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Business planning: How to plan and set up a new eCommerce Business?

Have you ever wondered what it would be like to be your own boss, be in full control of your own future and, decide how much money you would like to earn?
If you have answered yes to the above questions, then you will find some really good insight in this article. In addition, you will be able to access information that will get you started in your new business venture in no time.
Internet today has changed our lives. We saw the power of it during worldwide lockdowns due to the pandemic. Even though non-essential items were prohibited from being sold, we still had access to essentials such as food, medicine, bottled water, etc. Without the internet, it would have been very difficult for the government to manage a country-wide lockdown.
It is the power of the internet that gave birth to eCommerce. Amazon, which started by selling only books on the internet, now sells pretty much anything you can think of. There are billions of people in this world, and with sophisticated logistic channels and the world wide web, you can be sitting in the UK but can sell to people in remote parts of China.
This may have you start thinking about the enormity of this kind of business and the amount of money you can generate. You may also be thinking that it sounds very complex and may require a huge amount of investment. Well, you'll be glad to know if you understand the basics, you can soon be on your feet, and if you stick to our simple steps, you will be increasing your operations and your revenue in a blink of an eye.
What you will find in this post

Once you finish reading this blog, you would have gained a good understanding of eCommerce, and before you know it, you will have a fully functioning eCommerce business.

Without further ado, let’s get started.

 

What is eCommerce?

 Electronic commerce, the full word for eCommerce, essentially means doing business online. This can be in the form of goods or services. The most common type that everyone can relate to is ordering food online or doing clothe shopping. Can you remember last when you went into a physical store and shopped? With online shopping, you not only have access to a much larger variety of items, but you don’t have to wait around in queues, and your order gets delivered to your doorstep the next day, or on some occasions in a few hours.

Ecommerce has seen rapid growth worldwide and is expected to be worth a whopping 599.2 billion USD by 2024. Due to the pandemic, there was a 30% increase year on year, and this upward trend is not going to stop any time soon. As more high street brands close their expensive shops and aim to shop online, we have yet to see eCommerce in its full galore.

 

How does eCommerce Work?

eCommerce essentially uses the same model as a traditional physical business shop will use, but with a twist.

A customer visits your online store and browses through your catalog. If they like an item, they will add it to their bag and continue the purchase process. Once paid via their bank card, the customer will get an email sent to them to confirm that the order has been placed. A follow-up email is then sent advising them of the period they should be expecting the delivery, along with the details of the courier and the tracking details. After this, the courier company (if outsourced) will be informed, upon which they will collect it from your premises and have it delivered to your customer.

 

How to get started?

Let’s get on to the subject that you have been waiting to hear this whole time. We have developed an 8 step process for you, which, if you follow, you will be able to have your eCommerce up and running in no time.

Step 1

Figuring out what you want to sell is probably the most crucial part of your eCommerce business journey. First, you want to make sure you have the passion and desire for that particular product. This is extremely important as your passion will drive your business forward, and it is what will set you apart from the rest of the competition.

Step 2

Understand what your niche is. If you want to sell dog products, research which exact dog product you want to niche in. Food, toys, clothes, beds, etc. You also need to make sure that the niche you pick needs to be high in demand and produce a decent profit.

To figure out a niche, you may want to try some of these methods:

a) Search for Trends online

Browse through various online market places like Amazon, eBay, Alibaba, etc., to understand what items are getting the most interest.

If you think this task may be a bit too mundane, you may want to try an online tool called Jungle Scout. This will help you be a lot more efficient in your search and throughout your eCommerce business journey.

b) Keyword Search

This is another interesting tool to help you find what terms or keywords people use to find particular products. Once you compile data of these keywords, you can make your products searchable on the internet.

You may be wondering how on earth do we go about searching for keywords? Well, where there is a problem, a solution is not too far. We have listed some of the tools that you may find useful in no particular order.

–           Keyword Tool

–           Helium 10

–           Keyword Everywhere

–           Sonar

Step 3

Once you have recognised a product that you think will sell and have passion for it, it is now time to make sure you can source it from good quality suppliers. The traditional method of doing this is by searching for suppliers who sell your selected product and placing a large bulk order with them. You will then arrange a warehouse to store these products and arrange a courier service company to have the products delivered through this warehouse.

You may now be thinking all of this is going to cost me a lot of money. Well, that’s why we mentioned the word ‘Traditional’. However, eCommerce has now evolved, and there is something for everyone now.

For yourself as a start-up, there is a high probability that you don’t have much investment, and even if you do, you don’t want to spend it all, just in case the products you ordered don’t sell.

‘Dropshipping’ is the solution. Dropshipping is the business model that has become extremely popular with new entrepreneurs due to its low entry cost. This method allows you to bypass all of the above and let the suppliers handle it all. In essence, you will set shop online, and for any order that comes through, the supplier will directly ship it, without you to ever buy the item or store it. You pay for the items as and when they are sold, so you have nothing to lose.

