Five Questions to Ask Before Launching an e-Commerce Business
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For many entrepreneurs, starting an e-commerce site seems like a great option. You can work largely out of your home – at least in the beginning – and you can sell products that you love! But there are definitely some questions to ask yourself before launching the process, since there are so many different kinds of e-commerce small businesses out there. Just what kind of business are you planning to run? Read on for a list of some questions that you should have the answer to before getting started.
- What will you sell?
This is, of course, one of the most crucial questions. When determining what kind of products you’ll be selling, it’s best to start with what you’re passionate about. Are you a beauty fanatic? A sports enthusiast? An antique collector? The answer will determine what kind of business will have the most longevity and success because no business can succeed without a lot of passion.
- Who is your target market?
This is important to consider because the market you’re targeting will determine how you promote your business and brand yourself. Will you use eBay or Etsy? Amazon or Overstock? These questions can be better answered once you have identified the target market that most aligns with the kind of e-commerce business you’re creating.
- How to buy inventory?
To start an e-commerce site, you’ll need inventory to sell. That means you’ll likely need to take out a small business loan in order to pay for your initial rounds of inventory. Depending on the prices of the inventory, you could be looking at a small business loan, a microloan, or even a merchant cash advance. One of our consultants at Biz2Credit can help match you with the loan that works best for your financial situation.
- Who are your competitors?
It would be wise for you to take a look at who your competitors are in your e-commerce arena. What successful businesses are currently selling similar products, and what makes them stand out? Learn from the things that they’re doing effectively, and think about how you’d do certain things differently. Competitors can offer inspiration, and they can also offer a peek at what not to do.
- How will you manage shipping and returns?
Since there is no physical store if you set up an e-commerce site, all purchases, shipping, and returns will be handled online. How will you take orders? How will you track them? Will you package them yourself? Will you charge money for returns? These are all things to think about because these make up your interactions with customers.
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