How to Start an Online Store The Right Way in 6 steps
Picture this; you’re sitting on a pile of cash on an oversized couch in your newly built 8-bedroom mansion.l
You have a green lime Lambo parked in the garage. You don’t have a care in the world.
Your bank account has so many digits; you can’t even count. You plan a vacation to Hawaii every week because you feel like it.
What did you do to get here? You started an online store that made you join the 6 figure/month club.
Sounds too good to be true?
Meet Steve and Jenniffer
I love sharing stories of guys who are already rocking it to show you that it’s possible.
Check out this post on How adam Enfroy is raking in over $80,000/month from blogging.
Steve Chou and wife Jeniffer delved into online entrepreneurship a decade ago. Before the shift, they were victims of a disease known as complacency.
If you don’t know what disease it is, It’s the one that keeps you working 60 hours every week on your soul-sucking job that you hate.
The illness is so severe that it prevents you from pursuing your passion and personal goals. You just do the job for the sake of money.
“Work is love made visible. And if you cannot work with love but only with distaste, it is better that you should leave your work and sit at the gate of the temple and take alms of those who work with joy.”
After years of living a hellish life and the coming of their two kids, they knew it was time to take action.
Steve wanted to be a better father and get the financial security that would take care of his family. On the other hand, Jennifer didn’t want to miss a single moment of their kids’ childhood.
The blog, together with the online store, generates over $1 million of revenue every year. Their two kids, who are now 11 and 9 years, have followed in their parents’ footsteps. They’ve started an online clothing store that’s slowly growing.
This can be your story someday.
And I want to make it simpler for you. That’s why I came up with this step-by-step guide on how to start an online store in a couple of minutes.
Ready? Let’s set the ball rolling.
Covid-19 and e-Commerce
What does covid-19 have to do with online e-commerce?
According to Techcrunch, the pandemic has accelerated e-commerce by five years. In 2019, e-commerce had a 14% market share. The percentage will have jumped to 22% by 2023.
An excellent example is Amazon, which has seen a significant rise in its market capitalization since the pandemic began.
The e-commerce giant had a valuation of $920 billion when the year started. After a coronavirus became a worldwide concern, Amazon hit record highs with a 60% increase to stand at $1.49 trillion.
The answer to this rise is evident. People spent more time at home with minimal movements. They had to rely on online shopping to get all their stuff from groceries to electronics.
Hey, I can’t start a company like Amazon.
I agree you (probably) can’t.
But you can start an online store that’ll allow you to leave your suckish 9-5 job and travel the world while working from the comfort of your laptop.
1. Pick a Profitable Niche
It’s the common question newbie online entrepreneurs ask.
How do you choose the niche that is not only profitable but also good for you?
It’s a tough question because everyone has his/her preference. We don’t have the same goals and experiences. Likewise, not everyone can start an online store in the same niche.
If your friend is killing it by selling iPhones, you shouldn’t try to do the same. You might make more money if you start an online clothes store for example.
Still, some companies are the do-it-all type. And they do it very well. Amazon and ebay are good examples because they have huge markets that have sealed their success.
You can’t go the same road if you’re a new business owner. It’s advisable to start with one highly-sought product and then upsell later. Don’t bite more than you can chew.
What is a Niche for Online Store?
It represents the narrow category in which all of your products fall.
While a general niche may be a good start, It’s a sign of spreading yourself too thin. Don’t be afraid to niche down.
Indeed, you’ll lose a couple of customers, but you’ll create more demand by becoming an expert in that niche.
Micro-niche marketing is the talk of the town today. It’s all about finding the narrowest sub-niche while enjoying a broad audience.
Source: Kunzon Publishing
How to Choose The Best Niche For The Right Market
I’ll agree that it may appear hard. But there’s no magic formula or a secret hack that you have to do when choosing a niche.
I came up with five full-proof strategies that most online businesses used to get the niches they’re compatible with.
● Don’t Ignore What’s in Your Heart
I don’t think there’s a successful entrepreneur who does something he/she isn’t passionate about. Maybe you give me one example.
