How to Start Your First eCommerce Business10 min read
With the explosion of information technology and the digital industry, eCommerce develops as an inevitable consequence. Accordingly, the number of online shoppers increased significantly, by the end of 2020, e-retail sales exceeded US$ 4.2 trillion worldwide, with the number of digital shoppers has reached more than 2.14 billion people compared to only 1.52 billion people in 2016, it is about 28% of the total population worldwide. Or to put it more easily, there are more than 1 in 4 people around you who shop online. This increase is not surprising given that internet connectivity has pervaded the world and online shopping has become increasingly convenient.
With the trend on the rise, the potential for an eCommerce store is huge. Starting with an online store and diving deeper into these eCommerce stats will help to build eCommerce store owners better understand online shopping trends and expand the business in the fertile online market.
Through this article, we hope that we can help start-ups or businesses that are intending to open an online store to have a better overview of the eCommerce industry, thereby further accelerating the country's industrialisation modernisation.
Let's find out together!
What is eCommerce?
eCommerce, also known as electronic commerce or internet commerce, refers to the buying and selling goods or services using the internet and transferring money and data to carry out these transactions. eCommerce is commonly used to refer to the sale of physical products online, but it can also describe any commercial transaction conducted through the internet.
eCommerce refers to any commercial transaction conducted through the internet
While e-business refers to all aspects of an online business, eCommerce specifically relates to the goods and services transactions.
Like traditional business, looking at the parties participating in the transaction, eCommerce sites can be classified. These typically include:
- Business to Consumer (B2C): When a business sells a good or service to an individual consumer.
- Business to Business (B2B): When one business sells goods or services to another.
- Consumer to consumer (C2C): When one consumer sells goods or services to another consumer.
- Consumer for Business (C2B): When consumers sell their own products or services to a business or organization.
Pros of eCommerce
- One of the most significant advantages of selling goods and services online is the unlimited geographical location. Wherever your business is, you can sell to any consumer anywhere in the world. The customer database is open, so you can reach the desired customers while sitting at home or sipping a cup of coffee.
- The second plus point that cannot be ignored is that online sales take place 24/7., Tthe store owner's job is to post the products for sale and deliver them the following day, even if the transaction is made at night.
- Cost is always a complex problem for businesses, so for eCommerce, your business will not have to spend expensive space costs or hire a staff to stay at the store for 8 or 10 hours a day. The number of employees required to operate an online store can be as little as one-fifth that of a brick-and-mortar store or even less.
- By dropshipping, businesses will not have to worry about dealing with extensive inventory and warehousing costs. The store can ship goods to consumers directly from the manufacturer.
- Because it is an online virtual store, businesses can freely increase or decrease the size of their business based on reality without being affected by any relocation, renewal or repair of infrastructure to meet the needs of business demands.
Cons of eCommerce
- Compared to a traditional store, it is much easier to interact and retain customers by creating a relationship when buying and selling goods and services., Still, but for an online store to do this, it is necessary to use means of support such as email or live chat, but this is often less effective than face-to-face communication.
- We cannot deny the convenience of electronic transactions. Still it has to be said that by electronic transaction methods, you will face problems with system errors, interface errors, payment problems. Moreover, the system crashes, etc., any technical error that occurs will bring unexpected inconveniences in terms of time-consuming to close the shop for maintenance, patching…
- In the era of information technology and digital application, the competition becomes more fierce than ever. There are thousands of online businesses that exist and create new ones every day. Attracting customers and standing out from the crowd is also a challenge for businesses when they want to build an online store.
How to start an eCommerce business?
While there are notable differences in starting an eCommerce business versus starting a traditional business – there are also some similarities. As we'll discuss below, many of the planning and legal steps you need to take will follow the same (more or less) process. However, when it's time to get up and running, you'll find that starting an eCommerce business can be significantly different than you imagined.
Product to sell
The first step to building an eCommerce business is knowing what products you want to sell online, wholesale, or sell directly to consumers. This is often the most challenging part of starting a new online business. Choosing the wrong product can lead to very severe consequences for the business.
By conducting market research on the consumption demands of customers, especially online customers, and analyzing competitors, it is easy to find products with business potential. Research for your business plan. A business plan is a road map that helps bring the ideas and thoughts in your head together and put them on paper. A business plan is important in determining what to prioritize and how to reach new customers effectively.
In addition to figuring out what to sell, another challenging decision is determining your business name or brand name. An eCommerce website needs a domain name. A domain name is an online address where shoppers can find your business's website. Most online business domain names end with “.com” or “.net”. The domain name must match the name of the business as much as possible as this will greatly affect the search engine optimization (SEO) performance later on.
Build your store
While opening an eCommerce business can be relatively easy, you need a few things to get started. Here's a rundown of everything an entrepreneur must have to open an eCommerce business:
- Web hosting service: You will need a web hosting service to publish your website online for shoppers to see. These services store the data files that makeup web pages, including images, product tissue information, and more. Then upload those files to the web for website visitors to view through the official domain name of the website.
