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”The smallest company in the world can look as large as the largest company on the web”
Steve Jobs
INTRODUCTION
The above quote is so apt for ecommerce business today Small online retail stores are competing with large brick and mortar retail stores and guess what these online sellers are actually beating the physical stores in both sales and revenue. Global Ecommerce business in 2020 stood at whooping $25 trillion dollar and growing. Future truly lies in ecommerce business with huge economic prospect.
Read this article thoroughly till end as we take you step by step with all basic information needed in starting your own ecommerce store easily and fast.
1) Begin with Research and Competitive Analysis
Every business begins with research and so ecommerce business is no different so understand the working of e-commerce industry by conducting online and offline research, connecting and networking with industry experts.
Research every aspect of ecommerce business from product choice to business model. Analyse the competition to evaluate their strength and weakness to build a comprehensive Ecommerce business plan.
Read Books, Business reports, Articles etc on e-commerce topics to help you broader your knowledge. Read news on e-commerce sector and stay updated with latest progressions in Tech, Government regulations and Business affairs etc.
1.1) Types of Ecommerce Businesses
Understand the different e-commerce business Model’s and pick the right model which would suite your product or services you intend to offer.
Here are the list of 4 generally accepted e-commerce Business models
- B2B is a model in which Businesses sell their products/services or both to another Business which in turn might resell the product and services to its end user consumer. Ex indiamart, Alibaba etc
- B2C is the most common Business model worldwide. Businesses which sell products and services directly to the end user consumer and there is no intermediator in between the buyer and seller. Supermarkets, Retail outlets, Showrooms and even a home-based online seller are all examples of B2C Business models.
- C2B model is where Consumer or individual creates products and services for Businesses who are the end user. In most cases there are intermediator agencies like Upwork, Freelancer, fiver etc., who connect customer to Businesses for a fee.
- C2C is a business model in which Consumer sell products and services to another consumer directly or through intermediator is called C2C business. Classified websites, Auction sites, second hand or used articles sites are some of the examples.
Once you have decided on the ecommerce business model it’s time to study and analyse your competition.
Analyse all the competitive businesses in your segment and do an analytical study of some the important elements of these business like
- Business model
- Revenue model
- Product strategy
- Marketing and Sales strategies, and other technical and useful reports.
Perform a SWOT analysis of rival businesses and build a comprehensive ecommerce business plan.
2. Finding a NICHE Product or segment
What is a Niche? Niche are specialised products or services which appeal to group of interested customers who pay a premium to buy such customised items or services. Example, Customised Handmade leather case for IPhone, Specialised Car modifying services.
2.1 How to choose or find a Niche Product?
Choosing a right Niche is neither easy nor difficult it is all about identifying a particular need of a customer or finding a solution to a unique problem.
Here are some proven ways that can help you find a good niche product idea.
Problems: Identify a nagging problem an individual or group are facing and find a solution for that problem. Generally speaking, more severe the problem of a person the more desperate that person is for a solution and thus more disposed he is to purchase the solution from you at any given price.
Example, Wedding dresses for Obese Couples, Naturopathic medicine for Eczema.
Hobbies:
Well, if you are not a problem solver never mind. Turn your passion or hobby in business to create a profitable product niche.
Hobby niches are difficult more competitive and require more targeted marketing then Problem solving Niches. You will need a dedicated Marketing page and Sales Funnel.
Example: Passionate Hiker’s could start an online store for hiking gears like Shoes, Safety gears, Medical kit, Travel Bags etc.
Gaps in Market:
Research to find existing gaps in the marketplaces. Identify that particular need of the customer which the marketplace has not yet fulfilled.
This ‘Gap’ or ‘Need’ is the business opportunity and you could create a unique product or service fulfilling these needs for your customer.
Examples, Pets grooming products, Kids fancy dress costume, Male only salons etc.
