Basic ideas to start an online store

Basic ideas to start an online store

Running an online store business definitely has its appeal, but it also presents its own set of challenges. The truth is, starting a business of any kind requires a lot of hard work. Whether you’re already active in the world of eCommerce or looking to dive in and start an online store, you’ve probably heard the term drop shipping. It’s certainly maintained its lead as one of the hottest trending topics in the industry over the past couple of years. Dropshipping is a type of retail fulfillment that lets you sell products without managing, storing, or shipping inventory. Instead, you connect with dropshipping suppliers and source products to sell online. Customers check out on your site, then you forward the order info to the supplier, and the supplier fulfills the order.

Unlike traditional online retail, dropshipping releases the merchant from having to full fill their orders. That means you skip the time and cost of manufacturing products or acquiring stock, storing inventory, and shipping to customers. One of the main benefits of dropshipping is that it simplifies fulfillment processes for merchants. It can also reduce initial overheads and outlays which is important for entrepreneurs building a start-up eCommerce business, especially those operating on a small budget.

An Online Store can be of many types, before creating one, it is wise to do some research. If you are reading this guide, you have probably come to a point where you are ready to take action, so here are the steps you need to take to bring your idea to life. Sometimes, the best online business ideas are hindered by financial restrictions. But owing to digitization and the advancements in technologies, you can start an online store with a minimal cash investment in no time

Building your own online store can be a daunting prospect. There are so many things to consider, and it can be difficult to know where to start. Here to help you get things off the ground, we have the ultimate basic guide on how to start an online store.

Decide what to sell

First thing’s first, you have to decide what to sell. There are many blog posts on what products to sell that can give you inspiration, to begin with. Doing a bit of research will help you find out what’s selling well, what’s predicted to increase in demand over the following years, and where there might be gaps in the market. When you begin your market research, it’s useful to start mapping out your strategy to keep track of things. Here’s a useful e-commerce business plan guide to follow to get started.

To find the right products to sell here’s the basic framework you should be following:

  • Make a list of products you want to sell/ are passionate about
  • Check the demand for products on Google Trends
  • Check the demand on marketplaces like Amazon, Flipkart, and others
  • Take a note of their average pricing
  • Identify direct and indirect competitors/ other stores selling the same or similar products
  • Shortlist the products you can sell

Understand the different eCommerce business models

Don’t just jump in and start an online store. The first thing you need to do is understand the different models with which you can run an online store. This helps you understand how the business will work for you and also estimate the costs of setting up an online store.

Here are Some of the top business models used in the eCommerce industry:

  • Dropshipping
  • Makers
  • Manufacturing
  • Wholesale
  • Print-on-demand
  • Digital products
  • Direct to consumer
  • Subscription

Determine your target audience

One of the best things to consider when opening an online store is who you’ll be selling to. The closer you are to your product (or audience), the greater your chances of building a successful business.

If you already have a product idea, use that to determine your ideal customer. If not, consider an audience that you’re most familiar with. What products do you use on a regular basis? What do you value the most about your favorite brands? Or, who in your life are you looking to serve with your products?

As with any business, it helps to find a purpose that will keep you motivated in the long run. Ecommerce, after all, isn’t just sunshine and butterflies. There are numerous logistical and financial questions you’ll have to address. By reminding yourself why you’re running your business and for whom, you can better stay on track. To that end, take the time to establish buyer personas. Personas help you get into the mind of your buyer and, in turn, make decisions regarding messaging, website design, marketing strategies, and more.

Once you’ve brainstormed a few good ideas, take some time to make sure that it’s a realistic item to sell. Ask yourself:

  • Is your item easy to ship? With eCommerce, it’s best to stick with products that are non-fragile, lightweight, and don’t have a lot of moving parts. Shipping gets complicated when batteries or magnets are involved, too, so you may want to avoid those.
  • Where are you planning to sell? You may choose to sell on your website. Or you may choose to take advantage of multichannel selling and sell on marketplaces like Amazon as well. Each platform has its own rules of engagement. You’ll do yourself a favor by mapping out your grand plan and considering which products will sell best where.
  • Can you turn a profit? How much can you sell your product for? How much buffer should you factor in given your competitors, business costs, and any marketing plans? Make sure to calculate your estimated ROI early on so that you’re not caught off guard by your profit margins (or lack thereof).
  • How, exactly, will you manufacture it? You’ll need to find a manufacturer who can create your inventory in a timely, affordable, and consistent manner. It goes without saying that the more complex your item is, the more you’ll likely spend on materials, shipping, and R&D.
  • Are there any restrictions or regulations to be aware of? Certain product categories like food and beverages require special licenses and permits. Not to mention that some products may be prohibited on certain sales channels or ad platforms. 

