How to Start an E-commerce Business in 2021

Stepping into E-commerce: Advantages and Disadvantages

Reports from the most recent business statistics indicate that the ecommerce sector is experiencing dependable growth annually. Recent international occurrences have increased the number of difficulties faced by markets. Certain types of products are being purchased less frequently while other product types are experiencing growth.

eCommerce is the exchange of services and goods, but people tend to mistake it for e-business or businesses that operate through eCommerce. There is a slight difference. While eCommerce is only about the transactions of goods and services, the eCommerce business model deals with all aspects of an online business which include selling:

• Services
• Physical goods
• Digital products
• And, affiliates

Any business that exists online and can be identified under one or more of the previously specified types. It provides an indication of the kind of service/product you can provide to your customer.

Let me explain.

If you provide the option of selling items that your customers can interact with, such as being able to feel and hold the product when it is shipped to them, this is considered a type of physical commodity. For example, a water bottle, baby toys, etc.

Instead of being a physical object, a digital product is something that exists solely in a digital form. Typically, when a customer purchases a digital product from you, they do not get anything sent to them in the mail. They can get the digital version of what you sold.

Files that include eBooks, software, audio, and video fall under this category.

Online businesses can offer either physical or virtual services to clients. These services encompass offering instruction, fixing computers, and designing interiors. This type of business involves offering services rather than products. The amount of time that these services are offered can range from one day to multiple years, depending on what industry is involved.

Are you aware that eCommerce firms can make money through affiliate marketing? The cash obtained from this technique is referred to as a commission derived from affiliate links that offer to pay them a portion of what they make from a sale.

History of Ecommerce

The only way for customers to initiate dealings and share business information over the internet was through Electronic Funds Transfer (EFT) and Electronic Data Interchange (EDI). The origin of eCommerce can be traced to 1969 when Jeffrey Wilkins and Dr. John R established CompuServe, the initial major eCommerce organization. Goltz. This company was built using a dial-up connection. Although eCommerce had been previously developed, it didn’t reach its full potential until 1991 when the internet was made available for commerce.

Timeline of Major Ecommerce Events

Here is the timeline of major eCommerce events.

Major eCommerce Business Statistics You Want to Know

The eCommerce sector has seen a sharp increase in activity lately, with the clothing and beauty industries reporting strong double-digit growth. This trend isn’t bound to slow down. The figures provided demonstrate that the worldwide eCommerce sector is still experiencing persistent growth, owing to a few causes, for instance, inexpensive prices, the increasing prosperity of customers, and betterment of infrastructure. Making international connections is essential for achieving success rather than just an option.

We asserted that the eCommerce industry will experience rapid growth in the impending years. Here’s the proof –

• In 2021, more than 2.14 billion people are expected to shop online. (Statista.com)
• Global e-retail sales projected growth of up to $USD 4.8 trillion in 2021 from $USD 2.8 trillion in 2018.
• By 2023, eCommerce accounts for around 22% share of global retail sales.
• Ecommerce accounts for about 8.1% share of the total retail sales in North America.
• Amazon is the largest eCommerce company in the U.S.
• India is the fastest-growing country in the eCommerce industry during 2019-2023.

Let’s take a look at how regional expansion is growing worldwide.

China has the largest eCommerce market in the world. Asia is the leading region in the international eCommerce landscape, with China and India at the forefront, and a market size of $831 billion. North America and Europe are following closely behind with respective sales of $552 billion and $346 billion, according to Shopify.

1. Advantages to starting an ecommerce business.

Here’s why a growing cohort of entrepreneurs goes for ecommerce:

• Location independence. You can run an ecommerce business from anywhere in the world as long as you have a laptop and reliable internet access. On a personal level: you can travel indefinitely, live abroad, move to a more affordable location, etc. On an operations level: you have the flexibility to scale, compete internationally, earn a passive income, and profit from arbitrage.
• Flexible work schedule. Once you get your business up and running, you can tune your work schedule to fit your lifestyle. By using smart integrations, delegation, and automation you can run a growing ecommerce business with a co-founder, lean team (or even alone) without clocking in 12-hour shifts.

2. Disadvantages of starting an ecommerce business.

Despite all the good things about ecommerce, there’s also a flip side to it:

• Fragility. Ecommerce businesses are not as resilient as other types of online businesses, because there are a lot of moving pieces that can be prone to disruption. Shipping can be delayed. Manufacturing can get stalled. Product recalls are costly. Since many third parties are involved in your supply chain, there are a lot of risks.
• Competition. Small business owners in the ecommerce industry are in a particularly tough situation because they have to compete with other SMBs and with ecommerce giants like Amazon. The big-box retailers also set a high bar in terms of customer expectations. Because Amazon has Prime delivery, a lot of consumers now expect fast and free shipping from all other retailers. Differentiating from the competition and meeting customers’ expectations can be challenging.

Being an ecommerce business comes with certain drawbacks which are unavoidable. Despite being a small business proprietor with a restricted budget, you can triumph over them by having the appropriate course of action in your position.