Entrepreneurship isn’t only about the money. You have to devote yourself, work hard, get the right resources, and take the time to make it happen.
What does it take to get all these virtues?
Research by Deloitte found that 87.7% of the American workforce doesn’t love the job they do.
This means that they aren’t reaching their full potential.
Being passionate about a product is the first sign that it’s meant for you.
Below is a video from Neil Patel on how to choose a niche. Though it’s not directly related to what we’re talking about, it has useful insights on how to get a niche for your online store.
● Research Your Competition
There are probably tens, if not hundreds, of other online stores in your niche. Check them out to see if they might be a strong competition.
If you decide to move on, arm yourself with robust marketing strategies to get a slice of the market share.
You can use tools like SEMrush to generate data about your competition. Try keywords that receive a lot of monthly shares.
● Consider The Price
Let’s make it straight. If you’re passionate about cars, it’s not a good idea to start an online store selling cars (if it’s even possible).
You won’t sell a Bugatti Chiron online going for $3 million even if your passion for supercars drives you nuts.
But you can record some good sales if you start an online store to sell car parts. They are a bit cheaper and have a vast customer base.
(This is obviously only an example of what niching down can look like, don’t start an auto parts store, there are already too many of them! Unless you find a crazy new way to advertise them…)
On the same note, you can’t survive on a product giving you only $1 for each sale. If your goal is to hit six figures, you’ll have to sell 100,000 units which is tough to achieve.
Suppose you crack the nut, you’ll get around $50-60K per year. This isn’t worth the sacrifice of leaving your 9-5 job.
What if you sell products going for $100 per unit with a profit margin of $40? You’ll only need to sell 2500 units per month to get $100,000 monthly. This is relatively easy to achieve.
It’s recommended that you get a product that doesn’t go above $100 when starting. They’re easier to sell in a short period of time.
● Look for Product that is On-Demand
There’s no point in selling a product without a viable market. It’s like trying to sell the old B&W Television while people are buying the new 60 inches 4k UHD smart LED TVs.
How do you tell that a product is on-demand? Good question!
The ideal place to start is SEO using the Google Adwords keyword planner. The tool shows you the number of times internet users search for a keyword.
If the product has less than 1000 searches every month, then it’s not in high demand.
The focus has changed today. e-commerce experts advise that it’s better to sell products you don’t have much experience in but are in high demand.
A good example is the billion dolar CBD Industry which is a hot cake now. It’s a new industry but you can make good money selling CBD products.
● Check Out Social Media
More than half of the world’s population has access to social media today. Without a doubt, there is a lot of information you’ll get here that’ll give you an idea of the niche you can settle on.
Check the hashtags and content related to an immensely popular niche. Check out the number of people that follow them. Check out the Facebook groups formed to sell a particular product.
The information will give you an idea of the audience’s size that’ll be interested in your product and a viable market.
2. Decide between selling your Product or Dropshipping
It’s at this point that starting an online store becomes a dilemma. Both have their pros and limitations.
Dropshipping is very popular. Many dropshippers are making thousands of dollars per month.
Selling your own product, though not as popular as dropshipping, is more rewarding if you can persevere all the investment you have to make.
So which one do you choose?
All About Dropshipping
Dropshipping is a business model that doesn’t require inventory.
As a dropshipper, you’ll receive orders from your customers. You’ll pass it forward to a third party supplier who will ship the product to the customer under your name.
Below is an image that summarizes the whole process.
If you put all these together, it may look like the ultimate ecommerce store hack. The thought of relaxing in your house pool while a third-party company takes care of all your orders is just incredible.
But it doesn’t mean making money as a dropshipper is all rainbows and sunshine.
Since dropshipping has leveled the e-commerce playfield, anyone can get into it.
Why? It’s a low startup venture and easy to operate. Besides, it’s a $220 Billion industry and grows by 17% every year.
This is a downside in a way.
The fact that it’s an “everyone can do it” venture, the industry has been flooded. Competition is at its peak, which reduces the chances of succeeding.
It’s for this reason that 90% of drop shippers fail. They can’t make money due to the stiff competition.
