Starting a business in the technological age can be both intimidating and exciting! This Business Kitz blog will cover all you need to know about starting an ccommerce business.
Why should I start an ecommerce business?
Starting an ecommerce business has never been easier, gone are the days where you have to work multiple jobs day and night, take out an unreasonable loan from a greedy bank, and physically exhaust yourself setting up a physical store and products. Thanks to technology, all of this can be done in the comfort of your own home with only a small budget, a big vision and internet access!
Tools and resources
Online platforms such as Shopify, WordPress, and Wix have made the process of setting up a functional, professional online store seamless and budget-friendly. These platforms take away the pain point of administrative and technological duties and allow you to focus on mastering your product and marketing ideas.
The ability to sell online opens up your store to the entire international market, which can allow you to take your brand to new heights, meaning your growth and exposure is only limited by your ability to market and optimise online reach.
Ecommerce is a much more affordable option of business, which is why it is becoming increasingly popular within both traditional and new-of-age businesses. The only costs required to get started include software costs for your website. These costs vary depending on your chosen platform, however, some offer free basic services or a free trial. When getting started, Shopify ($29/month) and WordPress ($17/month for premium) come highly recommended! During your initial startup, you will also be required to pay for a domain name which will cost you between $2 and $20 per year. This price varies depending on the type of extension you choose, which may be viewed as more reputable than others (e.g. .com or .shop). Obviously as your store grows, more costs will be added, but when starting off on a budget this means you can have an entire store created for a minimum cost of $2 + inventory.
The biggest perk of ecommerce is that the only barrier to entry is your ability to access the internet. You don’t need to be a superstar coder or have 10+ years of business experience, online tools and resources will give you more than enough guidance and equipment to set up your online store. The biggest barrier to entry is your dedication towards your store, however, if you put in the time and effort to effectively set up and market your business, you will reap the benefits!
The rise in online business
Due to the current unpredictable financial crisis surrounding COVID-19, many physical stores have been forced to close, and we are seeing a rapid decrease in physical sales as people turn to the convenience of online shopping. This means that now is the perfect time to capitalise on this opportunity! Having a business online also means you have so much more control over the customer’s experience. We are also beginning to enter a consumer landscape of supporting small businesses. This is allowing small-scale businesses to finally compete with international large-scale corporations, by providing better value and experience.
How do I start an ecommerce business?
So you’ve made the decision to finally start an ecommerce business, how exciting! We are here to guide you along the way. The following are the most important steps you need to consider when bringing your entrepreneurial spirit to actualisation.
1. Ideation of your product/service
This may sound easy but this is the hardest step! Many have tried and failed to come up with a concept in which they are able to grow into their dream business, and this is why everyone isn’t an entrepreneur. Here are a few tips in sparking that initial idea.
The easiest way to start your ideation is to brainstorm from your own experiences. What are some problems you face in your day to day life that a business could solve? Take the founder of Uber for example, Garrett Camp, who was sick of having to hail cabs in the middle of a busy street with no idea how much you would be forced to pay at the end. Camp then sparked the idea by asking himself one question; What if you could request a ride from your phone? You’re not expected to be the next Garrett Camp, Bill Gates or Steve Jobs, but with the right idea you could be just as successful.
If you can’t brainstorm anything from your own life, try and turn to others around you and ask them questions. This can be with family, friends or even to strangers on social media. What are some of the biggest or smallest pain points in their life? How can these be fixed or improved? If all else fails, market research and follow the trends! Google is your biggest resource so don’t be afraid to see what is currently successful and what there is a desire for within the market. Sources like IBIS World and Deloitte are great tools to analyse market data and reports.
2. Business plan
Once you have your idea, you can sbegin to develop your initial business plan. A business plan will allow you to prioritise through defining objectives and structuring goals, which will enable you to remain in control of your business by developing a purpose and values to work under. There are numerous business plan templates to access for free online, which are a simple resource to complete and will ensure you are set up for success. The Australian Government has created a business plan template for small businesses which covers all the insightful details without becoming too complicated. The most important takeaways from your business plan should be your defined target market, mission and purpose, distribution channels, promotional strategy, and competitive analysis. The more thorough your business plan, the easier it will be to start setting up your business.
Business Kitz offers an Australian Business Proposal Template, which is included within our subscription service. Once your business is up and running you will be required to submit a business proposal if you are applying to provide materials and labour or become a supplier for major projects. This resource will allow you to detail critical elements of your business in a format that can be used to effectively convey your business to others.
