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How to start an online business?

How to start an online business?

You want to start an online business: now what?

Creating a business from scratch has become incredibly easier in the last years, given the increased access to a variety of tools and competencies online. We deal with B2C companies in the fashion world, a market which shows peculiar rules and strategies to emerge.

But which are the most relevant parts to be taken into account when starting an online business? Let’s find out.

Online business ecommerce: check product first

First analysis to be made: product-market fit.

The main prerequisite is that the product should be hard to find. Selling a product online which can be easily found in local stores is risky. This is why it would be beneficial to find a completely “new” product (jacket with electronic functions), a known product with a special twist (customized) or one that is catered towards a niche (environment-friendly or full-body customers are two examples).

Another aspect to be taken into consideration is how crowded is the market. While this can be a great sign for a potential investor (having companies which have reached an interesting market share), it also means that investments to increase brand awareness will be consistent and require important amounts for the marketing strategy.

Even finding a product which shows the previous characteristics, the search is far from over. In particular, we are looking for a product which is:

  • Not too expensive. If we are bootstrapping and we do not use dropshipping, thinking of selling products for more than $200 could be problematic from a cash-flow perspective. An excessive inventory could hurt our ability to use funds in the short term, especially if we are still testing the e-commerce with an initial investment.
  • With good marginality. Actually, the price itself is not as relevant as the marginality. As long as we have a good margin (at least 40%) we can sell items on our store with confidence. This is also a great reminder on why promotions and sales should be carefully crafted in advance, as a 20% discount on the complete purchase widely differs from a free shipping on the order or from the possibility of adding a complementary item for free on the same order. The cash flow should not be underestimated in this regard.
  • Easily sourced. Are we sure that it would be easy to sell 10 as well as 1000 of these items per month? Which are the alternatives if there is a problem with our main sourcing partner? Generally speaking, various startups try to reduce the risk dealing with multiple suppliers at the same time. The issue, in that case, is creating a consistent experience while having to rely on different manufacturers. On the other side, there is a certain security that the website won’t suffer from an “out of stock” option anytime soon.
  • Easily shipped. Shipping is widely underestimated, as it should be automatized and also properly communicated to the consumer on the website. When the competition is made out of retailers, the “free shipping” could make all the difference and is easier to absorb if we are dealing with smaller items.


Online business ecommerce: naming and values

Second choice to be made: naming and logo.

If we have passed the first checklist, we are ready to create a company. However, we need to find a name to increase our brand awareness. Two options are prevalent:

  • Tied to the market. If we are going to sell jackets, we could think of Many services help us into finding available domains in this regard.
  • Original name. This is by far the most common option for people starting an online business. However, it could be hard to find an interesting name from scratch which also resonates our preliminary brand identity.

Once we have defined a name (and we have registered an accompanying online domain), we do not need too much graphics. A logo would be a nice start to add a special touch to our products, but it could be hard to create if we do not have experience in this sector. What could we do?

  • Create a contest. Websites such as 99designs offer a broad choice of logos for a moderate amount.
  • Pay a selected freelancer. While a personal connection would be a better fit, websites such as Fiverr show a great number of freelancers willing to create logos almost for free.
  • Pay an agency. Any company dealing with branding would be easily in charge of creating a compelling logo, while being a more expensive choice for the entrepreneur.
  • Create it from scratch. Online logo makers are more developed than ever, but it could be timely and unsatisfactory if there is not a clear idea behind the final product.


Start online business ecommerce: website development

 Third choice to be made: the website.

We have a beautiful name, we have a product, we have a domain, we could need hosting depending on our choice from a technical perspective. If we will sell our products online, we should choose carefully how to test our business idea and how to develop it considering existing e-commerce solutions. What can we do?

  • WordPress. Easy to implement and modify after we bought a template and maybe a visual composer, it’s one of most prominent e-commerce solutions also thanks to Woocommerce. The great possibilities for customizations enable us to create a website that is both appealing and functional; however, one of the risks is to add too many plugins and to reduce customer satisfaction because of the “weight” of the single pages.
  • Magento is widely considered one of the hardest platform to start a business if the entrepreneur does not have a technical background, given the steep learning curve to run if efficiently. However, the results can be pretty rewarding as it is one of the market leaders in e-commerce and is considered a top-notch solution by important brands in its “business” version (
  • One of the most straightforward options for starting online businesses, Shopify offers a variety of functionalities which are easily available and do not require specific technical skills. The drawbacks can vary, such as limited array of information when a more in-depth analysis is needed or having to pay for more functionalities which could be required once the business skyrockets. A similar solution worth mentioning is Prestashop, which has a different pricing structure.
  • Other Content Management Systems. The possibilities are endless, but they tend to be preferred by technical entrepreneurs (Drupal, Joomla, Adobe CQ and others).
  • Web Site Builders (WYSIWYG). Last but not least, there are solutions which enable to create a website without writing any line of code. They could be a good initial test before switching to more advanced solutions, even if they have full-fledged functionalities in most cases (Squarespace, Wix, Weebly, Jimdo and others).

With a functioning website, a compelling product and a great name, the real challenge begins.


About the Author

Marco Filocamo is the Senior Business Analyst of Fashion Technology Accelerator.

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