There’s another problem.
You’re dealing with third-party suppliers who can easily mess up. If they do so, all the blame will be on you.
We’re human and things can happen without our knowledge or above our abilities to control. For instance, the supplier might delay the delivery, or some of the products might be defective.
If you were handling your store’s fulfillment, it’s easy to apologize and fix the mistake.
While it may sound unpleasant, my aim is not to make your fear dropshipping. I’m just trying to inform you to use the right strategies.
Here’s what I mean.
The Pros and Cons of Selling Your Own Product
Not everyone is into dropshipping. Why? They want to get all the profit by creating and selling their own product.
Another reason is that small manufacturers avoid re-sellers (dropshippers) like the plague. They want to go directly to consumers.
On the other hand, customers want to have a direct connection to the brands they purchase from. To me, this realization poses a great danger to the existence of dropshipping.
So what exactly means “selling your own product”?
In simple terms, this means that you actually own inventory.
You use an online store for marketing your products. When someone orders, you ship the product at your costs.
Like dropshipping, this model has its pros and cons. Below is what you need to consider.
- Good customer service: By keeping your product and doing everything to shipping, there’s no need for a middleman. You can strengthen your customer service which keeps them coming back. ..
- Getting discounts: Suppliers will easily allow you discounts if you order products in bulk. It enables you to make more profits
- Provide brand experience: Selling your own product allows you to build better relationships with your customers. For instance, you can do this by putting discounts on the products, giving treats, or including offers
- More profit: Unlike dropshipping, where you’ll only earn a percentage of every sale, selling your products directly to a consumer allows you to take the whole share. You’ll only subtract the cost of transportation and any other expense.
- More Capital – Opposed to dropshipping where you’ll just need a small amount of money to get a hosting and a blogging platform, you now need more cash to start selling your product. For example, you need more money for inventory and for renting a warehouse. You’ll also need to hire a transporter if you can’t do it yourself.
- More work on your table: There’s a lot to do to fulfill your orders. You have to manage your inventory, stay on top of stocking levels, handle packing and deliveries. You also need to be on par with marketing to beat your competition.
As you can see, there’s no better way of starting an online store than doing dropshipping. Selling your stuff is fantastic, but it’s hectic and expensive in the long run.
Dropshipping gives you all the things you need to start. The biggest challenge only comes in making sales because of the tough competition.
3. Choose an Online Ecommerce Builder and Create your Store
There’s a tone of online store builders out there. All of them promise to help you make millions with your online store.
But selling online is more than the store builder you pick; it’s the work you do in the shadows that guarantees your success.
Still, you need to find the best online store builders to help you reach your goals faster.
If you’re a WordPress user, WooCommerce can be an ideal option. If you want to start dropshipping, Shopify is the best option as many dropshippers use it.
Let me cut to the chase.
I’d prefer using Shopify because it’s the best ecommerce platform for all types of stores. It also gives you room for scaling which is quite impressive.
It’s popular and powers up to 500,000 stores. Besides, they have a robust and responsive customer service that will hold your hand till you hit your goals.
How to Build an Online Store with Shopify
Creating an online store with Shopify is a simple process. With this guide, it won’t take you more than 15 minutes.
You don’t need to worry if it’ll meet all your needs. Thanks to their 14-day free trial which will alleviate all your doubts and help you make an informed decision.
Follow the process below to create your online store with Shopify.
Step I. Sign Up with Shopify
Creating an online store a few years ago was a real hassle.
You had to get a server and upload an e-commerce system. You then had to hire a website designer to do the customizations. And the result was bad as the website usually was inefficient.
This is a concern that Shopify has sworn to eliminate since it came to market in 2006.
Creating an account is as easy as cooking a batch of cookies. It has simplified the process so you can create your store in a matter of minutes.
First, visit the website, navigate some of their features, and click the “Get started” button. You fill in your email address, your store name and set up a strong password.
In the next step, you give Shopify more details about you. You specify how much you want to sell and if you’re creating an online shop or a shop for your brick and mortar store.
The last page asks you to fill in your personal information like your address, phone number, and name. This information is used to calculate your tax rates and currency.
