1) Business plan
A business plan is more than a mission statement or a description of your business.   Even if you put this down on one piece of paper a business plan outlines all the potential issues and concerns of your new venture and helps determine its feasibility. What do you want the business to accomplish? Who are your target customers and how do you reach them? What do you need? Along with the risks it details the operations and costs associated with running the business.  Just like any business the success of your eCommerce business will be determined by how well you plan it and how well those plans help you to fulfill your goals.  Remember your business plan isn’t just the idea it is how to execute the idea and make it a reality.

2) Capital
A very simple rule is this – for every dollar you expect to make off your website at least 10% of that should be paid on the website.  So even if you only plan to make $500 per month you should be spending $50 per month on the website itself.  This doesn’t include marketing costs, other operational costs and the like. Like most business you should be able to run for at least 6 months or as much as year without making a profit.   While the upfront costs may seem low no one got a website business off the ground and making money without spending either a lot of their own time and/or paying someone.  So a reasonable budget is $1000 to $5000 with $1000 meaning doing most of the work yourself.  Not all of this has to spent right away so don’t panic if you have less than $1000 but its necessary that you are willing to work hard to get started.

3) Suppliers/products/services
If you don’t already have a business you will need to determine what it is you plan to sell.  Most everything can be bought and sold over the Internet including perishable items such as fresh fruits and veggies – this is often for local deliver only mind you.  But this kind of sale highlights the power of eCommerce.  Using the Internet to conduct business even in the same town makes sense as it is easier to plan deliveries, co-ordinate purchasing and deal with repeat orders, process payments and handle returns etc.  It also helps promote your business and keeps you focused on running your business.  In choosing what to sell you need to find something that your passionate about and love to do.  Whether its selling your own knitted sweaters, camera batteries or lawn care… sell it because you want to and are willing to work hard to make a successful business.

…more to come in Part 3

Lets start with the basic requirements. You will need a domain name and website hosting account. Using a product like OSCommerce, CubeCart or ZenCart means you don’t necessarily need a website designed for you as these offer a complete website in of themselves. BUT customization of their interface is required and most of them have a templating system to allow you to your eCommerce business unique and attractive to your customers. So once you have a domain name and website you will need some form of payment processing. PayPal is the most common and it has its advantages and competitors but for more details on payment gateways please check out this article. It also has information about dealing with payments and the various options.

There are some technical requirements as well such as a dedicated IP address for your website and an SSL certificate. Right now is not the time to bore you with what these items are but they allow your website to securely transmit and encrypt payment information over the Internet. Simply put a dedicate IP is a fixed address on the Internet and an SSL certificate makes the secure transaction possible. The added bonus is that these are provided by a third party so you customers have some assurances you are a legitimate company. There is more about this in SSL Certificates Explained.

So a domain name, hosting plan, eCommerce application, payment processing system, dedicated IP and SSL certificate. You will also need a name for your business and some idea of what it is you will sell.

What is eCommerce?

eCommerce, or Electronic Commerce, is the exchange of goods and services over the Internet. It is one of the most important business process improvements since the invention of the telephone. eCommerce allows people to buy and sell to one another anywhere on the planet at any time of the day or night. eCommerce is the usage of, and exploitation of, the interconnectivity of various business and information systems plus an application that provides a catalog and a shopping cart. We go into more detail on these components in the next few sections. There are few barriers to entry so armed with only a computer and an Internet connection you can start selling almost anything you want.

Why eCommerce?

How would you like a salesperson who could answer all your customers and potential customer’s questions, take their orders, suggest similar items of interest, provide billing and shipping information in real time and do all of this for pennies a day; 24 hours a day? With eCommerce you can have such a sales person. Granted this sales person is a collection of computer software applications designed to work together, communicate together and more importantly automate the buying and selling process. These applications are web-based and as such are available to anyone with a connection to the Internet.

There are low infrastructure and start-up costs as most hosting companies provide a basic eCommerce hosting package for less than $50 per month. PayPal is the most commonly used form of payment on the Internet and costs nothing to get a merchant account. You have a global market that you can sell to and buyers can choose the payment method that suits them best. eCommerce can also help increase sales for your physical store, commonly called a bricks-and-mortar operation, and and eCommerce website open 24-7.

So why eCommerce? Simply put it is the least expensive way to sell goods and services to people anywhere in the world at anytime of the day or night. This is because it automates and simplifies the commodity exchange process. It also provides a sinlge point of entry for clients to find all the relevent information about the products, services they are interested in and all about your company and why to buy from you. So detailed information, ease of transactions and sell to anywhere to anyone at anytime make eCommerce the most affordable business improvement tool since… well, ever.

So is eCommerce right for you?  We’ll answer that in Part 2.