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How To Start Your Ecommerce Business From Scratch

Starting an ecommerce business from the scratch seems bit difficult but once you take an initiative then you can rule the digital world.

lets make it clear what does ecommerce businees mean.

Ecommerce is a business model in which a firm and an individual engages to sell and buy a product over the internet. It takes place when an electronic medium like an internet exists where you can buy and sell products.

The world is moving fast towards ecommerce as selling on the web is quick & simple which makes it and drop shipping more profitable.

However, ecommerce industry has a high risk of failure if it does not work out like many companies ridding dot- com wave of the 2000s still witness the failure. This does not mean an ecommerce industry fail every time provided that how you attract customers to your website.

Ecommerce industry runs on three models from business- to -business such as shopify website, business -to – Consumer such as Amazon website, and consumer-to-consumer like ebay website.

What is Ecommerce?

Ecommerce is a business model in which buying and selling of products take place through an electronic medium like an internet. When you listen the word e-commerce it means that you come to know about the products that are being sold and bought over the web.

The Ecommerce industry is moving rapidly as it is easier for the costumer to buy while the seller gets it easy to sell on the web quick and simple.

This makes ecommerce more profitable in comparison to the physical industry which incurs high cost. However, this ecommerce business model has three main types which further distinguishes it.

Types of Ecommerce

There are three main types of ecommerce business model. The three basic models of ecommerce are as follows.

  1. Business-to-Business
  2. Business- to-Consumer
  3. Consumer- to-Consumer

Here is an overview of types of ecommerce

  • Business-to-Business

Business-to-business is an online practice where companies are doing business with each other whereas the final consumer is not involved.

However, this online transaction only involves retailers, manufacturers and wholesalers. This b2b has its importance as every company needs to purchase products and services from other business in order to launch, operate and grow.

There are many examples of b2b including shopify, Quill, Caterpiller and Upwork. However, Alibaba needs bit attention here as it is one of the largest online commerce companies.

The B2B of Alibaba is a marketplace where buyers and sellers around the world connect and transact business.

  • Business- to-Consumer

Business-to-consumer is also an online practice which is expanding to the success of online business. The B2C business model is one in which a company sells product or service directly to a customer.

It makes life easy for the customer to buy a product or hire a service from the ease of their home. This B2C business model simply saves precious time while purchasing from home or office. This is why B2C business model has become vital to the success of online business.

Some familiar examples of B2C companies include Amazon, Walmart, Facebook, and Google.

  • Consumer-to-Consumer

Consumer-to-Consumer business model is one where the consumers are in direct contact with other.

Some familiar example can be Quickr and Olx. This B2C business model does not involve a company, you can sell your personal goods and assets directly to an interested party like most of the time we put snapshot of our personal asset on Olx website to find an interested party for selling.

However, the personal stuff that we sell usually involves Cars, Bikes and electronics.

Advantages of Ecommerce Business

  • Ecommerce is an online practice where you can buy and sell products or service. This provides you an opportunity with a global reach which simply removes the barriers of the location.
  • Ecommerce makes life easy in a way that you can buy what you wish for while sitting in your home or in office. This simply saves your time, effort and energy. Unlikely shops, ecommerce website does not have working hours so you can shop at any time.
  • Ecommerce companies enjoy higher profit margin in terms of eliminating fixed cost at the expense of maintaining fixed cost for brick and motor shops which ultimately lowers the transaction cost for the business. This is simply an edge to ecommerce business model over the physical business.
  • One of the big advantage to ecommerce is affordable advertising and marketing. They do not have to spend a lot of money to promote their product or service like companies do in the physical world. Ecommerce marketplaces are visual companies where sellers can easily show off their products without doing expensive marketing.

Disadvantages of Ecommerce Business

  • The cost of creating/building an ecommerce portal could be very high. The cost that may incur during hardware and software setup, training to employees and constant maintenance and upkeep could be high and quite expensive.
  • Issue of security is high concern from the customer end. It is difficult for the customer to believe in online transactions due to security breaches where the information of the customer could be stolen. This could be information related to credit cards, debit cards and identity theft most of the time.
  • Lack of personal touch or feel of product during an online shopping also raise concern for the customers. They do not get what they see in virtual world which hates them from buying in while shopping online.
  • The most common fulfillment problem is that when you place an online order, it does not get on time. There could be the issue of shipping, delivery and mix –ups etc. this is another area of concern for the customers which makes them unhappy and unsatisfied.

How to Start an Ecommerce Business in Pakistan

It is bit easy to start ecommerce business in Pakistan or anywhere around the world. There are certain steps which you need to follow which can really help you while creating/ building Ecommerce Company.

The following steps will provide you a clear path towards digital world.