Build your brand identity

When building your brand identity, you need to think about your overall goal, and what you want to be known for. To create the brand identity, you need to define the characteristics of your brand, the tone of voice, brand colors/style, and the behavior and habits online keeping this consistent across all forms of communication online will allow your customers to recognize you. Remember to have your target audience in mind when building your brand identity. The most successful brands are those that engage with their customers, in a language that speaks to them.

Find your product source

After you have a list of products, you’d like to sell based on consumer demand, you should look into how you’re going to get the product. If you’re building the product from scratch, you will need to look for a manufacturer that understands your requirements and is able to deliver quality. If you’re looking for products that are already on the market, and you want to act as a channel, you will need to find a supplier who can drop ship for you.  There are also traditional ways of exploring local markets and marketplaces to curate the products you want to sell online.

As you explore all options, you need to keep in mind the following:

  • What is the available budget for product sourcing?
  • Which of the ways costs you the least?
  • Which of the ways gets you the best quality of products?
  • What will be the timelines for product manufacture/ supply?

Calculate your product pricing

Taking into account what you intend to sell and how you’re sourcing or manufacturing it, it’s time to calculate the product pricing. This is a crucial step to starting an online store because it impacts the ROI you get on the investment you make no matter how small the investment may be.

While pricing your products, you need to:

  • Calculate the investment you are making
  • Estimate the profit you’d like to make
  • Calculate the selling price
  • Calculate the marketing price (including store setup)
  • Predict the profit you will make

Choose a platform to host your store

There are many available platforms to choose from to host your online store, so it’s wise to choose one with a structure that will benefit your business. As well to customizable site designs, we at Jump seller, for example, also offer a lot of support to cater to all of your needs.

From setting up payments to creating social media promotions, choose a platform that will provide you with all the tools to create a successful online store. Now that you are aware of the resources available to you after product sourcing and have an estimate of how much you can earn, it’s time to find the right eCommerce platform. The eCommerce platform you choose does not only make it easy to set up an online store but can have a big impact on your recurring investment.

Here are the important things you need to keep in mind when choosing an eCommerce platform:

  • Is it easy to use?
  • What are the additional costs associated (domain, hosting, security, etc)?
  • When will you need to upgrade your plan?
  • What are the added benefits it has to offer?
  • Does it offer customer support and service?

Select the right payment gateway for your store

Before you launch your online store and start taking orders, you will also need to identify the preferred payment modes of your target audience.

Post which, you need to identify the right payment gateways and the setup as well as maintenance costs associated with them.

Here’s what you need to do:

  • Identify the payment modes you want to offer in the store
  • Shortlist the payment gateways that enable the above
  • Evaluate on the basis of ease of set up, support, commission, and maintenance fees

Find a good shipping partner

Another place that your online store costs can quickly add up is your shipping. Most eCommerce businesses make the mistake of not evaluating the costs of shipping and delivery when chalking out their investments.

We recommend considering the following if you’re starting with minimal investment:

  • Identify the shipping options you want to offer (fast delivery, one-day delivery, etc)
  • Shortlist the possible shipping providers
  • Check for serviceability to pin codes you want to sell at
  • List out the costs associated with each provider
  • Add to business expenses to calculate the impact it has on your investment and the profit you want to earn
  • Add to the selling price (to estimate how much the customer will need to pay) 

Create a marketing plan

Once your online store is set up, the next step is to create a marketing plan. Your audience will not automatically find you online, so you need to reach out to them, via social media platforms, online forums, and, once you have generated some leads, through email marketing too.

With social media, you have the option of using both paid ads and organic outreach to engage with your audience and drive them to your site. There are various tactics that can be used to increase the click-through rate, from posting at strategic times to using branded hashtags and encouraging user-generated content.

For a newly started online store, some of the ways to advertise your store are:

  • Contact local publishers to get an ad published in local and national newspapers which have a wide readership.
  • Understand the advantages of running paid ads on social media channels like Quora, Facebook, and Instagram, since a large chunk of the GenY customers is active on these platforms.
  • Seek out target communities for marketing your product and services; these communities often help in connecting with the right set of customers.
  • There are some other marketing channels that you can examine, for example – influencer marketing, email marketing, referral marketing, and others.

Track your analytics

In order to get a good measure of factors such as where your traffic is coming from, drop-off rates on the site, and how many customers complete the user journey and make a purchase, you’ll need to set up and track analytics. There are various online tools that you can use, and tracking analytics is also a service that your host platform will often help with.

Measure, optimize, and repeat!

Measuring analytics is only beneficial if you use the data to optimize your approach. Both quantitative and qualitative analysis will give you insight as to what products are performing well, what marketing strategy is most engaging, and on the other side, to recognize what isn’t working.

Converse with your audience and use customer reviews to your advantage. The more you practice social listening, the better you will understand your audience and be able to meet their expectations. This practice is not something that should be done once to be continuously growing and improving, you need to regularly analyze and optimize your strategy.

All the very best for your Online Business!

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