As a budding entrepreneur, launching an eCommerce store can be one of the most exciting endeavors to go down. Yes, with so many outlets out there, this seems like a great opportunity to start a business that eventually could run itself. However, getting to that level is no easy task, which is why I’m providing a few helpful tips on how to build out your foundation. Check them out below:
Start With Research
If you’re going to be launching an eCommerce business, then doing your research beforehand is going to be a must. After all, selling goods online is a competitive space and one that you’re going to want to learn what advantages might exist for you, as well as how to capitalize on the market. And although getting this right is going to take an extensive amount of legwork, you’ll also have a business plan that will bring you much more success.
Start out by looking at the current trends in eCommerce including what’s popular and why. As noted by Comscore, shopping online has increased overall 50 percent in the past year, which says that more people are shifting away from storefronts. However, what aspects are causing this trend?
For example, while buying clothes is something that we’ve traditionally done in person, what makes people willing to take the risk of purchasing an item they can’t try on? Furthermore, what along this process evokes trust, as well as familiarity. Asking yourself questions like this will allow you to hone in on what strategies you should implement for your business, bringing you a higher chance of acquisition off the bat.
Finally, if you can, compile what websites you find into case studies that highlight the main points of success. For example, the vape company Juul has been making strides lately for the unique flavors of their juices. Analyzing how they utilized things like color scheme, typeface, and even pricing are all important factors to compile in your research and will give you much more expertise in the long run.
Establish Your Model
After you’ve gotten a good feel for what’s out there, it’s time to start building out your business plan. While online selling can be an excellent place to make money fast, that also comes with the caveat of being competitive with both pricing and offerings. For example, let’s say I wanted to choose between a drop shipping business or traditional eCommerce.
With drop shipping, I’m able to run my store with much less overhead, only serving as an intermediary. However, this also would mean that I need to increase my markups by 15 percent (as noted by Inventory Source) to make any profit, which could be a moot point on popular items. If I was to take this route, then I’d need to be mindful of curating my store to be for products that are either out of the ordinary or can be packaged at a bulk rate.
All-in-all, taking the approach of knowing exactly what you’re going to sell and how is going to be imperative, as it’ll provide the basic model for how your shop will scale over time.
Handle The Logistical Items
Another aspect to consider when forming your eCommerce shop is both the legal and financial items you need to address before you get up and running. Whether that be having a lawyer help you establish an LLC as well as any trademarking issues or establishing what eCommerce platform you’re going to use, these are items that are crucial to legitimizing your business. And unfortunately, they can also be some of the most expensive.
According to Outer Box Design, the average upstart cost for an eCommerce site that’s on the low-end is approximately $20,000. Now, while that figure isn’t set in stone, it’s a good place to start assessing the costs you’ll accrue out the gate. Some aspects can be cheaper by choosing things like dropshipping versus traditional eCommerce, as well as by using a different hosting system, but the overarching mission is to create a budget and stick with it.
Make a list of all of the necessary materials you’ll need, including a web host, eCommerce store, possibly inventory, and even shipping. Any and everything that might be an expense should be listed, as the more accurate you can get that number, the better off your financial planning will be. Because while starting an online store can be a solid avenue to make money, it’s also one you want to be wise about investing in.
Overall, launching an eCommerce can be one of the most fun ways to become an entrepreneur, as well as the most lucrative (sometimes clocking in an average of $150,000 per month, according to RJ Metrics). Although it’s going to take some time to build out your foundation, once you’re there, it’s smooth sailing. Which begs the question: what are you most excited about when launching an eCommerce store? Comment with your answers below!