A successful business is nothing without branding. Branding is like your business’ own fingerprint. It should be unique to you, but should effectively convey your purpose whilst determining what people want to feel when they interact with your company. As a result, effective branding will allow you to build relationships with your audience, allowing you to create a loyal customer base. To create your brand identity, you can use a range of features to design a synonymous brand image. This ranges from the name, tagline, logo, colour, font and brand voice.
4. Building your store
Now that you have your brand, product and plan set up, you can start to design your website. There are an endless number of platforms available to do this but Shopify, WordPress and Wix are the most notable. These platforms eliminate the need for technical skills to code your website, and instead allow you to focus on designing the website and product pages. You can customise the free templates that are provided within each platform as a general basis of design, which have been proven successful. There is also the option to purchase templates either through the platforms or online, such as Etsy, which you may prefer. The formatting of these templates are easy to follow and allow you to play around with the design to make it personable to your own brand. You will be asked to choose a domain name and this will be what people search and see when they come across your website. Depending on your budget, there is also the option of hiring a freelancer to design and run your website which will allow you to completely automate the process. Freelancers can be found using a simple google search or via online recruitment sites such as Fiverr.
Your distribution strategy can be easily integrated within your online platform of choice, which will allow you to receive orders and details to directly ship to your consumer. This however, is entirely dependent upon your chosen distribution channel. There are four links in the distribution chain which incorporate the following: producer, wholesale, retail and end consumer. Depending on your position in this line of distribution, you may need to ensure that the role’s entire chain is being fulfilled. For example, if you decide to start dropshipping, you are choosing for the product to be shipped straight from producer to end consumer, with you being responsible for the sale but never having to physically touch the product. If you go down this path, be prepared to ensure you have a strong relationship and agreement with your producer to ensure that orders are being fulfilled. It is still possible to conduct the same method of shipping on the online platform, as the platform will directly connect the order with the producer, however it is important to contact the producer to determine if they are a dropshipping service.
6. Customer service
Once you have finally set up your store and your products are ready to be shipped, your focus should be on customer service. This allows you to assist new or existing online customers when they encounter questions or challenges they may have throughout the customer journey. Customer service can be used through multiple channels such as email, SMS texting, phone call, live chat, FAQ, Social media DMs, self-service menus, and social media comments.
The final step to grow a successful ecommerce store is your marketing strategy. This process is up to you, but the most effective methods have proven successful include using email lists, boosting your organic and paid social media presence, optimising your site for SEO, google ads and influencer marketing.
What type of ecommerce businesses could I start?
Allows you to set up your online store and accept payments. When the customer orders from your site the order is directly fulfilled and shipped by the supplier, with you keeping the price difference.
- Quick and easy to start
- No inventory or packaging
- No control over the process
- If the product quality is poor, reflects badly on your business
2. Private labelling and manufacturing
For those who have a desired product but are unable to fund or manage a factory. A company that manufactures your desired product offsite will send a plan or prototype to a contracted manufacturer who will produce the product and can ship directly to the consumer or the company to sell the final product.
- Full control of branding and product
- Opportunity to create a unique product
- Less competitive
- Expensive when prototypes are wrong
- Reliant upon communication with the manufacturer
3. White labelling
This allows you to choose a product successfully sold by another company, but design your own packaging and label to sell the product with.
- Allows you to differentiate the product and create brand association
- You must order in a minimum amount of products, so you are stuck with the quantity that you order
The reliance on a subscription model that allows customers to automate their purchases to ship in regular, scheduled intervals. The most successful niche subscriptions are within the following categories: health and grooming, beauty, fashion, and food.
- Relatively reliable income streams
- Easy to incentivise customers to purchase additional subscriptions
- Loyal customer base
- Reliant upon repeat companies
- The system needs to be correctly automated
Is your intellectual property protected?
Save your business thousands in legal fees with our Australian Confidentially Policy Templates drafted by top-tier Australian lawyers.
Starting an ecommerce business is less risky than traditional in-store business methods, however, as your business begins to grow you could be faced with an array of legal issues including copyright protection, transactional issues, privacy issues, and security issues. If you find yourself having issues with legally safeguarding and protecting your store, or need some guidance through any stage of the process, we recommend seeking legal advice through our sister company, Legal Kitz. You can book a free 30-minute consultation with their experienced and highly qualified team via our website now. If you are in need of legal templates to protect your business matters, Business Kitz has a range of customisable documents to get you started.