More than half a million Americans start businesses every month. Some businesses succeed. Many fail. When the latter happens it isn’t necessarily for lack of startup capital. In many cases, business owners fail to do the research necessary to create a successful business. Educating yourself about your industry and doing strong foundational work for your business are both essential elements to entrepreneurship.
Though starting an online store is easier than it looks, merchants should understand exactly what they’re getting into before they jump into the ecommerce game. The right mix of planning can go a long way in setting your online store up to scale successfully and offer your business a steadily growing stream of income.
We compiled four of the most crucial lessons to teach yourself before you get set up and start selling online. They’re complex concepts that require more research, but they should offer a strong start for entrepreneurs looking to get their start in ecommerce.
4 Things You Need to Know Before Setting Up an Online Store
1. How to create your business model
How will your business make money? That’s the core idea behind your business model. Though you might have some presumptions about how other online stores function, you might not realize that you have lots of choices around how your business makes money.
A few questions you should consider:
- Am I making my product, shopping out, or reselling? With handmade products like jewelry and clothes, you’ll need to consider the price of the raw materials and the amount of labor when you set the price. Shopping out your products (t-shirt printing, for example) requires you to find the right partners to work with. If you’re reselling already made goods, do you have a reliable source for them?
- Should we stock items or dropship them? If you’re selling readymade products, where are you planning to keep them? Dropshipping is a popular choice for online merchants. You store your goods at a warehouse, link your ecommerce platform through a dropshipping service, and have the warehouse fulfill your orders as they come in. Though this is a great way to get started, keep in mind dropshippers will cost money.
- What are my margins? How much you make on each product will determine how quickly your business scales and starts to show a profit. Your margins depend on market prices, fees you pay out on each order (to a dropshipper, for example), and how much products cost you to make or acquire.
2. What you want your brand to be
Your brand should reflect the products you’re selling and appeal to the people you’re selling them to. It accomplishes this through cohesive design, written voice, and mission statement, among other factors.
- Logo design: Engage a professional designer to create a logo that represents your business and stands out from the competition.
- Website design: Leveraging a responsive design template, your store’s design should reflect the colors, fonts, and shapes of your brand while being simple for your customers to navigate.
- Voice: The way you word your content — formal, conversational, direct, funny, or professional — is core to your brand. Make sure your voice is consistent.
- Mission: Every business should have a mission that goes beyond just making money. Tell your customers why you do what you do and you’ll be able to connect with them on even deeper levels.
3. Which technology you need
Because your store operates online, it can only be as good as the technology that powers it. There’s a big difference between content management systems like WordPress and shopping cart software suites prebuilt for online stores. Ecommerce suites are already configured for out-of-the-box store setup, which means the foundational work is done. All you need to do is walk through how you need it customized for your business.
Some considerations for shopping cart software:
- Easy for you to use, even if you’ve never built a website before
- Scalable payment package options so you can start with a small investment
- Lots of app integrations with specialized ecommerce services
- “Anytime” support for whenever you need help
- No transaction fees that eat into your margins
4. How to spread the word
Marketing is crucial to the success of your store. It’s the tool you use to spread the word, draw in customers, and keep them coming back for more.
There are many, many books on marketing out there, but here are a couple of areas online stores should consider for their marketing.
- Where should we advertise? Advertising is a great way to find customers you might not have reached otherwise. Do you want to bring in customers through search, display, video, or other advertising methods? (Hint: it’s a good idea to start with a small search advertising budget and work your way up from there.)
- How do we appear higher in search results? When customers search for your product, you want to appear higher up on the page. Search engine optimization (SEO) is the practice of making your website friendlier to search engines like Google. You should combine built-in SEO functionality on your platform with a strong product content and blogging plan that targets the key phrases you can reach customers with.
- How can we make use of email addresses? As you start accumulating customers, you’ll gather email addresses. Email marketing, which your shopping cart software should make easy, is a tried and true method for drawing in return customers.
Looking for more insights on ecommerce before you start your online store? Check out some of the in-depth content on 3dcart Ecommerce University.