You visited the plant operations in China. You were impressed by how your company’s product is being produced. You still have a few days to explore the city to do leisure stuff. You decided against it and asked your contacts to organize more meetings for you instead. You want to explore the possibility of starting an e-commerce business. You’ve been thinking about it for some time now, and this trip to China reinforced your idea. You aren’t thinking yet of an industrial type of operation with multiple products like Amazon or Alibaba. You want to start with something lean and small. How do you start? What kind of marketing services do online stores require?
Let’s explore.
The Age of E-commerce
It’s been 25 years since Amazon revolutionize the way people shop. Just five years after Jeff Bezos founded Amazon, Jack Ma co-founded Alibaba.com, the mega business-to-business e-commerce platform.
The e-commerce industry in the US recorded a whopping $546 billion in revenue as of July 2019. There are nearly 230,500 e-commerce businesses in America, powering the 14.1% industry growth rate.
Initial Steps
This is one of those businesses where the very first thing you need to do is to think of a name and then register that as a domain name. This is key because if your business would last a long time, then you want to own a good name. It should be a name that reflects your business, like ScentsByLucien.com if you’re selling perfumes or other aromatic products.
Simultaneously, you would have to take care of all the legality, like registering your business entity (e.g., sole proprietorship, partnership, corporation, etc.).
Business Model and Products
China is an excellent place to source many different products, from lipstick to pajamas to electronic devices. Selling multiple products is one option. Note that you would need to find a reliable and consistent supplier if you’re going to follow this model. Also, you would have to contend with physical storage. If you aren’t prepared to order in bulk and house a large inventory, then this model might not be for you.
You can also opt to do a single brand option or single product option. China, as a source, is still at play. The only difference is that you need to decide on a brand or line or item to sell, e.g., electronic items related to music like earphones, speakers, or music players.
A more exciting option is to sell your product line. This option allows you to create your brand via your product. It could be fashion jewelry that you make yourself or a special kind of hot sauce. You need to respond to customer’s demands. This requires building a bigger team.
The critical thing about e-commerce is to create your persona, find a niche market, and provide products that solve that market’s pain points.
Building Your E-commerce Platform
Your next step is to build your e-commerce website. Budget between $5,000 to $10,000 for your e-commerce website. You would also need to pay for the cost of hosting your online store. Building your team to create the website would probably cost more, but you have more flexibility when you want changes or additions to your site.
You need to incorporate a safe and secure payment system. Some third-party vendors can help you with this.
These are the main areas that you need to focus on. For your business to remain sustainable, you must get the pulse of your customers and provide products that they need rather than products that YOU think they need.