flevyblog

Flevy Blog is an online business magazine covering Business Strategies, Business Theories, & Business Stories.
MANAGEMENT & LEADERSHIP STRATEGY, MARKETING, SALES OPERATIONS & SUPPLY CHAIN ORGANIZATION & CHANGE IT/MIS Other

7 Things to Consider before Starting an Online Store

Editor's Note: Take a look at our featured best practice, Buy Now Pay Later (BNPL) Platform - 5 Year Financial Model (Excel workbook). Buy now, pay later (BNPL) is a type of short-term financing that allows consumers to make purchases and pay for them over time, usually with no interest. Buy now, pay later (BNPL) programs have different terms and conditions, but generally, they offer short-term loans with fixed [read more]

* * * *

Starting an online store can be a great way to make additional income or even start a successful business. An online storefront doesn’t require the amount of space it takes to house inventory, rent is generally cheaper than retail location costs, and it makes your business accessible from anywhere. Given that this type of business has many benefits, you should consider some factors before you start an online store.

1. What Type of Product Do You Want to Sell

The first step in starting an online store is to decide what you want to sell. You can either pick a single product or multiple products. If you plan on selling only one product, make sure it is something people are likely to purchase because if no one wants your product, no one will buy it. If you plan on selling multiple products, make sure they are related so people who are browsing for one item might see another and want to purchase it too.

2. How Much Inventory Will You Need

Inventory is the amount of physical stock that a retailer carries at any given time. Determining how much inventory you need will depend on what type of product you are selling. If you are selling clothes, for example, multiply the number of clothing items you want to sell by the average amount of time between reordering products. This will give you an idea of how many items to order initially. Do not get stuck with excess stock that ends up sitting on your shelves and collecting dust.

3. Do You Have the Funds for Starting an Online Store

When starting any business, the biggest expense will generally be purchasing inventory. While this can happen with a regular storefront too, you also have to consider other costs such as payroll, marketing materials, utilities, etc. Make sure you take all of these into consideration when determining how much money you will need to start up your online store.

4. Where Are Your Customers Located and How Can They Find Out about Your Products

Once you have decided what kind of product(s) you will be selling, make a list of all the places where people who might be interested in this product would visit. Think about what websites customers might view before they decide to make a purchase, and try to create a presence on these platforms.

5. Is There a Demand for This Product in Your Area or Is It Just Something That People Don’t Buy Where You Live

If you live in an area where no one seems interested in the kind of product you want to sell, this may not be the best idea if your goal is to make money. It will take a large marketing campaign and time before people know about your store, so you may have put all that effort into something that no one wants or needs.

6. What Is the Cost to Start an Online Store If I am Using a Website Builder like Shopify or Big Commerce

If you have never created a website before and don’t want to hire someone to do it for you, there are many online store creators available. These platforms allow you to easily add products, create a beautiful design, accept credit card payments, etc. They offer different features depending on how much you would like to pay.

7. Will the Economic Nexus Apply to My Online Store

As a business owner, you will have to pay quarterly taxes that are based on your total sales for the year. It is possible that large online retailers such as Amazon could be required to collect sales tax from their sellers which would mean added costs and paperwork so it’s best to do research on whether or not this will be required for your business.

For a summary of economic nexus laws by state click here.

Conclusion

Starting an online store may seem like a daunting task at first, but once you do your research and plan accordingly, it can be very rewarding. The most important thing is to make sure there is actually demand for your products in your area or else the whole process will only result in wasted time and money. With these tips in mind, you should be able to get your business up and running in no time.

13-page Word document
If you're planning to launch an e-commerce business but feeling overwhelmed, don't worry! You're not alone. The good news is that there's a solution for you. You can get a head start on your business by using a professional sample e-commerce business plan and feasibility report. This plan is a [read more]

Do You Want to Implement Business Best Practices?

You can download in-depth presentations on E-commerce and 100s of management topics from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.

For even more best practices available on Flevy, have a look at our top 100 lists:

These best practices are of the same as those leveraged by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Improve the growth and efficiency of your organization by utilizing these best practice frameworks, templates, and tools. Most were developed by seasoned executives and consultants with over 20+ years of experience.

Readers of This Article Are Interested in These Resources


Excel workbook
Model Options: This template is a detailed and user-friendly financial model that considers an e-commerce business's specifics. By Taking into account key assumptions such as traffic from different sources, conversion rates, the average purchase value for different product categories, and the [read more]


 
Excel workbook
 
 
Excel workbook

About Shane Avron

Shane Avron is a freelance writer, specializing in business, general management, enterprise software, and digital technologies. In addition to Flevy, Shane's articles have appeared in Huffington Post, Forbes Magazine, among other business journals.