Step 2. Customize the Design of your new Online Store
To customize your website’s look, go to the main dashboard and select the “customize the look of your site” button.
It’s a unique area as you can customize almost anything, including color, items that appear to be large, homepage carousel slides, fonts, and logos.
Step 3. Set up Your Store Settings and Add the Right Pages
On the dashboard, click the “settings” icon to adjust the following elements and a bunch of other stuff.
Next, you’ll add the right pages that will host your products. The process is straightforward. Navigate through your dashboard and click the “pages” icon.
You’ll see a big “add page” button, which will present you with an image like the one below.
Some people would want to create a blog page which is also a good idea. It’s an effective method to drive traffic to your online store.
Step 4. Add Products to Your Shopify Store
Once you’ve completed the above two steps, you’ll go back to your admin dashboard to do the fun part – adding your products to your newly built store.
The e-commerce website builder is pretty user-friendly, so this will be an effortless process.
On the left side of the panel, click on the “products.” icon. You will see another icon named “add products.” Click on it.
You’ll do the same process over and over again till you’ve added all the products you want to sell. There’s a lot of steps involved here that I won’t talk about now.
The important thing is that you’ve already dealt with the hard parts.
Step 5. Set Up Payment
Finally, it’s time to talk about numbers.
Once your products are listed and your store is already running, you’d want to set up a system on how your customers will pay you and how you’ll receive the payments.
When selecting the payment method, ensure that you know the transaction fees you’ll incur.
If possible, perform a survey on the payment mode most of your potential customers are accustomed to.
4. Get your Sales Tax ID and take your store Online
The question often asked is if it’s mandatory to get a business license to sell online.
The answer is yes, from a legal perspective. You don’t want to start running away from the IRS which you’ll never succeed doing.
In this chapter, we’ll have a look at all the legal documents you must have before your online store starts generating revenue.
I’d advise you to follow internet business tax laws to stay compliant with government agencies like the IRS and the state.
Setting up a Business Entity
In business class, we were taught that setting up a business entity has one benefit – It will operate as another legal person.
This means that you’re not personally liable for what happens to your business. Your personal assets are protected from any liabilities the company may incur.
The same applies to open an online store. We’ve heard stories of online stores that went downhill and carried their owners too.
Financial experts advise that it’s not yet the time to incorporate when your business is in its early stages. Wait until it starts generating revenue, like around $1000/month.
It allows the business to pay for its own incorporation since you’ll be doing it for the long term.
One more thing – I’m not a lawyer (though I trust my researching skills). Take my advice with a grain of salt. Get a business lawyer and consult with him before you make any move.
Sales Tax Nexus
All online businesses depend on nexus to determine how much you collect for sales tax.
Nexus is a legal concept that refers to the connection between a seller and the state. It requires the seller to register and collect tax in a state.
An online store has a sales tax nexus if it meets the following requirements.
Let me make this clear. Let’s say your online store is located in the State of California. Your office and employees, too, are located in California.
This means that you have nexus in only one state. You’ll only have to pay sales tax on orders placed in California.
Side note: Shopify calculates your tax automatically from wherever you tell it even if you have sales nexus in more than one state.
How to Prepare Your Business for Tax Time
There’s always an endless list of tasks to do when tax season is on the horizon. It doesn’t matter if you’ve been operating your business for ten years, or if it’s your first year.
Either way, you must be one step ahead of the taxman to avoid cat and mouse chase in the future.
Keep the Tax Deadlines in Mind - Missing tax deadlines come with hefty slaps of fines. The deadline is always the month of April each year. Add the exact dates on your calendar.
Get Your Receipts in Order - The world is changing now and everything is going paperless. Storing all your sales receipts online will save you the time you’ll waste going through your accounting files. You can use free software like Evernote or purchase Shoeboxed if you have many receipts.
Know every detail of Sales Tax Requirements - You’ll want to consult a professional accountant on this (Remember we aren’t lawyers or accountants). The most important information you must have is the sales nexus tax, which we have talked about. But delve in more to get complete guidance.
