Opening an eCommerce, today, can be an excellent investment. The market, after all, is expanding (in Italy as well as globally), also aided by the Covid-19 pandemic that has redefined and, at times, revolutionized consumer buying habits.
The numbers speak for themselves: the survey presented in May 2023 by the eCommerce B2c Netcomm Observatory – School of Management of the Politecnico di Milano revealed a 13 percent growth in online purchases by Italians in 2023, to reach 54 billion euros (of which 35.2 billion is for the purchase of products and 18.8 billion for the purchase of services). To give you an idea of the growth recorded in recent years, in 2018 the same figure was 27.5 billion euros.
If you are thinking of opening an eCommerce business, therefore, you would do well not to delay any longer. Remember the words of Seth Godin:
“Change almost never fails because you are too early. It almost always fails because you are too late.”
Now that you understand the importance of opening an online store before it’s too late, it’s only fair to warn you that creating an eCommerce, of course, is a great investment only if the creation process follows certain steps and some very specific rules. You will find out what they are in this comprehensive guide on how to create an eCommerce, from its design to the first sale. First, however, it is important that you are clear about what an eCommerce is.
ECommerce: what it is and how it works
The word eCommerce (which is also sometimes spelled e-commerce) is a contraction of “electronic commerce“.
This term historically refers to a business practice that connects merchants and buyers and enables the buying and selling of goods or services through the use of computer technology and the Internet.
At the regulatory level, the first official definition in Italy dates back to 1997, when, within European Commission Communication No. 157, it is indicated that the term eCommerce refers to the “conduct of business activities and transactions by electronic means” and includes activities such as:
- the marketing of goods or services electronically;
- the online distribution of digital content;
- the electronic execution of financial and stock exchange transactions;
- e-procurement and other settlement-type procedures of public administrations.
Over the years, the meaning of the term has evolved, and today we speak indistinctly of eCommerce, or eCommerce site as synonymous with “online store“.
The operation of an eCommerce site, not surprisingly, replicates the same dynamics as a physical store: potential customers can examine the various products for sale within the site and study their characteristics, before eventually making a purchase. To purchase a product within an eCommerce site, simply place it in the virtual shopping cart and buy it by choosing one of the payment methods that the platform accepts.
Planning an eCommerce
Now that we have cleared up any doubts about what an eCommerce is and how it works, it may be useful for you to know that the reasons for opening an online store can be many and very different: there are, for example, those who have a physical store and want to expand the audience of potential customers by bringing their business to the web, those who choose to open an eCommerce as a second job with the aim of earning some extra money and those, on the other hand, who choose this path to fulfill their dream of starting their own business, perhaps by starting an innovative startup.
Whatever your reason for deciding to create eCommerce, it is important that you know that planning a winning strategy is critical.
One of the first choices you are called upon to make is about your target niche. In this regard, you should know that your niche should have 3 very specific characteristics:
- must be profitable (that is, it must be able to provide a positive return on investment);
- its products must be searched and in demand (a valuable tool at your disposal is Google Trends);
- must relate to your passions and specific skills.
Avoid entering already saturated markets or going up against other established eCommerce sites. If you decide to sell something that is already popular, you definitely need to find ways to improve on what is already on the market and stand out from what the competition is offering. There is another piece of advice for you: aim for products or services that are purchased regularly and throughout the year (even if they are cheaper than other products) because this way you will ensure more regular and “secure” revenue.
In deciding what to put up for sale it can be very helpful for you to know that there are 3 main categories of “things” you can sell:
- physical products, which are the goods most commonly sold online and often secure the highest sales;
- digital assets (e.g. e-books, online courses, plug-ins, templates etc.);
- services (today startups and companies can create their own eCommerce sites to sell their services independently).
Types of eCommerce
Up to this point we have spoken generically and indistinctly about eCommerce site, but it is important to point out that there are different types.
The first basic distinction is that between:
- Direct eCommerce, in which the purchase of products or services takes place entirely online, since what is being bought and sold is not physical but digital in nature (the aforementioned digital goods or some services);
- Indirect eCommerce, in which the purchase is made on the web but the delivery of the good or service sold is made offline.
Another distinction you necessarily need to know about is the one based on the parties involved in the buying and selling of goods or services. In this case, the most common types of eCommerce are:
- Business to Business (B2B), which is concerned with online commercial transactions between businesses;
- Business to Consumer (B2C), in which a business sells its products or services to consumers;
- Consumer to Business (C2B), in which consumers offer products or services to companies;
- Consumer to Consumer (С2C), in which online business transactions take place between consumers (as, for example, in marketplaces).
Below you can find an overview of the most important and popular models you should consider when starting or expanding your online store.