Complimentary Business Training Guides


Many companies develop robust strategies, but struggle with operationalizing their strategies into implementable steps. This presentation from flevy introduces 12 powerful business frameworks spanning both Strategy Development and Strategy Execution. [Learn more]

  This 48-page whitepaper, authored by consultancy Envisioning, provides the frameworks, tools, and insights needed to manage serious Change—under the backdrop of the business lifecycle. These lifecycle stages are each marked by distinct attributes, challenges, and behaviors. [Learn more]

We've developed a very comprehensive collection of Strategy & Transformation PowerPoint templates for you to use in your own business presentations, spanning topics from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management. [Learn more]

  We have compiled a collection of 10 Lean Six Sigma templates (Excel) and Operational Excellence guides (PowerPoint) by a multitude of LSS experts. These tools cover topics including 8 Disciplines (8D), 5 Why's, 7 Wastes, Value Stream Mapping (VSM), and DMAIC. [Learn more]
Recent Articles by Corporate Function

  

  

  

  

  

The Flevy Business Blog (https://flevy.com/blog) is a leading source of information on business strategies, business theories, and business stories. Most of our articles are authored by management consultants and industry executives with over 20 years of experience.

Flevy (https://flevy.com) is the marketplace for business best practices, such as management frameworks, presentation templates, and financial models. Our best practice documents are of the same caliber as those produced by top-tier consulting firms (like McKinsey, Bain, Accenture, BCG, and Deloitte) and used by Fortune 100 organizations. Learn more about Flevy here.
  


OUR CORE OFFERINGS
Flevy Marketplace: Top 100
· Strategy & Transformation
· Digital Transformation
· Operational Excellence
· Organization & Change
· Financial Models
· Consulting Frameworks
· PowerPoint Templates
FlevyPro (Subscription Service)
KPI Library
Streams (Functional Bundles)
Flevy Executive Learning (FEL)
PowerPoint Services

FREE Resources

About Flevy
Management Topics
Marcus (AI-Powered Consultant)
Partner Program
LinkedIn Influencer Marketing
FAQ / Terms / Privacy / Blog
Contact Us: support@flevy.com



CONNECT WITH US!
       
TOP 100 TRENDING TOPICS
Acquisition Strategy
Agile
Analytics
Artificial Intelligence
Balanced Scorecard
Best Practices
Big Data
Breakout Strategy
Business Continuity Planning
Business Plan Financial Model
Business Transformation
CMMI
COBIT
Change Management
Cloud
Communications Strategy
Company Financial Model
Competitive Advantage
Competitive Analysis
Consulting Frameworks
Continuous Improvement
Core Competencies
Corporate Culture
Cost Reduction Assessment
Customer Experience

BROWSE BY FUNCTION
Strategy, Transformation, & Innovation
Digital Transformation
Operational Excellence and LSS
Organization, Change, & HR
Management Consulting

Customer Journey
Customer Service
Cyber Security
Data Privacy
Decision Making
Digital Marketing Strategy
Digital Transformation
Digital Transformation Strategy
Due Diligence
ESG
Employee Engagement
Employee Training
Enterprise Architecture
Growth Strategy
HR Strategy
Hiring
Hoshin Kanri
ISO 27001
ITIL
Information Technology
Innovation Management
Integrated Financial Model
Kaizen
Kanban
Key Performance Indicators

ADDITIONAL RESOURCES
Business Strategy Frameworks
Case Studies
Consulting Training Guides
COVID-19 Trend Data
Digital Transformation
Financial Advising Services (FAS)

Knowledge Management
Leadership
Lean
Lean Manufacturing
Logistics
M&A (Mergers & Acquisitions)
Manufacturing
Market Research
Marketing Plan Development
Maturity Model
McKinsey PowerPoint
McKinsey Templates
Operational Excellence
Organizational Change
Organizational Design
Performance Management
Post-merger Integration
Pricing Strategy
Process Improvement
Process Maps
Procurement Strategy
Product Launch Strategy
Product Strategy
Project Management
Quality Management


Free Resources
KPI Library
Lean Management
Lean Six Sigma Training Guides
Marcus Insights
Operational Excellence

Real Estate
Remote Work
Restructuring
Risk Management
Robotic Process Automation
SWOT
SaaS
Sales
Scrum
Service Design
Six Sigma Project
Social Media Strategy
Strategic Planning
Strategic Thinking
Strategy Development
Supply Chain Analysis
Sustainability
Target Operating Model
Team Management
Total Productive Maintenance
Value Chain Analysis
Value Creation
Value Stream Mapping
Visual Workplace
Workplace Safety


Product Strategy
Small Business Owner
Startup Resources
Strategic Planning
Strategic Planning Process
Value Innovation Strategy


© 2012-2024 Copyright. Flevy LLC. All Rights Reserved.