Before the internet, starting a business was only possible for a few people who could gather the necessary resources. A significant amount of starting capital was required, and outside funding was often hard to come by unless you had the right connections with financial expertise and entrepreneurial skills.
Now, with the rise of online sales and ecommerce, that’s no longer the case. The demand for ecommerce businesses has grown tremendously. From 2019 to 2021, ecommerce sales increased by more than 50%, making up 13.2% of all retail sales in the U.S.
Today, anyone can start and grow an online business, no matter their background or previous experience. However, while it is easier to get started, there are still challenges. Entrepreneurs must develop a solid product idea, plan out their sourcing or manufacturing, and choose a reliable sales model.
Reasons to Start an Online Business
You might wonder why you should start an online business instead of a physical store. The answer is simple: there are several advantages to starting online.
It’s affordable to begin.
Many people are discouraged from starting a business because of the cost. You need to pay for rent, buy inventory, and plan for employee wages. If the business doesn’t succeed, it can lead to financial ruin.
But with an online business, you only need:
– A computer
– A domain name
– A website builder
This means you can start an online business with just $100 and don’t have to risk your life’s savings to become successful.
There’s a lot of potential for growth.
Physical stores face limitations like real estate costs and local demand. With an online business, you don’t have these problems. You can sell to anyone, anywhere, and your potential customer base grows each year as more people get used to shopping online.
By 2025, ecommerce is expected to account for nearly 25% of all global retail sales. The number of internet users is also growing, with 5.6 billion expected by 2025. This gives your online business greater visibility, especially if you’re willing to sell internationally.
Your store is always open.
Online businesses can operate 24/7, even during lockdowns or other disruptions. Once your site is live, customers can make purchases at any time, without needing your constant presence. This allows you to make money with less daily involvement.
Find Your Niche and Develop a Business Idea
A niche is the specific focus of your business, catering to a particular market segment. This could be sports fans, hobbyists, or professionals. To choose the right niche, make sure your target audience:
– Has a problem that no one else is solving
– Is willing to pay for a solution to that problem
– Has enough disposable income to afford it
Once you’ve chosen your niche, there are several ways to build your business idea:
Start an ecommerce store.
Ecommerce has existed for nearly 40 years, but now is one of the best times to start an online store. A report from “The Future of Retail 2019” showed that 32% of U.S. consumers receive one or more Amazon packages every week, with 10% getting three or more.
After choosing your niche, pick an ecommerce platform and set up your store. You can sell on your own site or use marketplaces like Amazon, eBay, or Etsy.
Try dropshipping.
Dropshipping lets you sell products without keeping any inventory. When a customer places an order, you forward it to the manufacturer, who ships it directly to the customer. Dropshipping is a great way to get started in ecommerce without the financial risk of stocking items.
Become an affiliate.
If creating your own products doesn’t interest you, affiliate marketing might be a good option. In affiliate marketing, you promote other companies’ products and earn a commission for each sale through your referral link. With low startup costs, this is a popular way to make money online.
Offer web design services.
If you have web development skills, offering design services can be a profitable online business. You can build a portfolio and find clients through freelance marketplaces like Upwork or 99Designs. As you gain experience, you can create and sell your own products for added income.
Start a blog.
If you enjoy writing, blogging could be a good option. While blogging isn’t a business on its own, it helps you build an audience. Once you have readers, you can sell your own products, promote affiliate products, or run sponsored campaigns, all of which help you earn money while pursuing other projects.
Conduct Product Research
When deciding what to sell, consider three main product types:
Physical goods.
These are items that need to be made, stored, and shipped to customers. While selling physical products can be profitable, managing operational costs is crucial to maintain good profit margins.
Digital downloads.
Digital products, like ebooks, courses, or software, can be sold online without the need for shipping. These products often have higher profit margins, but pricing them appropriately can be a challenge.
Services.
Selling services online can be one of the fastest ways to turn a profit, though your earnings are often tied to the time you put in.
Conduct Market Research
Before launching your online business, market research is essential. It helps you understand your industry’s potential, competition, and profitability. You don’t want to offer something that no one wants. By researching the market, you can better meet the needs of your target audience.
Define Your Target Audience
Knowing your target audience’s demographics and interests is key to growing your business. This includes understanding their age, gender, income level, job titles, values, beliefs, and interests. These insights will help you market your products more effectively.
Source Products to Sell
Your products must be of high quality to succeed. You can:
– Make your own products
– Use a dropshipper
– Work with a wholesaler to stock and sell a range of items
Evaluate Product Viability
Before investing in large quantities of inventory, ask yourself:
– Are there successful businesses already selling this product?
– Is there sustainable demand for it?
– Can I sell it for a profit?
Build Your Brand
Your brand is the identity of your business. From your business name and logo to your website design, all elements should work together to create a consistent and memorable image.
Learn About Online Business Laws
Even online businesses must follow local business laws. Make sure you have the right licenses and permits, and choose the best business structure for your needs, such as a sole proprietorship or limited liability company (LLC).
Launch Your Online Store
Once your store is ready, follow these steps:
– Choose an ecommerce platform (e.g., Shopify, WooCommerce)
– Add high-quality images and detailed product descriptions
– Plan your shipping strategies
– Test your website to ensure it works well on all devices
Grow Your Business
After launching your store, focus on driving traffic through:
– Paid ads (e.g., on social media or search engines)
– Influencer marketing
– Social media marketing
– Search engine optimization (SEO)
– Email marketing
Final Thoughts
Starting an online business may seem overwhelming, but if you take it step by step, it becomes more manageable. By following these guidelines, you can develop a successful business and watch it grow.