ecommerce

How to Start an eCommerce Business

By - (Last Modified: December 16, 2015)

This is Part 2 of the 2 part series where I attempt to kill any doubts you have about eCommerce business and selling online. Click here to go back to Part 1 where I explained the pros and cons of having a store in an online marketplace like Amazon, Ebay or Flipkart.

B. How to create an eCommerce website

How to Create an eCommerce Website

While opening an eCommerce store is relatively easier than a brick-and-mortar store and require a much smaller investment, you still require a number of things to get started. Let’s start talking about them:

  • Product to Sell:This is obvious but you need something to sell online. The good news is that you can sell almost anything on the internet with the exception of restricted items like illegal drugs, guns, pornography, humans, etc.

    It’s also very easy to sell soft goods on the internet like e-Books, Music, Games, Softwares which can be instantly downloaded to customer’s computer after payment.
  • Domain Name: This is the online address of your business, also known as the URL which users will type into their address bar in a browser to reach you. This should preferably be identical to your business name.

    Domains come with an optional SSL certificate which makes your site encrypted so all communications between a customer’s computer and your servers are secure. Since eCommerce store transmits critical data like payment information, inventory and bank account details, you should always have SSL certification for necessary security.
  • Web hosting: A web host is a service provider which grants you a space on their servers where you can house your data (website) to make it accessible through the world. The reason you need a web host is that their computers are always on and ready to serve, they are high performance to handle heavy loads and are spread throughout the world, again to increase performance.

    Customers access the data stored on your server through your domain name.Web hosts provides different services for different needs so you should pick one that suits your needs. Generally a high end store can’t make do with a regular shared hosting due to performance reasons and should prefer a VPS (Virtual Private Server) for added speed and security.
  • Website: Finally we’re talking about your store. The website is your online equivalent of your store front. This is where you display your products digitally for the world to browse and buy. The website’s design should encourage users to stay and make a purchase, pay online, subscribe to newsletter and view information about your company.

    This is no easy task though, to make a website that is capable of displaying products, retrieve stock information, allow users to place orders and process their payments require an ecommerce software and third party integrations. How that can be done is explained in detail in the next section.
  • Merchant Service Provider: As awesome as you are starting your own online business, you can’t do everything yourself. This is where you delegate some of the tedious jobs to a third party:
    • Payment Gateway Systems: Small online businesses can’t accept payments directly through their website by law; you need third party payment gateways systems to provide you and the customers an intermediary interface to make the payment online. These service providers act as a link between the customers, business and the banks. It processes the payment and takes money from the customer’s account and puts them into your merchant account which is like a temporary holding location for the payments.Once the funds have been approved, they are transferred to the bank account (minus a commission fee) of your choosing, generally a current account of the business.

      The most trusted players in the business are CCAvenue and PayUmoney which offers intuitive and effortless payments for your customers and hassle free transfers to you with prompt customer support. Both charge around same commission of 2-3% depending on mode of payment. Check them both and pick one that suits your needs better.

      These options however only allow you to accept payments from within India. If you are catering to the world and need to accept payments from international customers, PayPal would be your safest bet.
    • Logistics Management: Once you start receiving your orders and you’re products are not software, you’ll then have to deliver the right order to the right person. The eCommerce software will make it easy for you to view pending orders along with their information like contact number, address and what they ordered. You can use this information to start dispatching the orders but generally small businesses cannot afford to employ dozens of delivery vans and hundreds of employees to pack, track, and ship the items in-house; this is where logistics services come in.

      Just like third party payment gateways, these are logistics service providers which acts as the delivery person for you. You sign up with one such provider with a small fee and mention your average product size and weight along with approximate number of deliveries you make per day/week. According to that a delivery person visits your business location, generally a warehouse, once a day or once a week or anything in between and collects the packages you have for them. They then take care of making sure it reaches the desired location on time.

      These services also provide tracking links which you can use to track the location of the package and also forward them to the customer so they can check the progress of shipment. Two of the most popular services in India are BlueDart and FedEx. Get a quotation from both and pick one that suits you best. The costs and services vary extensively according to your requirements so we can’t really tell which is better but both of these are the best in the industry.
  • Marketing: Finally, you won’t make money if no one’s visiting your website. Unlike brick-and-mortar businesses where passerby would notice your business and walk in, no one knows your website exists if you won’t bring it in front of the right people.