Choosing the business model
Also part of the eCommerce planning phase is the choice of business model. The fundamental question you must ask yourself is this: do you plan to have a warehouse where you will place your products while waiting for them to be sold?
On the answer to this question depends the type of business you can create: in case you decide to have a warehouse to manage, the business model is direct sales, while, in the opposite case, it is called dropshipping.
The direct sales business model is one in which the online store takes care of the entire supply chain, from stocking the items to be sold (whether they are made in-house or if they are bought in bulk from suppliers) to selling them, including inventory, packaging, and shipping. This more traditional business model ensures maximum control over the entire sales process and the highest profit margins, but it also requires greater responsibility and costs.
Dropshipping, on the other hand, allows products to be sold online without the need to physically own them. In fact, in this business model, the seller is not expected to have a warehouse and take care of the physical inventory: when a customer buys a product from the seller’s online store (paying the retail price), the order is forwarded by the seller to the vendor, who, once he receives payment from the seller (at the wholesale price), takes care of the storage, shipping, and delivery to the customer of the goods he ordered himself.
The main advantage of dropshipping is the low initial investment costs, an especially inviting aspect if you want to validate a product or test the viability of your startup at “low risk.”
This business model, however, also has limitations that you necessarily have to consider: in addition to the fact that, with this mode, there is less control over products and shipments (with all the negative things that can follow, in terms of efficiency of the sales service), dropshipping offers very low profit margins, in the face of particularly high market competition.
These two macrocategories (direct sales and dropshipping), together with the different types of eCommerce previously mentioned (from B2B to C2C) offer you a very wide range of choices, but all this requires a deeper analysis, which must take into account what you want to sell with your startup, your positioning and your target clientele. For this reason, it is certainly very useful for you to know that B-PLANNOW® can offer you a strategic advice ad hoc thanks to its eCommerce manager service called B-PLANNOW BOARD ECOMMERCE® , which can guide you toward choosing the best business model for your startup’s specific needs.
Competitor analysis and the business plan
Once you have decided what to sell and have identified the best business model for your startup, the next step is to analyze the behavior of competitors in the market.
This is a step that is sometimes underestimated but critical, because it allows you to find out who you are destined to directly confront and to understand what works and what doesn’t among all the products or services already available to your target clientele.
With this valuable information, including on the basis of your strengths and weaknesses (very useful in this regard is the famous SWOT analysis), it is easier for you to understand how you can differentiate yourself from the competition and secure a competitive advantage.
Not only that: all this information about competitors, added to the wealth of information gathered earlier, also allows you to more precisely draft the business plan, i.e., that strategic document that should serve you as a map to success but also as a valuable tool for finding investors interested in financing your project.
Again, as with the business model, summarizing in a few lines how to write an effective business plan risks leading you astray and generating unnecessary confusion now that you are focused on how to create a successful eCommerce business. If you would like to discuss this further, we recommend you take advantage of the opportunity to get strategic advice for business plan with the experts at B-PLANNOW®, which offers a unique (minimum) 5-year forecast business plan service.
Creating an eCommerce
If you’ve been paying attention well up to this point and have figured out how to implement all the tricks mentioned so far, you now have all the theoretical foundation you need to break the buck and finally create your eCommerce.
Creating an eCommerce site involves a number of often interrelated tasks, such as choosing the platform on which to open your online store, deciding on a domain name, working (or having worked) on the graphics and structure of the site, optimizing it for search engines following key SEO rules, customizing the home page, adding products and creating product lists, and automating everything.
Of all these activities, one in particular deserves a specific discussion within this guide: it is the choice of platform for your online store.
Choosing the platform of your online store
Choosing which platform to sell your products or services on is one of the most delicate decisions you are called upon to make because there are so many options available to you and each has specific advantages and disadvantages. Choosing the “technical” solution that you think is most ideal for your specific needs is also not enough because each type of platform is translated into practice by sites of that same type differently from one another.
In order to make the best choice, therefore, you need to know not only the types of platforms that offer the ability to sell products or services online, but also the most popular sites of each type.
The main options available to you are Website Builders and CMSs. The former represent more or less “ready-to-use” SAAS solutions, which allow even those who have no knowledge of computer codes to create websites (including eCommerce sites). In fact, in order to create the eCommerce site with this mode, all you need to do is to enter the content of the site into one of the proposed predefined templates, without the need to worry in any way about the technical management of the site.
As already mentioned, it is essential that you know some of the most popular website builders right now.
Shopify, arguably the most popular eCommerce website builder platform, offers you integrated tools and features that allow you to sell your products in a multichannel mode (from eCommerce to physical store, from social media to online marketplace), without the need to pay attention to technical aspects such as hosting and software updates (the platform itself takes care of all that). Shopify plans, ideal for those who want to sell dropshipping, start at 27 euros per month.