Brand Potential:
Identify products that have potential for Brands building. A branded product line will yield better margins in long term and build customer trust and faith in your Brand. Invest in Brand awareness as it helps people to recall your brand and products easily
If you are starting small then having a specific Brand with limited products will be much better to manage and scale.
3. Build your own ecommerce website store
3.1 How to plan your ecommerce business?
Plan your ecommerce website before you actually set out to build one. Planning your whole ecommerce site can be daunting and time consuming. But once done this task will make your work a lot simpler, organised, less stressful and save you a ton of money and time.
Set a budget for your ecommerce site. A full-scale ecommerce website will cost you anywhere between $1000 to $250000 or even more depending upon various variables like design, complexity, scalability etc., consult a qualified web designer for precise Budgets.
3.2 How to choose a web development company for your ecommerce store?
Choosing the right Web Development company is a crucial step. A good web developer should be able to design a website as per your requirements and within the pre-described budget and time.
Look at their portfolios check for reviews and testimonials ask them for Demo sites and Sample pages. Always, interact with your web developer on regular basis for smooth and timely completion of the project.
Ensure that you get reliable security frame work as you would be dealing in secured payments gateways and storing sensitive customer information on your site.
Post Development Maintenance and support is very important once your site is live. A quality website will need continuous maintenance occasional upgrades and long-term customisation once your site gains traffic and increased bandwidth.
Choose a web development company that offers a complete set of web solution under one roof. Most Web development companies will provide you additional services like SEO, Web designing, Graphics Design, LOGO design, Digital Marketing etc. for extra charges. Make sure you ask for a complete package of web solution along with web development.
3.3 How to choose a good domain name for your ecommerce business?
The next step is to choose a domain name for your Ecommerce site. A domain name should be Short, catchy and memorable it should be easy to remember and pronounced.
Choose a domain which matches your business vision, products or service and the overall design of the website. A good domain makes your site look professional and tidy its help in SEO and gain traffic to the site.
Use domain extensions depending on your location, business type etc. example .COM,.ORG, .BIZ, .IN etc. ‘.COM is the most commonly used domain extension worldwide.
Godaddy, Hostgator, Namecheap, Bluehost are some of the prominent Domains registering Companies which sell domain name worldwide.
Check their websites and compare their prices and choose the Domain company which offers you the best price and additional benefits.
3.4 How to choose a hosting company for your Ecommerce Website?
Choosing the right Web Hosting services is a crucial aspect of your ecommerce business. Make sure you choose a hosting service which has 99.99% uptime. A hosting company which cannot promise maximum uptime will hamper your ecommerce business operations big time leading to loss of potential customers and revenues.
Compare and corroborate similar Web Hosting service providers. Some of the standard features you need to compare are evaluate between hosting providers are Pricing, Performance, Speed, Storage, Uptime, Bandwidth, Customer Reviews and Testimonies, Security, Customer support etc.
Support Services are very important if you are not technically savvy. Choose a Web Hosting company that has quickest response time and solves your problems at the earliest. You can search the internet to find reviews posted by other users about the companies support services.
3.5 How to keep your ecommerce store secured from web attacks?
Since ecommerce business will involve dealing with payment gateways and storing of sensitive customer data on your servers its is of paramount importance the hosting services have high standards of security.
DDoS protections, Firewalls, Virus and malware protection, Cyber-attack security, Spam protections and HTTPS / SSL Security certificates etc, are some of the additional Web hosting security features you should look when buying plans from Web Hosting service providers.
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4.Register your Ecommerce store with trusted payment gateways.
4.1 How to choose a payment gateway company for your ecommerce business?
Choosing the right payment processor for your ecommerce store is vital for your business. You would not want your customer to have a harrowing shopping experience while making payments for their purchases. Buggy and bad payment gateways can lead to abandoned carts and loss of revenue.
As a Merchant take a moment to understand how the payment gateways work how does the money flow from your customers pocket to your Bank Account.
