Creating an Online Business for Beginners

Women selling products online

There has been a seismic shift in societies across the globe. But it’s not the pandemic that has created such a shift, though it accelerated what was already occurring. The shift is the accelerating ease and use of consumers to make purchases online instead of traditional brick-and-mortar shops.

According to the U.S. Census Bureau, the total amount of online sales in just Quarter-3 of 2021 was to the tune of 214 million dollars, or over 13% of total sales. These numbers were exponentially more than any previous year, proving that online retail and sales are fast becoming a dominant force in the market.

Selling Online Basics

Before you quit your job and spend your savings on an online business, you need to do a few basic things to succeed with selling online. First, decide on the type of legal entity you wish to operate. From sole-proprietor, LLC, an S-Corp, the type of legal entity you choose will be for tax purposes and liability protection, especially if you’re selling online and shipping overseas.

Know the Type of Business

Do you want to buy products and ship them directly to consumers, or prefer to be a “middle-man” from provider to consumer? The middle-man type is known as drop-shipping and is the business model you see with online retailers that don’t produce or manufacture a product.

But, again, think about all those advertisers on Amazon. Those are great examples of drop-shippers, the businesses that advertise, promote, sell, and fulfill orders with services by Amazon to the consumer at a mark-up from the purchase price.

Finding Products That Sell

You may have an excellent idea for a product to sell, but you need to research to see if it is a logical option. Often items at the top of search lists and advertising on Amazon will be heavily competitive and challenging to make enough profit to keep your business idea afloat.

However, researching what is already saturated gives you insights into areas with gaping holes that need to be addressed. That’s the sweet spot, finding a niche or underserved area where you can promote and sell products.

Choosing the Right Platform

As you’ve established the legal entity, the type of business you plan to operate, and what to sell, choosing the right selling platform is crucial. For example, selling hand-made, unique jewelry may move units on a platform like Amazon, but maybe it is better suited for a platform like Etsy or sold through a business website.

Getting Providers and Suppliers

You’ve got a great idea, found a niche product that you have researched and believe will perform well. The final step is to find providers and suppliers to get the product produced at a reasonable cost that you can make a profit. Wholesalers, discount brokers, and direct from manufacturers may be good options to consider when researching your product.

Add Customer Service as a Priority

Customer service is the lifeblood of your business. Why is that? Because unhappy customers will create a lot of noise and negativity online. Your online profile and brand are dependent on reviews for new sales, and having an adept customer service department or outsourcing your needs to an organization with a proven track record is crucial.

You should have your customer service team set up for success by the following:

  • Hiring the Right People
  • Establish a Culture of Consumer-Centric Care
  • Educate Team Members About Product Details and Company Policies
  • Training for Staff About How to Handle Customers
  • Actively Listen and Engage With Audience and Customers
  • Strive to Exceed Expectations

Some sites like Amazon provide customer service for their fulfillment partners at a cost included in Amazon’s services.

Legal Considerations for Overseas Sales

Selling your products overseas and in foreign countries may have risks without properly aligning with those countries’ regulations and laws. For some platforms, an Amazon customs broker to assist with compliance issues and other regulatory functions will add even more liability protection for your business.

With the acceleration and proliferation of sales moving away from retail shops to more online sales, for businesses to pivot and emphasize this trend is crucial. For businesses that are starting out, having a detailed plan and focus on using online sales as a part of your sales strategy gives your start-up a foundation for success, but only if done correctly.

Leave a Comment