Start Your E-Commerce Business Today
You take part in an electronic commerce business (e-commerce) almost daily and you may not even know it! Read more to find out how common it is to encounter an e-commerce business and what steps you need to take to start your own. Statistics Canada provided an advanced estimate of the sales in retail trade on February 2022 and found that retail e-commerce makes up 5.3 per cent of the total retail trade.
Clothing and accessories are at a 15.1 per cent increase in sales following a 10.9 per cent gain in January for building material and garden equipment and supplies dealers.
That is a strong indication that the economic situation in Canada is advancing. Starting your own e-commerce company will enable you to contribute to an increase in sales! First, what is e-commerce?
Definitions
There are four traditional types of e-commerce business models.
- BUSINESS TO CONSUMER (B2C): Direct sales from a business to an individual customer.
E.g. Business sells it’s own handmade mugs to its audience.
- BUSINESS TO BUSINESS (B2B): Business sells to another business.
E.g. Business sells their built-in software for other businesses to use.
- CONSUMER TO BUSINESS (C2B): Individual sells to business.
E.g. Social media influencer gets exposure on a business’ goods or services for a fee.
- CONSUMER TO CONSUMER (C2C): Individual sells to another individual.
E.g. An individual refurnishes used furniture and sells it on Facebook marketplace.
An e-commerce business uses the internet exclusively to sell tangible goods and services. This business model tracks all of the commercial transactions taking place online. Although there are advantages and disadvantages to e-commerce, starting your own business online is cost-effective. E-commerce can minimize costs by dropshipping, eliminating the cost of payroll, rent and fees by running a virtual store and marketing your business using organic resources.
Read more: The Insurance Guide for Canadian E-commerce Companies
Choosing what to market all comes down to your preferences. Selecting the most popular items isn’t always the most effective route since it may just be a trend that you cannot capitalize on for a long time or an item that may end up sitting in your inventory for months on end. Deciding on a product or service that you want to sell requires doing your own research.
Consider selling tangible products or services that you also consume. Since you are part of the market, you can easily identify who the target audience is. Making your online business successful can be facilitated by choosing a product or service you really know a great deal about. You know what people like, what they don’t like and what prices they are willing to pay. As a consumer, you can also make suggestions to your product or service that will make you stand out from other competitors.
Creating your own content strategy, implementing your own communication tactics, and choosing how to present your brand are just a few of the ways you can gain control over your own business with e-commerce.
E-commerce poses a substantial risk of competition in an evolving market. Everybody on the internet is competing against you when running your online business. How are you participating in e-commerce if you have never started your own business?
We see e-commerce represented by the laptop case you bought through Amazon, the shoes you bought online, and the shirt you saw your favorite influencer wearing.
Examples of E-commerce
- DROPSHIPPING:
Previously, the term “dropshipping” was mentioned, which is the marketing of a product and facilitating your own sales without having to distribute the products physically yourself. To find a product at a low price, you need to research suppliers and communicate extensively with manufacturers. As soon as your product begins to attract sales, you will send information directly to customers via a third party.
- WHOLESALE:
When you purchase dropshipping goods, the supplier typically uses the wholesaling process. Whether you sell materials in bulk for other businesses or cars to dealerships, wholesale is an example of a business to business e-commerce model.
- SUBSCRIPTION:
The subscription model is an automated purchase of a service or product that you receive on a regular basis. It is usually paid on either a monthly or annual plan. One example of this is food delivery services such as HelloFresh and GoodFood.
- PHYSICAL PRODUCTS:
Selling a tangible product that you created or purchased that is physically shipped directly to consumers as sales are made. This is similar to dropshipping, but in this case you would be purchasing in bulk or creating made-to-order products so you control your own deliveries. Whether you add a touch of branding to the packaging or modify the product you buy from suppliers, this is an example of e-commerce.
- RETAIL:
During the severity of the global pandemic, retail stores hours were minimized to mitigate contracting COVID-19. Regardless of the conditions, the sale of a product by a business directly to a customer is considered retail trade. This can be done in person or online on a website.
- DIGITAL PRODUCTS:
Fivver and UpWork allows freelancers to have their own business online. If you are a digital creator, you can sell your templates, nutrition plan or courses. This type of business consists of downloadable digital goods or services that is purchased for use.
- SERVICES:
This can also be compared to digital products as you can sell your set of skills on platforms such as Fivver and UpWork. You can create websites for small businesses in exchange for compensation. Another example is detailing vehicles for other individuals.
Platforms for E-commerce
The best platform for your e-commerce business varies depending on the type of business model you want to pursue.
There are handfuls of exceptionally great platforms to use for e-commerce but the following are examples of platforms that you may need a mix of.
Amazon, AliExpress and DHgate
Amazon, AliExpress and DHgate are examples of platforms that individuals use for wholesaling, dropshipping and retail. Unlike some platforms, Amazon allows fast delivery where you as a business give Amazon your products and have them handle shipping, returns and customer service. This service is called “Fulfilled by Amazon” or “FBA”. E-commerce platforms like these are examples of business-to-business and business-to-consumer models.
Websites like AliExpress and DHgate allow businesses selling tangible products to purchase in bulk to sell separately to consumers. These websites are also effective for wholesalers who have large amounts of inventory to sell to other businesses. Lastly, this type of platform is also used to sell to consumers without having to create or fully market your own products.
Read more: Canadian Amazon Seller Insurance Requirements and FAQ
Shopify, Wix and SquareSpace
Your online business needs a website. It contains information about your tangible or digital products or services, as well as a blog or an About page. Building a well-structured website allows you to create a strong brand identity. You can use this opportunity to sell people the idea on why, how and where they can purchase your products or services.
Shopify, Wix and SquareSpace are notorious for having an in-house suite of tools to help you drive traffic to your business. You can showcase your products or services to directly sell to customers through these website builders. By dropshipping, you can then use the sales to make purchases from a supplier. If you are selling your own products, you have the ability to directly sell your products to customers without going through another third-party. With that, if you are physically shipping your products to the customer, most website builders like Shopify, Wix and SquareSpace will offer discounted shipping rates from USPS, DHL Express and other carriers.
Some of these website builders will allow you to manage your whole business online in one platform. These platforms can offer free marketing services, Search Engine Optimization (SEO) tools and even real-time sales, inventory updates, progress reports and much more.
Having a website can also be used to build brand presence. In order to attract new customers, you need a website that tells your audience about your set of skills and the digital products or services you provide. This will tell them who you are, what you do and your experience. With Shopify, Wix and Squarespace you can create a brand identity to represent your business, personality and overall style.
Register to Sell
When it comes to starting an online business, there are a lot of factors to consider. You have to determine what type of business you want to pursue, what products or services you want to sell, who your consumers are and the brand you want associated with your business.
Having the ability to sell online requires a few fees. This includes registering your business on Amazon or other platforms for a Professional Selling Account, paying monthly or annual fees for website builders and lastly, business insurance.
Read more: Insurance for Canadian Retail Stores
Whether you have grown your business, big or small, it is essential to have insurance in order to protect you from any negative outcome from consumers or other businesses for potentially filing a lawsuit against your business. It is important to work with an insurance broker that understands the Canadian e-commerce industry. The experts at Fuse Insurance are ready to help. Get started today by filling out our online quote application or giving us a call at 1-866-387-FUSE (3873).
