Blog Post
How To Start An E-Commerce Business?

How To Start An E-Commerce Business?

‘How to start an e-commerce business?’, a question which is commonly asked in today’s digitized world.

Digital technologies have made an entry into our lives in a big way. In fact, we have embraced technology to such an extent that it is difficult to imagine life without it. Can you imagine a day without ordering essentials on sites such as Amazon or commuting without Uber or Ola or traveling without referring to the Google Maps. And the most used, shopping via several e-commerce platforms such as Amazon, Flipkart, Myntra, etc. 

E-commerce platforms have become a significant part of our lives. There are platforms to ease each and every task at hand, whether it is to shop for daily essentials like vegetables, groceries and toiletries or to commute, whether locally via cars or rickshaws using various ride-hailing or ride sharing platforms or travelling long distances by booking tickets for planes, trains, buses via various travel sites and platforms or even learning various skills such as cooking, sewing, languages, arts, technical skills, etc via various videos and learning platforms or even shopping for kids and adults alike via numerous shopping websites and platforms. Digital technology and these various platforms have become an integral part of everyone’s lives. Most of these platforms are known as e-commerce business platforms and given how popular these are and how they have become an indispensable part of daily life, they are a great business opportunity to sell products online

E-commerce is short for electronic commerce and e-commerce business is technically described as any type of business, or commercial transaction that involves the transfer of information across the internet, where the transfer of money, as well as data, is also carried out via the internet, in order to complete the transactions. Often, starting an online store is considered as an e-commerce business, but an e-commerce platform comprises of much more than just an online retail store. 

So exactly how to start an e-commerce business? There are various business model types on which the e-commerce business can be based. For instance, the e-commerce can be a platform which allows other vendors to showcase their products, irrespective of the type of product, the business just provides a platform for showcasing them, reaching out to a wider audience and handling the payment methods as well as the delivery. Another type can be where the platform helps other dealers sell their goods but only of a specific type such as only clothes, or books or food items or electronics or furniture exclusively, etc. Another type of e-commerce platform business can be where the entrepreneur provides services through the platform such as beauty services, or cleaning services or repair and maintenance services, where the platform can tie up with local operators to provide the services at various locations. Another type of e-commerce business can be where the platform offers specialised search options such as, only hotels or only air flights or only houses and properties for buying or selling or only used cars and other vehicles for purchase or sale. Another e-commerce business can be where the entrepreneur is into manufacturing and white labeling along with displaying the products on the e-commerce platform. There are several models of e-commerce businesses and all are lucrative business options that aspiring entrepreneurs can consider. But just deciding on venturing into an e-commerce business is not enough if the entrepreneur does not have the requisite knowledge of how to set up an ecommerce business and establish it. Starting an e-commerce business requires keeping in mind certain essential factors, discussed herewith.

How To Start An e-Commerce Business?

While learning how to start an e-commerce business the following points need to be kept in mind, to help make a successful start.

Choose The Type Of E-commerce Business Model

Depending on the type of transaction between the business and consumers, the e-commerce business can be of various model types, such as-

  • Business to Consumer (B2C)-

This model is when a business sells a good or service to an individual consumer.

  • Business to Business (B2B)-

This is when a business sells a good or service to another business. For instance, when a business sells software in the form of a service for other businesses to use, it is referred to as B2B.

  • Consumer to Consumer (C2C)-

This model type is when a consumer sells a good or service to another consumer. For example, when a consumer sells their old furniture on eBay to another consumer, it is referred to as C2C platform.

  • Consumer to Business (C2B)-

This model is when a consumer sells their own products or services to a business or organization. An example of this is when an influencer offers exposure to their online audience in exchange for a fee, or a photographer licenses their photo for a business to use, this transaction is termed as C2B.

