Online stores have huge potential to generate revenue. Whether you have a brick and mortar store and are looking to expand to eCommerce, or this is your first foray into the world of business, setting up your store comes first.
Setting up your store involves finding your niche, choosing your products or services, pricing, and more. You also need to decide what kind of online store you want to create – whether on your own website, or on an existing platform like Amazon.
Here is everything you should know about setting up your online store:
1. Your Product And Your Niche
Before you choose your product, you should do your research on other brands within your chosen niche. Various niches are highly saturated, especially when it comes to online stores. In certain niches, brand loyalty can also keep customers from you.
Think about it this way – certain product categories, such as sound systems and speakers, sports clothing, smartphones etc. have certain brands that people automatically flock to. If you choose to start an online store in that niche, you could have a harder time finding customers.
At the same time, you don’t want your niche to be too unique either. When this happens, you may not have a large enough target audience to generate decent sales. Ideally, the niche you choose should be something you’re interested in, and where competition is more balanced. In order to protect yourself and your business make sure you have the right balance of protection with business insurance .
2. Pricing Strategy
Pricing your products right can be the difference between making profit and not making enough sales. When you’re pricing your products or services, you may also need to account for other costs. These can include warehouse costs, transportation and shipping costs, labor costs, and more.
Most online stores, after taking all other costs into account, aim for around 20-30% profit over their base costs.
3. Registration and Structure
Even if you open your store online, you’ll still need to have a business license. Depending on the kind of store you’re running, you may need more than one kind of license. Looking through your local government website to understand your licensing requirements can help ensure you have all the documents you need.
You will also need to provide a name, and choose a legal structure. Your legal structure is the kind of business you’re running – whether a sole proprietorship run by one person or a large corporation that has many stakeholders. Different legal structures have their own tax and liability requirements, so consider looking through these as well.
4. Business Model
Your business model will also have a say in how much profit your make from your online business. Even as an online store owner, you may not need to pay for costs related to warehouses, managing inventory etc. Certain online store business models, such as dropshipping, enable you to achieve this.
In dropshipping, you don’t buy products in bulk like you would do in wholesale Instead, you only order an item after it has been ordered by the customer, through your online store. You then order the product from your supplier, and the supplier ships it to the customer. This model helps you save money, but you will need a reliable supplier to ensure that they keep their work commitments.
There are other ways you can sell products online as well. Subscription based products and services are great for retaining customer loyalty. When they sign up for a subscription, you can expect monthly payments. Models like white labeling or print on demand are ideal for people selling personalized or customized products. In both these models, the product is created by a third party and then shipped to the customer.
5. Online Store Platform
You can choose to sell your products and services through your own website. If you opt for this, you will need to invest in your domain. Your website should be SEO integrated so that potential customers can find your website. You’ll also need to heavily market your online store on social media platforms to generate traction.
You can alternatively choose to sell through platforms like Amazon and Shopify. In this case, the process is more streamlined and simplified. However, you will lose a degree of control compared to before. For every product sold, the platform may also receive a certain percentage of the price.
Conclusion
With this, you can set up your very own online store. There is still work to be done though, such as running a market analysis, creating a marketing campaign, and more. You can also consider protecting your online store with business insurance.
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