    All successful eCommerce businesses have a strategy to attract customers to their website. Without a carefully thought out plan, making profits in the online marketplace will become that much more difficult. Like we mentioned earlier, online business is competitive so you need to stand out with your USP (unique selling proposition) which could be a unique product you sell, a unique competition that you have going on or an attractive offer/sale.

    You need marketing to tell this to the customer and convince them to visit and purchase from your site. Some of the options marketers have at their disposal are search engine optimization (SEO), paid advertising, email campaigns and social media interactions.

Get an eCommerce Website

Building An eCommerce website

To create an eCommerce website, you need eCommerce software that provides the necessary framework for designing a website, uploading and managing inventory, shopping cart and payment options for shoppers. Nearly all software provides everything you need to set up a functional store.

When choosing an eCommerce software, business owners should consider their hosting requirements, design, SEO features, shopping cart features and accepting payment securely from the shoppers; and their technical expertise. Finally the software must provide top-notch security as mentioned earlier, such as fraud protection and SSL encryption to give consumers peace of mind to make a purchase with confidence that their personal information won’t leak into the wrong hands.

A lot of services are out there offering new ways to create your online store but I’ll cover the most important and widely popular ones. These include Magento, Opencart, WooCommerce and Shopify; together they account for all the different ways of creating a web store.

  1. Shopify: One of the most popular systems for people with less technical expertise in terms of coding and computer programming, Shopify offer easy ways to get started with your business. It allows you to register the domain, provide hosting in built, easy to install themes and marketing features to reach targeted audience.

    The downside would be that their servers are slow according to our experiences, you don’t get a lot of freedom of customization and the costs can be a bit high with the lowest usable plan of $79 per month.
  2. WooCommerce: This is an eCommerce add-on for wordpress that adds eCommerce functionalities to your website based on WordPress. Since wordpress is such a popular tool for creating blogs and websites, WooCommerce get the hype to be popular among new entrepreneurs and provides a seamless interface for the users who are already familiar with WordPress platform. It offers a simple feature set that is sufficient for a basic store.

    The downside? WooCommerce is so tightly linked to WordPress that it can’t be used without it. And while the basic themes and plugins are free, they are not very good and premium ones are very expensive.
  3. OpenCart: Before we talk about Magento, let’s transition smoothly from a similar software called OpenCart. OpenCart is similar to Magento with a good set of features, including a catalog functionality and order processing system. It’s easier for new users to get up to speed with using OpenCart compared to Magento.

    OpenCart is an open source project which means it’s freely available for anyone to download. It also offers detailed and easy to understand documentation to allow new users to set up their store fast.

    A major con of this option is that the performance is very poor and you’ll have to setup plugins and extensions to improve it like SEO and Caching. OpenCart is also very restrictive with customizability and could be constricting for some businesses.
  4. Magento: And finally, the cream of the crop, the most popular system for eCommerce in the world and our preferred method of choice is Magento. It is feature rich and offers powerful functionalities for its users. Customization is easy and with the right infrastructure, Magento can offer very good speeds and performance.

    It’s also very SEO friendly and scalable to the moon.Language translation and currency conversion are built in and easy to use. These features are great for international reach.The community edition is free to use and because of a worldwide huge fan base, the support is easy to find.

    The only downside is that the system is very complex and the learning curve is long. Once mastered though, the range of features are immense. The community edition is free and comes without any restriction but to get support from Magento team, you’ll need to buy Enterprise edition which is not very affordable at $15,000 a year.

    Enterprise edition also offers targeted promotions, Solr Search, Automated Email Marketing, Reward Points and more but it still doesn’t justify the high costs according to me since the Community Edition can deliver nearly everything out of the box and even more with free or inexpensive add ons.

Conclusion

So selling on preexisting marketplaces tends to be expensive in the long run and it’s a bit tough to gain your footing with the competition already settled there; on the other hand your own website offers freedom and functionalities as you like but setting up is not an easy task. Solution?

The best of both worlds would be to get your website built by professionals for a small fee to avoid the hassles of setup and then continue on with your business focusing on selling more and not paying anyone else for your hard work.

If you like us to setup a store for you, just fill out  the form on the contact page and we’ll be give you a free quotation!

By now, you should have extensive knowledge of eCommerce business and armed with this, you will make an informed decision. What do you think is the best course of action?

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