Wix eCommerce provides you with over 500 store templates that can be customized in different aspects, from storefront to checkout, from product pages to shopping cart. The drag-and-drop and easy-to-use editor is one of the flagships of this platform. The basic package costs 20 euros.
Weebly operates similarly to Wix (drag-and-drop) but, unlike the latter, offers unlimited storage space and pages. The basic package, in this case, is free and, in general, this platform stands out for its excellent value for money.
Square also gives you the option of free plans. This solution proves particularly suitable for omnichannel selling.
Finally, among the best website builders for those who want to sell online is Squarespace: the basic eCommerce package costs 24 euros per month.
The great alternative to website builders is CMSs (Content Management Systems): these are open source management software that you have to install on your site and configure yourself. This solution gives you more control over the site but is recommended for those with more advanced skills: you should know, in fact, that with a CMS you have to take care of the technical management of the site yourself. Not only that, by choosing a CMS you also have to provide for the purchase of hosting. Moreover, at the price level, although free, CMSs require other expenses, such as hosting.
The most widely used CMS in the world (as well as the “safest” in terms of support and development), is WordPress. Thanks to the plug-ins that can be added it can also be a good solution for those who want to sell online. WordPress is available both as downloadable open source software and as an online platform.
Joomla, like WordPress, is also a CMS that allows you to create and manage different types of sites, including eCommerce sites.
Unlike the previously mentioned platforms, Magento is a CMS platform designed specifically for those who want to create and manage a professional eCommerce. Magento offers several extensions to increase the functionality of the online store and also allows you to create and manage several eCommerce simultaneously from a single control panel.
Prestashop, like Magento, is also a CMS designed specifically for those who want to create and manage an eCommerce. Its interface can be more intuitive than Magento’s, and, not surprisingly, ease of use is one of the strengths of this particular platform.
Then there are PAAS (Platform As A Service), ultra-high-performance platforms dedicated to corporations and multinationals; they are “tailor-made” CMSs with extremely advanced features that can be customized; as with SAAS they charge a monthly fee and/or fee on transacted business.
Finally, there are proprietary CMSs, which are platforms developed ad hoc by specialized agencies or internally within the company; while they offer total customization and high performance, they also involve high development time and costs.
Below you will find the most important CMSs divided by category:
Promoting an eCommerce
Having arrived at this point, your march toward creating an eCommerce site can be said to be underway but, in order for you to truly achieve success, you certainly cannot stop: the next step, in fact, involves promoting your site. You have many marketing tools at your disposal but, before you figure out how you can best use them to make your eCommerce site known to your potential customers, you need to worry about one more aspect: you need to do branding.
The brand and its positioning
Speaking of Brand Awareness, it is important to remind you that when it comes to the domain name of the eCommerce site, it can be useful to match the brand name with a keyword that can immediately explain what you sell or the differentiating element of your online store. Also remember that the domain name should be short and, most importantly, easy to spell and remember.
The logo, payoff, and tone of voice (colloquial or more formal) are the other key elements around which your branding activity should revolve: all of these elements should lead back to your identity and market positioning.
If you’re looking for logo and payoff ideas (this term refers to a short phrase that sits below the logo and makes explicit the company’s identity and values) you should know that there are several “generators” on the web that can help you find the most suitable one for your eCommerce site.
Even if you decide to use these tools for your payoff, always keep in mind that the payoff should be short, simple, recognizable, attractive, interesting, memorable, positive, and honest (the payoff is your promise to your audience). Look for simplicity in your logo choice as well: overly complex designs risk confusing your audience. Keeping the color scheme is another necessity. In this regard, remember that colors convey very specific messages and meanings and can be valuable allies in best communicating your identity.
Using marketing to increase sales
As we have already mentioned, there are many marketing tools that you can use to promote your eCommerce site. Prominent among them are Content Marketing, Email Marketing, Social Media Marketing and Influencer Marketing.
Doing content marketing means offering quality content on your site that can attract quality traffic to it and, therefore, potential customers. For an eCommerce site, this can translate into a company blog where you can offer tutorials on how to use the products on sale, suggested pairings and shopping tips.
Don’t underestimate the importance of Email Marketing: inviting visitors to your site to leave their email address (and permission to be contacted) allows you to increase leads and sales with a series of targeted communications, such as, for example, those aimed at recovering the visitor’s abandoned shopping cart or those containing discounts and special offers aimed at those who have already purchased from your online store.
