I don’t know how many times I have had a business idea pop up in my head, so I said it to my friends and family “I should open a business now!” I don’t, but I would believe it would be online.

Why? Global retail E-commerce generated 3.53 trillion US Dollars in revenue in 2019. Online shopping is catching on even if it wasn’t a popular option a few years back.

An additional reason why I would open an internet retail business is because it would be simpler for my employees. Instead of opening a brick and mortar shop, I could use an online management system to manage business functions and create an E-commerce website. Apart from physical inventory, everything I need can be done from my laptop.

But, I know that online retail is and not a “if you build, customers will follow” situation. It is a difficult and expensive endeavor.

This post will focus on how to open an online retail store. To navigate to each section, you can use the table of contents below.

What is an online business for retail?

A retail transaction is when a business sells a product to a customer for their own personal use. It is only the end-user who qualifies the sale as retail. Transactions can be done through many sales channels including online, direct sales or mail.

Online retail stores or digital retail stores don’t require that you have a physical address. To show your customers the products and services that you offer, you can either create a website or Ecommerce platforms . You must provide reference images and a description of your products/services as an online retailer.

Customers can choose any product or service they wish to order and place an order directly. Customers can then order any product or service they like online and pay when it arrives. 

Future of online retail

Customers will assume you don’t actually exist if you’re not online. Online retailers will gain more customers as traditional retailers lose their grip. This is evident in the expansion of online products and the variety of merchandise that physical shops offer.

Online value exchange is cheaper, quicker, and easier for brands to realize. Online retail has seen a lot of growth.

According to Statista in 2019, the worldwide E-commerce share was 14.1%. Analysts expect it to rise 2% annually until 2023, according to Statista .

From 2015 to 2023, E-commerce shares a significant portion of global retail sales

Online retailers who embrace the digital age are being challenged to keep up with rapidly changing customer demands and rapid technological changes. Customers are seeking simple navigation , easy interfaces, accessibility for mobile devices, usability across multiple platforms, and simplicity in design. These demands are driving the online marketplace to change and shaping how online retailers act.

Let’s now look at what you need to do in order to open an online store and remain competitive.

9 steps to start your online retail business

Step 1. Build your own business plan

A formal business plan can be an essential step in starting a business. A solid and practical plan is essential for any online business.

The business plan is a blueprint of your company’s details. It should be used as a reference point about your business’s sales, structure, and the way it will run.

First, determine the purpose of your online retail business plan. It could be used to communicate with investors, banks, customers or alliances. It could also be used to communicate with internal audiences (e.g. employees, business owners). )?

It should also include your approach to managing, marketing, financing, and financing the business. Your audience should know exactly what your online business does, where your cash flows are located, and what your marketing and sales strategies look like.

These are some things you should remember when creating your online retail business plan.

• Spend time doing in-depth research. It will be a huge help to spend time researching the market, who is buying your products/services, and who else may be selling them the same products/services.

• Define your customers. You can save money on advertising if you can narrow your target customers . You can also tailor your business strategies to suit them by adjusting the level of detail.

• Find out what makes your online business unique. For example, if you plan to open an online handmade gift shop, you will need to distinguish yourself from the many brands. Are you using environmentally-friendly materials? Are you able to personalize your products? Do you want a percentage of your profits to go to charity? You’re not selling just your product or service. Instead, you are selling a mix of value and brand experience. Think about what makes your online business stand out.

• Keep it concise and to the point. It might be tempting to list all of the research results, but it is better to keep your business plans short and concise.

• It is possible to (and should) modify it as your needs change. Keep in mind that your business plans are a living document and can be updated as necessary. If you intend to apply for funding, you may want to make updates a year or so later.

Keep in mind that while many businesses may be successful without having plans, the ones that have plants can grow 30% more than those that don’t.

Step 2. Determine your niche and products to sell

Your business plan will outline the product types that you intend to sell. However, this step requires a more detailed and comprehensive list of all your products.

