How to start an online store in 2023: 7 steps (Step 7)

Starting an online store requires more than just launching a website. You'll also need to define your target customers, source your products, and take steps to formalize your business. Start small, for example by offering only a few products at a time. e-commerce business Get up and running fast.

Here are seven steps to take in preparation for launching your online store.

1. Refine your business idea

What do you sell? Who are your customers? Answering these questions in advance will help you stay focused. ecommerce business ideas You will be able to choose the right tool.

To structure your idea further, try writing it like this: business plan. In addition to defining your product and target audience, this process will also help you dig into other questions, such as:

• Who are your competitors?

• How do you plan to ship your products to your customers?

• Do I need a license or permit?

• How much does it cost to run a business?

• How much do you need to charge to break even or make a profit?

Even if you are planning a small online store, e.g. Open an Etsy shop Here we list some handicrafts every month. Look at your competitors and think about your target customers. This information can help with everything from creating more effective product listings to deciding which social media platforms to advertise on.

2. Choose your online store platform

Once you've decided on your business vision, it's time to shop in your virtual store.can be used e-commerce website builder Create your own website with your own domain name and your own design. Or you can build a store on a third-party marketplace like Amazon, Etsy, or Depop.

Perfect for: Online stores that want to develop a strong and unique brand through their own website.

These tools will help you build freestanding e-commerce website It is not linked to any particular marketplace. Popular options include Shopify, Squarespace, and Square Online. Think of it like renting a storefront on Main Street and giving it your own address, signage, and customizable space inside.

On the other hand, building your store this way gives you more control over the appearance of your website and potentially saves you on transaction fees. On the other hand, you may need to invest more in marketing and advertising to compete with sellers on the web.

Perfect for: Online stores willing to pay higher fees and sacrifice branding opportunities in exchange for easier access to customers.

Third-party marketplaces include websites such as Amazon, Etsy, Depop, Poshmark, and eBay. You can set up your storefront to list your products on the platform of your choice. When shoppers come to your site to search for a specific type of product, chances are they'll find yours. Think of this as renting a kiosk at a craft fair or a booth at a farmers market.

On the other hand, these marketplaces already have loyal shoppers, so they only need to compete with other sellers on the platform. On the other hand, your store is probably very similar to other stores in your chosen marketplace. These places tend to charge higher transaction fees in exchange for providing more infrastructure.

If you sell services rather than physical products, look for an e-commerce platform that allows you to accept reservations, prompt customers to fill out intake forms, and send reminders.

3. Sourcing products for your store

Now that you've decided what your store will look like, it's time to fill its (virtual) shelves with products.

If you're planning on making items yourself or reselling vintage items, this may be a no-brainer. For example, the items you list depend on how much you can make or what you find at monthly estate sales.

But if you're selling industrial products, you'll have more options to consider.

If you want to protect stock If in stock, your options are:

• Wholesaling, that is, purchasing goods in large quantities from industry sellers and selling them in small quantities. Although you can search for wholesale products online, going to trade shows and wholesale markets allows you to focus on specific areas.

• White label, meaning you buy a generic product from the manufacturer and add your own brand.

• Retail arbitrage, or finding retail goods at a deep discount and selling them at the regular price.

If you don't want to deal with inventory management, consider the following:

• popular dropshipping online business ideas But it can be a tough field to compete in. drop shipper Manufacturers and wholesalers identify the products they want to feature in their stores. When a buyer places an order, the dropshipper passes the order to the dropshipping supplier. The supplier then ships the goods to the customer. Drop shippers do not handle the products themselves.

• Print-on-demand is a type of dropshipping. Print-on-demand services print designs on common items such as T-shirts and coffee cups. When a customer orders a product, a print-on-demand supplier creates and ships the product.

4. Choose a payment processor

Shoppers will likely need to be able to pay for their purchases with a debit or credit card.This service is called Payment procedure. Expect payment processors to receive about 3% of your revenue in exchange for their services.

When you build an online store on a third-party marketplace like Amazon, payment processing and fees are likely built into your total transaction costs.

If you choose an e-commerce website builder, you'll likely have the option to select a built-in payment processing option. For example, Shopify chooses Shopify Payments by default, and Squarespace offers Stripe. If you have a monthly website builder subscription fee, the payment processor automatically receives a percentage of each transaction in addition to the website builder monthly subscription fee.

Think about how you get your products from the source to the customer, such as your basement or warehouse.

many online store builder We offer shipping label printing, and certain shipping companies may even offer discounted rates. We may also automatically provide tracking information to our customers. Some also offer dynamic shipping rates at checkout. That is, you determine the shipping cost based on the customer's address and pass that cost on to the customer.

Choosing an e-commerce platform with shipping tools can take away the headache of manually handling shipping.

However, if you choose to manage your shipping yourself, please note that shipping charges are usually determined based on the weight of the package and the distance traveled. The bigger and farther you go, the higher the price. Find out shipping costs in advance and incorporate those costs into your price.

6. Formalize your business

When starting an online store, it's important to separate your business and personal finances. Even if you only sell a handful of products, you'll need to know how much revenue your business is making when tax time comes.

Important decisions at this point include:

• open business checking account. This can be done online for free. NerdWallet recommends that all business owners, no matter how small, have a bank account dedicated to their business.

• Check if any licenses or permits are required. A business license may be required. Occupational licenses may also be required if you perform certain services. Check your state or local government website for requirements.

7. Launch an online store

It's finally the grand opening. Publish your website and sell your first few products.

If you've created a detailed listing on a third-party marketplace, orders may start pouring in when shoppers find your listing. However, if you choose to build your own website, you may need to invest more time and resources. online marketing.