Running an e-commerce business is very lucrative due to low startup costs, high returns on investment, and the ability to reach millions of potential customers. People all over the world are turning to e-commerce to make an extra income or even replace their 9-5 jobs. The most profitable online business is undoubtedly Amazon FBA (Fulfilled by Amazon). This means that you buy products from a wholesaler, send them to Amazon’s warehouse, and they will sell the items on your behalf. Since you don’t need any stock of your own (and no risk involved), you only pay for the products once they’re sold.
What is highly beneficial about this business model is that Amazon takes care of everything: payment processing, customer support, shipping, and returns. Starting an Amazon FBA business is fairly simple, but it does require some initial investments to acquire the products.
As an online retailer, you have the choice of selling your own merchandise or purchasing products from wholesalers, repackaging them with your logo, and selling them on other platforms.
Things You Need for Your E-Commerce Business
The domain name and web hosting
While you don’t need a website to start selling online, having your own website will give you more credibility for customers. There are multiple options when it comes to hosting. Many web hosts offer free domains if you host with them, but they usually have strict rules about bandwidth usage and whatnot. You can also purchase your own domain name and use it with any hosting service.
Online selling platform
There are many platforms to sell your merchandise, but eBay is probably the most popular one for beginners since it’s well-established in terms of trustworthiness. You can also try to sell on Facebook or Craigslist. We have a guide on how to open an online store with Shopify.
Name, address, and phone number of a registered business
You can purchase a DBA (Doing Business As) online for as low as $50. To be found by search engines, your website or shop name should contain the keywords that best describe your business. If you’re unsure about your business name, you can use a temporary website with placeholder text.
When it comes to receiving packages, you have the option of working with a courier pick-up service provider or simply doing self-pick-ups at your local post office. Many online retailers work with DHL, UPS, and FedEx since these services are reliable, offer discounts, and can track packages for you.
Tax ID number (or EIN)
If your business is a sole proprietorship, you will need a Federal Tax ID number to open a business account online. You can easily apply for an EIN by filling out an SS-4 form and submitting it to the IRS.
Time and patience
Running an e-commerce business will not be easy at first. You need to set up your website or eBay store, create listings for your products and constantly promote them if you want to succeed. It’s important that you don’t give up after the first few weeks and you keep looking for new products to sell.
You need a payment gateway to process payments and keep your funds safe. PayPal offers a great solution for new online businesses, but it comes with higher fees than other alternatives such as Stripe or Square.
There will always be customers who want to cancel their order, return the product, or ask questions. It’s important that you provide your phone number and email on your website and list all policies for returns and refunds. Even though customer support is stressful at times, it makes you look more trustworthy in front of potential customers.
Customer feedback software
Many online shoppers consider customer reviews to be critical when making decisions about purchases. Feedback Genius is a great plugin that will help you gather reviews from happy or unhappy customers. You can also use it to solicit feedback from your Shopify store visitors.
Logo and pictures
Your logo is what customers remember the most about your brand, so it’s important that you have a professional design. You can buy a logo on a stock photo site or find a freelance designer. Professionally-edited photos are equally important.
If you want to be found online, it’s important that your website is properly optimized. There are plenty of SEO services, but Moz Local will help you with the location part of the equation. You can also start by doing some basic search engine optimization on your own.
Even though opening up an online store will require some initial investments, you should always try to think long-term when starting a new business venture. If you decide to start selling online, you will need to create listings and take good product photos. You can choose to hire a freelancer for these tasks, but it might be more beneficial to learn how to do this yourself.