Starting a new business from home is an increasingly popular venture. Setting up an e-commerce shop has never been easier, and the same technology that lets you connect and share in your personal life also allows you to advertise a business and grow a customer base. As with any commercial venture, the key to success is planning and research.
E-commerce involves buying and selling goods and services on the internet and transferring money and data to execute transactions. You might sell physical goods, such as products in an online store; services, such as content creation; or digital products, such as audiobooks or video streaming.
Common e-commerce models
E-commerce businesses can largely be categorized into four models: business to business, business to consumer, consumer to business, and consumer to consumer. The business-to-business model includes consultants, software developers, and wholesalers. The business-to-consumer model includes retail, streaming services, and service workers. The consumer-to-business model includes freelancers, hiring agencies, and product creators. The consumer-to-consumer model includes online marketplaces and commission-based products, as well as classified ads.
Benefits of e-commerce
Both consumers and business owners experience the benefits of e-commerce. Consumers can shop online from any location at any time, with easy access to a wide range of products and services. For business owners, benefits include relatively low capital investment and overhead costs compared with traditional businesses. If you have a phone or computer, internet access, and some type of commerce platform, you can sell a product or service from home.
Assess your options
If you’re an aspiring e-commerce entrepreneur, you’ll need to decide what kind of business you want to run, who you’ll be competing against in the marketplace, and how you’ll deliver your products or services.
Explore home-based business ideas
There are countless kinds of home-based businesses. You might sell homemade products through an online store, run customer service for another business, or provide online services such as writing or web design.
Analyze the competitive landscape
Before creating your business, determine a market need. Look for opportunities to partner or cross-promote with other businesses. Avoid overly competitive markets with established leaders.
Evaluate e-commerce platforms and tools
There is a wide variety of e-commerce platforms, online marketplaces, and payment tools that make it easier to run an online business. Once you know the products and services you want to offer and the customer base you intend to reach, you can select the appropriate technology to support your business.
Create your business
There are many steps to creating an e-commerce business, and each venture brings unique requirements and challenges. However, some prerequisites are common to most online businesses.
Validate product ideas
Steps to getting your products and services ready for market include creating a consistent brand image, determining a target demographic, and testing your product carefully. You’ll also need a plan for providing customer service.
Register your business and brand name
Once you’ve chosen a business name, you’ll need to register your company and get an employer identification number (EIN). Depending on your industry and location, you may also need to apply for a business license or other permits.
Finalize your business plan
Figure out your break-even point. Project your revenue and expenses. Calculate your profit margin. Iron out details such as staff, sourcing, logistics, and marketing budget.
Create an online store
Register your domain name. Choose e-commerce software, including security applications. Set up email marketing, customer support, and coupons.
Create ad campaigns, such as sponsored content or pay-per-click ads. Create an email list. Promote your business through social media channels.
Find success with your home business
Whether you’re turning your hobby into an online retail shop or working as a freelancer, creating and running a viable business from home is possible. With an understanding of fundamental business concepts and a sound plan, you can achieve your entrepreneurial goals.