Hire a CPA - There’s a lot to take in when starting. The easy way to get it right would be hiring a CPA to do all the above if they’re overwhelming. He’ll do your bookkeeping, file your returns, and help you during auditing. Shopify also has plugins tha might help you in accounting which is great.
5. Select the Perfect Marketing Strategy
90% of online businesses fail within their first one hundred twenty days if you didn’t know. Quite staggering, right?
The alarming rate is because of the following reasons.
I’ll focus on the last reason as it’s the most prevalent.
Research by Digital Marketing Solutions found that 37% of the failed businesses do so because they don’t have an effective online marketing strategy.
Don’t say that you have fantastic products with compelling product descriptions. You’ll get zero ROI if your marketing strategy is weak.
The marketing strategy is what determines if you get your first $1000 dollars online or end up like the other 90% of online businesses.
As the old adage goes, “what can’t be measured, can’t be managed. And what isn’t planned can’t be successfully executed.”
How to Pick the Right Marketing Strategies For Your Online Store
Not all marketing strategies will work for your business. And don’t bite off more than you can chew.
With this in mind, you need to ask yourself the following questions.
If you got your answers right, the right strategy will have to focus on your target audience, workforce, and your budget.
Four Killer Marketing Strategies to Employ in Your Online Store
I. Deploy ChatBots for an Automated Marketing
Has this happened to you? You’re looking to buy a new smartphone, so you head on to Google and search the “best smartphones under $300”.
You click on the first page which hits your face with lots of options. As you continue scrolling the page, you notice a “customer representative” on the bottom left side of your laptop who’s ready to lend you a hand.
Let me introduce you to chatbots. These are artificial intelligence programs that can simulate a chat or conversations with site visitors.
According to Wikipedia, a chatbot is a software application used to conduct an on-line chat conversation via-text or speech in lieu of providing direct contact with a human agent.
Chatbots came to the limelight in 2016. Most online stores have employed them as their core marketing strategy ever since.
Their use is growing significantly with big businesses like Starbucks and Sephora joining the bandwagon.
A chatbot is not only an effective marketing tool but also helps in reducing business expenditure.
According to IBM, businesses spend at least $1.3 trillion every year on customer service calls. Chatbots reduce this amount by a whopping 30%.
That aside, excellent customer service is what will keep you above the competition. Plus, it helps customers decide on whether they should or shouldn’t spend money on your product.
The reasons customers purchase a product depends on the response time and resolution speed. According to a survey by Zendesk, both aspects should record at least a rate of 89% to keep customers coming back to you.’
And Chatbots can do both.
Customers want their issues addressed and solved on the spot. You can’t do all these alone unless you have a huge team (who you must pay).
Research has it that businesses lose $75 billion every year because of poor customer service.
This is why Chatbots are a time saver. They are designed to simulate human conversation.
They can work like this 24 hours a day for a whole year and not ask for a raise even if they’re converting like crazy. It’s an excellent example of what a perfect employee should be like.
II. Use Email Sequences To Nurture Your Leads
Email is a powerful marketing tool.
Four billion people used emails in 2020. The number is expected to shoot up to 4.3 billion by 2023.
An email sequence is the act of sending a series of automated emails after some time to promote a company’s product. You don’t do it to shove your audience into purchasing your products.
You do what is called nurturing.
You can compare this to planting tree seedlings. You’ll give them the nutrients and water to grow. Though it’s hard work, you’ll enjoy the fruits when the trees have grown.
Email sequences are meant to develop trust with your potential buyers. You provide all the information about the product or anything related to your niche.
Once they have “grown,” you can now start eating the fruits of your labor by selling them your products.
III. Boost Your Social Media Presence
Once again, social media appears as one of the strategies to market your online store. Over 3.56 billion people who have access to the internet spend an average of 2 hours on their accounts every day.
By boosting your social media presence, I don’t mean that you open a scanty Facebook account and start posting links to your online store or “interesting articles” on the net.
Just like sending email sequences to your subscribers, social media is a platform where you’ll nurture your prospects.