A niche market is a group of people who share a common interest. It is easier to be the preferred retail destination in that niche market if your interests are narrower. There may be many online shops that sell pet products but you might be the only one who specializes in dog costumes.

These are the steps to help you find your niche.

• List your hobbies and interests. You’ll be spending a lot of time as an online store owner immersed in your chosen niche. Your hobbies and interests are the best place to start. Your online store will be more authentic if you choose something that interests you.

• Research each niche’s potentials. You can research the potential income-making potential of each niche by researching tools such as Google Trends and comparing competitors via social media channels.

• Investigate potential profits. To determine the profitability of your niche, you can look at Amazon Best Seller Lists or industry statistics to see what sales are like in your chosen categories.

After you have identified your niche, it is time to think about the products you want to sell. You should know what problems your products solve. Ask yourself these questions:

• Why should customers spend money on your products?
• What can they do to help them?
• What can we do to help those in need?

Answering these questions will give you a better idea of what and how to market.

Step 3. Choose between holding your own inventory or dropshipping

Next, you need to decide if you want to build your online retail business. Deciding whether to dropship or keep your inventory.

Dropshipping is an example of a business model that does not require inventory. The order is sent to the retailer when it arrives. The third party then ships the product directly to the customer.

This business model is proving to be a success because it eliminates the need for physical locations and requires only a computer with Internet access.

However, you can also keep your inventory in-house. When your online retailer receives an order you can export the item(s) and ship them to your customer. The online retailer that the customer ordered from receives their order directly.

We’ll go over the pros and cons of each option to help you make an informed choice.

	Keeping your inventory in-house	Dropshipping
Pros	– Improved control over shipping options, customer support – Less chance of production shortages – Higher profit margins	Low overhead costs – You don’t need capital to purchase items Sell products with almost zero risk
Cons	– Large initial investment (buying and storing, packaging costs). – Obsolescence and deterioration – Shifts in market demand	– You have less control over lead times and order fulfillment – Lower profit margins – Limited customer support

Step 4. Register your business domain name

Although your business name may not be as important as the niche, it is still very important. It can stop you from starting an online store if you’re not careful.

A domain is the address of your website if it is a house. An address is a sequence of numbers such as 123.456.789. This address is known as an IP address (Internet Protocol address). Although computers use IP addresses to communicate with each other, it is difficult for humans to remember or access. A domain is a sequence of letters that serves as a convenience.

Domain names are unique to your company, much like your fingerprint. They cannot be shared between websites. 

It is important to choose the right domain name. Simple spelling combined with brand identity and SEO will increase your chances of being found in SERPs.

Here are some suggestions to help you choose your domain name.

• Keep it short and simple.

• Avoid using numbers (e.g., Floridasouvenir123.com)

• Avoid making it a full or complete sentence (e.g., buysouvenirinFlorida.com)

• Do not misspell domain names

• Avoid hyphenated domains

A web hosting account is required to store your website’s information. It is easy to see that if your domain is an address, your web hosting will be the actual address.

Before you choose a reliable web host provider, it is important to take the following notes:

• Price of web hosting
• Security features
• Upgrade options
• Reputation
• Customer service

Step 5. Learn about online business laws

Online business laws look very similar to brick-and mortar business regulations. You should know some important things, however, as each law has its own unique characteristics and features.

These are the three rules that your online business must strictly follow:

#1. Online customers care deeply about security and privacy. They will immediately leave if they feel your online business isn’t secure.

This is why E-commerce companies must ensure that customer information is kept secure and away from cybercriminals. Online privacy and security are also important to the government because they not only benefit customers but also help businesses avoid legal problems.

As an online retailer, it is important to consider the following:

• Contact information
• Account numbers
• Information about credit cards
• Social security numbers

#2. These words are often misunderstood by many people. However, it is important to distinguish them when you build an online business.

• Copyrights. Copyrights. Protect works of authorship such as songs, videos and photos.

• Patents.

• Trademarks. Protect logos, brands, or company names that identify the source of goods from other parties.

You should carefully examine the products you sell to ensure you do not violate any other copyrights or patents.

