How to Start an eCommerce Business from Scratch

How to Start an eCommerce Business from Scratch

payment methods ecommerce store

The eCommerce Business is exploding and brick and mortar stores may never see a flourishing business again. Shopping online was considered to be a luxury but now it’s a necessity, as a result, a lot of people wish to start a business but they don’t know where to begin with. Well, let’s take a look at how you can start your business from scratch.

Steps to start an eCommerce business from scratch

eCommerce businesses are flourishing now, although, businesses tend to struggle to get traction, it’s mainly because business owners fail to meet the initial necessary prerequisites of a business.

Despite all of that, there’s nothing more rewarding than starting a business from scratch and watching it take a flight.

overhead view of business people working on new business plan, business teamwork

Step 1: Research and Decide the model of your eCommerce business

Research is the first and the most crucial stage of any procedure, and eCommerce won’t make any exception. Invest in heavy market research. Conduct extensive research of : 

a) consumer behavior 

b) existing sellers of the product/service 

c) existing eCommerce business models

d) pricing strategies other eCommerce businesses

e) procurement of raw materials and their processing

After you study the findings of your research, decide on the business model according to the capital you are willing to invest. Not all eCommerce businesses need investments. 

Some eCommerce business models: 

a) Business-to-Business (B2B) –

This is a generic type of eCommerce business model where an online transaction occurs between 2 businesses for further selling to consumers. It is generally how the online wholesale market operates. 

b) Business-to-Consumer (B2C) –

This eCommerce business model is very common and has been in existence for a very long time. An online transaction between an online store and a consumer is defined as a Business-to-Consumer model at its simplest. 

c) Consumer-to-Business (C2B) –

It is exactly the reverse of traditional B2C eCommerce. In this model of eCommerce, many individuals make their products/services available to business houses that are seeking the product. 

d) Consumer-to-Consumer (C2C) –

The online transaction between two consumers is a Consumer-to-Consumer eCommerce model. It usually takes place on a platform provided by a third party. For instance, the rising number of thrift stores on social media.

e) Business-to-Administration (B2A) –

All online transactions that take place between a business and public administration. 

f) Consumer-to-Administration –

All online transactions that take place between consumers and public administration. 

Depending on your products, interests, and resources, you should choose the model of your online business. 

Step 2: Segmentation of the market 

STP, a very popular abbreviation, is a critical step that an eCommerce business owner cannot afford to miss out on. It is the broad framework that helps to plan marketing strategies. 

Segmentation involves the process of segregating the consumers according to demography, geography, psychography, and behavior. New entrepreneurs need to understand that your product cannot solve the problems of everyone, your product cannot be used by everyone. Hence, it becomes extremely important for you to identify the various segments and narrow them down. 

Furthermore, it’s impractical to have an eCommerce website and have hundreds of products and dozens of categories. Choosing your niche is the next most important step in opening your online business. Don’t pick an overcrowded niche, the more specific you are, the lesser competition you are likely to face. You can also work with other business powers in those niches to cross-promote. 

Step 3: Define a Target Audience

After segmenting your market, you have to work upon the target audience that suits you the best, that would respond to your product better. Segmentation is the foundation of this process, identifying the target based on that will give you the most positive results. Experts advise targeting one segment at a time since a lot of hard work has to be put in, to target effectively. 

Your target audience also determines a lot of future decisions that have to be taken, before and after setting up the business.

Step 4: Position your product 

In the minds of your target audience, decide how you want to position yourselves as. Position your eCommerce business in the minds of consumers with the help of the Unique Selling Proposition that your business has. This can be done by focusing on why consumers should choose you and not your competitors. 

Each segment that you are catering to will have different wants and needs, position your product in the minds of the consumers such that they are convinced that your product adds value to their life when they buy it. In other words, this is called value positioning. 

Step 5: eCommerce Registration

Before you get into the nitty-gritty of building a brand, there are some basic steps that you need to take.

  1. Choose a business name and register your company as there are legal protections and tax benefits for incorporating.
  2. Pick a name for your site and the legal name for your business. make sure that it fits your niche.
  3. Look for a mentor who can guide you with the necessary licenses required for your business.
  4. To open a business bank account, you need an employer Identification Number. This is necessary even if you don’t have employees.

Step 6: Finalize your eCommerce plan

By now you should have a great idea of what your business looks like. You have your target audience, product niche, and your brand name in place. Now you need to look into the business plan and put it on paper and determine your startup budget and monthly expenses. 

Step 7: Pricing

Selling products online

Pricing is a critical and difficult step of any business. It depends on the raw materials, manufacturing process, layers that it goes through, the target audience, your profit margins, and competitor pricing. The price of the product should justify the quality, availability, and use. Depending on the industry that you operate in you should determine the price of the products. 

7 Pricing strategies that are most commonly used:
  1. Price skimming
  2. Penetration pricing
  3. Competitive pricing
  4. Loss leader pricing
  5. Premium pricing
  6. Value pricing
  7. Psychological pricing

Step 8: Creation of an Online Store

You need to register your domain name and any redirect URLs that might be relevant. Selecting the right eCommerce software can be challenging. There are multiple eCommerce solutions available online. Your website is a reflection of you, your brand, and your services. Make sure you ace this aspect as this is the face of your business. 

Dash101 is a full-stack eCommerce platform that helps you in creating your online store. It helps you to create a website that is SEO-friendly and has the latest encryption practices. It has premium themes to suit your business model. You get to pick a domain name exclusive to your store or purchase one with Dash101 and unlimited hosting.

Step 9: Devise a marketing plan 

Marketing is to the product what petrol is to the vehicle. 

Marketing acts as a catalyst to the growth of your business. With a strong marketing plan in place, your eCommerce business gets more visitors.

Some of the common marketing techniques:
  1. SEO Marketing 
  2. Advertisements
  3. Retargeting 
  4. Influencer Marketing 

The best eCommerce sites invest heavily in online marketing. Driving traffic to your page is the most difficult part of your business. Subscribe to podcasts, marketing newsletters, to get marketing tips.

Step 10: Payment Gateway 

Wikipedia defines Payment Gateway as, “A payment gateway is a merchant service provided by an e-commerce application service provider that authorizes credit card or direct payments processing for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar.” 

Choose a payment gateway that is aligned with the target audience of your eCommerce business and consider other factors like user experience, recurring bills, customer support, security, etc. Consider the option of Cash on delivery since it helps you gain the trust and thus the loyalty of your buyers. 

Step 11: Logistics Partner

Choose a logistics partner that offers several shipping partners, helps you in reverse logistics, and offers services at a cheaper rate. Your logistics partner should be reliable, fast, and area that they cover. Some partners also collect cash if you have Cash on Delivery.

For instance, Dash101 provides 8+ shipping partners and delivers to PAN India, covering more than 27,000+ pin codes, starting at ₹23/500 gms. 

Your store is ready to go, now you have to rope in those customers.

Do you feel ready to start an online business? The efforts that you put in while starting will help make your process faster. Don’t be overwhelmed by the steps that you have to follow. The key is to have a plan and follow it thoroughly. 

Dash101 is your go-to guide where you can create an eCommerce store in less than 1 minute. With unending features to choose from, Dash101 helps you to build a brand.

Many wish to start a business but they don’t know where to begin with. Here’s how you can start your business from scratch.


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Many wish to start a business but they don’t know where to begin with. Here's how you can start your business from scratch.
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