How to Start an E-Commerce Store

E-commerce is a rapidly growing industry in both Canada and around the world. Canadians are choosing to make more frequent purchases online and in 2019 alone, 28.1 million people made at least one online shopping transaction equaling out to 1.85 billion Canadian dollars in revenue. With these numbers expected to continue to expand in the future, its no wonder that more businesses are looking to enter into the e-commerce market.

What is e-commerce?

Short for Electronic Commerce, e-commerce is the process of utilizing the internet to sell both goods and services to consumers.

What are the benefits of starting an e-commerce store?

There are so many benefits to starting an e-commerce business and in fact, in order to stay competitive in today’s marketplace and to meet the demands of consumers, most businesses and service providers are finding that an e-commerce store is essential for their survival.

Some of the biggest benefits to beginning an e-commerce operation include:

  • Convenience for customers – Customers can shop from the comfort of their own home, any time of the day or night.
  • Customer reach – Selling your goods and services in a brick and mortar store allows you to only reach the customers that live in your general geographic location. Opening an online operation, however, allows you to sell to people all over the country and even across the globe.
  • Low start-up costs – Since your business will be run online, there are significantly lower start-up costs to running an e-commerce business. Expenses that come from things like rent and staffing are much lower and if you use a process like drop-shipping, there are lower inventory costs as well.
  • Ability to work remotely – When running an e-commerce business, working from home is a reality and if your business is large enough to require extra employees, these employees can work as virtual assistants, from their own home offices as well. This will help to keep operating costs down by minimizing labor costs.
  • Personalized selling – E-commerce allows a personalized sales experience which isn’t available in physical retail locations. You get to choose exactly what products are highlighted to the customers, which images they get to view and provide a detailed product description that says exactly what you want the customer to know about the items you are selling.
  • Increased impulse buying – Impulse buying is one of the biggest advantages of selling online. Online shoppers are more prone to give in to impulse buys than any other type of customer. By highlighting sales and specials as the customer browses your site, you will be able to take advantage of this phenomenon.
  • Better knowledge of your customers – When a customer walks into a physical store, unless they make a purchase and provide their email address or other information, the store owner has no information on them or their shopping needs and preferences. One of the many benefits of e-commerce however, is that every time a customer enters your site or clicks on one of your advertisements, you are able quickly and easily obtain information such as their browsing history. Online customers are also much more likely to sign up for email alerts, become an online member of your store or fill out specific marketing surveys. All of this information can help you target your specific market better and allow you to cater to the specific needs of your customer base.

What steps should I take to start my e-commerce business?

Once you have determined what your business is and have devised a strategic business plan you are ready to start selling online. Here is an outline of what you need to do next:

Decide on your product 

E-commerce stores sell all kinds of products, including physical products like t-shirts and shoes and digital products such as photos or books. People also use e-commerce stores to sell various services including virtual assistance, social media marketing packages and more. It’s important to have clear idea of what it is you are going to be selling online, before going into the details of launching the actual store.

Register your business  

The government of Canada will require that you pay taxes and therefore you must obtain a tax identification number and a VAT number. Depending on the type of business that you run, you will also require a license which may vary from province to province. You will also be required to have a registered domain name for your website.

Research reputable e-commerce platforms  

Unless you have a strong background in computers and programming, it is almost always recommended that you use one of the many e-commerce platforms that are available today. These platforms are designed to streamline the online selling process to help make the experience as easy as possible for both the buyer and seller.

Start selling!  

Once the sales start coming in, be sure to keep track of all of your sales and customer data. Knowing who your customers are and how your business is doing will help you be prepared to make the changes required to be successful in the future.

Are you interested in starting an online or e-commerce store? Check out the top business loan providers in Canada to help get you started!

Benefits of e-commerce platforms

There are a multitude of e-commerce platforms available in the marketplace today and each one has its own unique features and benefits that can aid you in your online selling ventures. Some of the most common benefits of e-commerce platforms include:

  • Ability to help you manage your products
  • Manage taxes and shipping costs for both domestic and international shipping destinations
  • Ability to help manage and track your customer base
  • Order management and tracking
  • Marketing solutions to meet your individual needs.

Frequently asked questions about how to start an e-commerce store

How much does e-commerce software usually cost?

Depending on the features you are looking for and the ability to customize your experience, e-commerce platforms usually cost around $30 per month. This amount however, may increase as your business grows.

What is drop shipping?

Drop shipping is the process where a seller places an order directly from the manufacturer or wholesaler and has it delivered directly to the final consumer. This eliminates the need for a business to have high levels of inventory in stock all the time and helps to keep operating costs lower.

Is e-commerce competitive?

Yes. One of the biggest disadvantages to e-commerce is that it is highly competitive and unlike brick and mortar stores, your competition isn’t limited to your local neighbourhood. Your competition spans the entire globe which can make standing out and drawing customers into your site more of a challenge.

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Amanda Leach

Fifteen years can be a long time to work in one industry, but not when you are doing something that you love. Amanda has enjoyed the freedom of working as a freelance writer for the majority of her career. She has successfully combined her passion and skill for writing while still enjoying a life filled with travel, learning and exciting new experiences. While she loves exploring all different types of writing, her PhD in Consumer Psychology has made her a sought after writer for marketing, business and technology fields. Amanda is a regular contributor to Smarter Loans.