#3. Sales tax online You may have heard of sales tax. This is an extra percentage businesses collect from their customers. It might be slightly different if you sell online.

If you have an American online business, for example, the most basic rule to collect sales tax is:

• Online sales taxes must be collected in the state where your business is located (office, warehouse, inventory).

• You don’t need to collect sales tax online if you haven’t.

Keep in mind, however, that not all states have a sales tax. Regulations change frequently so it is important to stay up-to-date!

Step 6.Create your website

There are many options for starting an online store.

These platforms are fantastic because you can buy your domain name and they provide all the tools and guidance you need to build your website.

You should also choose a design theme for your website. It includes elements such as your website’s theme, product pages, etc. To attract customers to your website, it is a good idea to add sections such as About Us, Contact Us and FAQ page.

Step 7. Launch, advertise, and market

Now it’s time to get to the fun part, making sales. Once your website and products have been live, you cannot just wait for potential customers to visit you. To attract them, you need to do something. Marketing and advertising are key to increasing traffic and generating revenue.

Online marketing uses many common tools, including:

• SEO: This long-term and effective marketing strategy is used to drive traffic to your online business website. Google and other search engines like it, assess websites based on how much time they are used. This is where SEO and Content Marketing are useful – high-quality content can help you rank higher, keep audiences longer and drive more traffic and sales to your online store.

• Email marketing. On average, email marketing can bring in $44 for every $1 business invests. Yes, that’s right. $44 for 1 Money machine! Email marketing is therefore one of the most effective and profitable types of marketing.

• Social media marketing. It is important to be present where your customers hang out. Keep your social media accounts active and up-to-date!

• Influencer marketing. If done correctly, this marketing tool can yield huge benefits. Influencers are often well-known for their credibility and large following. E-commerce merchants often pay influencers to promote products on their channel. This can be a great way to promote your products!

Step 8. Keep your customers satisfied

It is important to get new customers in your door, but it is even more crucial to retain them. Once you have closed the deal, you can’t ignore them. You need to take care and provide outstanding customer service to them. And nurture them into loyal customers.

How can you keep your customers satisfied and make your online business stand out? Here are the answers.

• React quickly. Customers demand fast responses. It is important to respond quickly to customer requests to ensure that they are satisfied. You should pay attention to how many times your business is mentioned on various channels. Then, help them solve their problems.

• Keep track of every customer’s touchpoints. It will pay off in the long-term to have a better understanding of customers’ experiences. What length of time have they been with you? What was their experience with the sales process? Are they happy with your product or service? These questions will allow you to have more productive conversations.

• Make an FAQ page on your website. Your website can become a trusted resource for customers as they grow. You can also make it easy for them to use self-service by including FAQ pages that answer common questions and give them directions.

Step 9.Set up your funding plan

Many small businesses need capital or funding to make a profit. You can fund your business completely on your own or with the help of friends and family. This is known as “bootstrapping” and it can eliminate the need for additional funding.

Here are some options to get additional funding if your startup needs it.

• Seed financing. Everybody who invests in your company will receive a share of the stock. Although there are many types of seed funding, this is the basic idea. Investors will likely seek their investment back if the company is sold.

• Small business loan. A solid plan of how you will spend the money is key to convincing a lender, bank or community organization to lend you a loan.

• Accelerator. Accelerators are highly competitive programs where you compete against other small businesses at a pitch competition. Many times, the winners are awarded funding, seed, or capital. This is a great opportunity to build a network of other businesses.

• Crowdfunding. Crowdfunding is not a method of raising capital from potential co-owners but rather from potential customers or fans who are interested in supporting the business idea, but not necessarily owning it.

• Venture capital financing. This is when one or more venture capital companies make large investments in your company in exchange for preferred stock. Venture capital investors get a preferred return along with governance rights such as a seat on a Board of Directors (Board of Directors), or approval rights for certain transactions.

The final verdict

Everything you need to start an online retail business is covered by us, from business planning, regulations, marketing, sales, and more. While I’m still trying to find my winning idea, you are ready to start working on yours. Good luck!