  • Step 1 Think about perfect business plan
  • Step 2 How you can think about your brand name
  • Step 3 What Company you want to Form
  • Step 4 How you can register your ecommerce business in Pakistan
  • Step 5 Open Bank account
  • Step 6 How to build ecommerce Website for Your Business
  • Step 7 Payment gateways
  • Step 8 logistics
  • Step 9 How to attract customers to your website

Here is a step by step guide on How to start an ecommerce business from the Scratch

Step 1 Decide Ecommerce Business Plan

How To Start Your Ecommerce Business From Scratch

You have to simply decide perfect business plan and ecommerce business model. However, we are here to help you out in your business model. There following are two types of Business model that you can opt and can go for either of them.

  • Single vendor
  • Multivendor ecommerce
  • Advantages of Single Vendor 

Vendor is any supplier of goods or service who sells product or service to another company or individual. A manufacturer is a vendor to a retailer or wholesalers.

However, single vendor marketplace in ecommerce model is nothing but a website which involves only two entities. One is seller who is selling product or service to multiple customers.

However, it does not offer a broad range of products to its buyers. It could be the reason this website is also called standalone website.

You only deal with one supplier to whom you pay. This helps you to lower your administrative cost and you have more control over the inventory at hand.

  • Advantages of Multivendor 

Multivendor market place can have a number of vendors. You have to negotiate contracts with them It holds a lot of potential in terms of revenue for business owner.

If you are an e commerce entrepreneur then this can be a cost efficient because it allows you to sell a wide range of products to a larger audience without maintaining an inventory.

This model also provides security in terms of making a sell- such as you could switch to another supplier if one of your supplier was not available to provide product or service whatever could be the reason. This advantage can help you to deal with demand fluctuations and prevent in a supply disruption.

It depends upon your budget which product line you want to choose either you want to opt single product line or have multiple product line for your ecommerce business.

Step 2 How you Can Think About your Brand Name

How To Start Your Ecommerce Business From Scratch

Once you have decided which business model you want to go then think about the brand name. The brand name is most important for your ecommerce business. It should be one which defines your target market. You must think about niche market while thinking about your brand name.

Moreover, your brand name should be short and easy to remember, it reflects your brand and should be unique otherwise it should define what your business is all about.

Step 3 What Company you want to Form

If you have decided about your brand name along with the logo of your business, the next step is about how you want to form your company. You may easily find four popular kinds of companies around the world.

  • Sole proprietorship ( Limited liability)
  • One person Company
  • Limited liability partnership
  • Private company limited

If you want to form sole proprietor company then there is no need of Tax ID number.

You may use your allotted security number. However, if you want to opt for corporate or partnership based structure then you are supposed to file tax return and have a tax id number.

Employer Identification Number (EIN) define your business which is required in online business model in order to open a business bank account so that business taxes can be filled in the next financial year.

Step 4 How to Register Ecommerce Business in Pakistan

How To Start Your Ecommerce Business From Scratchdc

First is to create a digital signature and you need to sign up at the eservices of secp.gov.pk

  • Obtain PIN for Company registration from agency Securities Exchanges Commission of Pakistan (SECP). You as a user will receive 4 digit pin code on your provided email address and cell phone number. This pin code you will use to electronically sign the process/forms
  • Once you have received the pin, now you can apply to the registrar to seek the availability of proposed company name. You can an also check out the availability of your company name from the official website of Ministry of Corporate Affairs.
  • Once you have received the confirmation about your company name, you can now incorporate the company name within six months. However, you can also renew the name of your company by paying certain amount of money.
  • Attach the necessary documents which may include Article of Association and Memorandum of Association likewise attach form- 1, form -21 and  form -29. In addition to, fill forms -27, -28 respectively and fill form S-1. These necessary documents are nothing but the requirements that you need to attach and fill the form. However, it may hardly take less time to attach and fill.
  • You can also apply for the goods and service tax certification, shops and establishment licence. It could be quite important to apply for it regarding payment gateway integration and professional tax ( PT)
  • The last but not least apply for the Certification of Company’s Incorporation. This will officially register your company under company’s act 2013. If you want to have Employees State Insurance Corporation for medical insurance of the employees then you shall apply to open provident fund (PF) with respect to provident fund organization.

For furher information: Visit SECP

Step 5 Open Bank Account 

When you officially register your company under the act. The next step is to open bank account and this bank account must be opened with the official name of the company. You may open bank account in any bank with the name of the company for which you are not bound.

If you are going for the proprietorship model for your ecommerce business then you will get GST registration.

After getting GST you are now allowed to open up a bank account with the official name of your business.

When your bank account is open then you may list the products you want to sell on your ecommerce website and you need ecommerce website for this.