The easiest way to get a large social media following is to show some extra love to your audience.
Show that you care by posting helpful content, stocking vibrant images, and creating good videos.
It’s the best method for growing your social media following without spending money on paid ads. Why? They’ll share your content with their friends if it’s good enough.
6. Time to Grow - Things to do to scale your Online Store
You’ve already finished setting up your online store, congratulations!
You did a good job and you deserve a pat on the back.
But it’s not over yet until you close your first sale. This is what we’ll talk about in this chapter.
If you do a simple google search on “how to scale your online store,” you’ll get a lot of information, and most of them revolve around marketing.
I’ve already talked about marketing. I’ll shift my focus to unique ways that you’ll not only grow your sales but also serve your customers better.
If you get it right here, you won’tt spend money on paid ads but use organic marketing and “word of mouth” marketing from your previous customers.
Here we go.
● Make it Very Easy for Customers to Purchase your Product
Surprisingly, buyers have to grow through maze-like websites to buy a product. 77% of agencies believe that bad user experience is the main reason why online stores don’t make money.
By this, I mean that your online store should have;
Experiment by eliminating unnecessary steps in your order process. The simplest changes you make can make a more significant change in your bank account.
● Leverage the Power of Email Automation
Email sequences, email marketing, email automation. These are the words making a frenzy in the digital marketing world.
And they are changing the e-commerce website’s ROI significantly. What’s their secret? They’re using the power of email automation in the right way.
The critical thing to note is that email marketing isn’t a “sell-it-quick” kind of campaign. You have to nurture your leads until they trust you.
By this I mean, sending enticing information, giving out offers and discounts until they pull out their wallets.
Like any other form of online marketing, email marketing requires a lot of optimization and split testing.
This you do until you get a system that nurtures and converts while you’re sleeping. It’s the real meaning of passive income.
● Create a Robust Customer Service Policy
Let’s face it – you will get complaints if you sell products online.
Now, can we do the math? If you’re selling 200 products and you get two complaints, you’re doing a good job.
Let’s say that you’ve scaled up to 2000 products. You’ll now be getting 20 complaints, which isn’t a good number. In a nutshell, the more you sell, the more you get complaints.
This means that you have to up your game in customer service soon to avoid getting swarmed with a load of complaints. You know how far negative customer reviews can go.
If you can, hire a customer service representative that can attend to all them. Chatbots won’t do the job here since all the answers are automated.
The bottom line is that your priority is to ensure all your customers get the best service. Remember that the customer is always right.
● Keep Consistency With Social Media Branding
The market opportunities are not only on Facebook. Instagram is a rising social media marketing giant. There are also big market opportunities lurking on Twitter. I didn’t even mention LinkedIn.
To succeed on all social media marketing platforms, maintain branding consistency across all of them.
Here’s what I mean.
Use the same handle across all platforms. Depop is an excellent example of consistency. They have massive followers on Twitter, Facebook, and Instagram.
Their social media handles are easy to remember as they’re similar across all of them.
One last thing to do is cross-promoting your products on all your social media accounts. You can get your audience connected to multiple channels, which increases your followers base.
For instance, if someone is following your brand on Twitter, add a “ connect with us on Facebook” icon.
If they give in, they’ll get to engage with your past Facebook posts leading to the conversion you badly need.
Let’s have a recap of what we’ve talked about today. I know it was a long post and you might have forgotten some vital points by now. So to start an online store, you need to;
Find a Profitable Niche - The money is in the niches. You can’t be a jack of all trades and expect to make huge sales.
Dropshipping vs. selling your own product - Dropshipping is better, but it’s saturated. Selling your products is easy to start, but very expensive. Remember, dropshipping’s pros outweigh selling your products.
Create your Online Store - Shopify is your guy. It has lots of features and is easy to navigate. Building your online store will only take you a couple of minutes.
Get your Sales Tax ID - The taxman is everywhere. Make sure your store is operating legally to avoid huge fines.
Look for a Marketing Strategy - Marketing allows you to amass an audience that will later turn to buyers. Once you’ve generated the right audience size, you start with a bang since they already know and trust.