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Online marketplaces are on the rise as it provides convenience and variety of options for the customers with just a few clicks in their computers and gadgets. It is also made possible by the continuously evolving technology that provides faster internet connection and accessibility through smartphones and tablets. According to Statista, retail e-commerce in the United States alone reaches $USD 343.15 billion for 2019 and is projected to grow in the years to come.
Vast opportunities await in e-commerce, but it also means robust competition. You need to establish your business idea first, do in-depth research, and prepare a business plan to assess your proposed e-commerce business’s viability.
Let us discuss the steps to be taken before starting your e-commerce business.
Identify What Product/s You Want to Offer
Generate ideas regarding the product you want to offer. Do some research about those niches you want to enter and who your competitors are. Products can be physical or digital products. What is your competitive edge from your competitors, and how will your position affect your product?
As a start-up, it would be best to focus on one or a few products to offer. It will allow you to test the water and gain enough knowledge of how this industry works.
Identify Target Customer Profiles You Will be Accommodating
It is essential to know what personas you are catering to know how to position your product better based on their preferences, occupations, needs, and behaviors. Targeting successful entrepreneurs’ interests will be different compared to students and young professionals. Focusing your business theme on your target market will help you establish your brand.
Execute Marketing Strategies
Online presence is critical in establishing your name in the niche you are catering to. Next to inventory for physical products, marketing expenses are a high cost you will incur when you start. You need to establish your presence for your product to be known to your target market. Some strategies that can be used are email marketing, social media campaigns, content marketing, and internet ads. It is also essential to create great content to drive traffic to your website.
Register Your Business
The same with brick-and-mortar businesses, you need to register your company. Your business name does not necessarily match your stores’ name but making them identical can provide advantages. Your business will be more familiar and easily recognized.
Get your business’s licenses to operate legally. Process your Employer Identification Number (EIN) for opening a business account and filing taxes. EIN is the identity of your company and used in doing business-related transactions.
Create Your Website
You can create the website on your own if you have skills or hire an expert to create it for you. The feel of the website must be according to your product offering and target personas. Choose a logo and colors that will identify your brand.
Estimate the Start-up Costs
You must have a reasonable estimate of how much you need to start your online business to be up and running. For the first few months, sales can still be lower as you establish your footprints and focus more on marketing.
Depending on your product, start-up costs can include the following:
- Website Development
- Salaries
- Domain Name and Hosting
- Business Licenses
- Marketing Expenses
- Product Inventory
- Storage Cost
- Packaging
- Delivery Expenses
It would be best if you perform due diligence before starting your e-commerce business. Prepare a business plan from the information you gathered to have a different perspective on tackling different business scenarios. It can be less costly to start an online business than a traditional store. Still, increasing the probability of success will need hard work and strategy before and once the operation commences.
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