How to Start and Online Store / eCommerce

How to Start an Online Store

Starting an online store today is not very difficult at all because everyone is doing it, so there are loads of companies with solutions at competitive prices.

So lets evaluate what need to be done in basic Steps.

Step 1 Establish a Business model
Step 2 Define your Product or Service
Step 3 Research your Customer Base
Step 4 Evaluate Profitability
Step 5 Set up legal and accounting system
Step 6 Set up Domain Name and Hosting with eCommerce
Step 7 Advertise
Step 8 Sell and Make money

Step 1: Establish a Business Model

Obviously the first thing you need to decide is what to sell and how you will sell it. Maybe you want to sell home made wines. Will you be a discount brand or a premium brand? Will you maybe offer a wine of the month club or some type of membership model like Walmart's Sam's Club?

This is not only important because it is your entire business but when choosing your ecommerce platform it will need to support your business. If you want members, that is quite specialized and you won't be able to just use any old shopping cart for $10 and run your store. You might need custom programming or even a completely custom solution.

Companies like Walmart don't even blink at paying webmasters $100,000.00 to work on a website, but you might. So it is a good idea to research what solutions are available before you build a business around a model that may be cost prohibitive to implement.

Step 2: Define your Product or Service

Once you know what is available, then set up the product or service in such a way that you can sell it online. Will you sell just wine? Or maybe wine and beer, or wine gift baskets.

It will be important to build a brand. Will people come to you because you are cheaper, or have more choices or you sell a premium product?

Having a direction is very important. Can you expand you line? Are you prepared for market changes?

If you sell frozen shrimp and that is all, what happens when the season is bad and the cost doubles? Can your business survive? Maybe you want to sell a few items so there is less impact from market trends or seasonal variations.

If you were selling "Partially Hydrated TRANS Fat" products when that became unpopular you could go out of business if you did not offer an alternative for the more healthy conscious.

So create a line that will be solid, one that will help through bad times and insure good cash flow.

Of course many companies make money on one product, but that is risky and can sometimes be very dangerous if you have a monthly overhead and changing sales volumes.

Step 3: Research Your Customer Base

Too many products are sold without every finding out if anyone will buy them. Companies spend a bunch of money to launch products that will never sell, because they are just bad ideas.

Just because 500 other people sell the product does not me there is money in it.

So evaluate whether you will sell in certain markets, who will buy ad how can you reach those buyers.

What will your customer acquisition cost be? How much will you need to spend to get each customer? How much will that customer buy over time? What will be the reorder rate?

If you sell wine and it is good, chances are people will reorder. But if you sell Screwdrivers or Wrenches, people only need them one time and will never reorder so getting sales is much more costly since you always need to continue to acquire customers.

Step 4: Evaluate Profitability

Will this business make money? Do the numbers add up?

What will you spend on marketing, what will your website ecommerce solution cost and what is the bottom line?

Before you embark on building an online store you need to figure out if you will actually make money. 99% of the website owners never do this resulting in millions of closed websites.

If you get an online store from pageBuzz.com and it only costs $20 a month, that is not a lot of overhead. But if you use a larger provider and the store is $300 or $1000 a month which is common, you have to sell a lot of products just to cover the hosting.

What your expenses are will depend on your business model, so establishing the right business model is important to the success of your business overall.

Step 5: Set up Legal & Accounting Systems

You will need a few things here. One, a way to keep track of sales, a bookkeeping system like Quick Books. You will need a Tax ID for your state, a Federal ID if you pay employees and paperwork establishing your business as a DBA, Corporation or other entity.

You will need a merchant account or some way to collect payments, checks or use something like Paypal.

You will need a bank account, checks and likely a company debit card or credit line to buy inventory.

You might consider trademarking your name or getting other legal protections as you build your brand. If you build a brand like 1800flowers.com you don't want someone to go out and start 1800flowers.net, so having some legal protections in place are advisable.

Step 6: Set up domain name and Hosting

Now the fun part. Assuming you have a name that is available you will need to register that and get a website that can support your product.

Using a system like pageBuzz is a good idea because it is inexpensive and we are a bit more flexible than companies like Godaddy. We can often modify programming to include extra features at no cost to the customer where as other systems that are even more expensive cannot make changes. So if they don't have a feature, they just don't have it and you are out of luck.

So work with a company that can support you as you grow ad will be reliable and flexible as you realize new products, ideas and market trends.

You can hire a programmer, but if you have any problems like the healthcare.gov site did, then fixing them could break the bank. So it always makes more sense to use a already established solution than to build one from scratch.

If you do use pageBuzz for your online store, it is very simple and with an existing database of products a website can sometimes be up in the same day and ready to sell.

So this part of the business should actually be the easiest even though most people think it will be the hardest part. Spend $20 on a store and you could be open for business tomorrow.

Step 7: Advertise

In todays interment, you have to advertise. Nobody will come to you just because you built a website. They wont even find you, so you need to advertise.

Now that does not need to cost money, you can use social media and forums to advertise, but that does take time and most companies will need to hire people to do it if they can't do that themselves.

It is hard to avoid spending money on enough advertising to make money, buy is anyone does figure out how, we would love to hear about it as well as about 100 million other people online.

Step 8: Count Your Money

It is not that easy, but at this point, you will have a working business, with the right paperwork, legal protections and a working website. So now it is as easy as taking the orders and shipping the product.

But don't settle it, markets change, products change and people change. So what people are buying today is not what they might buy tomorrow. Make sure you stay up to date, keep your website fresh and your products fresh.

Even companies like Coke change formulas, packaging and marketing regularly to keep customers buying. Even with iconic designs without new ideas, new looks coke drinkers would get bored and sales would go down.

So don't ever stop thinking and don't even fall asleep, things will pass you by quickly and before you know it you will be out of business as quickly as you opened it in the first place.