Starting an online business is not difficult, in fact, Wix, WordPress, Amazon, eBay, Etsy and Shopify have made it quite easy. However, on the flip side, this means that it has become increasingly difficult to start a profitable and successful online business.
This year, people have become increasingly aware of how fragile their daily lives really are and particularly their income and jobs. As a result, a lot of people have turned to the internet to make some extra money or to replace their income. Don’t get making money online confused with an online business. Making money online is the same as your day job, you are working for someone else and being paid for your work.
Whereas with an online business you own the business and you are selling your product or services to the consumer or client.
In this article, we are going to look at how you can start a successful online business.
Finding a niche
The first thing you want to do is decide what your business is going to be related to. A niche is a segment of a larger market or topic, so, for example, Web Design is a niche and being UX designers or digital designers are a niche of Web Design. The biggest mistake most people make when starting an online business is aiming it too broad when they should laser focus their niche in the beginning and expand out as they become more established and profitable
Remember, this is going to be your business so you want to choose something you will not lose interest in or get bored of in 5, 10, 15 years.
Choosing a business model
Once you’ve decided on your niche you need to think about your business model, there are many different models to follow for an online business so here are the five most popular.
i) Informational- this model is the easiest to start with little cost or upfront overheads. With this method, you are primarily selling ‘information’. For example, if you were an artist you would build a website about painting etc. and sell ‘How to Paint for Beginners’ or ‘How to Sell Your Paintings’ courses and eBooks etc. Another way of making money with this type of model is by putting Google ads on the site.
ii) Affiliate marketing- the next level is affiliate marketing. Following the above example, if you do not have any eBooks or courses, you could sell others using services such as Amazon etc. and get paid a commission. This is affiliate marketing. Most large eCommerce sites such as Amazon, Walmart, Target, and Costco have an affiliate program you can join. You are given a unique referral link to put on your website and if someone uses that link to make a purchase you will get a commission.
iii) Drop shipping- the next step up from Affiliate marketing is drop shipping, the two models are very similar but the big difference is that with drop shipping the consumer stays on your site and makes the purchase from you and then you would purchase from your supplier and they send it to your customer as if it was sent by you
Again, using the example of an artist, you would use an eCommerce platform like Shopify to sell the products then buy them from the wholesaler when a sale was made.
iv) Retail and Wholesale Arbitrage- with arbitrage you start to buy directly from local retailers to resell for a markup on your eCommerce platform or eBay. This model, along with drop shipping, has become extremely popular in recent years. Another example of running a successful arbitrage business is buying up liquidated or bankrupt stock and reselling.
v) eCommerce Store- this is probably the most common business model used by most online businesses; however, your business will probably need to be registered and registered for Sales Tax or VAT. You can then buy product from a recognized supplier or distributor at wholesale price to sell. The two biggest eCommerce platforms are probably Shopify and ESTY (Easy to Sell Yourself).
Shopify tends to be extremely popular with Drop shippers and traditional eCommerce stores, whereas ESTY is a cross between eBay and Shopify focused on arts, crafts, jewelry, housewares, and artisan candies or baked goods etc.
vi) Selling Private Label products- a private label product is one that has been generically produced and your logo has been added to it. This is the most profitable business model to follow and also the most difficult. With private labelling, you source a product directly from the manufacturer, but they add your logo to the finished product. This is the model most large retailers use for selling their own branded products
- Business Plan- writing a business plan at this stage may seem a little strange as you don’t know all your costs and expenses etc., but that’s one of the main reasons you need to draw one up, to give you focus and a goal. Without a business plan, you will have no direction. A business plan will focus your needs, targets and goals as your business succeeds and moves forward. You need to analyze your costs at each stage, so you know ahead what sales you need to achieve to break even.
- Professional Branding and Logo- create your own image, mission statement and logo from day one in order to build brand recognition and your own business equity. Make in short, simple, memorable, recognizable, and most importantly flexible, such as YouTube, TikTok, Facebook and Twitter.
Most social media and eCommerce sites have different specs and requirements for images and logos etc., so there is no one fits all solution so when designing your logo and creating your brand keep this in mind.
Did you know that businesses with a website were 51 per cent more likely to grow than those without?
It never ceases to amaze me how many businesses and even large international brands do not have a website, but they have a Facebook page, Instagram, and Twitter and even an Amazon store in most cases. A website should be the engine of your business, the hub and destination for everything else
The problem with this is that they do not own the business but Facebook and Amazon etc. do. For example, you have a Facebook page with 200,000 followers and a weekly income of $5000 but suddenly Facebook decides to start charging a 20% fee on all transactions and a $40 monthly subscription fee for your business page. What can you do?
There are three main parts to creating your website:
- Domain name
Domain name and hosting
Domain when choosing your domain name, your ca either go with a traditional name that tells your visitor exactly what your site is about briefly. The other is to choose a more abstract name that will intrigue them and perhaps pique the interest enough to entice them to click.
However, an abstract name has two major faults, firstly not being clear what it is for is more likely to loose you visitors than those being interested enough too ‘look, which brings us to the second problem that if it’s not what they had hoped or thought they will leave immediately thereby increasing your bounce rate which is an important SEO matrix
Make sure you Google it also to make sure nobody else has registered it and to make sure there are none similar if there are look for a new one. This is because later you may be open to litigation, many couples (big and small) have had to ‘give-up’ their domain name after years of building their business because it was too like an earlier one.
Try to find a short, unique, memorable, easy to spell one with the main keyword in it. If there is not a suitable one, try an acronym. Also do not use hyphens or dots in the name. Once you are done, register it, before someone else does!
Hosting- Next, we have the hosting. Most hosting companies, due to the amount of competition, offer remarkably similar deals. The main things to look out for are security, downtime, loading speeds etc. and most importantly good customer support or technical support because if your website goes down in the middle of the weekend you want to know you can contact someone. Also make sure you check how much in included or you may run out of room very quickly.
Lastly, we come to Content Management System (CMS) which will be the guts of your sites and there are hundreds of them out there to choose from so make sure it is user friendly, secure, unhackable, and loads quickly. The two most popular currently are probably WordPress and Wix, but there are literally thousands so look for the one that best suits you and your business. These are the first five processes on how to start an online business.
For the article we are looking at tips on how to start an online business, we are going to look at social media marketing, email marketing, SEO we are going to look at how to continue building your online business etc.
In a coming article I will draw more tips for succeeding within digital environments, meanwhile, it would be interesting to hear your thoughts in order to reflect about the implementation of these general guidelines.
by Colin Dorman