With eMarketer recently reporting that the UK are leaders in global eCommerce, the potential for starting an online retailer business is undoubtedly huge. However, exactly what is involved? With a little help from some eCommerce friends, I’ve assembled a complete how-to guide on setting up a successful UK eCommerce business. Here’s the first part. From thinking up the product, to performing market research and registering your business name, I’ll walk you through the preliminary steps of setting up an eCommerce business.
Finding the product
With eCommerce, the product is obviously everything. It’s what’s going to inform your business and your brand. Since you’re in the fortunate position of starting a business, see the online space as your digital oyster. Exploit this freedom and choose a product that defines whatever it is you’re passionate about.
It could be that you’re passionate about solving a problem just as much as a topic, industry or hobby you’re interested in. For example, while Andrew Horner-Glister developed MCA into a eCommerce store due to his love for digital and motorcycles, Max Valverde started Morning Head due to his determination to eradicate the annoyance of bad morning hair. Running an eCommerce business can be difficult so it’s this passion that’ll drive you through particularly challenging times.
Another approach to finding the right product is researching and browsing the digital landscape. Use relevant hashtags on social curation platforms like Pinterest and Wanelo to flip through popular product imagery and find what people are talking about.
If you’re particularly revenue-driven, focus on popular products from the eCommerce giants. Amazon’s bestsellers and eBay’s market research will allow you to see a typical users purchase habits and will ensure your product offering is on-trend and in-demand (albeit, in a highly competitive space). These approaches will also start to inform your market research.
The next step is to validate your product idea by conducting market research. Are the public looking for your product, and if so, what is the demand for it?
To facilitate this, use Google Trends and Google Keyword Planner. These are typical search-marketing tactics but highly transferable to eCommerce startups. Since the majority of internet users use search engines to navigate around the web, it follows to research search trends to realise what your customers are looking for and in what volume.
Researching your market also involves researching your competitors. One method of conducting competitor research, again practised by search marketers, is to search for your main keywords in Google. Analyse which businesses rank for these and note them down. Ask yourself questions like what are their USPs? How aesthetically pleasing is their site? And, how will their pricing and shipping options compare to yours? It’s your overall aim to eventually better these.
Sourcing your products
Now that you have established the product you want to sell, you need to establish how you're going to source your stock. Here are the four most common methods:
- Making the product - this is a viable option if you have the skills, materials, and resource in place to make the product yourself. This a method employed by Great Bean Bags, an eCommerce store who manufacture all their bean bags in-house in the UK. Patrick Tonks, Creative Director at Great Bean Bags, says how this approach allows him to have “completed control of the quality of our output and adds to our business’ overall USP”. If you decide to undertake this model, you need to seriously consider the cost and scalability implications involved.
- Finding a manufacturer - another approach is to find a manufacturer who can produce your product and stock for you. Bear in mind the location of the manufacturer, as a UK manufacturer will be more convenience in terms of cost and maintaining communications than an overseas manufacturer.
- Finding a wholesaler - this is where you purchase your stock at cost-price from the original manufacturer or a ‘middleman’ supplier. This is particularly ideal if the products you identified in the previous sections aren’t your own. It also means that you can get your eCommerce startup business of the ground quicker as the stock is already there waiting to be shipped.
- Finding a dropship partner - with dropshipping, you simply take orders on your eCommerce site and then forward them onto your dropship partners to fulfill. The dropship partner will take a portion of each sale which is a major consideration when you’re considering your pricing structure. Despite this, the biggest advantage associated with using a dropship partner is the low startup costs since you’re not physically holding any stock.
Naming and registering your business
This is your first tangible step to launching your eCommerce startup. You may already have some idea of what you want to call it but you need to make sure the domain name and trading name is available. This will ensure you are not infringing on anyone else’s business. You can see whether a trademark is registered here and use GoDaddy to determine whether the domain name is available. Once you have decided on your business and domain name, you need to think about protecting it. It’s also worth securing your social media channels at this juncture so no other businesses can register the same profile name.
Writing a business plan
This is the final preliminary stage before you start building your eCommerce site. A business plan is an opportunity to consolidate everything we’ve discussed so far, from clarifying your business idea to unpacking your market research where you can discuss potential threats and problems.
Remember, a business plan is actually a formal requirement when securing an investment or loan from a bank so it’s a critical component if you’re thinking about heading down this route. Use this government resource if you need assistance in writing a business plan.
You’ve identified what product(s) you want to sell, you know the market inside out, you’ve written an engaging business plan and topped it all off by christening your eCommerce startup with an original and unique name; it’s now time to get into the aesthetics of your online presence. Your next step is to start designing your eCommerce store.
By Petar Jovetic, Digital Marketing Account Manager at Impression Digital