Starting an online retail business: 7 essential steps for aspiring entrepreneurs

Finding the right product, distribution method and price is what can be the first step to starting a multi-million dollar company. There’s plenty of available information out there and many things you can consider.

However, in this article, we’ll be diving deeper into learning more about the 7 steps you can follow for starting an online retail business.

1. Define your product and service

Starting an online business has the advantage of allowing you to access millions of customers, but let’s not forget that the level of competition you are going to face is also higher. No matter how unique your product is, you’ll still face hundreds of other retailers that have the same idea as you do.

Avoid trying to start an online business and not knowing which products you want to sell. It’s not smart to change the products you sell over time since it’ll make you look unprofessional.

2. Register your online business

Registering a business is important and can be done by choosing a name and filling in some forms. Let’s not forget about the entity type you are forming. Businesses can be created in several ways, you can register as a corporation, partnership, sole proprietorship or even as a limited liability company.

The process involved in registering your business all depends on the country you are planning to register in. It’s important to do some research before you register in these areas.

3. Do your research

Market research is an essential part of the online world. It definitely shouldn’t be overlooked and it’s important that you identify your target audience and gather important data based on buying behaviours, paint points and preferences stated.

You can consider using keyword research tools like SEMrush, Google Trends, social media analytics and learn more about the popularity and demand of your product or service. Understanding your audience buying behaviour allows you to better learn more about improving marketing strategies and offerings.

4. Consider ecommerce integrations

The retail and manufacturing industry needs to pay close attention to consumer behaviour. Personalization is important in modern days and companies who pay close attention to it will have a 40% higher revenue rate.

All customers want to be in control of their online experience, so it’s important to offer self-service capabilities in addition to transactional websites. Whenever they engage with your online store, they want to be able to do whatever they want, whenever they want.

Overall, e-commerce integrations offer many benefits and through personalization, they can make the buying experience an unforgettable one for customers.

5. Write a business plan

A business plan is a written document that helps organizations organize their goals, thoughts, and strategies in one place. It gives businesses a direction of where they are heading, more in the early stages and allows you to stay focused throughout the process. A business plan is a written document that helps you make easier decisions without taking on unnecessary risks.

Important aspects of your business plan include:

• The executive summary: Includes an overview of what your business plan is about, mentioning the main focuses of your business, the products, and services it offers, future plans and more.

• Business structure: Your business legal structure includes the name of employees, CEOs, and executives. Also, each owner should be labelled with their level of involvement in the company.

• Business model: Is part of the company's strategy and describes how your business is going to capture value, deliver and create it to profit in the long-term. The most common business model types are subscription, franchises, wholesalers, distributors and more.

• Financial forecast: Allows you to see your business’s current position and what to expect in the future. Financial forecasts are a statement of what you can expect from a business’s costs, expenses, and sales in the future.

Next time you write your business plan, remember that it’ll serve as an assistant to you in uncertain times.

6. Provide high-class customer support

Customer support is a highly important factor when it comes to starting an online business in any sector. 60% of customers claim that high-quality customer service improves customer retention.

Always having a customer-centric approach is when a business dream turns into a reality. Your customer will always remember the type of interactions they had with your business. When it’s good, they’ll happily come again to purchase, but leaving a bad first impression and not quickly solving issues the customer may have isn’t a good practice.

Many modern day e-commerce stores are using chatbots to deal with 24/7 inquiries. Remember, if your audience is international, you’ll need to be there for them at all times. Nobody will favour waiting hours or days for a response, so chatbots are the new solution.

Let’s not forget that if you use chatbots, you’ll have an advantage over many other online businesses, especially in the retail industry. Currently, only 9% of online companies are using chatbots and they’re predicted to save companies more than 2.5 billion hours of work.

7. Determine your retail startup costs

After you’ve defined everything else, you need to now sit down and learn more about what your retail startup costs are going to look like. You need to try and set up the most realistic approach you can about your retail costs. The great news is that when you start an online business, it doesn’t always need to be expensive.

Costs will strongly depend on your business structure and type, but the start-up costs are the ones that matter the most. These include:

• Web development costs

• Domain names

• Hosting for your site

• Technology-related costs

• Business registration

• Ads

• Promotional material

• Staff expenses

You can never know the exact costs of your retail business, but you can try and guess it closely.

Why you need to follow these steps when starting an online retail business

Starting an online business isn’t hard, but only if you follow the right steps. There are businesses all over the world that want to start a business and don’t know which direction they are heading or which target audience they are promoting to.

Not defining your product, service and not being aware of the amount of costs you’ll be facing when starting your online retail business is a mistake you should avoid at all costs. Taking things step by step is what will help you succeed in the long term and not set up for failure.