How to Start an eCommerce Business from Scratch: Things to Consider

With the world going through a pandemic for the past year, the eCommerce industry has been more vital than ever. According to a report done by eMarketer, the eCommerce trade is expected to reach $4.89 trillion in sales by the end of 2021. People are getting a lot more conscious when going out, and most prefer shopping online instead. With that being said, online purchases are now considered a necessity.

The following are a couple of reasons why you should consider starting an eCommerce business from scratch:

  1. There is a huge chance for growth. Since everything is done online, there is a big chance to expand your opportunities whenever you prefer. You can choose to widen your niche, offer additional products and services, and market to different groups of customers. You can make all the marketing efforts in the comfort of your own home, and you don’t have to worry about renting a storefront and such.
  2. It’s highly doable. With the growth of the eCommerce industry comes the improvement of tools that are available for entrepreneurs to use. Business owners can now choose to utilize software that can further optimize their brand. Some of the most well-loved eCommerce tools include Shopify, BigCommerce, WooCommerce, and Oberlo.
  3. The market is massive. According to Statista, over 2.14 billion people worldwide have made an online purchase at least once in their life. That makes up 27.6% of the global population, and the numbers are expected to grow. However, marketers must create an effective eCommerce business plan to reach their target market.

Now that we have discussed the advantages of putting up your online store, it’s now time to delve into how to start an eCommerce business from scratch.

Advantages of Starting an eCommerce Business

Work on Attracting a Niche Audience

As we mentioned earlier, the eCommerce industry is a massive one. This means that you have multiple competitors, no matter what your niche is and where in the world you are operating from. Creating a niche audience that will love and enjoy your products is essential to your brand. You have to compete with more prominent eCommerce companies such as Amazon and eBay, and to do that; you need to offer something unique to your consumers.

Here are a couple of things to include in your eCommerce business plan to attract a niche market:

  1. Know your business inside out. You can’t convince people to buy from you if you are not entirely aware of what you are selling. Find something that you are passionate about, do your research, test the waters, and then go for the gold.
  2. Understand your target market. Once you’ve had a good grasp of the business you are about to dive into, you now need to understand better the people you will be selling to. This stage means handing out surveys, interviewing current customers, and doing ample research to determine your brand’s demographics.
  3. Do competitor analysis. As we brought up earlier, the competition can be challenging, no matter what industry you’re in. Take your time to learn how your competitors market their brands and how they operate.
  4. Test and validate. There is no way to know if you are targeting the right niche audience but to test and validate your strategy. You can start by marketing to a small group of people or even through your close circle.

Once you’ve put all of these things into practice, success will follow.

How to Attract a Niche Audience

Choose a Business and Domain Name

Choosing a brand name is one of the most enjoyable parts of starting an eCommerce business from scratch. Consider selecting a name that would directly reflect your brand as a whole. Of course, you’d have to do your research to see if no other company owns it. You need to patent and secure your chosen brand and domain name, and you can’t do so if another brand already owns it.

Apply these tips when choosing your company’s name:

  1. Check your local state’s naming guidelines.
  2. Be creative and unique. Don’t pick out a name that’s too similar to any of your competitors.
  3. Make it short so your audience can easily remember the name.
  4. Be consistent and avoid changing brand names.

Think About Online Distribution

Determining the proper online distribution channels to use should be one of your primary concerns when starting an eCommerce business from scratch. You need to maximize your opportunities to reach your target audience, and you can’t do this if you are using the wrong platforms. To choose the correct channel for your eCommerce business opportunities, you’d have to consider the following:

  1. Check what channels your close competitors are using. You don’t have to copy them – just get a good idea of what platforms they prefer to use and if it works for them.
  2. Be aware of the costs. See if you can still get your profit and return on investment even after paying for the channel’s fees.
  3. Have a wide array of options. List down a few channels and compare each one. Pinpoint the pros and cons and choose the one that you know you’d get your money’s worth from.

Getting the right partners and vendors is also necessary, so do your research on this as well.

How to Choose the Right Distribution Channel

Secure Your Business Licenses and Permits

Most eCommerce businesses still need to be registered with your local city and state, even if you do not have a physical location. The licenses and permits differ in different areas, so it would be wise to check with your local government and see what papers you need to prepare. However, here are some of the most common permits that you’d have to secure for your business:

  1. Business operation license
  2. Sales tax permit
  3. Employer identification number or EIN
  4. Seller’s permit
  5. Home occupation permit
  6. Occupational license
eCommerce Permits to Secure

Wrapping Up

After you’ve done the things we have listed above, it’s time to market your business. Creating your website is an excellent step towards spreading the word, and it will make your customers see that you are running a legitimate company. However, if you are just starting and money is tight, you can choose to sell on different eCommerce platforms such as eBay, Amazon, Etsy, Facebook Marketplace, and Google Shopping.

Now that you know how to start an eCommerce business from scratch, it’s time to put your plans into action!

Marketing Team