Business

How To Start An Online Retail Business From Scratch

The internet has changed the way we live and the way we buy. With every advancement of technology comes another wave of new online buyers and of each online buyer buying more stuff than ever from the internet.

Find a Product

The first thing you need as an e-commerce merchant is a product. That seems simpler than it actually is. It’s estimated that you can find over 500 million different types of products on Amazon alone. So finding a good product idea is harder than it seems.

The best place to start is to look at what products you use and buy. When you’re thinking of a target market, it’s also a good idea to think about what market niche you belong to.

Are you a woman that is really interested in cosmetics and makeup? Do you enjoy fishing or hiking? Are you a tech geek always looking at gear reviews?

Making whatever product you choose to be something you’d buy yourself will give you a huge headstart in understanding your market segment and even knowing what products to source.

Eat your own dog food. That’s a common saying among Silicon Valley startups. Essentially sell a product that you’d buy yourself, and it’ll be hard going wrong, at least in terms of product selection.

Another thing you want to research is if people are buying the type of products you’re selling. If you love a particular product but it’s not doing well on Amazon, you don’t want to sell it. Just buy it for yourself and enjoy it, but don’t build a business off of it.

Also, check to make sure the market isn’t saturated with your product. The downside to selling popular products is that there are thousands of other e-commerce merchants that can see that as well and you could run the risk of selling the same thing that thousands of other sellers are selling.

Source the Product

Sourcing cheap products from overseas have never been easier than it is today. You can go online and buy a case of cheap goods to sell at a markup with the click of a mouse.

The most popular places to source products are Alibaba and Alibaba Express. Both are own by the same company and it’s mostly goods manufactured in China.

Alibaba Express is the version of Alibaba where you can source in smaller volumes. This is a great place to start when you are a new e-commerce merchant. It’s also good if you’re wanting to test a product out on your market and don’t want to invest a ton of money and make a big bet on one item.

Market the Product

Once you source your product, now comes the fun part. Now you have to market it. 

It’s always a good idea to build a website with your products on there, but it’s actually not necessary in the beginning. In fact, many e-commerce merchants don’t have a website. 

So how do they sell their items online? They list their products on other websites, namely Amazon, eBay, Etsy and other marketplaces where they allow third-party sellers.

The best way to manage listing products on all of these marketplaces is by using an e-commerce platform that will allow you to do this easily. There are great solutions like Shopify Plus, Magento Enterprise, and Big Commerce that will allow you to do this.

These platforms will also help you manage your inventory and process your fulfillment. They’re pretty much all-in-one solutions in order to run your business around. In fact, once you’re ready to build your own website, you can integrate it with these platforms to that as well.

Fulfill the Product

The next thing you need to figure out is how you will fulfill your orders. Many people start out by storing and shipping inventory out from their garage or spare bedroom. But as you grow, you’ll eventually run out of space.

The next logical step used to be getting a warehouse and fulfilling orders from there. But you no longer have to do that.

There are fulfillment firms, the most popular being Fulfillment by Amazon (FBA), that will process and fulfill orders on your behalf. In fact, you don’t even have to list your items on Amazon in order for FBA to fulfill them for you. You can get an order on eBay and ship it out from an Amazon fulfillment center.

The other, more conventional option is to lease a warehouse and do it yourself. But that means recruiting, hiring, training and managing a warehouse and fulfillment team. There’s a lot of overhead with running it yourself that many don’t have to deal with by using something like FBA.

Rinse and Repeat

Once you’ve found that hot product, figured out how to market that product, and figured out the fulfillment process, it’s now time to rinse and repeat. Simply do this over and over again and you will become a successful e-commerce entrepreneur.

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