HOME - shopping-carts.com :: The Resource Center for eCommerce and Shopping Cart Software Articles
The Premier Resource Center for
eCommerce and Shopping Cart Software Articles
List of eCommerce and Shopping Cart Software Articles
Title: Starting An E-Commerce Business
By: Author: Danna Henderson
The development and expansion of the Internet has made business
opportunities, once only available to the wealthy, available to
nearly everyone. In the past, opening a business was a huge
commitment in terms of finances and risk. Traditional business
owners had to quit the their current jobs, obtain bank
financing, and sign leases before they even made a penny. It's
easy to see why 95% of them failed within five years. Today,
business opportunities are available to anyone willing to put in
the time and effort to learn about the world of e-commerce. Best
of all, you can start an e-commerce business with minimal funds
and very little risk. This guide will take you though the steps
necessary to start your own e-commerce business.
Find Your Niche
The first step to creating your own e-commerce business is to
find you niche. Examine your hobbies and interests for potential
business ideas. If you love soccer, consider selling soccer
supplies or team uniforms online. You may also consider opening
a business that is similar to your current job. For example, as
a nurse you may know a lot about medical supplies and how
hospitals obtain them. You could start a medical supply
business. Your contacts and industry knowledge could give you an
advantage over a competitor who does not know the inner-workings
of hospitals the way you do.
Research The Demand
Now that you have a few business ideas, it's time to research
the demand for your products or services. If you plan to sell to
the general public, you'll want to find out how many people are
looking for your products or services. As a small business
owner, you will not have the marketing funds to create a demand
for a product. The products you sell, must already be in demand.
A great way to determine product demand is to see how many
people are searching for a specific product. Overture has a
wonderful keyword tool
(http://inventory.overture.com/d/searchinventory/suggestion/)
that displays the number of searches for specific keywords. It
will give you a good idea of which products are popular and the
specific keywords you should target when building your website.
Scope Out Your Soon-To-Be Competitors
Before settling on a business idea, scope out your would-be
competitors. Visit their websites and compare the following:
- Professional Look & Feel
- Products and Services
- Search Engine Ranking
- Page Rank (Available on the Google Tool Bar)
- Keywords
- Back Links (how many sites link to them).
You'll need to know your competitor's websites inside and out.
Spend some time exploring each one. This will give you an idea
of what you're up against. Keep in mind, that your website will
need to be equally as professional or better than theirs. Don't
worry if you don't think you have the technical skills necessary
to create a professional website. The use of professional
website templates will be explained later.
While you're researching your competitors, check to see if the
products you intend to sell are sold at large department stores
such as Wal-Mart, Target, and Amazon.com. It is very difficult
for a small business to compete with these large companies
because the profit margins are extremely low. You'll need to
sell products that are in demand, but aren't sold by corporate
giants.
Establish A Business Entity
In order to conduct business, you need to establish a business
entity. Fortunately this can be as easy as filing a "Doing
Business As" or "Fictitious Name" form with your local County
Clerk's office to become a sole proprietor. When you arrive at
the County Clerk's office, they will check their records to make
sure your intended business name is not already in use. If it's
available, you will need to complete the appropriate forms and
pay your filing fee. Each state has different requirements.
Check with your state for requirements on becoming a sole
proprietor.
You will also need a sales tax id. You will need to charge sales
taxes in the state where your business resides. Contact your
county office for details about sales tax ID's and any other
requirements they may have.
Open A Business Bank Account
Now that you are a legitimate business owner, it's time to open
a business bank account. Take your court documents to the bank
and open a business checking account. Most banks offer a variety
of business accounts. Choose the one the best meets your needs.
It's usually best to start with their least expensive account
because it could be a while before you start earning revenue.
You can always upgrade in the future.
Some banks require a business owner to wait specified amount of
time, usually 90 days, after the court documents are filed
before opening a business bank account. These rules are in place
to help prevent fraud. Check with your bank to obtain waiting
period information.
Choose A Domain Name
While you wait to open a bank account, you can start building
your website. First, register a domain name. Names that end in
".com" are best. If possible your, domain name should include
one or more of your target keywords. For example, if you are
creating a yoga supply business, you'll want to choose a name
with the word yoga, such as yogacenter.com, yoga-supply.com, or
yogastuff.com.
Create Your Website
One of the keys to successful e-commerce businesses is a
professional website. Your website is the first and often the
only impression your visitors will have of your business. A
professional website can be the difference between your visitors
viewing you as a home-based business operating out of your
garage and a multi-million dollar business with hundreds of
employees. Fortunately, you don't need to be a web programmer to
create a professional website. There are companies that sell
professional website templates. You can get website templates
for free, but it's much better to pay for a highly professional
template. To find these templates, simply search for "website
templates". You should expect to pay $50 - $150 for a good
template with multiple pages and professional images.
