Starting an online retail business can be a great way to generate side income or start a new career.
If you’ve got knowledge of SEO and other marketing techniques it can allow you to quickly scale up your product line and sales. Many potential entrepreneurs wonder where to start when getting started.
Follow the steps in this basic starting an online retail business checklist to learn how to get into e-commerce and set your venture up for success.
First Step to Starting an Online Retail Business: Choose a Product
Before you can sell anything you need to have a clear vision for what you’re selling. Do your research and make sure you understand the market landscape for any item you’re considering.
It’s important to look at the cost of a product, anticipated markup, prospective clientele, demand, and of course competitors. A product category with razor-thin margins doesn’t leave much room for error. When you’re first opening an online store you’ll probably have less cushion than you will after several successes.
Check out what the intended market for a product is and make sure that market saturation isn’t an issue. Whenever you can, avoid commoditized products. You don’t want to sell things that are functionally identical to what everyone else is selling if you can avoid it.
Figure Out Your Fulfillment Plan
Once you know what you’re selling you have to figure out how you’re actually going to sell it. There are now several well-developed business models relating to small and medium scale e-commerce available to you. These include:
- Drop Shipping
- Fulfillment Solutions
- Traditional Sales
Dropshipping is very popular among retailers who don’t want to deal with inventory management and storage. To get started as a dropshipper all you need to do is place an inventory order with a wholesaler and arrange shipment methods. This is a great way to start an e-commerce business from scratch as it requires significantly less capital than other methods.
Fulfillment solutions are closely related to dropshipping. Fulfillment companies, such as Amazon, handle the warehousing, packing, and shipping of your products from their own facilities. This is an excellent solution if you plan to manufacture your own products but don’t want to deal with developing your own supply chain.
With the conveniences provided by dropshipping and fulfillment solutions providers, traditional sales aren’t recommended unless you’ve started a very large venture. Not only do you have to create an online storefront, but you also have to figure out warehousing, inventory management, picking, and packing, as well as shipment and returns processing. It’s a pretty big headache that can distract you from actually running your business.
Decide How to Store Your Product
Depending on what model you’ve chosen for your e-commerce venture you’ll have some storage and inventory decisions to make. While you can always buy or lease a warehouse, it’s often cheaper to employ a storage solutions provider.
If you chose to go with a fulfillment services provider they also handle product storage and management. If you want to ship your own goods, it’s still possible to benefit from a managed storage solution.
Don’t Get Discouraged
One of the most important attributes of a successful entrepreneur is the ability to brush off setbacks. Don’t get discouraged if when starting an online retail business sales don’t immediately take off. In many cases, you can make a few small changes to drastically increase your sales.
If you would like to learn more about e-commerce and online marketing, check out our many other useful articles.