Understand the Payment Processing Fees structure of your payment provider, it is important to know what fees you pay every time you transact. Usually, payment providers charge a minimum transaction fees which is between 1.75% to 3% + taxes on every successful transaction. Look out for other Charges like AMC charges, penalties, etc. that the provider may levy.
Make sure that your payment provider supports various payment methods like Net Banking, All major Debit and Credit Cards, UPI, Mobile Wallets and other modes of payment. Having a varied payment options will help your customers to pay through whichever methods they deem convenient.
Your Payment provider should have payment gateways which is fortified with Data encryption, Security standards and fraud preventions methods at par with Industry standards.
Your Payment gateway provider should be compliant with PCI DSS standards andfollows the SSL (Secured Socket Layers) protocols and 256bit AES ENCRYPTION.
Your payment providershould provide you with additional features like dedicated Merchant Dashboard, Plugins for easy integration with website CMS software, Omni-channel support, Reports, Inbuilt Invoicing systems etc. Search through various Payment providers to see who offers you the best features along with Payment solutions this way you can get the best of both the world.
Good Customer support from Payment providers is must. In the view of payment dispute the customer service should be quick to respond and resolve the issue quickly and timely.
Make sure there is a dispute resolution mechanism to handle various situations that may arise in the event of failed payments or other disputes or discrepancies that may arise in payment settlements or other issues.
5. Managing Sourcing and Supply chain management?
5.1 How to manage your Product Sourcing and Supply chain management?
Planning your purchases allows you to fulfil your order on timely basis without any delay or backlog. Purchase planning also allows you to reduce your overall warehousing cost and manage you Storage of Inventory efficiently.
Suppliers and vendors for your business should be carefully screened. Always look for reputation of your suppliers its clientele, suppling capacity, timely delivery and financial position. Ask your suppliers for Line of Credit if you are deciding to contract them for long term purchases. Always have small pool of suppliers as backup in case of your main suppliers are unable to fulfil your demands.
Negotiate with your suppliers and vendors wisely if you plan to procure large quantities. Get quotation from different suppliers and bargain well for getting the best prices.
Specify your suppliers about the Quality Standards for your products and services. Always check your purchases for quality and standardisation like size, weight, packaging etc. Have a mechanism for regular assess the quality of your Products or services. Quality and standardised products help in building customer trust and confidence in your Brand.
Procurement is the process of obtaining the desired goods or services from the suppliers to your warehouse. Make sure your products reach you in perfect condition and in desired state.
6. How to manage your ecommerce Inventory?
Control your Inventory, always keep track of your stocks you should always have real time data of stock levels and placements for speedy and smooth operations.
Get an Inventory Management software system for systematic tracking of Inventory levels, stock placement, orders, sales etc this tool can also help in managing your sales-returns, avoiding overstocking, billing and stock reports.
Managing Inventory is a significant part of business it helps you to manage your budgets. It minimises wastage of warehousing spaces and allow you to fully optimise your storage thus increasing your storing capacity and smoothens the entire process of Order processing.
7. How to Find right Delivery and logistics partner
‘Last Mile delivery’ Logistics is the backbone of any e-commerce online marketplace or small Business. If you have successful Logistics strategy you can maximize your business profitability by increasing your new customer’s base rapidly and retaining older customer successfully.
Any Logistics partner that you choose should have the maximum serviceable pin codes. They should cover areas from cities to the most rural parts of your country. The logistics partner should have a robust logistics infrastructure with safe and sound last mile delivery service.
Technology is the Backbone of a Logistics operator make sure that the logistics provider uses the latest technologies in logistics industry. They should comply with the latest industry standard and practices.
The logistics partner should fulfil both Forward direction and Reverse direction logistics. Forward direction means delivering of goods from your warehouse to customer location and Reverse direction means delivering of goods from Customer locations to your warehouse in case of products returned by customer for any reasons.