The transactions can further be categorised as following-

  • Retail- which is the sale of a product by a business directly to a customer without any intermediary.
  • Wholesale-which is the sale of products in bulk, often to a retailer that then sells them directly to consumers.
  • Dropshipping- this refers to the sale of a product, which is manufactured and shipped to the consumer by a third party.
  • Crowdfunding-this comprises of the collection of money from consumers in advance of a product being available in order to raise the startup capital necessary to bring it to market.
  • Subscription- subscription refers to the automatic recurring purchase of a product or service on a regular basis until the subscriber chooses to cancel.
  • Physical and digital products- the first refers to any tangible product that requires inventory to be replenished and orders to be physically shipped to customers as sales are made, and the latter refers to downloadable digital goods, templates, and courses, or media that must be purchased for consumption or licensed for use.
  • Services- this is a skill or set of skills provided in exchange for compensation. The service provider’s time can be purchased for a fee.

The business can be based on any of these models.

Decide A Niche Product Or Service Market

Once the type of e-commerce business model is decided, it is equally important to select the product or service type that the business will associate with and be known for. It is vital to create a niche, given there are so many products and so many services to offer that the platform and the entrepreneur must concentrate on one thing or be unique and introduce a new niche sector in order to stand out. For instance, the business can deal in any of the products such as apparel, sports equipment, fashion accessories, electronics and gadgets, groceries and daily kitchen essential goods, baby products, furniture and furnishings, home utilities, or any other products. Further, the platform can only specialize in handmade products or only promote women entrepreneurs or deal in and promote local crafts and artisans. There are a lot of options to choose from for the entrepreneur to take the E-commerce business into a particular direction and make it a niche platform. Similarly, if the platform deals in services, it can choose from a variety of choices.

The main thing to remember is to choose the niche sector carefully and consider all the aspects of the business in detail.

Promote And Advertise The Platform

Now that you are clear about the initial steps of how to start an e-commerce business, it is time to dig deep into the matter. A digital platform provides several vendors and other businesses a means to showcase their products or services, thus in a way advertising their business. Why then would the platform itself need advertising is what many entrepreneurs planning to start an E-commerce business might wonder. But the platform too needs to attract the attention of customers for them to visit it. Additionally, with the number of small scale platforms, it is important to draw the attention of the large number of prospective customers who are online. And this can be done via digital marketing methods since the audience for an E-commerce platform will have to be targeted vis digital advertising and marketing methods itself. The digital marketing checklist will help entrepreneurs plan their marketing strategy by becoming aware of all ways in which the e-commerce platform can be advertised. 

how to start an ecommerce business

Apart from these steps, the business will also require requisite knowledge regarding digital technologies and skills needed to set up an e-commerce platform and to make it accessible for the public. Another requisite for starting an e-commerce business is funding. The capital requirement will largely depend on the type of business platform the entrepreneur chooses, and the recommended sources of obtaining the capital include loans via banks or NBFCs. The business will also require certain registrations and legalities to be completed in order to carry out the business. These need to be known and completed before starting the operations. 

These are the basic steps that entrepreneurs need to consider and be aware of, while planning to start an E-commerce business. We hope that we have answered the question, how to start an e-commerce business. But for queries related to the business model or any step involved in the business, deAsra can be approached for advice and guidance on any of the aspects of the business. E-commerce business is a profitable business opportunity that is in sync with the present time and demands and these steps will help entrepreneurs start an E-commerce business successfully. 

Greetings from deAsra Foundation! deAsra Foundation has been nurturing entrepreneurship for over 6 years and has shaped the lives of 1 Lac+ entrepreneur. In order to positively impact the entrepr...

Question: Dear Sir, there is a buzz about electric vehicles everywhere. Many companies have introduced their vehicles. These vehicles will need charging stations. Would it be right to build such st...

Greetings from deAsra Foundation! deAsra Foundation has been nurturing entrepreneurship for over 6 years and has shaped the lives of 1 Lac+ entrepreneur. In order to positively impact the entrepr...

Greetings from deAsra Foundation! deAsra Foundation has been nurturing entrepreneurship for over 6 years and has shaped the lives of 1 Lac+ entrepreneurs. In order to positively impact the entrep...

Question: Hi, I am a parent. My son is doing M.Sc. Computer. Ever since he was in college, he wanted to start his own business. But it takes a lot of capital to run a business, and there is no guar...