I have just discussed about What is eCommerce, in detail in my previous article. Now, I will discuss the next step of the process about how to start an eCommerce business.
Since, you have a clear idea about the eCommerce business, its prima-facie requirements, considering your growth and choosing relevant platforms to ascertain your business model. My detailed guide and upcoming blogs will be concentrating on the UK eCommerce industry. However, the idea and process are not restricted and can be applied to any region regardless of localisation issues with few tweaks and relevant changes.
Marketplaces or Website: What to consider?
After considering everything as per the details on the previous article, it is an alarming situation about every individual. This situation is not an exception, as it is literally a conflicting status of every mind. Business owners or the upcoming newbies are always wondering where to start with and what marketplace to consider. Should you consider creating your own website or an existing marketplace will assist your initial goals?
Marketplaces: Once of the best low-cost choice for beginners.
Some might think what the heck is a marketplace! In the eCommerce industry, a website that allows buyers & sellers to interact with each other to sell goods & services is called a marketplace. Few of the examples are Amazon, eBay, Walmart, Etsy, OnBuy and many more. There are many marketplaces which have their niche of products. They are especially renowned for those specific categories for eg. Etsy started with handmade items and then expanded further.
Amazon & eBay are one of the best marketplaces to start with for any business, depending on the demand for their products & services. Both marketplaces serve sellers & buyers, while reflecting their control on each-other’s behaviours, patterns, transactions, and much more. These both marketplaces have their criteria to identify the potential faults in the transaction. Amazon is much more established as customer-centric and goes a long way to support their customers (buyers), while eBay, in general, is much more impartial and goes with the best solution for either customers or sellers.
Hence, my personal choice for a small business is to opt for eBay. Any small business who would get hold of the initial stage of the process considering the total inventory setup. Once they are well acquainted with this process and move along the line of sales, they would realise the potential of their system and knowledge of procedures. Once they know in & out of inventory & order management with this small setup, they can plan and move further to set up an account on Amazon.
How to start an eCommerce business on Amazon?
Well, setting up an account on Amazon is as easy as creating your email account. Any marketplace would ask for some basic information about yourselves if you are registering as an individual and further a few more basic details about your business once you expand further as a professional seller. However, I would suggest you go with the professional seller plan, as you are already well aware of the process by now, as you have already dealt with eBay’s initial stage of the process. Now you are fully ready to play around and get the ball rolling with a larger amount of revenue, loads of orders and dealing with lots of inventories.
Next big question, Is Amazon business profitable?
This is a question which nobody can answer the best, except yourselves. Basically, this would depend on the products you would plan to invest in and the competition you would face on the marketplace. I will surely dive deep on selecting the best products to select, finding the profitable niche, metrics to consider on the platform, and off the platform. This is where businesses need to seek analytical skills and work around pricing, suppliers, cost of their goods, storage and dispatch.
How much does it cost to start an eCommerce business?
Well, consider everything above I discussed so far. Along with all the aspects described above, you also need to plan how you want to go for your business’s financial side. So I would highly recommend seeking suggestions from a qualified accountant or someone who can help you think about incomes & expenses to plan the amount of investment you would want to make in the business.
Although, this would only give you a rough idea on your initial capital. Besides, all the financial jargon and hefty thinking, it is an eternal fact that there are always unplanned expenses and you would never have an exact idea about your actual cost.
Websites: Not a very low-cost choice for an eCommerce business.
While we are touching base for the stuff about the marketplace, let’s not forget your own real growth on your own website. As we have seen that you are going to sell your products or services on marketplaces, let’s not forget that it is just a marketplace and not your own website. The reason after this thought is that they can kick you out a day whenever you make a little mistake or they may ban you for a period resulting into lots of loses for the vacant period.
Hence, it is always a good idea to develop your own brand or your own eCommerce store for a backup and keep developing it alongside your marketplace business. I am into the sector for more than 8 years now and I haven’t seen a single seller which hasn’t been banned or restricted from selling by Amazon or eBay. There are scenarios where every seller would make a minor mistake or might intentionally won’t comply with the marketplace policy, and either Amazon or eBay will take charge. This is the situation you can’t control.
I don’t want you to fall in a similar situation, so I am trying to make you aware of the fact. It is a very simple fact to consider that the marketplace is not your website; it is not your property. The products or services that you would offer are only your property, and because you don’t know how to bring visitors or buyers on your website, you would be selling on the marketplace.
You would also be paying these marketplaces for your membership as a seller. You would also pay for every sales transaction, as they won’t let you sell your property on their property for free. It is as simple as growing your own business on someone elses property and they can kick you out at any point when relations are not good enough or in case of any disputes. So, simple advice is to be wary of situations like this and be prepared for the worst-case scenario.
Despite discussing many things, I haven’t discussed the website, its platforms, structure, etc. But you get the overall idea of starting the process about eCommerce. However, I will discuss the website later because there is a very important aspect to consider. Before I forget, let me scribble it down here, which is multi-channel eCommerce. Briefly, it means to sell your products or services on various marketplaces and websites and everywhere else possible, so you don’t lose out on sales. Also, if you are banned on any particular marketplace, there are other sources of sales available and running.
This is where you need to consider tools that would help you run your business smoothly while not running out of stock via multi-channel approach and managing the rest of the bits and pieces efficiently. This multi-channel approach is itself a vast topic and I will touch-base on another occasion and will write about it in full details later.
Consider to work out your eCommerce business plan.
What is eCommerce business plan? Well, I have mostly covered the issues that every seller will face before beginning their eCommerce journey. Being an eCommerce consultant and long enough within the sector, I have gained experience in a comprehensive practical manner. I am going to share it with you on an ongoing basis. I would love to hear from you people about any of your requirements and any further questions you may have regarding eCommerce.