Most website templates can be customized with common HTML
editors and a simple graphics program. Templates can be edited
without having to invest a lot of time and energy into learning
how to code web pages.
You'll want your website content to target specific keywords.
This can be achieved by creating articles, product reviews,
product comparisons and detailed description of your products.
Avoid repeating the keywords so often that the text becomes
difficult to read. There is a fine line between good copy text
and spam text. Spam text is designed to increase your site's
listing in the search engines, but often backfires when
penalties are issued and your website is dropped from the
listing.
Host Your Website
Now that your website has been created, it's time to find a
company to host your website on their servers. You should be
able to find a good hosting company for around $10 per month.
This fee should include technical support and email accounts
with your domain name. Domain name-specific email accounts are
important for a professional image.
Your website files can be uploaded with a simple FTP program.
The hosting company's technical support personnel can walk you
through the steps to upload your files and launch your website.
Implement A Shopping Cart
No e-commerce website is complete without a secure shopping
cart. There are many shopping cart options. Many e-commerce
business owners make the mistake of using PayPal to accept
payments, which immediately tells visitors that their company is
very small and not professional.
A good alternative to PayPal is a remotely hosted shopping
cart. Remote shopping carts take the burden of maintaining
security and credit card numbers off your shoulder and places
the responsibility on another company. Remote shopping carts can
usually be configured to look similar to your website. In fact,
your customers may not realize that they have left your website
to place an order. The remote shopping cart provider will give
you the HTML to add to your website. When your potential
customer clicks on the Buy Now button, he or she is taken to the
remote shopping cart to enter the personal information and
payment details.
Depending on your choice of a shopping cart, you may or may not
need a merchant account to process transactions. Some shopping
cart services allow you to use their merchant accounts for a
slightly higher fee.
Stock Your Inventory
Now that your website has been created, it's time to stock your
inventory. The first step is to find the manufacturers of the
products you wish to sell. You can find this information by
reviewing your competitor's websites. Some of them may list the
manufacturer with the product name or description. Once you have
the name, you can search for the manufacturer online.
Contact the manufacturer and tell them that you are interested
in becoming a distributor. Ask for a wholesale price list and an
application. The price list will help you determine if the
profit margins are high enough to justify selling their product.
You'll want to ask the manufacturer the following questions:
- What is the MSRP (Manufacturer Suggested Retail Price) for the
- item?
- Am I required to sell the item at MSRP?
- What is your minimum order quantity/amount?
Some manufacturers will not sell to e-commerce businesses that
do not have a brick and mortar retail location. If this is the
case, you'll simply have to find a company that manufactures a
similar product and is willing to sell to an e-commerce business.
Promote Your Business
Now that your website is live and you're open for business, it's
time to promote your website. If no one knows that it exists,
you will not receive any sales. Most website visitors originate
from search engines. Before search engines can list your
website, they have to know that it exists. You'll need to submit
your website to search engines and directories such as Yahoo!,
DMOZ, Excite, and others. Search engine submission programs and
services are available, but they not effective. Most good search
engines require websites to be manually submitted. They enforce
this by displaying an image with a series of letters or numbers
that automated programs cannot read. The code embedded in the
image is required to submit your website.
Search engine algorithms are extremely complex. The ranking of a
website in their search results depends on a number of factors,
including keywords, density, back links, page rank, and other
factors. After submitting your website to the major directories
and search engines, the next step is to establish back links.
When search engines crawl the web and find a link to your site,
they count the link as a vote for your site. The more votes you
have, the higher your site will rank (assuming other criteria
has also been met). You can acquire back links by sending emails
to other website owners and offering to exchange links. It's
very difficult for new websites to acquire back links. Most
people prefer to exchange links with established websites. In a
way, it's a catch-22, but it can be done and the results are
worth it.
Starting your own e-commerce business is a lot of work. Making
it successful is even more work, but the pay-offs can be
rewarding. Thanks to the explosion of the Internet age,
e-commerce business opportunities are now available to anyone
with a computer, a few hundred dollars for start-up costs, some
spare time and the desire to create a business.
Copyright 2004 Danna Henderson. All Rights Reserved.
About the author:
Danna Henderson started ZIP Baby in order to provide parents
with comprehensive potty training information as well as a large
selection of potty training products. For more information about
potty training, or to browse the potty training store, visit
& more.
Return to Index