Key Factors to Consider When Opening an E-Commerce Shop

Opening an E-Commerce Shop

In 2021, retail e-commerce sales amounted to 4.9 trillion US dollars globally and this figure is forecast to grow by 50%, reaching a total of 6.5 trillion US dollars by 2023 and 7.4 trillion US dollars by 2025. According to Nasdaq, by 2040, around 95% of all retail purchases will be made online, spelling the end of traditional retail. If you wish to take advantage of the e-commerce boom by opening an e-commerce shop and launching your own business, make sure you prioritize the following essentials to achieve optimal success.

Identifying Your Niche

If you choose the right niche and use data to drive your business decisions, your business can enjoy a 241% return on investment. Therefore, conducting research into a profitable niche is worth your time and money.

Check out what your competition is doing and spend time reading opinions, queries, and social media posts to identify gaps or problems they are failing to fill or address. Use tools such as Amazon’s business niche category, Google Trends, Trend Hunting, and ClickBank to discover how much profit your niche can potentially make you. Browse top products in your category, ensuring you don’t find too many similar items to those you are considering selling.

Set Up Your Company Legally

Select a business name that resonates strongly with the values, ethos, and needs of your target market. Next, choose the appropriate legal structure. Sole proprietorships and general partnerships are ideal structures for starting an e-commerce business.

However, as your business grows, you may want to form an LLC to boost your liability protection and earn the entitlement to greater tax advantages.

Setting Up Your Online Store

Start out with an easy ecommerce hosting platform like Shopify, BigCommerce, GoDaddy, Wix, or WooCommerce for WordPress. This way, you don’t need to code a store from scratch (which takes considerably more time and money).

The platform you choose should make inventory management easy, provide accessible analytics, enable you to customize your platform to your needs, and offer optimal support features. If you are building your own hosting platform, you should use a payment gateway that facilitates global purchases.

Top multi-currency payment gateways support a wide range of payment methods, follow required payment card standards, are securely encrypted, and offer excellent anti-fraud protection. It should be user-friendly, have no hidden fees, and have a short total set-up time. 

Sourcing Your Products

You can either manufacture your own products or source them from other distributors. One easy solution is to open a dropshipping business. This saves you the hassle of managing inventory, packaging items, and shipping.

Dropshipping is a very easy model. You simply select a supplier, and every time a client makes an order, this gets automatically sent to your supplier. The latter then prepares the order and ships it directly to your customer.

Under this model, you can serve as a type of curator of items that are in demand in your niche. This model will enable you to launch your business with a smaller amount of capital and to test out products that work before investing in manufacturing your own.

Now is an excellent time for opening an e-commerce shop, provided you identify the right niche. Once you have the legalities out of the way, you should choose the right platform with features such as optimal inventory management and analytics. You can then work on sourcing your products, starting out with a dropshipping model if you have a small budget for your launch.

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