How to start an e-commerce business
Continuing our e-commerce series, we’re going to delve into the steps needed prior to starting an e-commerce business.
Starting an e-commerce business is no rocket science. You just have to ensure that you’re off on the right track. To begin with, differentiate the pros and cons of a niche-specific store and a general store for a better understanding of what you want to do.
Prepare a business plan
When you are developing your e-commerce business plan, your target audience is yourself!
A business plan will assist you to pen down your ideas on paper. Take your time to write everything down. It might seem like a lot of work however, it will save you a lot of time and money in the long haul. It will prepare you for the challenges and opportunities that you’ll face as a startup. Here’s what you should get out of your e-commerce business plan.
- Knowledge – A better sense of what do you know, but more importantly, what you don’t know.
- Resources – This should cover resources like capital, partners or the team you’ll need to ensure your e-commerce business is successful.
- A Road-map – Set clear business goals.
Also, there are three objectives you need to derive out of your business plan. They are:
- What are you selling? – Physical products, digital products or services.
- Who are you selling to? – Are you a B2B or a B2C business model or a marketplace acting as a middleman?
- How are you sourcing your product? – Are you manufacturing in-house? Are you sourcing it from a third-party manufacturer? Are you wholesaling or dropshipping?
One more thing, use the financial section of your business plan to forecast sales, expenses and net income. Maintain an excel sheet on a monthly basis that identifies your:
- Fixed Expenses
- Variable Expenses
Many entrepreneurs miss out on researching their competitors. Some say they lack time whereas some say that their competition strategies do not matter to them. Regardless, it is a good practice to keep an eye out on your competitors. It will allow you to:
- Identify customer pain points
- Come up with new products
- Analyze promotional strategies
- Pricing opportunities
- New ideas
- New keywords
You can begin by researching on Google. Put yourself in the mindset of your customer. Pick a product and run a search based on the keywords you think your potential customers will be using. Also, make sure you run the search in an incognito window just so Google does not alter results based on your search history.
Track the results on a spreadsheet. Make it a baseline analysis and run it every fortnight or on a monthly basis. You will be surprised to see changes that take place in your competitive space.
Browsing search engines only won’t cut you all the slack. You also need to visit and thoroughly go-through your competitors’ websites. Take a look at their landing pages, their product categories, their product descriptions, what keywords they are using to rank etc.
Note down all the key findings of your experience. Make sure you do your research as a consumer and not a competitor.
Finding the right vendors
There are plenty of factors and elements that ensure the success of an e-commerce business. One amongst them is to find the right vendors for your business.
You can always work with the local vendors as that reduces both the shipping time and costs. It will allow you to physically test the product and control the quality of goods being shipped. The cherry on top, you will also be playing a vital role to boost your country’s economy.
Additionally, if you’re a middleman or a dropshipper, and you intend to offer a unique variety of products to your customers, you can outsource the products from different countries. The downfall here is that you won’t be able to control the quality of products as you cannot physically test the product(s) due to geographical restrictions. However, on the bright side, you won’t have to worry about managing inventory as the vendor directly ships the goods to your customers.
Following are the few factors that you need to check in order to find the right vendors for your business.
- Experience, Expertise & Trustworthiness
- Quality Practices
- Size & Scalability
- Customer Reviews & Testimonials
- Sample Projects
- Transparent Pricing
- Management Processes
Setting up an e-commerce store
With the right knowledge and resources, you can scale your online store in any niche effectively. But before we proceed further, here is a list of the essentials you need to take care of.
- Name & Logo
- Securing Domain & Hosting
- Registration and licensing
- Building your store
- Selecting Sales Channels
- Launching your online store
Once that have been taken care of, you’ll need to establish a system to manage everything including:
- Order management
- Inventory tracking
- Customer Relationship Management (CRM)
- Vendor management
NetSuite SuiteCommerce makes it easy to deliver engaging brand experiences to online shoppers across any device on a single cloud-based platform. It provides one source of truth across all channels for inventory, pricing, order, payment and returns processes. It automates and manages the end-to-end order lifecycle to ensure that you fulfil your commitments, including order capture and validation, order release, shipment confirmation, customer communications and settlement. At the end of the day, you’ll have real-time views into store statistics and cash management which give you insights into forecast sales, expenses and net income.
With all the preparation in place, you are now ready to start your e-commerce business. Good luck