Are you planning to start a business to achieve your goals in life? If you do, you should consider a venture in eCommerce.
Ecommerce is a fast-growing retail segment focusing on selling and purchasing products and services via the internet. With this, people can order anything they want anytime, anywhere, without wasting money, energy, and time visiting brick-and-mortar shops.
Once the order has been finalised, customers only need to wait for their orders to arrive at their doorstep. The convenience and efficiency of eCommerce is the main reason most people prefer shopping online over physical stores (e.g., boutiques and malls).
On top of that, even basic necessities, such as groceries, clothing, and essential services, can be purchased and sold through eCommerce.
However, it’s important to understand that structuring an eCommerce startup isn’t as easy as it seems. This is especially true when handling paperwork and legal matters. If you need help, don’t hesitate to consult a business filing specialist right away.
If you don’t know where to start, going over this post may help. This article contains a step-by-step guide to structuring your eCommerce startup properly. Read on to learn more.
Step 1: Choose Your Business Models
First, it’s important to understand that there’s no one-size-fits-all business structure when it comes to eCommerce. So, before you choose what to sell, find the right model best suited for the eCommerce startup you want to build.
The right eCommerce business model depends on the goals you want to achieve. For example, you may choose drop shipping if you want to earn without paying a hefty initial investment.
Here are some business models to choose from:
- Drop Shipping: This is the simplest model for eCommerce businesses. In this structure, you act as the mediator between the manufacturer and the buyer. Once customers place their orders, your supplier will take care of the rest, from packing to delivery.
- Wholesaling: This is similar to typical brick-and-mortar shops, but you have no physical store to manage, only a warehouse. In this structure, you’re in charge of everything, from getting orders to packaging and shipping.
- Private Labelling: If you lack the resources to produce your own products, this model is right for you. In this structure, you’ll need a manufacturer to produce these unique goods with your own brand. They’re also in charge of the shipping process.
- White Labelling: This is similar to private labelling. But instead of producing unique products from scratch, you choose an existing product from a manufacturer and replace it with your own brand, packaging, and design.
Step 2: Identify Your Niche
Here’s an important rule to follow in eCommerce: unless you want to become the next Amazon, don’t sell whatever you want just because you have to. This is why choosing a niche when structuring an eCommerce startup is important.
Start your niche research by looking at some of the most popular and successful eCommerce brands. Make sure the niche is competitive enough to ensure that there will be a market for your products and services.
Another important rule to remember when choosing your niche is to avoid highly competitive areas. This is especially true when it comes to niches dominated by brands with a huge following.
Once you find the right niche suitable for your eCommerce, you can collaborate with other similar shops to promote each other and expand your customer reach.
Step 3: Evaluate Product Ideas And Target Customers
Now that you have a niche to focus on, you’re probably excited to choose the products you want to sell. But hold on and stop right there for a moment.
Before choosing which items to sell, think about your business’s personas. People won’t purchase a product from an online seller who has no idea who they’re selling to.
Start by asking yourself the basic questions, such as:
- Who are you?
- What does your eCommerce represent?
- Who are your target customers?
Keep in mind that your company’s image must always be consistent. For example, a would-be sustainable beverage company won’t last long if it starts producing products packed using non-sustainable packaging materials. In short, hypocrisies aren’t allowed.
Once you’ve identified who you are and your target customers, it’s time to brainstorm product ideas. Start with small investments and test the waters before you expand your offerings.
Furthermore, make sure your products are viable. Check if your supplier can match your pricing and plan a backup in case they fail to process your orders at the right time.
Step 4: Choose And Register Your Business Name
After choosing which products to sell, it’s time to select your business name. This will be the front of your eCommerce, so you want to make sure that it’s as attractive, suitable, and compelling as possible.
Here are some tips that may help you:
- Don’t choose a name similar to your competitors. You surely don’t want to be known as a copycat of someone else’s business.
- Avoid a business name that’s hard to spell and pronounce.
- Make sure it’s consistent with your brand.
Once you’ve chosen the right business name for your eCommerce, the next thing to do is to register your company. This offers legal protection (e.g., inability to settle debts) and determines the amount of tax you must pay.
Aside from business registration, here are other things you need to do at this stage:
- Acquire an Employer Identification Number (EIN) for tax identification purposes, even if you don’t have plans to hire workers.
- Obtain your business permits and licenses for legal purposes and to show your customers that you’re legitimate and worth trusting.
- Create your company logo. Make sure it’s consistent with your brand and business name.
Step 5: Create Your Ecommerce Website
After accomplishing all the steps above, now is the right time for the most exciting part of structuring your eCommerce business—creating an online selling platform.
When you create a website, you’ll need to choose a domain, URL name, and design. In terms of domain, stick to ‘.com’ and avoid other tags that can’t be easily remembered.
For your URL name, choose one that is easy to identify and memorable. Avoid long and complicated names, which are harder to remember.
When it comes to web design, make sure to keep it as simple as possible. Avoid using unnecessary elements that can reduce the responsiveness of your website. Also, make sure that your web design reflects your brand.
Final Words
Building an eCommerce startup is one of the best ways to start a business, especially if you don’t have enough capital for a brick-and-mortar shop. However, it’s no easy task—much like any other business out there. But by following the steps discussed above, you’ll be one step forward to achieving success in the realm of eCommerce.
