ECommerce is the sale of products or services over the internet. It has become one of the most widespread and fastest-growing marketing strategies and an effective distribution channel for many businesses worldwide.
In fact, eCommerce has become a necessary part of doing business in many industries, especially those involving retailing. Therefore, it is almost impossible to imagine any company not using at least some of its principles if they want to succeed in its field.
The internet allows businesses to connect with consumers from all over the world and offer them services or products they might never have been able to access otherwise.
Advantages of eCommerce
As a virtual platform, eCommerce offers a wide range of benefits, namely reduced costs of marketing, promotion, and delivery of products or services and improved management of customer accounts.
ECommerce also provides consumers with greater access to information and numerous choices apart from helping small businesses to grow at less cost. With the use of portals, companies can easily increase their revenue by 200% or more.
There are a lot of advantages to using eCommerce platforms apart from increased revenue and profits, such as 24×7 access to new customers, new markets, better visibility, etc.
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What do you mean by an eCommerce business plan?
Several aspiring entrepreneurs are learning their way to establish their businesses while using eCommerce’s advanced, user-friendly features and paving the way to a successful business venture.
“A business plan is the first step toward creating a new eCommerce business or growing your existing one. It’s the framework you’ll use to create an actionable plan for your company.” – as nicely defined by Moti Karmona, the General Manager of Top10.com, in one of his recent interviews.
You may also call it a strategic plan, marketing plan, or business model—whatever term you use for it, it’s intended to be a detailed document with information about how you’ll launch and run your eCommerce company.
Following are the pre-requisite to writing an effective eCommerce business plan that will guide you throughout your entrepreneurial journey.
If you came up with good ideas during the brainstorming session, it’s time to bring those ideas into a more formal plan that can be shared with family and friends. Put your plan into words and numbers so that people can understand them.
- Clearly define the niche of your business venture by stating the nature of goods or services that you plan to sell.
- When you plan to offer a product or service, is it better to create the product in-house or outsource it to an outside supplier?
- Are you going to need a physical location for your business, or will it be operated entirely online?
- Who is your target customer?
- Write about your business’s vision. What do you aspire to accomplish? What sets you apart from your competition?
About the company
You’ve assembled a great eCommerce business plan, so make sure it gives potential investors a clear idea of your company. Provide readers with a short overview of your business.
Discuss the type of business you run, what makes it unique, the goals you have set for yourself, and how they align with similar companies in your industry.
Share any unique selling proposition (USP) that makes your product or service stand out.
- Choose your brand name that resonates with the product or services you plan to offer.
- Clearly state the structure of your business, whether it is a sole-proprietorship, a partnership, or a private ltd. Co. etc.
- Choosing a domain name and getting it registered is an integral step.
- Your branding approach includes your mission statement. It must express why you are in business in one or two sentences. What is it that motivates you? Why did you get the concept for this business in the first place?
- Write down the organizational structure comprising key designations like CEO, Finance, marketing, sales head, etc.
Know your market
To be able to meet the customers’ needs and expectations, you need to know your market in-depth and understand their desires. Therefore, your product idea should be based on customer needs rather than just trends. The best way to do this is by conducting market research that can be done through a combination of surveys and interviews, and secondary sources.
Once you understand how your customer feels about a particular product or service and how they like to shop, you can create an effective marketing strategy based on these factors.
Then you should focus on popular demands so that no matter how fast the industry changes, your product will still be relevant to your customers.
Know your competitors
It is crucial to have a well-defined idea of your competitors and their strategies. Your direct competitor is the firm with which you are in direct competition for customers in the same product category or service.
Indirect competitors may not belong to your industry but may affect your business through their position in the market (e.g., by supplying or purchasing from you).
Define your product or service
Describe your product or service as a social platform that allows users to connect with similar people and share ideas. The platform is designed to create a safe and supportive environment, which enables users to interact freely while engaging and building meaningful relationships.
We want users to feel more connected than ever before, both physically and emotionally.
Our goal is for them to enjoy using the product in their daily life and to become a part of the community itself.
Consider your overall marketing campaign budget to determine how much money you’ll need to generate sales. The money that you should invest in your marketing campaign should be defined by your annual revenue objective and the amount of money you have to spend on it.
The two most significant variables determining how much money your business can spend on marketing are how much revenue you can expect from online advertising and how much money you have to work with after paying taxes each year.
Setting aside funds for social media platforms like Facebook, Google, and Instagram ads will help spur interest in your brand or product.
You don’t want to overspend on a social media campaign that fails to deliver results, so make sure that the budget is flexible enough to allow for additional testing.
Choosing the proper Marketing channels
If you are trying to reach people who are interested in what you have to offer, you should be looking at targeting them where they spend the most time.
Create an effective marketing strategy and plan after locating where your target audience spends most of their time. Once you have determined where they spend their time, develop attention-grabbing marketing strategies to make them stand out.
Paid marketing channels are forms of promotional strategies that use exchange and return. This means you exchange money for the product or service that the person is providing, and once they receive your payment, they complete their part of the contract.
There are also many different ways to fund these campaigns, such as; getting inbound leads, outbound campaigns, and joint ventures.
Organic channels are used to communicate your value proposition or place in the marketplace. Organic marketing tactics do not require a financial investment and often take longer to show results than paid advertisements.
These channels comprise search engine optimization (SEO), social media pages, blogger networks, and content marketing.
Operational and logistic plan
Your logistics and operations section details what you need business-wise to run your company. Tech requirements (computers, printers, cameras) come first. Next, you’ll cover warehousing since many eCommerce companies use drop ship techniques for inventory control.
It includes a comprehensive list of the other necessities you will need to keep your company running apart from the information about where you are going to operate, how people will get to your workspace, what equipment and tools you will need to run the day-to-day business and any additional materials you may need for specific projects or events.
Finally, you discuss capital and operating expenses. Before writing this plan section, ask yourself: How much money do I need every month to run my business?
Making a financial plan
A good financial plan lays out the numbers for your business and explains how you will use those numbers to grow. It gives a detailed analysis of your income statement that breaks down your revenue sources and your cash flow statement, which indicates precisely how much money you’re making or losing at any given time.
This basic overview shows what your business is doing day-to-day and month-to-month.
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A good eCommerce business plan is an integrated and overarching explanation of your company’s goals, strategies, and reasons for starting or growing your business. It explains why you want to start or grow a business, how much funding you need, where it will come from, how the money will be used and where you expect to be in three years.