Starting an Online Retail Business – A How-To Guide
2019 February 11th at 3:32
In 2017, global eCommerce sales added up to more than 2.3 trillion US dollars - in 2019 and 2020, the number is expected to reach 3.45 and 4.14 billion dollars respectively.
With the increasing market in mind, more business owners are going online in order to sell goods and capitalize on this trend.
And it's not only that - in addition to a seemingly limitless audience, starting an online retail business also comes with fewer financial commitments than running a store from a physical location.
Today, setting up an online business is more or less straightforward thanks to eCommerce platforms. In this article, I’m going to tell you how the most important things to note before you start selling. From legal documentation - to building a website, I've covered it all.
Here are the steps on starting an online retail business:
- Establish a framework and roadmap for developing your business
- Create a business structure
- File your documentation with your state or county
- Research suppliers for your business
- Choose an eCommerce platform and create an account
- Decide on a domain name
- Pick a theme for your retail business
- Add a catalog of products with barcodes
Step 1. Establish a Framework and Roadmap for Developing Your Business
The key to starting online stores is to go in with a plan, and by this, I mean a business plan. This business plan should include a roadmap and framework that outlines the purpose of your business and sets the standards for developing your online business activities.
This plan should also highlight your vision and mission statement as well as your marketing, advertising, and financial activities.
Answer yourself questions, such as: what are you going to sell? What is your main audience? What's your marketing strategy? The business plan must also include the steps you will take so that your business reaches its goals. The latter is also known as an executive summary.
Aside from giving you a clear overview of your business, you can also use this plan to obtain funding from investors.
Step 2. Create a Business Structure
Once your business plan is complete, it’s time to choose a structure. There are various business structures for you to choose from, some of which include a sole proprietorship, partnerships, a Limited Liability Company (LLC), a corporation, and not for profits.
The structure you choose will depend on the size of your business, the number of owners, as well as the liability and tax structure you’d like to follow.
Naturally, the laws applying to your location will also affect the decision. So make sure to research all the options available.
Step 3. File Your Documentation With Your State or County
When your business plan is complete and you’ve chosen your business structure, it’s important that you file all the relevant paperwork and documentation with your state or county.
This will establish your business as a legal entity, and will save you from a lot of tax trouble if you become a big business.
Step 4. Research Suppliers for Your Business
So, you’re legal and you’re ready to start selling online but, you can’t do this without the right merchandise. With this in mind, it’s important that you research and vet suppliers specific to your niche. Here you have three choices. You can either contact individual suppliers, work with a wholesaler, or use a drop-shipping company.
If you can, I recommend you use a drop-shipping company. These types of organizations place orders only when you receive them from your customers.
Instead of having to invest money up front for the products, you only pay for what you sell. Because of that, you also don't need to worry about storing your merchandise. Some of the most popular drop-shipping companies include AliDropship and Oberlo, just to name a couple.
Step 5. Choose an eCommerce Platform and Create an Account
Now - once you get all the boring stuff out of the way, it's time for fun. Let's create your shop!
For this creation of my online retail store, I'll use Shopify. That's due to how easy it is to use, and how well suited it is for both very small businesses and huge brands such as Budweiser, Tesla, Yeezy, Pepsi, and many others.
To set up and account, visit the Shopify website and click on one of the “Start free trial” buttons. You’ll then be redirected to a page asking you to choose your login credentials. Next, you’ll have to fill in some personal information before being redirected to the dashboard.
Step 6. Decide on a Domain Name
The following step involves choosing and assigning a domain to your online retail business. To do this, click on “Add Domain” followed by “Add Domain” again.
You’ll then be given three options. You can either click on “Buy new domain”, “Transfer domain”, or “Connect existing domain”.
If you click on “Buy new domain”, you’ll go to a page that will ask you to type in your preferred domain name. Once you do this, you’ll be able to know whether or not your first choice is available. If it is, click on “Buy” to complete your purchase. If it’s not, it’ll be marked as “Unavailable”. Here, you’ll also be given a choice of alternative options to choose from.
The “Transfer domain” option allows you to transfer your domain from another site you own, and the “Connect existing domain” allows you to connect one you bought from a third party. Both these options come with varying step-by-step guides depending on the location of your domain and the company from which you bought it.
Step 7. Pick a Theme for Your Retail Business
When you've assigned a name to your website, it’s time to customize it so that it aligns with your niche and your branding. You can do this by clicking on “Themes” under the ‘Online Store’ menu.
Here, you’ll notice that you’ve been assigned the ‘Debut’ theme, Shopify’s standard option for all new sites. If you like this theme, click on “Customize” to personalize the various features.
If you’d prefer to choose a new theme, scroll down and click on “Explore free themes” or, if your budget allows, click on “Visit Theme Store”. Once you click on one of these options, simply select the theme you’d like to use.
Alternatively, you can pay for a designer to create a theme for your business - or purchase it from a third-party company. To upload it, click on “Upload theme”.
Step 8. Add a Catalog of Products With Barcodes
Once your online retail business looks the way you want it to, it’s time to add your product catalogs to it. However, to legally sell products online you have to assign a bar code to each one of them. This includes variants of products. For example, if you sell the same piece in a different color or size.
Once you have your barcodes, it’s time to input your product details into your store. You can do this by clicking on “Products” on your dashboard. Then, if you want to add products individually, click on “Add product”. Alternatively, you can click on “Import” if you already have a list of products organized in a spreadsheet.
On the next page, you’ll be able to add as much detail about each and every one of your products as you like. This includes titles, descriptions, images, pricing, as well as a range of other information.
This is where you can also add your barcodes in order to keep track of your inventory. To do this, scroll down to "Inventory" and complete the sections in as much detail as possible.
Additional Tips on Starting Online Stores
Starting an online retail business isn’t complicated. That said, it’s important that you’re organized so that you stay on top of your orders. To do this, you need to manage how you ship products to your customers. Here’s how you can change your shipping settings:
- Click on “Settings” at the bottom left-hand side of your page
- Select “Shipping”
- Click “Add shipping zone”
- Add a zone name, the countries within that zone, and your rates
- Click on “Save”
This page also gives you the chance to use a packing slip template and you can add extra shipping methods if you want to use the likes of DHL, FedEx, and UPS, for example.
And there you have it - by gettign legal stuff done, and building on a reliable online platform, you can have a solid foundation for your new online business. Best of luck in your future endeavors!
Or have you created your online retail business using another method? If so, please tell me more about it in the comments below.