The internet’s increasing availability and integration have paved the way for e-commerce to be a staple in today’s retail landscape. By 2027, it is projected that 22.6% of global retail purchases will be made online. That means nearly a quarter of the world’s market will be hosted on the internet.
For entrepreneurs, this projection means developing an online retail business is not only a great opportunity but highly lucrative as well. That being said, knowing an opportunity exists and capitalizing on it are very different things.
For a beginner in the e-commerce space, knowing where to start can seem quite daunting. Here are several steps to get you on the path toward maximizing your earnings and creating your e-commerce empire.
Consider the E-commerce Landscape
E-commerce is a diverse and complex industry. While the face of e-commerce is a storefront, a lot is going on behind the scenes.
Those interested in the industry have many e-commerce career paths available. For example, software developers create the websites e-commerce relies upon, while digital marketers use data insights and advertisement to reach new audiences. Meanwhile, user experience (UX) designers make every platform usable while security analysts keep data safe. These are just a few examples of the giant e-commerce ecosystem.
Besides career paths, industry businesses specialize in different markets, some of which cater to other businesses. These markets include the following:
- Business to consumer (B2C): Selling directly to the customer.
- Business to business (B2B): Selling wholesale to another business.
- Consumer to consumer (C2C): Selling from one customer to another.
- Dropshipping: Selling to a customer and shipping directly from the supplier.
- Digital products: Selling digital goods like photos, apps, video games, or software.
- Digital services: Selling digital services like web development or cloud computing.
- Subscription services: Selling recurring services like content subscriptions.
Regardless of which style best fits your entrepreneurial agenda, understanding these different e-commerce models will allow you to go beyond brick-and-mortar solutions and better navigate digital growth and expansion as a company.
Choose a Business Direction
After familiarizing yourself with the e-commerce landscape, you will need to refine your entrepreneurial idea. Here are three questions that all businesses must answer to get you started:
- What’s your product?
- Who’s your customer or target market?
- How will you get the product to that customer?
For example, if you’re starting a craft-based Etsy business, your product will be a handmade good or design, your customer will be the demographic that your product best serves, and you will get your product to this customer through Etsy’s online marketplace where they can search for and purchase your goods from anywhere.
Once a direction is established, you will need to formally create a business entity. This entails drafting a business plan, choosing a business structure, registering your business and getting the appropriate permits, and finally setting up a business bank account with start-up funding.
Setup Your Online Storefront
After creating a formal business entity, you will need to populate it with your products. This setup phase is where online and brick-and-mortar businesses truly diverge. Online businesses are primarily hosted on e-commerce platforms.
E-commerce platforms are software created specifically to facilitate electronic transactions. They traditionally support websites, ensure traffic capacity, and secure online payments. When building an e-commerce website, there are three main types of e-commerce platforms from which to choose:
- Open source: A platform that offers open-source code for anyone to use.
- SaaS or software as a service: A platform specifically designed for e-commerce powered by a service company.
- Headless commerce: A hybrid platform that separates general web content from secure e-commerce payments.
Security is a fundamental part of operating an e-commerce site. Your online store will hold a lot of customer data for both marketing and transactions. Creating a comprehensive security system can cost a lot more time and energy than you bargained for, so consider investing in cyber insurance to protect yourself should the worst come to pass. Many online shopping platforms like Shopify have rudimentary cybersecurity, so a layer of insurance can give you the financial security you need in the event of a breach.
Upon choosing the right e-commerce platform for your needs, it’s time to customize your online retail space. You will need to purchase a web domain, set up your website, populate it with your products, set up your payment and shipping options, and then test your system.
And with that, the final step in your e-commerce journey is simply to reach your customers and start selling!
