Complete Guide to Starting an Online Business

When entering the online business world it is essential to make informed strategic decisions from the start!

Identifying a lucrative niche market and validating the business idea are the first steps to the success of an online venture. However, the process doesn't stop there. The choice of the appropriate e-commerce platform, the design and development of the site, as well as the configuration of online payments, are aspects that require attention.

Identifying the Market Niche

Start small, study the niche markets you have the most affinity with, analyze your competitors, suppliers, market size, costs, and profit margin. Don't stop at the first niche, study several niches and compare them all with each other. Take into account your affinity and your network of contacts in the market to make the decision about which one to follow.

Business Idea Validation

In this step, it's important to plan everything very well. You already know what niche market you are going to work in and you know the average cost of products, so it's time to sit down and design a functional and profitable business model.

Estimate the initial costs of the operation, calculate the breakeven point and plan for the short, medium and long term. That will be your map going forward.

The numbers and analyses will indicate whether the business is viable or not. If it's not feasible, don't worry, go back to the first topic to find another niche.

Choice of E-commerce Platform

Here, the most important thing you need to know is: there is no better or worse platform, there is the one that best fits your business. Plan this stage well, chat with at least 4 market platforms, both large and small. Don't jump on the bandwagon of having the “biggest” or “best” e-commerce platform on the market, study well what you need: the functionalities, the native integrations, the costs. Stay tuned for integrations with ERP, payment methods, and anti-fraud.

Site Design and Development

Here it's time to find qualified partners to develop your site. Again, be careful! It's not because the partner is expensive that he's good, and it's not because the partner is cheap that he's bad. Talk to partners, request cases, talk to old clients and analyze well before closing the deal.

The layout must be mobile first, as currently few sales are made by devices such as desktop or tablet. The site should be fast and simple to use. Study e-commerce already in production and research your customer's behavior to understand what the layout should be like.

A well-done briefing for the chosen partner makes all the difference, as with it the result of the layout will be more assertive.

Here's my suggestion to talk to Tec4u, they developed the new Velocità store and it was sensational!

Online Payment Setup

Here, the first lesson is: we are in Brazil and we have a lot of fraudsters, so be prepared! But don't worry, there are several payment methods that already have built-in anti-fraud and guarantee money in case of fraud.

Important points to note when hiring payment methods:

• Does this payment method have built-in anti-fraud? If so, does it guarantee 100% of transactions?
• What is the size of the customer database of this payment method? The larger the base, the better the analyses and the chances of success.
• What is the average credit card payment conversion rate for this payment method? An excellent rate is over 95%, but this varies from market to market due to fraud.
• What are the fees charged per transaction for this payment method?
• Is the receipt in the flow or in advance? If it is anticipated, what is the advance rate (calculate to understand if it is worth investing in 100% of the CDI)?
• Is this payment method integrated with the e-commerce platform I chose?

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Answer all the questions, evaluate one by one and close the deal with the one that best fits your new e-commerce!

Inventory Management and Logistics

You've decided on the niche, chosen the products and found the suppliers; now it's time to invest in inventory and manage it efficiently. This is a complex issue, which varies from sector to sector. Overall, it's important to keep a stock with high turnover and control investments. Having too much inventory can be harmful, as can having too little inventory. Remember: if you don't have a product, you don't sell it.

As for logistics, there are several ways of working. You can choose to hire a company like Mandaê to outsource your entire shipment. Or you can choose a company like Kangu to use their own labels and carrier contracts. Another option is to sign a contract directly with the Postal Service or a private carrier, such as Total Express, and manage those partners on your own.

Digital Marketing Strategies

Here we have several points to consider. Take into account that those who are seen are remembered, as my girlfriend, Melissa Pio, says. If you just open e-commerce and don't invest in marketing, it will be just another site in the vast world of the internet. Consider the points below:

• Performance marketing: Focus on ROAS (Return on advertising spend), or return on ad spend. It's easy here: you invested money, you got a return. But no one lives on that alone, follow the line:
• Branding: Focus on the brand, here it's long-term. Brands are built over time and require constant and consistent investments. This investment will differentiate you from any brand to a desired one in the long term.
• SEO (search engine optimization), or search engine optimization: you need to work on SEO! If there is no investment to hire professionals at the beginning, study and do it yourself, but it has to be done! SEO is the search traffic that goes to your new e-commerce “for free”, that is, without clicking on a paid advertisement (the performance marketing one).
• Email: Yes, email converts a lot if done correctly. Invest in lead capture, form a solid email base, segment that base, and communicate with customers through email. E-mail still sells a lot!
• Social networks: Take advantage of the “hype”, remember my girlfriend, Melissa Pio, “who is seen, is remembered”. Use and abuse memes, videos, and new social networks. Well-done content is essential.

Performance Monitoring and Analysis

Now that you've chosen your e-commerce platform, you've signed a development contract with an agency like Tec4u, you've chosen and implemented the payment methods, and you're already investing in digital marketing, it's time to monitor and analyze the performance of your store.

Mainly follow these KPIs:

• Sales conversion rate: How many sales were made on your site in relation to the number of hits. The ideal is to always be above 1%. Initially, the conversion rate is expected to be lower, but with branding and marketing well done, this rate should increase to close to 1% or more.
• Separate accesses by access types: Organic, paid, email, etc. It's important to keep track of this! The ideal is for everyone to always be growing.
• Payment conversion rate: If the rate is low, it's worth talking to your payment method to understand what's going on.
• Average ticket: The average ticket is the average amount of purchases made on your site. Follow this metric closely and invest in ways to increase the average ticket, such as combos, buy together, gifts, etc.
• DRE and cash flow: Every e-commerce is a company, so analyze the numbers carefully and take controlled risks!

I shared some of my knowledge to set up a new online business; I hope you enjoyed it! Share with your friends who are interested in starting an online business!

If you need more help, I am available to ask questions on my LinkedIn or you can contact Tec4u for an online business implementation consultation.

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