According to Nasdaq, 95% of all purchases will be through e-commerce by 2040. The prediction is most likely because of the 93.5% of global internet users who have purchased online. In fact, in 2017, Amazon accounted for 44% of US e-commerce sales, where 59% of millennials go to them first when online shopping.
Starting an e-commerce business can be a daunting task. Whether you are planning on selling physical or digital products, there are many things to consider before taking orders. It includes conducting research on your possible niche and products, crafting a business plan, and marketing.
It is never too early to start planning for your e-commerce business. You cannot just dive right in without first assessing the risks, the costs, and the potential profits. Read further to know the things you need to account for before starting an e-commerce company so that you do not waste time or money.
Things You Need to Know Before Starting an E-commerce Business
There are many things that you need to consider before starting an e-commerce business. The first thing is your product and the market it will cater to. An excellent place to start would be Amazon if you want a ready-made audience or find one online through forums such as Reddit.
You also must decide on the niche of products you want to sell, for example, fashion apparel or electronics. It is important not to get overwhelmed by all these decisions. Below are some of the things you need to know before setting up your e-commerce store from scratch.
1) Research Niches and Products
Before starting an e-commerce business, you must know what types of products you want to sell online. So when the time comes, you will be able to start researching suppliers immediately after making this decision.
You should also spend some time thinking of the niches you want to sell in because this will influence your business strategy and affect how you conduct market research. For example, if you decide on selling cosmetics online, they should be high-end luxury items like Chanel or Dior rather than low-cost products.
However, if you want to sell a product in high demand and low supply, such as the iPhone X, it might be better for you to start an e-commerce business selling cell phone accessories.
2) Starting a Business Plan
After you have figured out what types of products or niches your e-commerce business will deal with, you should start a business plan. A business plan will help you map out your goals for the future so that everything is in perspective when starting an online store.
It means figuring out what type of products to sell, how much money it will take before launching the website, and determining which marketing strategies work best. You can find templates online or if you are dedicated, hire someone to help you write one.
Now that your e-commerce business is up and running, it is time for the fun part: Marketing! You will need to do this so more people know about your website, which will improve sales.
However, there are many different ways of reaching potential customers on the internet, so it is essential to figure out which marketing strategy works best for your business.
For example, suppose you are selling high-end products or expensive items. In that case, you will want to focus more on advertising through social media sites like Facebook and Instagram rather than spending money on Google Adwords & PPC campaigns.
Also, keep in mind that your products or services should be low-cost-per-click if you decide to use Google Adwords.
4) Capital Requirements
As with any business venture, saving money before starting an e-commerce store is extremely important. It will take some time for sales from your website to start rolling in, so make sure that you have enough capital for marketing, advertising, and the initial costs of setting up your online store.
You have to research the amount of money you need before starting an e-commerce business because this will vary depending on the products you will sell. Taking all this into consideration means that if you want to sell luxury items like Chanel, it will make more money than if you decide to sell lower-cost products such as makeup brushes.
Suppose your e-commerce business is going to be a side hustle. In that case, you must have enough capital for the time being until sales start coming in, which could potentially happen quickly depending on what type of website and marketing strategies are utilized.
The e-commerce website building process can be pretty time-consuming. Ensure that it is perfect before launching to get your store up and running. If you want to know more about starting an e-commerce business, grab time with me on my Calendly: https://calendly.com/jayant-eproxim/linkedin.