially, it is better to avoid selling products that are too costly to ship or may involve legal hassles.
Select a Business Name and Legal Structure
You need to select a unique business name that is representative of it. The name should project the ideal persona for your online store. You should research if the business name is available or already taken. The next step is to decide on a suitable legal structure. Choosing the right legal structure is important as it will have significant financial and legal implications.
Apply for Employer Identification Number (EIN)
You must apply for EIN. It is needed to open a bank account for your business and file your business taxes. EIN is similar to the social security number for your business. EIN is a nine-digit number that helps segregate your personal and business finances. You can apply for EIN from the IRS for free.
Obtain Licenses and Permits
Another important step in how to start an e-commerce business is to apply for relevant licenses and permits. If you have registered your business as a sole proprietorship, then you do not need to register it with the state. For all other business structures, you need to register it with the state and obtain a general operating license. You may also need to obtain a local operating license depending on the location of your business. Online stores do not need as many licenses as brick and mortar stores. Such licenses and permits are important to meet all regulatory and statutory compliances.
Choose Ecommerce Platform
Once licenses and permits are done, you need to create a website and choose an e-commerce platform. The website will be the face of your online store. It is the first thing customers will notice about your store. You also need to choose the ideal e-commerce platform. Shopify is perhaps the most popular e-commerce platform among businesses. Other e-commerce platforms to consider include WooComemrce, Squarespace, Magento, etc.
Source the Products
The next part is to source the products for selling on your online store. It includes planning from which suppliers to buy, deciding the price for procurement, finalizing logistics, etc. Sourcing is more complicated if you are selling products instead of services. It will involve higher logistics and inventory storage costs. It is important to source products in ideal quantities and not understock or overstock them.
Drive Customers to Your Online Store
The final step in how to start an e-commerce business is to drive customers to your online store. You need to do aggressive marketing of your online store. It can involve using Google Ads, social media platforms, word of mouth, etc. On an elementary level, you would like to use SEO to optimize your website. This will drive more organic traffic to your online store. Once your online store is up and running, you must track its performance and engage in regular marketing campaigns.