The internet has greatly equalized the opportunities for small business owners worldwide. Commencing an online business is comparatively simple, without the high initial expenses associated with a physical storefront business. Nevertheless, this convenience doesn’t entail that you can effortlessly initiate and advertise your enterprise.
To ensure the growth and success of your online business, it is crucial to establish a firm foundation. The steps mentioned can be done in any order, but they aim to provide a sturdy base capable of withstanding your business’s expansion.
1. Assess the viability of your new business idea
Starting an online business may be more convenient, but it does not imply that it is entirely cost-free. Similar to a brick-and-mortar enterprise, your first course of action with an online business is to evaluate the feasibility of your concept.
If your product or service doesn’t have a market, even the best business idea will fail. It is pointless to spend money on a solution to a problem that most people don’t consider important enough to invest their resources solving.
Given this consideration, you must analyze your concept. Here are some inquiries you must pose to yourself:
- Does your product or service solve a problem that enough potential customers have?
- Does your product or service provide a cost-effective solution to that problem?
- Are people willing to spend money to solve the problem?
- How costly will it be to reach the people in need of the solution your product or service offers?
2. Develop a business plan
After determining that your idea is viable, it is crucial to create a thorough business plan. Even if you do not intend to secure funding for your venture at the outset, having a business plan is advantageous as it enables you to anticipate and address any possible challenges in the future, while also strategizing for growth and profitability.
Your initial efforts in the first step provide a solid foundation to build your business plan, and there are numerous online resources to aid you in assembling the essential components of a robust plan.
A well-designed strategy can aid in pinpointing your target audience, defining your goals, mapping out a marketing plan, and guiding you toward critical decisions that could determine whether you succeed or fail.
3. Choose a business name
Selecting the name for your business is a crucial aspect of starting up. As your business will operate mainly on the Internet, the name you choose must be available for registration as a business name within your state and in the digital realm.
You will be required to verify if the name you desire is obtainable in the following categories:
- Business name in your state
- Domain name
- Username on each of the social media platforms you plan to use
If your chosen name isn’t available as a domain name or social media username, consider different permutations of the name, and remember that many domain name extensions beyond the original “.com” are available. Additionally, it’s important to check that your name and domain name aren’t impinging on any registered trademarks.
4. Decide on your business structure
Choosing a business structure will determine the legal and tax obligations that you must fulfill. The majority of small business proprietors opt for one of the subsequent structures:
- Sole proprietorship. This is the simplest form of business structure, but its lack of limited liability offsets its simplicity.
- Partnership. While this form of business structure might appeal to you if you are embarking on your venture with a partner, your liability is unlimited like a sole proprietorship.
- Limited liability company (LLC). An LLC offers limited liability without the additional complexity of incorporation, making it one of the most popular small business structures.
- Corporation. Like an LLC, a corporation provides limited liability, and while it’s more complicated to both set up and maintain, it may be a good choice depending on your circumstances.
Seeking advice from a lawyer is recommendable when establishing a new business to choose the appropriate business model. As each structure is subject to diverse tax regulations, it may also be wise to consult with a tax expert.
5. Take care of all the legal tasks
To establish a sound legal foundation for your new business, you must complete all required business-formation documents and other paperwork, which is similar to the process involved in setting up a physical store.
- Registering your business with the appropriate government authorities
- Obtaining all the required permits and licenses
- Meeting all federal and state tax requirements, such as applying for state and federal tax ID numbers
It is crucial to research to ensure that you fulfill all relevant requirements, as they differ from state to state and depend on the type of enterprise you are running. Seeking assistance from a lawyer who specializes in business startups in your specific field is advisable to ensure that you are complying with the appropriate regulations.
6. Build your website and choose your sourcing and fulfillment methods
Giving equal importance to the virtual counterpart of a brick-and-mortar store, an online business must pay the same attention to detail when creating its website as it would when scouting for a physical location and negotiating a lease agreement.
When considering the construction of your website, take into account the available payment processors. It’s a wise business move for numerous online companies to employ a website developer to assist in building their site.
The selection of your web host is a crucial factor to bear in mind. Your website may be of high quality, yet it will be of no use if your host experiences frequent downtimes or if the website’s browsing speed is too sluggish.
Apart from browsing through online reviews, it’s worth asking individuals in your personal and professional circles. In particular, fellow online business owners can offer priceless insights regarding the dependability of a web hosting service.
Depending on the products or services you’ll be offering, you will also need to evaluate and choose your sources of supply and inventory, as well as how you will deliver your product or service to your customer. Again, several options are available. Given the importance of having inventory on hand—or a good on-demand provider—and a reliable method of fulfillment, spending adequate research time on this aspect can mean the difference between success and failure.
