How to Start an e-commerce Business
Setting up an online e-commerce business is simple. This article describes the processes and functions of an e-commerce Web site. Everything you need to know about How-to plan and start an online business is provided.
Knowing how to start e-commerce businesses is one of the first steps to setting up an online business. First, the initial business plan and idea must be established, and then the e-commerce structure follows. In case you need instruction on the initial business plan of an online business, I will briefly outline it. If you are familiar with business plans, then skip to the third paragraph.
A business plan defines what service or goods your business will provide. It also defines who your customers are, and which market your business should serve. Also, it includes a market analysis, which determines profitability and potential of the market you intend to serve. Next, it defines direction of your business development and growth, as well as operations. In a nutshell, that is a very simplistic business plan.
In order for me to describe the process of starting an e-commerce business, I will describe the outline of how e-commerce works. First, a customer visits a Web site that retails goods. Next, the customer selects goods to make a purchase. The selected goods are added to a shopping cart system. Once the customer is ready to pay for the goods he proceeds to the checkout, where he provides payment and arrangements to receive the goods. Finally, a receipt of purchase is provided via e-mail and usually posted on the screen.
Next, we look at the structure that facilitates this process. First, the e-commerce site is constructed on a Web site that one makes with Web development software. This kind of software is usually Microsoft Front Page or other HTML graphical software, like Flash Dream Weaver, or Joomla. The shopping cart system is usually simple to install software, like php extensions. Once the Web site is setup and the shopping cart system is loaded, the goods may be listed and priced for sale on the shopping cart system.
The next step is the payment processing. A merchant (an e-commerce Web site owner) must establish a bank account and an agreement with a payment processor. A payment processor is an entity that processes credit card numbers and other forms of payment. Processor agreements are termed contracts that usually require a merchant to provide a 1-800 number so that customers may receive help with their purchases should they need. The contracts are usually a minimum of 2 year service agreement. Also, the merchant’s bank account must be linked to the processor, so deposits and withdrawals may be made.
A merchant, like any other business retailer, must provide the processor with a tax identification number or social security (if the merchant is a sole proprietorship). Since we are discussing legal requirements, another need-to-know fact is that sales tax is only applicable if the purchaser’s home state is the same as the shipping point of the goods purchased. For example, if I’m from Texas and I purchase goods to be shipped to my home address in San Antonio, TX, and the merchant lives and ships from New York, NY, I don’t pay sales tax. However, this doesn’t mean that the merchant is tax exempt, federally.
The transportation of goods is an important step. Most e-commerce Web sites are set up for drop shipping. Drop shipping is simply a middle-man approach to retailing on the Web. Drop shipping setup is setup to process orders and payment, but the merchant doesn’t ship the goods. Actually, the order is relayed to a wholesaler, who in turn ships the goods to the original customer. In the end, the e-commerce site only captures a margin of profit from each good sold. Other e-commerce web sites function so that they process the orders and ship the goods all in-house. This is more of an e-bay approach. Beware if high volumes occur, and then you may need to hire help so that you can fill all the orders.
Overall, this is the general instruction of how to start e-commerce businesses. Now that you have seen how it functions inside and out, it’s time for you to begin your business planning.
Business Planning
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Finding the right business today is critical to survive in this economy, today more people are looking to the internet to find discounts on the items they buy, having the right items and the right prices can mean the difference.
E-Commerce And Affiliate Marketing
Customers buy products, you’ll receive pay based on what you sell and how many. When it all comes down to it, you’ll need to set up a business and web site to get the most from. E-Commerce or affiliate marketing.
How would a small business go about getting an ecommerce developed website? Search that powerful tool again, the internet. Find a reputable web design firm that specializes in ecommerce development and ecommerce shopping cart solutions.