- Website Development: Giving your website its own unique personality will help set you apart from your competitors. Treat your eCommerce site as a physical store. Give it a unique style that can keep your customers coming back again and again. Make visiting your eCommerce website a habit. Of course, this should be done in a minimalist and smart way based on user-friendly design, high security, fast response speed, and above all, a reputable quality product.
- Mobile application: Just as important as website development, today's mobile devices have almost become an integral part of modern people's lives, so with many people buying directly from their smartphones, it will be much more convenient than having to turn on desktop or laptop. Your website needs to be optimized specifically for mobile devices, which means it dynamically resizes and layouts for easy browsing on smaller screens. Or you can also consider creating a special app that customers can download to attract them.
- Shopping cart software: indispensable software for eCommerce sites. The software helps shoppers search the business's inventory to see what's available, select the items they want to buy, and finally purchase them. In addition to transaction support, many shopping cart software options include features for inventory control, shipping setup, and tax calculation.
- Merchant services provider: one of the characteristics of eCommerce is online payment, customers and businesses will not be able to pay each other directly, but must go through a secondary unit, the service provider. Also known as credit card issuers. Thereby, the provider acts as a custodian of debit and credit card payments that an e-commerce business earn and will collect a specific commission as a payment intermediary.
However, the easiest way to set up an eCommerce website is through eCommerce platforms available in the market. This is much more convenient, less expensive, and much less time-consuming than having to resort to the services of a professional web developer to create a website from scratch. eCommerce software simplifies the online store opening process by guiding owners through every step of the process, including domain name registration, website design, uploads, and inventory management, connecting to the shopping cart and providing secure payment options for shoppers.
Most eCommerce software providers charge online businesses a monthly fee for their services. While most of the top software providers are free to set up, the monthly cost can range from $15 to $300 a month depending on several factors, including the size of the store. online shopping and the number of software services the business owner needs.
At Groove Technology, we have done extensive reviews of many eCommerce software options. Here are its top three options:
- Shopify was one of the first eCommerce platforms to gain significant popularity. With over 250,000 online stores currently running on the platform. You can upload unlimited products to your Shopify store, and best of all, there are no transaction fees. That's an important factor to keep in mind if you expect a large number of sales. Depending on what you need (and the budget you have), you can choose from Shopify plans that range in price from $29 to $299 per month. Shopify is considered to be the best choice for selling clothes, furniture and digital books.
- Bigcommerce since its inception, BigCommerce has supported more than 55,000 stores and has become one of the most recognized eCommerce platforms. It is used by companies of all sizes and is very useful for people with no programming knowledge and newbies. The price of the packages also ranges from $29 to $299, but additional fees are required to use the ancillary applications.
- WooCommerce is a free, open-source platform designed to integrate seamlessly with WordPress and requires intermediate or higher coding skills. It is mobile-friendly, ensuring that your web store will look great on any phone or tablet. You can add free plugins to your store to get powerful new features. The only downside is that some of the advanced plugins cost money.
What makes an eCommerce store successful?
Running an eCommerce business is not easy. Just having one store and a few items for sale doesn't mean people will flock to and buy your products. There are things you can do to try to make sure your store gets frequented:
- Focus on the User: Identify the target audience of your online store and focus only on them to meet their needs, images, styles, products,… don't be greedy to please everyone, you will lose focus!
- Test with a group of customers: do surveys on how they transact in your store. How long does it take them to find products in stock? Is the website responsive as expected? Is the payment process fast or slow? And in the end, are they satisfied with their shopping experience in the store? Check out a group of people you trust and listen to them to improve the quality of your store!
- Be Mobile Optimized: a popular and successful store is when it can launch on any device's browser, whether it's desktop or mobile while ensuring a perfect user experience , so be sure to keep a mobile version handy!
- Invest in SEO: SEO drives traffic to your store, so miss them, find a good consultant or agency if you have the budget or start by learning about commercial SEO eCommerce and apply relevant strategies to your store to ensure maximum advertising effectiveness.
- Update inventory frequently: Hot-selling products tend to disappear quickly, which is why inventory is so important. Constantly looking for new product ideas that can keep traffic coming to your store. Don't rely on just a few products to drive all your sales. Instead, offering new products to your existing customers and regularly testing new product ideas based on Google Trends will greatly help with new product listings.
The eCommerce industry will continue to grow. Over time, eCommerce will continue to take away market share from brick-and-mortar retailers as it has in the past few years. This is good news for those looking to start an online store as sales will continue to grow, although competition will also increase in this area.
What is eCommerce? Small and medium businesses when starting up do not need to put too much emphasis on this issue anymore, let reputable service providers deal with eCommerce concerns. eCommerce is changing and this is an exciting time to be a part of it.
Come to Groove Technology to join the high-tech flow!