Getting Started on eBay
Beginning to make money online through eBay is an effortless process. All that is required is signing up for a free account and starting by selling items that you no longer need. Besides creating extra room and eliminating unnecessary belongings, this will allow you to gain familiarity with the eBay selling process.
Just because you have no use for your unwanted belongings, it doesn’t necessarily mean that nobody else would want them!
“The garbage of one person can be a valuable possession for another!”
That old series of comics that you collected as a kid, maybe there is a collector that would like them. Those clothes that you have outgrown, might fit someone else. Your old computer doesn’t work anymore, someone might want to fix it up or get spare parts from it. Etc.
Naturally, certain products will have better sales while others may not be sold at all, with many factors such as the prospective target audience, the quality, and the cost of the item playing a vital role. It is unlikely that a highly-priced, impaired, and vividly colored bathtub would hold any interest for most individuals, but if your aim is simply to get rid of your belongings, then only a single person’s interest would suffice.
A Niche eBay Business
If you plan to launch your eBay venture, you will require inventory unless you possess a bottomless collection of unwanted goods.
When beginning an eBay business, it is essential to determine the type of products that will be sold. While it is possible to sell anything, establishing a niche can aid in developing a reputation as a particular product expert.
It’s important to select a market that offers ample room for expansion without leaving you feeling swamped. Consider the massive online market for pet supplies – you could offer everything from dog collars to fish tanks to hamster wheels, etc. But it’s best to concentrate on a particular niche, like only selling products for dogs or solely offering items for fish. By focusing on a specific area, customers searching for fish supplies will know that your eBay business specializes in everything related to fish pet products.
Read our ‘ 3 Profitable Niche Blog Topics – How To Select A Blog Topic That Makes the Most Money? ‘ for some inspiration.
Selling What Sells!
To earn profits through eBay, it is important to determine which products are popular within your specific market. This can be accomplished by utilizing eBay’s advanced search functionality to investigate selling trends and prices.
You may have a desire to auction video games on eBay. There exists a vast assortment of games available for sale, including retro games, brand new games, sports games, strategy games, PS3 games, Xbox 360 games, PC games, and many others.
Investing in the wrong stock could lead to monetary loss if you’re unsure about which products will sell. By examining the completed listings, you can identify the most profitable and popular product categories.
Getting Stock To Sell
Knowing the types of products to sell, it is important to also determine the sources from where to acquire the stocks.
It is highly unlikely for any vendor to disclose the origin of their inventory as it would reveal their trade secrets. Therefore, it is essential to research on your own to locate reputable suppliers.
If you want to sell a specific product, the simple act of looking at the packaging can often reveal the name of the supplier. You can then check out their website to see what other products they sell.
Searching for product suppliers on Google is often overlooked but can yield great results. By using this method, you may discover some exceptional suppliers and gradually expand your sources for acquiring stock, ultimately increasing your product selection.
Wholesale and Dropshipping are the two primary avenues to obtain stock. Each has its advantages and disadvantages, with the choice ultimately depending on one’s personal preference.
- Wholesale – This method requires you to have the room to store the stock that you buy and the money to buy it in advance. The risk with buying from wholesalers is that you could potentially buy a stock that doesn’t sell, but as long as you do research and make sure to check completed listings before you order anything, the risk here should be kept to a minimum.
- Dropshipping – This method holds all the stock for you. When someone buys an item from you, your drop shipper company sends the item for you to the customer’s address. You only actually pay for the item once you have received payment from the customer. This method does require you to pay a membership fee to join the scheme in the first place though.
eBay Feedback
Being a successful seller on eBay depends largely on the feedback you receive from your customers. When buyers share their experience with your service, including the quality of the item, packaging, and delivery speed, it is visible to everyone interested in purchasing from you. This feedback is a crucial determinant of how trustworthy you are as a seller and sets you apart as a dedicated professional. As your feedback score increases, you are on your way to achieving the coveted ‘PowerSeller’ status. Therefore, it is important to have a high assessment score as it reflects your ability to serve customers well.
Serious eBay sellers highly value the ‘PowerSeller’ status as it signals trustworthiness to potential customers, increasing the chances of sales. There are five levels of achievement, beginning with the Bronze level which is attainable with relative ease. By expanding your product range and progressively increasing sales, reaching the ‘PowerSeller’ status will naturally occur without an excessive need for goal-setting.
eBay Shop
It’s possible to start a shop on eBay, but it might not be advisable at the beginning. It’s preferable to hold off until you have a sufficient variety of merchandise and have earned an ample amount of feedback so that your shop doesn’t seem barren if you only have a small number of items to sell initially.
Product Price
The crucial point to bear in mind is the selling price of your items. Even though you can earn more by selling an item for $50 than at $5, there may be a significantly higher number of potential buyers for the $5 item.
Make sure to check the prices of competitors offering the same product. If two products are identical, customers will most likely opt for the cheaper option. So, keep this in mind!
