When it comes to setting up a business, many turn to e-commerce instead of a physical traditional setup. It’s not hard to see why, considering how it’s now an indispensable part of the global retail framework, and will account for 23% of total sales by 2023. Just last year, an estimated 1.92 billion people purchased goods or services online, and e-retail sales managed to surpass 3.5 trillion U.S. dollars worldwide.
An e-commerce business is undoubtedly appealing given the revenue potential, but starting one demands hard work and involves many critical steps and decisions. To help you out, here are some things you need to consider before setting up your own online venture.
Select the right products to sell
Before anything else, you must first select the right product to sell, ideally one that you truly believe in. But keep in mind that arriving at the right product involves doing good market research to identify what your target market is buying and to recognize the hottest products on the market. Bplans notes that you also shouldn’t just select certain products because someone reported success in a particular niche or you have something you want people to buy. They state “selling what your target market wants to buy is always easier than selling what you want the market to buy.”
If you truly want to succeed, you should validate your product idea to see if there’s a real demand for it. This can be as easy as tracking Google trends and collecting customer feedback by checking reviews left by customers for your competitors. You may also want to offer a few samples to your target market and ask them for their objective opinion. That way, you know if your idea is worth pursuing or if there are things that need improvement.
Choose the right business structure
Sole proprietorship and general partnerships are great for kick starting an online venture, but if you have plans on expanding your business in the future, it’s worth setting up a Limited Liability Corporation (LLC) instead. One reason an LLC is popular among new companies is that you get to enjoy the benefits of both a corporation and a partnership.
ZenBusiness suggests that an LLC’s advantages include pass-through taxation, customizable ownership options, less-complicated procedures, and a flexible management structure. This gives the owners more control over how they run their company compared to traditional businesses that have more oversight. With the e-commerce market constantly in flux, being agile is a huge advantage as you will be able to react faster to changing trends.
Pick an e-commerce platform
If you’re not going to develop your own website, you may want to host your e-commerce business via an existing platform instead. But given how there’s a myriad of options available, it may be difficult to select which one is right for your business, especially if it’s your first time setting up an e-commerce venture.
Aside from ensuring that the platform can accommodate the look of the website you’re going for, writer Syanthiyana Sadagopal recommends checking the pricing first to see if it’s something that you can afford. Compare the plans and pricings between multiple e-commerce platforms until you get the one you were looking for. Then, check if your selected platform is SEO-friendly, as you need to build towards having a good ranking once you decide to launch. You should also see to it that your eventual site will be mobile-friendly, and that it’s secure enough that your customers’ payment information won’t fall into the wrong hands.
Develop a marketing strategy
When you’re just starting out, you shouldn’t hesitate to be aggressive with your marketing. Business 2 Community highlights how it’s imperative that you adopt a proactive approach to online marketing, given how the e-commerce space is increasingly competitive.
You should established relevant social media profiles for your brand, and then create content for your company blog to kick start the process of engaging your audience, which will lead to brand loyalty. Be sure to include the relevant keywords and core metrics to increase your chances of ranking highly. It’s also worth trying out new marketing tactics from time to time so you can drive more traffic to your website, and convert that traffic to sales.
For more news and tips about e-commerce, check out our Online Biz section.