Here is how you go about setting it up:

a) Visit a drop shipping supplier’s website, Amazon, Ali Express, etc., and find a product your want to sell.

b) Head to your eCommerce website (Discussed later) and post your product there for a higher price.

c) Customer purchases the order and fills out all the necessary details for the order to be delivered to them.

d) You transfer the amount to the dropshipping supplier.

e) The supplier will ship it off to the customer once in receipt of all the information.

As you can see, you can make money out of thin air. It only requires a lot of time and effort. Also, make sure the supplier you chose is reliable, as your whole business will be reliant on it.

The best players in the market are:

–           Dropship direct

–           Ali Express

–           Oberlo

They essentially buy in bulk from suppliers and sell them to you.

Step 4

Now that you have a good idea of what you want to sell, from where and how. You can move on to the next step of creating an identity for yourself online and a platform from which you will ultimately sell your items. This platform is in the form of a website or a digital shop for your customers to come in and browse. (Read on to know how to create an eCommerce website)

To create an identity, you need to make sure you have a catchy name and is available to use in the market. In other words, it hasn’t already been taken up by another existing business. You can use a tool called Bust A Name. Once you have a list of potential names, you want to use, head over to companies house and search if a company by that name already exists. Also, check if the domain exists by searching on godaddy.

Step 5

Now you have the concept and a complete understanding of your business. It is time to make it official. Either you can register yourself as self-employed or register yourself as a ltd company. You can find more about which ones to chose here.

Step 6

To have a clear understanding of your goals and objectives, a business plan acts as an anchor. It is a document you will refer back to and will continue to update as your business evolves.

Here are a few headings to get you to start thinking in the right direction.

a) SWOT

Here you will explain what your product’s strengths, weaknesses, opportunities, and threats are. Essentially, you will explain what problem your item is solving, if there are any negatives that may not resonate with people, are other people are selling it, and if there are others in the market, how to compete with them.

b) Target Market

Making sure you are speaking to the right people is important. The target market is essentially the kind of demographics that would be interested in your product—age, gender, interests, etc.

c) Marketing

Having a website Is one thing, but how do you let other people know that you are selling these products. You would need to outline some strategies that you will use to gain customers.

d) Schedule and Operations

Making sure you are clear on your tasks is important. Now that you will be running your own business, you will have to be very disciplined with your time. Prioritising your tasks will be essential, and delegating the work that you think you may not be able to do would prove efficient.

List down your tasks, and make a blueprint of which tasks are done by who and when.

e) Financial forecast.

No business plan is complete without a financial forecast. A good understanding of what expenses you are likely to have would ensure you stick to your budget and not risk blowing your funds.

Making a realistic sales forecast will help keep you on track and benchmark your actuals against your targets.

Step 7

Now is the time that you can finally get cracking. Creating your website will be extremely exciting; it is when your business will finally start taking shape. As we have chosen to dropship, you will have to choose an eCommerce platform.

Most people who are new to eCommerce business would be a novice at building websites, and so a fully hosted eCommerce website would be the best option to start from.

This will be automatically created for you when you sign up, there will be a subscription fee, depending upon how big your store is.

Some of the biggest ones in the market are:

–           Shopify

–           Big Commerce

–           Volusion

Step 8

Now that you have a fully functioning business, you want to make sure that customers looking to purchase your products searchable. Just like you outlined in your business plan your strategies, here are some suggestions.

1)         Social Media

Facebook, Instagram, Twitter are just some of the popular ones you can use to promote your products. By creating content and connecting with people, you will be able to showcase your products and potentially create a whole lot of money for yourself.

2)         Google Ads

This can be costly if not performed correctly. These are essentially the links you find right at the top of Google when searching for something you are looking for. Make sure you look into this properly and have a tight budget.

3)         Email Marketing

Once you start creating a sales funnel, you can use all those emails to send monthly or weekly newsletters to your customers. This will entice them to buy again, resulting in repeat customers.

4)         SEO

Search engine optimisation is probably the slowest method, but nonetheless, it is front and centre in the game of marketing. If done correctly over time, your website will start ranking high in google searches, and with that, it will bring a lot of sales.

If you found this article of interest and would like further guidance on starting an eCommerce business, head over to our contact us page to book your free consultation.

About the Author

Bilal Khalid

CEO, Accountant

Bilal Khalid EvoTax accountant

Successfully running my own small business for years has taught me a great deal about the complexities of taxation and I understand all the pain points that every entrepreneur has to go through. I often found myself paralysed with fear of making a mistake and getting fined and eventually decided to take up accounting and finances myself. Today, I help other small businesses suffering through similar mistakes and I am happy to share my knowledge, jargon free!

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