In this day and age, times are changing. More people are looking to be their own bosses and be in charge of their own futures. The Internet makes this goal more accessible than ever, and e-commerce is one exciting avenue for success.
Still, it can be tremendously difficult to know exactly how to start an e-commerce business that will actually do well enough to generate revenue.
Creating a plan of action is necessary to prioritise your resources as you develop your own e-commerce business plan and for starters, it involves more than just setting up a website and getting started on sales.
This guide acts like a checklist of sorts that offers tips on what you need to do before getting started:
1. Choose A Product To Sell
If you’re totally new to the world of e-commerce, you might be wondering just what exactly you should be selling. In fact, getting stuck on this is a big reason why people never take the plunge in starting their own e-commerce businesses.
In actuality, you have to be strategic in identifying a set of products or a single item that’s trendy, or not so easy to find in stores or on popular e-commerce websites like Amazon.
That’s why going the generic route and opting to sell books or jewelry will likely lead to a dead end. There are already lots of major players out there meeting those demands.
Instead, you’ll want to go with more specific items that appeal to a particular audience. Think about things that you, your friends, co-workers, or family would be interested in. Also explore social selling sites like Pinterest, Etsy, or even Instagram for more input on what to sell.
There really is inspiration everywhere once you start looking, and you can always verify whether your product ideas are any good by searching for them on Google trends.
2. Research And Understand The Market
Research is integral to the success of your e-commerce store.
Once you have chosen your products, look at your competitors and analyse what they are doing.
Here are a few things to pay attention to when researching competitors to make sure you take everything you can into account when it comes to e-commerce business success:
- What is their business model
- Are they selling multiple items or just one product
- What social media channels do they utilise
- Who is their target market
- How do they push sales (e.g. paid social, SEO, email, etc)
- How engaged and loyal are their audience
Knowing how much work and money that you need to invest in a startup can change your motivation to sell certain products.
You should also get an understanding of the regulatory landscape for your idea. You may have to comply with laws that may increase your costs and alternatively, you may be able to obtain tax benefits or grants that can help your funding situation.
For one, you should get the TrustSg shield. The nationally acclaimed seal stands for credibility and security for an e-commerce site. It also implies that your business and online store are fully compliant to all codes and standards set by the Singaporean government.
At the end of the day, the more informed you are, the better you can plan ahead, minimise business risks and improve your chances of success.
3. Incorporate Your Business
Before you can execute your plan and begin operations, you must incorporate your business.
Remember that your choice of business structure will determine your exposure to liability, your taxes, and your ability to raise capital and run the business.
Most entrepreneurs prefer to incorporate a private limited company in Singapore due to its numerous advantages such as legal entity status, limited liability, credible image, perpetual succession, and tax incentives.
Furthermore, registering a private limited company in Singapore is quick and easy involving just two procedures that can be completed within 24 hours in most cases.
For expertise on choosing a company structure and company incorporation, consider engaging a professional corporate services provider such as Corporate Services Singapore to help you navigate your way through regulatory requirements.
4. Setting Up An Online Store
Once you have chosen your products and done your competitor research, the next thing to do is build your store.
Choosing e-commerce CMS tools like Shopify can make setting up your store easy. They have lots to templates to start with and an easy to integrate e-commerce platform that doesn’t need development support. Choose a theme that suits your target audience and prices that reflect the success you envision.
Naming your e-commerce business something memorable will guarantee that people will remember your name. This goes for your logo also, which can be as colourful or creative as you want it to be.
When your website is ready to start taking orders, remember to try a test order yourself to make sure the process is smooth for the customer. Alleviate any additional steps needed to buy something online and only ask for information that is necessary for the check-out process.
5. Marketing Your Business
After you’ve launched your store, concentrate on e-commerce marketing 110 per cent. Everything else can wait until you’re sure you can generate traffic and reach potential customers.
The secret to e-commerce marketing is to find the right channel for your products, and then to perfect your marketing strategy until bringing in one new customer costs less than what you earn from a sale.
You should sell products that have high enough markups to cover your marketing expenses on a consistent basis. You want to aim for that infinite loop where you spend less than you earn each day.
Since e-commerce marketing can cost a lot of money, make sure you price your products well. A $ 100 investment should bring you at least $ 101 dollars in sales so that you can reuse it on advertising again.
Also, make sure you reinvest all of your profits into your ads. In the early stages, it’s not advisable to pocket all your earnings.
Therefore, you should keep a close eye on the relationship between profits earned and money spent on e-commerce marketing by checking your advertising ROI at least twice a week.
Only once you get to this point, you can begin to optimise your store design, invest in creating a great brand, and look for ways to generate more money. You can’t optimise a store if you don’t have any customers to test different features on first.
Thus, e-commerce marketing is really essential to standing out from your competitors and generating sales.
6. Plan Your Product/Service Fulfilment
Once the customer has placed an order, you need to deliver the product/service to your customer as advertised. For this, you need staff, space and potentially inventory stock.
Make sure you are ready to deliver the products/services that you are advertising on your site – nothing kills a business faster than an inability to deliver what has been sold.
If your online business is at a very small scale, you can explore the possibility of having a home office. Singapore’s Home Office Scheme is of particular significance in this regard.
Under the Home Office Scheme, owners, tenants, or persons authorised to live in private or HDB (Housing Development Board) property are allowed to conduct small-scale businesses within their homes, as long as their business activities do not fall under the scheme’s negative list.
Note that the premises must be used primarily for residential purposes with only part of it being used as an office.
In order to set up your home office in Singapore, you need to register with the Housing & Development Board (for HDB premises) or Urban Redevelopment Authority (for private premises) and comply with the terms and conditions of the scheme.
Note that in order to qualify for the Home Office Scheme, your business must be registered with the Singapore Company Registrar, ACRA, beforehand.
7. Bookkeeping And Accounting
Bookkeeping and accounting is a mandatory requirement of any incorporated company.
From day one, all directors should seek to put in place a good system for easily tracking and accounting for all business transactions.
Aside from the obvious benefits of knowing your financial position and cash flow, keeping track of a company’s accounts is important for securing future business loans and investment.
Due to the high volume transactions, many e-commerce businesses choose to leverage accounting software to help automate much of the accounting and bookkeeping requirements for their businesses.
Accounting and inventory management software like Xero can help to easily keep track and reconcile sales invoices, expenses and bank transactions. The good news is that today many of these solutions integrate together and even to the different banks in Singapore to make your life even easier.
Other Considerations To Take Note Of
A great e-commerce business plan does require some investment.
Putting money into your advertising tactics should ultimately convert to sales, which you need. Unless you have a bigger budget, you should exclude long-term ideas like SEO or email marketing for now.
With direct advertising through Facebook or Adwords, you can get more sales immediately. It’s best not only to learn how to run your first e-commerce marketing campaign on Facebook, but also how to optimise them.
Alternatively, read how others are approaching Instagram marketing or the latest trends in advertising on Snapchat. With this knowledge and inspiration, you can apply new strategies to your own e-commerce business.
When it comes to assessing the performance of your e-commerce marketing efforts, test your advertising campaigns instead of your product pages.
This will keep you from getting bogged down trying to analyse and change all of the small details of your store. Just focus on advertising and marketing, not the ‘buy’ button on the product page.
While much of the advice about how to start an e-commerce business seems easier said than done, it certainly helps to have a clear idea of the first steps including launching a simple store and dedicating your energies to e-commerce marketing.
Featured Image Credit: ASEAN UP
