Creating an ecommerce business is appealing for many reasons, which is why established business owners and new entrepreneurs flock to the idea. Ecommerce – any commercial transaction conducted online – often requires little initial investment, and does not possess the same overhead costs of typical bricks-and-mortar retail shops.
Online sales can generate hundreds to thousands of dollars in extra income each month and lead to rapid expansion. The forecast looks promising for the industry. According to the U.S. Census Bureau, retail ecommerce sales in the U.S. surpassed $390 billion in 2016, and are a bigger percentage of overall retail sales each year. By 2020, ecommerce is predicted to make up 15% of all worldwide retail sales, according to digital research company eMarketer.
In some cases, establishing an online store can be as simple as monetizing your current website, particularly for existing retail businesses. This means augmenting your site or adding a shopping cart that allows customers to order and pay online for your products or services via credit card.
What you need to start selling products online
In general, as with any startup, launching a successful business requires background work before you go live.
The first step is to decide what you want to sell, be it a product or service or both. If you have a particular expertise or a hobby you’re passionate about, it may translate into a successful ecommerce business. For instance, a skilled woodworker can set up an online store selling handmade items he or she creates in a home woodshop. Or having a passion and knowledge about your local area can turn into an ecommerce business that operates guided city tours. If you’re looking for ideas, check the large online sales and auction sites to see what products sell best.
Remember that low-priced products with smaller profit margins require a higher volume in sales to make money, which may mean more time spent on shipping. At the other end, high-ticket items typically come with higher profits but often require added customer support to be successful. You should be aware of the availability of your service or product in local shops because the harder it is to find what they want in stores, the more buyers will be inclined to shop online. Look for shortages of products that seem in high demand. You may be able to address a need before potential competitors.
Knowing an industry will help you make fundamental decisions, including whether there’s room for another competitor, and if there is, what you should charge and how you should market your products and services. Insights based on sound research will help you differentiate your company from others in the same space. For example, you may win customers through discounts and product enhancements that are not otherwise available.
You might even offer a more specialized service within an industry that seems crowded on first glance. If you’re interested in watches, you might focus your ecommerce business on selling and repairing antique pocket watches.
Some online businesses, particularly professional services or social media firms that don’t need manufacturing or storage facilities, can launch with minimal startup funding. Online retailers also have much lower costs than bricks-and-mortar stores.
If needed, a micro-loan can help with the cost of new computer equipment, or building a website. Once you build a revenue stream, you can invest back into the business or seek additional funding from angel investors, crowd funding services, even venture capitalists.
Make sure to complete your due diligence on the basics such as licensing, insurance coverage, and consulting an accountant and tax attorney. If working out of your home, be sure to know the tax implications.
Marketing your online business
When creating your website, think of your landing page as your storefront. The site should be easy to navigate and give detailed descriptions of your products. The look of your site should be attractive, professional, and appropriate to the products or services you are selling. If you choose to create the site yourself, many website hosting platforms offer templates and domain names as well as encryption services to help keep customers personal data, as well as yours, secure. You can upgrade the website at any time once you generate more revenue.
To best promote your business, keep your website current and consider adding an industry-related blog. Not only will regular informational blog posts attract potential customers to your site, they can also boost your search engine ranking.
Use social media outlets to market your business, which can be an effective, low-cost method for driving traffic. Easily accessible links to popular platforms will allow readers to share interesting stories and spread the word about your brand.
Whether you’re looking for additional income or want a full-time business, ecommerce is an appealing option as more shoppers look online to make purchases. Use our resources to learn more about getting the most out of your e-commerce business.