Step 6 How to Build Ecommerce Website For Business

How To Start Your Ecommerce Business From Scratch

There are two ways to build your ecommerce website. First you can use pre-built form. Secondly you can make it from the scratch to design according to your wish and which is opted to a large extent.

Prebuilt Website

Prebuilt websites are those that offer you thousands of readymade templates like Word press and Wix. You can use these ready templates at free of cost as well as you can get paid one if you do not get the right design for your website.

The best part of the readymade template is that you don’t need to hire professional designer. You don’t need to waste time, money and resources to build it. This is what you can easily do at the expense of watching videos on YouTube on how to do.

Building/creating website from the scratch

If you have already imagined the design of your website which you want to develop.

This can be only possible if you make it from the scratch. There are some familiar options to build your website like Woo commerce, Magneto, Shopify, Zepo and Kart Rocket. It depends upon you the design you want them to set for your website.

Step 7 Payment Gateways

Payment Gateways

It’s time to set payment method for your online business when customers buy product. The payment method can be credit card, debit card, net banking and cash card as it will allow transactions through your ecommerce website.

The following process tells that how you can grant payment gateway for online business

  • You must have bank account on official name of the business
  • PAN card of the business
  • Certificate of incorporation
  • Memorandum of Association
  • Articles of Association
  • Proof identity
  • Address proof
  • Website privacy policy
  • Website terms of use

When you are be able to provide these documents, you will be provided with payment gateways for your business ultimately which enable your online payments. The popular payment gateways are PayPal, MasterCard, PayU,and  RazorPay.

Step 8 logistics

logistics

The charted Institute of Logistics & Transport UK (2019) define the 7 Rs of logistics:

Getting the Right product, in the Right quantity, in the Right Condition, at the Right place, at the Right time, to the Right Customer, at the Right price.

The definition is quite useful to explain the function of logistics. Logistics is simply the process of shipping an order to a customer or transporting an inventory to a merchant

How your Ecommerce website works under logistic process

If a customer has placed an order on your website, you will be notified with the help of an inventory software which is usually used by ecommerce website. When you confirm this notification from the end of customer then you need to ship the product.

If you run a small company which you operate either from your home or from separate office which has also inventory there then you just need to package the product that has been ordered and send it directly to the buyer. This would save your time along with the extra cost which incurs when you outsource a third party for delivering process.

However, if you run a big company then you need to outsource third party Company that can deal in supply and distribution. This third party will also get notified automatically about the order from the customer end and they send out the package in question quickly.

Step 9 How to Attract Customers On Website

How To Start Your Ecommerce Business From Scratch

There are strategies that you need to follow to bring traffic on your site.

  • SEO ( Search Engine Optimization )
  • Advertisement & Promotion
  • Word of Mouth

Lets make it more easy to understand

SEO ( Search Engine Optimization )

One of them is SEO (Search Engine Optimization). This is the smart strategy which can take you to the top of Google page and from here you can rule on digital world provided that you use the best SEO strategies.

The question is how you can do best SEO for your site. This merely depends upon the keywords you are using.

However, there are different kinds of keywords that you must use which also reflect your business product line. Thousands of keywords are searched within seconds and you must such keywords that are searchable.

Advertisement

Secondly you can go for advertisement while you need to pay certain amount on platforms like Facebook, Instagram which promote your product on users’ daily feeds.

This can help you to attract more customers on your site once they click on the ad that is shown by these platforms.

However, it is in your hand how you make them loyal to get back every time whenever they shop online. To put it simple, the product must satisfy the needs of your target market.

Word of Mouth

Thirdly, if you are still out of enough resources that you can’t go either for advertisement or promotions which from my view needs enough money if you are in the initial phase of your ecommerce business then you must opt for word of mouth.

This strategy still works a lot under limited resources. You just need to ask your customers to recommend your brand to their relatives, friends and families.

Moreover, you can also contact to professional bloggers to run ad of your product on their site like most of the ecommerce business does.

This may not cost you a lot but it helps you to get enough traffic on your site within limited resources.

There are lots of other strategies that you can opt for provided that you have got enough resources. The more resources you have got to promote your business the more chances to get high traffic.

This will definitely make your business more profitable that is to say, more customers, more sale and the more profit.

HAPPY JOURNEY TOWARDS AN ECOMMERCE BUSINESS

Seraphina Lucius
Seraphina Lucius
A devoted writer with a penchant for penning insightful blogs. I love comics, finding joy in their vibrant stories. Embracing complexity, I thrive on unraveling intricate concepts. My blogosphere is a tapestry of career insights, educational pathways, financial wisdom, and strategies for success. Join me on a journey of words and ideas that shed light on the multifaceted landscape of life and ambition.

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