How to Start an eCommerce Business in 7 Easy Steps
A host of factors – few associated with changes in the economy at the macro level, others with changing consumer behavior and few related to challenges of distribution – have led to the widespread acceptance and growth of eCommerce in India.
Success stories like Myntra, Flipkart, Snapdeal have only added fuel to this high octane growth of the industry.
We will look at a few of the important aspects before you start an eCommerce business in India; assuming that you have already figured out a product or a service to sell let’s be clear there is no eCommerce business without something to sell.
How to Start an eCommerce Business in 7 Steps
Step 1 – Do your research and find the best niche that suits you.
Now that you have decided to start an eCommerce business, it is necessary to finalise the product or service that you wish to digitalise. Before finalising the product or service, market research is vital. It helps to check various factors like the current demand, production cost, logistics and other costs, competitors and their strengths, innovations, etc., that involves the shortlisted business plans and select your niche accordingly.
Step 2 – Weave the magic with the name.
After you finalise your niche, branding becomes the next important task. The famous saying by Oliver Holmes Jr. – “Words have meaning and names have power” stands true even in this digital world. It is a proven fact that a good name has better chances of making conversions. Good names are better attention grabbers, making it easy to remember and come back to your service. The cherry on the cake is if the name resonates with a large target audience.
Step 3 – Complete the legal procedures and EIN application.
For your business to start functioning, it is important to register your company with legal structures. The various forms in which companies are registered are- sole or general proprietorship, LLC and corporation. Consult your legal advisor to know more about the criteria your company fits in. Register your company and start your business marketing and sales.
EIN or Employer Identification Number is not mandatory for all businesses. But most of the businesses register themselves for taxation and other purposes.
Step 4 – Obtain necessary permissions and licenses.
You would require to obtain permissions and licenses based on the product or service you have chosen for the business. The various licenses that need to be obtained include:
- Health-related licenses
- Signature related licenses
- Environment-related permissions
- Sales and taxes related licenses
Step 5 – Create an online presence for your eCommerce business.
This means registering your domain name, getting a hosting plan, creating a website and making it live. There are a lot of options available for each of the above-mentioned services. Domain selling companies like Godaddy and BigRock will allow you to buy domain names. Consider this as your address online.
Sites like Hostgator, Godaddy will host your site for a small amount. Once you have your domain name and hosting in place, you may choose among open source, SAAS, and Enterprise solutions to create your web presence.
For a detailed understanding of how to choose the right eCommerce platform for you, please read our earlier blog.
Step 6 – Get your operations in shape for your eCommerce business.
Now that you have an online presence for your eCommerce business let’s get ready to tackle your future customers. Remember, if the first few customers do not get the right impression of your store, the eCommerce business path will become tougher to tread.
Operations for your eCommerce business mean getting your payment gateway in place, getting logistics partners aligned, getting customer service up and running, and streamlining your procurement from vendors.
This is also a time to set your terms and conditions, policies regarding exchanges/returns, and process flows for as many used cases as possible.
There are a number of payment gateways available for eCommerce businesses- CCAvenue is one of the oldest, but a host of other players like Citrus, Payu, Payzippy are worth exploring. Be sure to compare the rates as well as the setup costs for each.
Products on your eCommerce store will decide whether you need a logistics partner for surface shipment, air shipment or both. While there are a huge number of logistics providers available, not all provide the same level of service.
Few offer unmatched service levels, while others offer rock-bottom prices. You will have to choose wisely among the available service providers for your eCommerce business.
One important criterion is the availability of reverse logistics and ease of integration with your eCommerce business.
Step 7 – Market your eCommerce business.
Creating and setting up your eCommerce business is one thing. But to get the right customers to your eCommerce store to shop is a completely different ball game. Marketing your eCommerce business will help you achieve this.
Marketing your eCommerce business is a mix of online and offline activities. Companies are pivoting the characteristics of both online and offline models and creating innovative hybrid models. The medium of choice for marketing depends on the type of eCommerce business- b2c, b2b, local, international. Digital Marketing is as important as it is efficient for an eCommerce business, and therefore we will focus only on digital.
To start with, you need search engines to find your eCommerce business online and index it. This requires optimising your store as per the guidelines from a search engine. This is the essence of SEO and the important first step.
Social is another medium that helps eCommerce businesses to connect directly to the customer. Social is extremely important for eCommerce businesses dealing with B2C products and more so if the product is not need-based.
Depending on the target segment Facebook, Twitter, Linkedin, Pinterest, Instagram are few of the channels that can be activated. One must remember here that activating the channel is the easy part. After this, one must put in a considerable amount of effort in creating quality content and sharing it with the community.
Search ads are targeted at people who are actively looking for your type of products and such people are a good target because they are found near the bottom of the buying funnel. You may want to read more about buying funnel in one of our previous blogs.
Display ads are an extremely efficient channel when you are looking to increase the consumer base and awareness for your eCommerce business.
Email marketing is also a good channel to target relevant customers for your eCommerce business. An example is when an eCommerce business dealing in baby products targets people who have gotten married recently.
While it’s not impossible to cover each and every aspect of the eCommerce business in a small blog, the main points are listed. Feel free to make additions about eCommerce and your experiences in the comments section.
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