Many people wants to start their own online stores, whether clothing, gift basket or toy stores on the Web. Using a clothing store as an example, here are some basic steps to creating your online storefront:
1. Define your business
The very first step is to always know what it is you want to do. This includes knowing what type of clothing business and what market will you tap (kids, babies, women or men). Consider some niche markets out there — some examples include online clothing shop for plus sized women, or corporate and work outfits for pregnant women. Look at your competition (and there are a lot) and think: what will make the customer choose your store instead of going to a clothing retailer like Gap.com or a superstore like Amazon.com?
2. Research your market
Understand your target customer as well as know your competitors — who they are, what are they doing and how are they presenting their store, how are they marketing, are your target market buying online and from where. Also subscribe to publications such as Internet Retailer to help you learn more about the best way to sell online and what the big businesses are doing
3. Envision your website
Determine the features you want for your website. The beauty of the Web is that it makes it easy for you to research the competition. Visit the sites of your potential competition, including the sites of big businesses. Why do you think their websites work? What are the features they have that you think you need to have? Think like a potential customer and see which features make the shopping experience pleasant for you? Remember, even the smallest detail can spell a difference in terms of conversion rates and sales — e.g. from the color of the Add to Cart button to the promotions and element on the homepage. Of course, big businesses like Amazon.com will have significantly deeper pockets than you may have, but consider the level of personalization and customization that these sites do.
Divide the list of features you should really have (e.g. photos, copy, etc) to the features that are nice-to-have-but-no-money-for-it-this time. Once you have the must-have feature list identified, start shopping for an ecommerce provider that offers most, if not all, of what you need.
4. Write a business plan.
A business plan is important to help you think through your business — who is your target market, what do you intend to accomplish with your site, how are you going to market your products, what technology you need to accomplish your goals, where will you source your products or how you are going to manufacture your items, and how much resources you need to have. You don’t have to write a thesis or a very formal business plan — unless you will seek out financing from loans or investors.
5. Arrange your startup capital.
If you think your idea can work, then it is time to start the ball rolling. If you need to apply for a loan, prepare a business plan. If you have savings or will ask loan from your family and friends, a business plan is optional but it can help you think through the business. There are no grants for starting an online store to sell clothing
6. Decide what ecommerce platform you will take in selling online
You have several options in terms of building your online store. You can build your own systems, choosing and adding the elements yourself. Or you can also buy a packaged solution where the provider has selected for you all the elements you need. Be sure to weigh their pros and cons including scalability and room for growth:
- Create your own ecommerce website.
- Sell in an online marketplace such as eBay or Etsy and create storefronts from these marketplaces
- Use a turnkey ecommerce provider such as Yahoo Stores
With your own ecommerce website and using custom developed ecommerce functionalities, you get to have the exact features that you really want. Plus, you get to control how often and when you need to upgrade your system. The downside of course is that it can be expensive, especially if you keep on adding bells and whistles.
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7. Start the legal and regulatory processes.
Register your business and your assumed name (doing business as), get a sellers permit from your state, find out reporting schedules for tax purposes, decide on the legal structure of your business (e.g. sole proprietorship, LLC, S corp, C corp, etc). Go to your county.
Note that some trade shows will only allow you to attend if you can prove that you are indeed part of the industry – which means you have business registration to show to them
8. Line up suppliers – where will you get your merchandise.
You may not be able to arrange an account at this stage without a sellers permit, but at least find out who are they. Attend clothing tradeshows so you can meet manufacturers and other industry players personally. Use B2B marketplaces such as Alibaba.com if considering looking for international manufacturers or suppliers.
9. Start working on your website
Get all the elements you need to run your online store based on the platform you have decided to use for your ecommerce venture. At its most basic, you need to be able to display your products/services (catalog), take orders (shopping cart), and collect payment (payment system)
- Get your domain name
- Decide on a web host
- Compare and decide on the shopping cart system
- Get an SSL certificate
- Decide on your payment gateway
- Determine your system for inventory management (and whether you want one that is connected to your shopping cart system)
10. Decide how you will accept payment.
Apply for a merchant account or decide what payment options or combination of payment options you will offer to your customers. Here are a number of options to help you accept payment for your ecommerce site:
- Credit Card processors (American Express, Visa, Mastercard, Discover, etc) such as Cardservice International or Merchants Account Express or Worldpay in Europe
- Google Checkout
11. Design your website.
Put together your website. Decide the look and feel that you want, as well as all the aesthetics considerations:
- Find a designer/web programmer to create your site, if needed
- Find a photographer to take pictures of your products, if needed
- Hire a copywriter to write your sales and website copy including the description of your merchandise, if needed
12. Decide on your shipping and fulfillment mechanisms
When you sell a product online, shipping and fulfillment are key elements that you need to plan for at the start. Some considerations you need to think about are:
- Should you do fulfillment in-house or should you use a third party fulfillment?
- What is your target fulfillment and shipping costs per order?
- Will you use an integrated ordering and fulfillment software?
- Will you need a warehouse?
- What shipping strategies will you use? Examples include free shipping for x amount of orders, free shipping on everything but higher priced, no free shipping but lower prices, flat rate shipping such as Overstock.
- Will you allow drop shipping arrangements with manufacturer?
- What shipping companies will you use?
13. Learn about the laws and rules affecting ecommerce
There are a number of important rules that you need to be aware and follow, such as
- Data security standards put forth in the PCI Compliance Guide
- FTC guidelines on endorsements and testimonial advertisements
14. Plan your marketing strategy
- Make sure that you are running web analytics on your site, setting clear goals and metrics to better understand your ROI
- How to market via search engines and whether you need to hire someone to optimize your website and do pay per click advertising
- Decide whether you need to hire a PR person to help you raise publicity for your business
- Think whether you are going to use coupons to attract first time and repeat customers?
- Think of how you can use email marketing to promote your ecommerce store and entice customers to purchase again from your store
- Decide how you can use videos on your site, whether to educate your customers about your products or show how to use your products
- Learn about social media and social marketing and how using sites such as Twitter, Facebook, Stumbleupon, etc. can help your business
15. Protect Your Business
Take the necessary steps to protect your ecommerce store, especially from
- Hackers who could break the security of your online store and undermine the confidence of your customers.
- Watch out for fraudulent orders and make sure that you use the necessary precautions to prevent them, such as CVV verification, address verification, and even blocking out orders from selected countries. Read the article “How to Protect Your Online Business from Credit Card Fraud”
For more information, get the book How to Sell More Online: 40 Tips for the Small Online Entrepreneur
(Note: Post originally published March 20, 2007 and updated on November 12, 2009)