There are now somewhere between 12 and 24 million e-commerce businesses up and running, with more coming online every day. With more than 5 billion global internet users, it’s not surprising that commerce has moved online. Setting up an e-commerce business is quick and relatively easy, and the overheads are minimal, at least in the short term. If you are thinking of starting an online business, there are a few important considerations to bear in mind. Read on for more information.
New Business Vs. Established Business
You have a choice: you can either build an online business from scratch or you can buy an established business. There are always SaaS, e-commerce and content businesses up for sale, so if you have minimal experience and don’t want the additional risk of building a new business, buying a business that already has a customer base and established brand makes a lot of sense.
Different Types of Online Business Models
Before you do anything, it’s important to think carefully about what type of online business you want to start. There are many options.
- An e-commerce store is a popular business mode. Sites like Amazon have proven how popular online shopping is and how unlikely we are to go back to buying everything from bricks and mortar stores. There are many pros and cons of running an e-commerce store, but a significant downside is that you’ll need to carry an inventory to fulfil orders.
- Dropshipping is an online store without inventory. Instead, you fulfil orders by sending them to a third-party manufacturer, who sends the product directly to the customer. The downside to this is that customer service has extra layers of complication, among other things.
- Offering a service online is another popular business model. This could be anything from web design to online counselling.
- Affiliate marketing is a good online business if you don’t want to sell your own products and services. Instead, you earn money by promoting other people’s products and being paid a commission for sales generated.
There are other things you can do if you want to set up an online business, but those are the main models.
Market Research
Once you have decided what type of business you’d like to start, focus on some market research.
- Is there a market for your products?
- Who are your competitors?
Market research is useful because it tells you whether there is demand for what you want to sell and helps you validate your pricing. After all, it is pointless starting a business selling blue widgets if there is no demand for blue widgets or the market is already saturated with loads of other blue widget sellers.
Building a Website
If you need a website, the next step is to decide on a business name and look at domains and hosting. There are e-commerce platforms like Shopify and WooCommerce that are great for online stores, but most require a bit of technical skill to get a fully functional store set up and running without bugs. Unless you have a lot of web design experience, it may be sensible to hire a web design company. Look at your options and do a cost/benefit analysis.
Marketing
Marketing is essential, especially in a saturated market. Without a clear marketing strategy, customers won’t find you easily, which makes it hard to generate sales. There are various marketing channels to try. These include:
- Social media marketing
- PPC
- Email marketing
- Influencer marketing
Which one works best for you will depend to a degree on what products you sell, but it is often worth trying more than one channel.
It takes time to build a successful online store, so don’t expect immediate results. Focus first on building a fully SEO-optimized e-commerce website and a strong brand. The rest will fall into place in time.