Freight charge may vary for different logistics company. Delivery fees charged by operators depends on your packaged weight of goods, Distance, Mode of transport, number of shipments, Cash on Delivery handling fees etc. Most logistics company charge flat rates / gms if the delivery location is in metro cities but in case of rural areas and remote locations the delivery charges may increase considerably.
Tracking your orders in real time is important to make sure your products reach the end user safely and quickly. The logistic company should have its own tracking system which provides you with with real time status of your products. Tracking your orders allows you to avoid loss of goods in transit and wrong delivery.
8. How to Managing products returns on your Online Store?
Almost 30% of all products sold online are returned for various reasons, unfortunately there is no way to avoid returns. Handling a product return or exchange request can be a daunting task if you don’t have a simplified process. Mismanaging post purchase returns can threaten your bottomline margins.
Dedicated Return and Exchange Policies, provide an additional benefit to your customer and encourage purchase. Most customer prefer to buy goods and services from online sellers who have a dedicated return or exchange policy. A 14 days no questions asked Return or Exchange policy is a standard industry practise.
Have an Automated Return Management process which should be a combination of Coordination, Planning, Resource, Automation and Execution. Having a simplified, organised and easy to follow return process will smoothly manage your returns and also lower any reverse logistics cost you may incur.
Lower your Return rates, Ecommerce returns are tricky to many returns and can hamper your profits and put-up losses, the best way to manage your return is to have no returns. Returns are an unavoidable part of ecommerce business, but you can put in place a product return strategy to minimise returns and maximise profits.
Have a Product return strategy to lower the incident of avoidable customer returns. Here are some of the good industry practises to lower the incident of customer returns.
- Share high quality Images of items shot in day light or bright light setup
- Include correct and accurate description of your product.
- Mention accurate dimensions and weight on product images.
- If applicable mention correctly any compatibility or interoperability requirements
- Add a product demo video if possible.
- Be honest with your customer and do not indulge in malpractices.
9. How to Partner with online marketplaces and become a full time Online Seller?
You could be Selling your products through your own store but it is also pretty advantages to sell as Registered Seller with Online Marketplaces like Amazon, Flipkart etc. Marketplaces offer tons of opportunity to Online Sellers in terms of Revenues and Brand exposure as they have huge market capitalizations and customer pools . With millions of genuine customers registered with these Online Marketplaces the opportunity is immense.
The first step is to Register yourself as a Seller with online marketplaces. Apply for registration with all relevant documents. Produce your Company incorporation details, Sales tax registration details, copyrights details (if applicable), etc. In case of Amazon FBA, open an Amazon seller Central account by submitting all details.
Understanding seller’s policy and guideline, it is imperative to understand and adhere to each and every point of the policies and guidelines set by your Online Marketplace sites. If you fail to understand the terms and policies, you may accidentally violate any of the company policies and thus you may be penalised with suspension’s, putting your Account and business in jeopardy.
Always remember never sell counterfeit and duplicate products on Marketplace sites. Most of these sites discourage the selling of counterfeit items on their platforms. Sellers found violating copyrights terms are suspended from selling on their platforms while Companies who own copyright products may also initiate legal action against you and may file for compensations for losses worth several thousand Dollars.
Fulfilment Providers or Third-Party Logistics (3PL) Services are Outsourcing companies that provide warehousing and order shipping services to all kinds of Big and small Ecommerce Companies, Independent Sellers, Retail Merchants, Wholesalers etc. Most of these Fulfilment providers now specialise in Ecommerce Businesses models offering services like warehousing, flat shipping charges, fulfilment centres, Inventory management, Cash on delivery handlings, Reverse pickups
Advantages of Fulfilment services fulfilment provider offers some great advantages to ecommerce sellers. Here are some of the its merits.
- Reduced cost of operations
- Quick order processing and last mile Delivery
- Increased Inventory capabilities
- Inventory Management services
- Scalability and flexibility during Festive seasons
A well thought out Third-party fulfilment services will help your business attract more customers smoothen your operations and allows you to focus more on important aspects of your business, while the fulfilment provider takes care of your storing, packing and shipping of your products to customers.
