Starting an eCommerce business is an excellent idea, especially now that clients are looking for more home deliveries and fewer physical interactions thanks to the coronavirus. However, just like any other business, you need to make critical decisions and weigh several factors before opening a shop. We’ve compiled a list of six critical issues you should know about starting an eCommerce website.
1. Selecting a Product or Service to Sell
The first step is to identify the products you wish to sell on your eCommerce website. It’s critical to find products that you can sell directly to a consumer while solving a problem. For example, specializing in dog products from leashes to shampoos can help you establish an eCommerce business. You can also:
- Sell products to hobby enthusiasts. For example, you can specialize in supplying products for boxers by providing mouth guards.
- Use a skill that you’ve grown over time—for example, illustration and digital drawing.
- Look at customer reviews for products and develop a product that meets their needs.
- You can also invest in a long-lasting trend- for example selling VR products.
As you select each product, ensure that you evaluate it to confirm the demand.
- Conduct a competitive analysis to find out if their products are selling.
- Focus on making the first few sales to verify demand.
- Research the product by looking at search volume through tools such as Google Trends.
- Interview the customers in person and provide free samples.
- Ensure the product has reliable vendors and delivery services.
2. Conduct a Competitive Analysis
A competitive analysis helps you identify your competitors, their products, and their sales and marketing strategies. You can also use the analysis to identify a gap in the market, find out new trends, and also market your business better.
- Determine who your competition is. Start by identifying direct competitors selling similar products within your geographical area and then look for indirect competitors who sell different products that can solve the same need.
- Determine the type of services your competitor provides. What is their price point? Who are their ideal customers? How is the company different from yours? How are their distribution channels? What is their sales process? How is their customer service? Do they provide regular discounts and sales?
- Analyze their marketing strategies and how they affect their sales process. Look through their websites, social media accounts, blogs, and paid ads. What can you improve on? What can you learn?
- Once you have enough research, compare your business to theirs to see how you stack up.
3. Set Up Your Business
Once you’re confident of your products, it’s time to open shop. Ensure you conduct an online corporate name search to check if any other business has the name you wish to choose. If you confirm it’s available, register it with the United States Patent and Trademark Office (USPTO). As you register your business, you also need to select your business structure. Are you an LLC, or corporation? What is your address and state of registration?
You also need to get a federal tax number (also known as the employer identification number (EIN), to help you file tax returns and report on business processes. It’s also wise to open a business bank account to separate business funds from personal funds.
4. Get a Website and Domain
Since you’re establishing an online business, you need a website and domain. A domain name is an address that users use to reach your site. Ideally, you should use your business name as the domain, but sometimes, it may be unavailable. You can try different variations of your business name when choosing a domain.
Invest in a proper e-commerce website because this is your shop. You can hire a designer to help you create a suitable and secure site.
- Design: Create an organized website that’s easy to navigate as a visitor.
- Speed: Ensure that your website takes users quickly from page to page to avoid losing clients.
- Inventory: Ensures customers can quickly search what they need and add it to their carts. Organize products according to brand, price, and category for efficient searches.
- Transactions: Avoid unexpected and extremely high shipping costs and extremely few payment options.
- Delivery: Ensure you streamline your delivery services and improve checkout and tracking from your website.
5. Write Your Business Plan
Creating a business plan helps you define your business and create a vision. Your business plan should include:
- Your name, address, e-mail, website, and other contacts.
- An executive summary that includes your business structure, financial requirements, and structure.
- A description of the industry and your products and services.
- A market analysis and competitive analysis.
- Business operations and management.
6. Get PSS DSS Compliance
If you plan to accept card payments in your e-commerce store, Payment Card Industry Data Security Standard (PSS DSS) compliance is necessary. With this framework, you can ensure the security of your customer’s card details. Compliance helps you prevent data breaches and ensuing lawsuits. Being complaint includes:
- Using firewalls to protect cardholder data.
- Changing all default passwords on hardware and software you use for your e-commerce website.
- Using VPNs, especially when connected to public hotspots.
- Controlling access to all cardholder data.
- Regularly updating all software and scanning for malware.