Estimated reading time: 7 mins
You no longer need a shop or stall to sell things. Many retail companies operate exclusively online. Starting up such a business can be very profitable, however there are many laws to be followed and measures that need to be taken if you want to be taken seriously. Here’s some important things you need to know in order to be successful with your e-commerce venture.
Buying and stocking your inventory
You first need to decide what you’re going to sell and how much of it you plan to keep in stock. If you’re not making the things you sell, you’ll need to find distributors and manufacturers to buy from. Start with a small inventory of things you know you will sell – you can add to it later.
It’s illegal to advertise items for sale online that you don’t actually own. The only exception is drop-shipping in which you act as a listing site for other sellers (a bit like Amazon) and they are in charge of their own inventory. You’ll need to do a regular stock take and replenish items on a regular basis. Downloading stock take software is useful for speeding up this process and keeping clear records.
Decide where you will store your stock. If you don’t have enough room in your home or simply want to keep your business separate from home life, renting self-storage or renting a warehouse may be required. You can share warehouse with other people to cut costs at first until you have a large enough customer base.
Creating a website
You’ll need to come up with a business name and brand before building a website. Decide on a domain name and check that no other websites have your chosen address. Your next step is to buy that domain name – you can do this through the likes of Go Daddy.
Next you need to build your website. Most people will use an easy website builder tool such as Shopify. If your design skills aren’t up to the mark, you can hire a Shopify website designer to build a website for you. You can even sidestep Shopify entirely and invest in a web designer to build a site entirely from scratch exactly to your liking. Once you have a working website and inventory, you can then start to market your business.
Marketing your business
There are many forms of marketing. Creating a social media page for your website may be your first point of action. You can use this to promote your business and grow your client base. Facebook and Twitter are the main social networks that you want to use. Instagram is an image-based social media platform that may also work for some businesses. You can also sign up to LinkedIn – a great site for networking with other businesses.
Grow yourself a following on social media by inviting all your friends and family to join. Persuade clients and visitors of your site to follow you by adding a plug-in on your website.
Online reviews are very popular nowadays and you may wish to enable them on your site. Lots of positive reviews can make your business appear more credible. Negative reviews can be damaging – moderate these by responding apologetically to sincere negative criticism and reporting and blocking trolling. You may wish to use a PR company to try and get some professional reviews of your service.
There are many other digital marketing tactics such as SEO and PPC ads that you can consider. These will involve paying professionals, so make sure you choose a reputable marketing company. You may be able to think of other creative DIY ways to market yourself. Blogging is a popular way of attracting new visitors – you can run a blog section on your site or write guest posts on other people’s sites.
Network heavily and you will create new marketing opportunities. You may be able to find another business to cross-promote with – you promote their service and they promote yours. Alternatively, you may be able to pay an internet celebrity or recognised figure to endorse your product.
Come up with creative promotions and deals that are likely to get initial interest and build up your client base. Competitions are popular form of promotion, especially if you’re offering a freebie. Offering coupons or vouchers to past clients may also lead them to return. Use social media to shout about these promotions. Keep tabs on competing businesses so that you can undercut their prices or offer different services.
Once you sell items you’ll need a system for shipping them. Many people will rate an e-commerce business on how quickly they are able to ship the item, as well as the cost of shipping.
You need to be making enough profit to cover the cost of packaging and delivery. As a startup, you may be able to rely on companies such as FedEx and UPS to handle your deliveries. You may want to limit deliveries to your country first to save costs and then expand overseas later. Eventually you may grow to a size when you need more elaborate shipping process such as using multiple delivery companies or opting for drop-shipping.
Costs of shipping can also depend on the items that you’re delivering. Large and heavy items for example will cost much more to deliver. Fragile items meanwhile may need more complex packaging. A private carrier might be better suited when it comes to such awkward items – the likes of UPS can handle the last leg of delivery.
If you’re hiring private carriers, you may want to download some form of analytics software so that you can monitor the delivery. Such software allows you to see where the package is via GPS and you can even share this information with the buyer so that they know at all times where their package is.
Handling the admin
As with any business, there’s a lot of paperwork to consider. You will need to register your business either as a sole proprietor, partnership, corporation or LLC. Each has their benefits and their disadvantages, so look these up before committing to one (if you don’t choose a business structure you will be automatically registered as a sole proprietor).
You must then notify the taxman of your business. Once a year you will have to do a self-assessment tax return. These means keeping a record of all earnings and expenses so that you know exactly how much tax you need to pay.
Accountancy software is worth downloading to automate this process making your tax calculations faster and more accurate. Alternatively, you can hire and accountant to do your book-keeping.
If you’re hiring staff (e.g. warehouse operatives, private carriers, private accountants) you’ll also have to handle all their paperwork. This will include calculating their hours and possibly creating a rota if you run a round-the-clock business. HR software may be able to help with this.
There’s a lot of legal paperwork to consider too. It’s worth having a solicitor on call that you can use for legal advice. You may want to get terms and conditions for clients professionally written up so that they are tight and you cannot be wrongly sued. Contracts for employees should also be professionally written up.
Insurance schemes can also be worth taking out to protect you from any further legal problems. Employer liability insurance is compulsory if you take on staff, so take this into account. Product liability insurance meanwhile is an optional form of insurance that allows you to refund anyone that receives a faulty product. You may also want to consider property insurance if you own a warehouse to protect against fire, theft and other disasters. There are business insurance bundles that can cover all of these angles to lower costs and keep things more organised.
Getting all this admin sorted on top of buying inventory and paying for shipping/packaging can all add up costs. It’s therefore worth writing up a business plan first so that you know exactly how much money you need to start off with to get your business of the ground. There are business loans out there that you can take out if you aren’t able to raise the funds yourself. You may be able to use a loan broker to find the best loan for you.
You may be able to delegate various admin tasks to a personal assistant once your business is doing well. This may take some of the pressure off allowing you to focus on marketing and other roles. If you’re selling products that you yourself manufacture, it could be worth having a business partner to handle all the business side whilst you focus on creating the supply. Find the least costly and most productive method for you. Business will be slow at first and you may be able to juggle all roles, but once things start picking up they may pick up fast and you want to have a plan for making the next move so that you can meet the demand.
Check out these similar posts:
- Essential Things to Know When Starting a Drop Shipping Business
- How to Keep your Warehouse Efficient and Productive
- Business Automation: Where Should You Start?
- Keep Stock Safe At Your Small Business
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