Fees and charges of Fulfilment services most fulfilment services will charge you for Storing, Packaging, Handling, Shipping and Returns Charges. Different fulfilment operators have their own pricing. Their rates usually depend upon your order volumes.
Always consider the cost involved and what impact it may have on your Product pricing strategies. It is highly advisable to fully understand all the various Charges and fees you have to incur while using their services. There may be other hidden charges you may not be aware of initially such hidden charges can severely impact your earnings. It is highly advisable to communicate clearly with your Fulfilment providers regarding all the charges, fees and commissions you have pay for using their services.
Sellers Support, A good Marketplace site should be able to support its sellers in every way i.e by providing marketing and advertising support, branding, grievance resolution, fulfilment services etc. The Marketplace sites should be fair and transparent in their operations. The company’s policies should be both customer and seller friendly.
They should have Robust Ecommerce Platform with stable and reliable software which is safe, secure and updated with industry standards. The platform should have all basic and advanced features both on customers side and seller’s side for smooth operations. The platform should support all modes of payments.
The Marketplace site should have strong active customer base. Through regular advertising campaigns and promotional event, they should be looking to attract new customers to their sites and increase their customer base.
Marketplace sites should help your business with brand exposure and increased sales revenue through focused marketing campaigns.
Marketplace site should also provide fulfilment services to its privileged seller’s. They should have fulfilment centres across the country which is robust, efficient and has maximum possible coverage.
Their Fees, commissions and other charges should be nominal and at par with industry rates. Make sure they provide you with complete list of all the charges and commissions you have to pay in case of sales made through their platforms.
Understand the payment cycles, when does the Marketplace sites settles your account once you have registered a sale with their site. Most of Marketplace sites settle their seller accounts once in 7 days.
Make sure you have positive balance in your sellers account after deducting fees and commissions during the settlement period. Have a valid Bank account information registered with your seller’s account for quick and smooth transfer of funds to your Bank accounts.
10. Here are some quick tips and advice for your Ecommerce business.
Here are some important tips and advices that we gathered from Industry experts for your Ecommerce online business.
- Choose a Niche with a competitive edge. Find a niche just small enough in size to discourage any Big players from entering it.
- SEO is the key to unlock the doors of ecommerce industry. SEO is a must if you have to survive in this highly competitive e-commerce industry alongside giants like Amazon, Flipkart etc.
- Invest in good Software Platforms like WordPress, Magneto, Shopify or any other robust and trusted ecommerce platforms.
- User Interface and ease of navigation is the heart of any Online Ecommerce Website so focus on user experiences and ease.
- Beware! 60% of customers abandon online shopping carts. Invest in shopping cart solution to minimise the instances cart abandonment.
- Social Media is great platform for Ecommerce companies. Facebook and Instagram are ideal platforms for laser focused customer targeting.
- Customer service is the voice of your Online E-commerce Business. Remember up to the minute customer service is essential to customer retentions and Brand building.
- Quality is actually, the customers experience with your products and services. Even if you think your products are better there is always room for improvement.
- Be patient and don’t lose heart! Ecommerce is like every other business it takes time and patient to build and run a successful ecommerce business.
CONCLUSION
Starting an online Ecommerce store is a profitable venture if managed professionally and skilfully. Follow all the details closely given in this article and research to keep your self up to date with latest development in Ecommerce.
Every business runs the risk of failures and financial losses and Ecommerce business is no different. Be cautious and alert and educate your self before investing heavily in online business keep all your bases covered.
If, still you need motivation to kick start your online ecommerce business a quick grab of Jeff Bezos or Jack Maa’s biography will lift your spirits immensely.
So lets end it here, with the hope and wishes to you to start your Online Ecommerce Store Business quickly.
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