The United States Census reported that e-commerce sales approached $200 billion in 2011 and were increasing faster than their offline retail counterparts. As a concrete example, online sales for holiday purchases in 2011 increased by about 15%, as opposed to “brick and mortar” growth of just 4%. A clear trend is developing that favors products and services that are well-adapted to an Internet driven economy. Many traditional brick-and-mortar businesses are migrating parts of their operations online and giving new attention to the emerging financial opportunities offered through e-commerce business tools.
Starting an e-commerce business requires considerations familiar to those necessary for any type of business start-up, but altered to suit the medium of the Internet. Before opening an online business, it is important to know exactly what is going to be sold and to whom the product(s) or service(s) will be sold. Finding a niche market is about marketing a product to support a specific need while avoiding as much competition as possible. Additionally, other issues such as securing adequate shipping and storage capabilities, and developing a functional online storefront interface must also be addressed.
Starting any business requires a comprehensive business plan to define a primary focus, make a budget, and other necessities of running a successful commercial firm. E-commerce businesses need not be initially expensive. In fact, the greatest expense for an online venture is in maintaining a substantial product inventory and shipping apparatus. The actual daily functioning of an online business costs very little and investing large sums of money into further developing and expanding the business should wait until it proves to be viable.
One of the most important factors influencing the success of an e-commerce business is its website. Many functional and useful websites can be created and hosted for free or for a low cost. Spending lots of money on a busy, flashy website isn’t necessarily the way to sell a product or service. A commercial website best addresses customer needs by giving them quick and straightforward access to products and information that they need, easy access to website and product assistance, and a simple and navigable shopping cart utility.