Best Ecommerce Business Ideas to Try in 2021

Now you have a better understanding of what you are committing to. Let’s revisit ecommerce business ideas: what trends are popular in 2021 and what has fallen by the wayside?

1. Create a niche apparel product.

You can build an ecommerce site to offer niche custom apparel, including logoed merchandise and shirts with sayings.

You do not need to spend money on the stock beforehand. You can employ Printify, which is a print-on-demand service, to drop ship items such as t-shirts, sweatshirts, hoodies, and even socks.

It is simple to link a BigCommerce e-commerce website to an on-demand partner. When someone purchases your item, the partner will manufacture the item and deliver it to the new purchaser.

Why sell niche apparel products?

• We all need clothes, don’t we? When you enter the apparel market, you don’t have to worry about the demand unexpectedly drying up. Last year, in April 2020, t-shirt sales increased by 47% and pajama sales jumped by 143% as per Adobe Digital Index.
• Apparel remains a growing industry. In 2020, the global apparel market generated approximately $1.46 trillion in revenue. And it’s predicted to grow to roughly $2.25 trillion by 2025.

2. Sell industrial B2B products with little competition.

When people consider commencing an ecommerce business, particularly a digital store, they most likely will start by looking at the B2C area. But there’s no reason to limit yourself to it. Test out the B2B market space!

Why sell industrial B2B products?

• Rapid sector growth. Last year, digital B2B sales grew 10X faster than total offline than total manufacturing and distributor sales. Businesses are ready to purchase online, but suppliers are not up to speed yet.
• Anyone can dropship B2C products nowadays. Meanwhile, sourcing new products in the B2B space is less challenging.

3. Do what Amazon can’t.

It is possible that you assume that beginning a digital commerce business is a doomed activity. How can you possibly compete with Amazon? Well, truth be told… You can’t. And you shouldn’t.

If a product can be purchased both on Amazon and through your own ecommerce store, which do you think the customer is likely to select? They continually choose Amazon due to their familiarity, comfort level, and confidence in the company.

You ought to avoid putting yourself in direct rivalry with “the everything store”. The best course of action is to make available to your possible buyers something that Amazon can’t supply: a tailor-made, top-notch range of specialized merchandise.

What causes cheese lovers to willingly spend more money at artisanal shops? They desire cheese of good quality, produced from milk coming from animals fed exclusively on grass. And they will pay a premium for it.

4. Sell something that is trending.

You can also gain financially by taking advantage of prevailing market tendencies. How do you find one?

• Go to Google Trends.
• Put in the keyword.
• Pick the timeframe.
• Analyze the results.

Why sell something that is trending?

• Hype: When some blogger-approved product becomes trending, everyone rushes to get their hands on it. So you can spend less on advertising and capitalize on the surged demand.
• Instant cash injection. You can turn a good profit quickly if you jump on the bandwagon. This can improve your cash flow and give you extra funds to re-invest in your business.

5. Dropship.

A form of e-commerce where there is no need to store the items being sold, dropshipping is a way to offer products for sale on the internet. Instead of ordering stock in advance, you register with a producer who provides merchandise to your customers when they buy from your online store.

Why dropship?

• Lower startup costs: Dropshipping reduces the costs of launching an online business because you don’t need to invest in inventory upfront.
• Diverse product range: You can offer a wider range of product categories and jump on new trends.

6. Sell toys online.

People of all ages enjoy playing with toys, especially those with unusual features or that are homemade. Research different toys types and come up with your specialty such as:

• Eco toys, made from natural materials
• Supplies for children’s activities
• Educational toys

Why sell toys online?

• Growing industry: In Europe, revenue in the Toys & Games segment is projected to reach $48,225 million in 2021. This market is expected to grow by 1.7% annually between 2021 and 2025.
• New approaches to parenting: Modern parents place greater importance on safety and sustainability. At last year’s New York Toy Fair, sustainability was one of the most-discussed topics.

7. Launch a CBD business.

Many people are very anxious to buy products with CBD, such as oils, ingestible, and creams. So why not launch a CBD business?

Begin again by selecting your area of specialization – this can range from edibles with CBD added to products for pets containing CBD.

Why launch a CBD business?

• CBD products attract a lot of interest at the moment. It’s a viable market with tempered competition at the moment.

8. Consider print-on-demand.

In addition to specialized clothing, you can offer a selection of other on-demand wares like home decor, writing materials, extras, and more!

Why sell print-on-demand products?

• Print-on-demand is a type of dropshipping, so this ecommerce model drastically reduces the financial risk of starting an online business.
• Print-on-demand is a great option for those who already have an audience and want to monetize it by selling branded merchandise.

9. Sell a beauty subscription box.

Beauty subscription boxes are another great online business opportunity.

Instead of only offering individual items, you can gather them together in a box and require a subscriptions fee for it.

Why sell beauty subscription boxes?

• Subscription boxes provide predictable, recurring revenue.
• Beauty supplies are perfect for this business model since they need to be frequently replenished.

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