Thinking Of Setting Up An E-commerce Business? Here’s What You Need To Know

E-commerce businesses are booming. In the age of the internet, possibilities are infinite, and setting up a business online has become increasingly popular, even for someone who has never owned a business before. There are so many options and things to consider when setting up an e-commerce store, all equally important to each other in order to build a successful business.

e-commerce business graphics

Business Idea

So, you have an idea, great! It could be the most amazing idea you’ve ever thought of but you will need to delve deep into all aspects of the idea to make sure that it’s going to be viable in an over-saturated e-commerce world. Do people actually want this product or service you are offering? 

Examples of things to consider regarding your idea:

  • Scalability
  • Popularity/Relevance now
  • Relevance in the future (how long will your idea be important for – e.g. if your idea is related to a specific year, it may not stand the test of time)
  • Competitiveness
  • Profitability
  • Can it be easily, and preferably sustainably, manufactured?

You can carry out some market research, and competitor analysis, and calculate potential costs to determine whether your idea will be successful. 

Selling Platform

Finding the right platform for what you need is so important and can be easily overlooked. Will you create your own website or use an online marketplace? You’ll need to think about:

  • Fees
  • Traffic
  • Competition 
  • Mobile Friendliness
  • Customer Support
  • Seller Support
  • Transaction Security

Affordability and an easy-to-manage platform are the two important factors a new business owner considers when they’re picking a platform to sell on. This is why shared web hosting can be a great option because the technicalities of building and maintaining a website are covered by the host server and you can upgrade your monthly plan once you’ve built up your business some more. Shared hosting is when multiple websites use a single server, rather than another option which is when a server is dedicated to hosting just one site. Whilst there are benefits to the latter, it’s what makes it more expensive. 

Business Plan

Once you know your idea is viable, you can move on to coming up with a plan. Business plans are important for ensuring your idea is presented and sold to the world with as few hitches as possible. Setting goals and objectives can make sure every hour you put into your business is intentional, and that each action is working toward achieving that goal. 

If you’re going to be looking for external funding then you will need a plan to prove your trustworthiness to investors. It’s highly unlikely that someone is going to loan you money if they don’t know what the future holds for your business and whether it will actually make money or not. 

business plan

Branding

When we think of branding, we often think about colors, fonts, and logos. Whilst the aesthetic of your branding does play a crucial role, you must not forget about values and tone. Using all of these will strengthen your branding, which will help you become memorable and can incentivize returning customers. Consider your target audience, unique selling point (USP – more on this later), and mission statement, when you are planning your branding. 

Your branding has to remain consistent across all areas of your business, including things like staff member demeanor, prices, packaging, who you use for shipping, and which charities you support. These are all things that can reflect your brand values. You shouldn’t be afraid to switch up your branding, but not too often, to reflect changes in the world and within your company. 

Branding layout

Unique Selling Point

Having a unique selling point (USP) is going to do wonders for your business. This is basically asking yourself – what makes my business different from the rest? You need to mainly consider your competition when thinking about this; if you don’t have any competition because this is a completely new idea then your product would be your USP. More examples are:

  • Percentage of profits go to charity
  • Your product is personalized
  • You practice sustainability
  • Quality of product
  • Affordability

Once you’ve identified your USP, you need to incorporate this into your branding and marketing as much as possible. This will give you a competitive edge and encourage more people to check your business out.

Marketing

Marketing is the process of communicating and delivering your offers as a business. This is how you’ll help drive traffic to your e-commerce business to start making sales. You can do this through:

  • Social Media
  • Email Lists
  • Affiliates
  • SMS 
  • Collaborations
  • TV Advertisements
  • And so much more!

Search engine optimization (SEO) is a form of digital marketing and its importance has become increasingly known over the past few years. This is how you can improve organic traffic through search results on search engines such as Google. There are a number of ways of improving your SEO, such as gaining backlinks and use of keywords.

Costs

You’ll hate to admit it, but to make money you’re going to have to spend money. And of the money you make, you’re going to have to spend a lot of it again. Some of the key costs you need to consider:

  • Taxes
  • Manpower
  • Materials
  • Equipment
  • Bills such as electricity and heating

Manpower includes your time and energy – how much are you going to pay yourself? Most likely it’s going to be pretty low and first because you’ll need to reinvest what you earn. That’s why optimizing your time is crucial and is why a lot of people employ virtual assistants to help with their e-commerce business. Whilst it might seem backward to spend money on tasks you could easily do yourself, this will actually make you more money in the long run because you have more time to focus on meaningful tasks which help you grow your business. There is a lot of financial help available in many forms when it comes to setting up your business. Just take a look at this ecommerce P&L example to see how you can calculate your profit and loss statements so that you can manage your financial performance.

So overall, setting up an e-commerce business has never been so accessible and easy to do. Once you have an idea, create a business plan, come up with a brand, and then market it will help you drive traffic and sales. There’ll be challenges and you’ll make mistakes but as long as you remain resilient and learn from them, then you’ll be on your way to success. 

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