Social media allow you to connect with your potential customers right there where they spend the most time on the web and prove to be particularly useful tools for those with a limited budget or those who, for example, decide to bootstrapping a startup (i.e., relying only on their own resources). Remember that each social platform has its own unique features: identify the ones best suited for you and your purpose. Influencers can give you a big hand in promoting your products and increasing sales, but always take care to build direct and sincere relationships with those who follow you.
Advantages and disadvantages of eCommerce
A 360-degree analysis of how to create an eCommerce site, to call itself truly complete, cannot fail to consider the advantages and disadvantages associated with opening these sites.
An eCommerce site, first of all, is more cost-effective than a physical store because with it you eliminate the expenses associated with the use of a premises to be used as a store and you have fewer personnel-related costs, since many operations typical of physical stores are automated. Not only that, administration management is also more streamlined.
You must also consider that eCommerce has a much larger potential customer base than physical stores and is open (i.e., reachable by users) 24 hours a day, 365 days a year.
Another great advantage of eCommerce sites, then, is the fact that you have a multitude of information about your customers (which you can leverage to increase your chances of bringing in more sales thanks in part to marketing automation) and about the business itself (so that you can take timely action if necessary).
Opening an eCommerce, moreover, is also more affordable because it gives you access to benefits and grant funding designed specifically for eCommerce projects.
ECommerce, of course, also has some limitations. The most obvious, probably, are the lack of human contact between the seller and the customer and the impossibility for the consumer to touch the product with his or her hands before the purchase (the most modern sites, not surprisingly, are trying to improve this aspect, even resorting to virtual reality). When buying a physical product online, moreover, one must always put into account a delay in receiving the purchased item, which is not the case when the purchase is made in a physical store.
While, for the consumer, having the ability to quickly compare prices before making an online purchase is a great advantage, for those selling through eCommerce it can be a downside because this could all result in the loss of the potential customer.
Another scenario that leads (in this case inevitably) to the loss of customers is that of a possible technical problem that could send eCommerce offline: if the online store site is not accessible, obviously, users cannot complete purchases within it.
While it is true that the almost infinite audience of potential customers represents a great opportunity for those selling online, this can also be an obstacle because it is necessary to know and comply with the different legislations of the countries in which one operates.
Last but not least is the fear of experiencing online fraud that still endures in many people, despite the fact that electronic payment options have become increasingly secure in recent years.
The legal aspects
The legal aspects involved in opening and operating an eCommerce are a very sensitive button. As mentioned, you need to be familiar with the different legislations of the countries reached by your online store but, even before that, you need to be clear about the legal requirements needed to open an eCommerce site.
One of the most common doubts in this regard is the following: do you need a VAT number to sell online? The answer to this question is affirmative: in order to open an eCommerce site and sell on the web, it is necessary to open a VAT Number, with ATECO code G47.91.10 or 47.91.1, which corresponds to the activity of “commerce via the Internet” or “electronic commerce.”
Opening an eCommerce: how much does it cost
Another fundamental question that many people ask before embarking on such a venture is: how much does it cost to open an eCommerce business? Quantifying the exact costs is certainly no easy feat. This has been mentioned several times in the previous paragraphs, since the expense of opening an eCommerce depends on a multitude of factors, from the business model (dropshipping, for example, requires a lower initial investment than direct sales) to the platform (CMSs are free but require other expenses, such as hosting, while some website builders offer free plans but with limited functionality).
Compared to a physical store, as already pointed out, an eCommerce allows you to cut down on some items of expenses, but to open and operate an online store you have to put in a number of investments related to, for example, site creation and marketing activities (in the various steps leading to the creation of an eCommerce site you may need the help of specialists in the field).
Some final tips for starting an eCommerce business
Now that you know (almost) everything you need to know about opening an eCommerce site, you may fall into the mistake of underestimating the risks involved in such an undertaking. Opening an eCommerce may seem easy to you now, but what you should never forget is that, to make it really work, you need to make well-thought-out decisions guided by meticulous analysis and accurate data.
In this regard, it may be very useful for you to know what are the 5 most common mistakes that can decree the lack of success of an online store (according to a survey conducted by 123Ecommerce):
- choose over-saturated niches;
- not having a clear business strategy;
- not providing an adequate investment budget for both launching the business and running it in the first few years of its life;
- believe that business success depends on the eCommerce platform;
- not knowing (or not wanting) to invest in marketing in a structured way.
To close this guide dedicated to how to create a successful eCommerce, it is important to point out that, alongside the most common mistakes, there are also patterns and best practices applicable to eCommerce projects. The final piece of advice for you, useful for quickly acquiring these skills and thereby reducing the risk of committing missteps in your race to success, is to choose the advice of a B-PLANNOW® eCommerce expert.
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