fbpx

How to start E-Commerce Business from scratch in India – 2022?

The term ‘electronic commerce’ or “ecommerce” refers to businesses and individuals that purchase and resell goods and services online. E-commerce can be done on computers, tablets, cellphones, and other smart devices, and it operates in a variety of market categories.

E-commerce transactions make almost every good or service conceivable accessible, including books, music, airline tickets, and financial services like stock trading and online banking. It is seen as a very disruptive technology as a result.

These business dealings can be either B2B (business-to-business), B2C (business-to-consumer), C2C (consumer-to-consumer), or C2B. The widespread use of e-commerce sites like Amazon and eBay over the past 20 years has significantly boosted the growth of online retail.

According to the U.S. Census Bureau, 5% of all retail sales were made through e-commerce in 2011. With the onset of the COVID-19 pandemic in 2020, it had increased to more than 16% of retail sales.

“If your business is not on the internet, it will go out of business,” stated Bill Gates once. The eCommerce sector is ushering in the next wave of change for the Indian economy, so if you’ve been considering dipping your toe into its world of endless profits, the clock is ticking and the opportunity is now.

We learned from Amazon, Flipkart, and Snapdeal that e-commerce is the way of the future. And the only reason they were able to achieve their level of success was that they recognised and tested the e-commerce market’s enormous potential.

The Economic Survey of 2017–2018 projected the Indian e-commerce market at $33 billion, representing a 19.1 percent increase over 2016–2017.

Furthermore, according to the Nasscom Strategic Review of 2018, which was published in 2018, the e-commerce market was valued at $33 billion in 2017–2018 but increased to $38.5 billion in 2018–2019, representing a noteworthy growth rate of nearly 17 percent, according to The Business Standard.

Different types of E-Commerce Business

Business-to-business (B2B) E-Commerce Business

Instead of between businesses and customers, e-commerce refers to the electronic exchange of goods, services, or information between enterprises. Online directories and websites that allow businesses to search for products, services, and information as well as start transactions using e-procurement interfaces are two examples. According to a 2018 Forrester report, B2B e-commerce will reach $1.8 trillion by 2023 and represent 17% of B2B sales in the United States.

Business-to-consumer (B2C) E-Commerce Business

It is the retail component of online e-commerce. It occurs when companies offer goods, services, or information to customers directly. The phrase gained popularity in the late 1990s dot-com boom, when online stores and sellers of goods were still a novelty. Today, there are countless online malls and stores that sell all kinds of consumer items. The most recognisable of these websites is Amazon. In the B2C market, it is king.

Consumer-to-consumer (C2C) E-Commerce Business

Consumers trade goods, services, and information online with one another in this type of e-commerce. These transactions are often carried out through a third party that offers an internet platform for their execution.

Two instances of C2C platforms include online auctions and classified ads. Two well-known examples of these platforms are eBay and Craigslist. C2B2C, or consumer-to-business-to-consumer, is another name for this type of e-commerce because it involves businesses like eBay. C2C purchases are also possible on platforms like Facebook Marketplace and the fashion reselling platform Depop.

Consumer-to-business (C2B) E-Commerce Business

It is a form of internet commerce where customers offer their goods and services for sale to businesses who may then bid on and buy them. This goes against the conventional B2C business paradigm. A market that offers royalty-free photos, images, media, and design components, like iStock, is a well-known illustration of a C2B platform. An additional illustration is a job board.

Business-to-administration (B2A) E-Commerce Business

It alludes to business-to-government or business-to-public administration online transactions. Different kinds of e-services or e-products are required by numerous governmental branches. These goods and services frequently deal with legal records, registrations, social security, monetary information, and employment. These can be obtained electronically from businesses. As investments have been made in e-government capabilities, B2A services have increased significantly in recent years.

How to start an E-Commerce Business in India?

Deciding business plan and model

The first thing you need to do is give careful consideration to selecting the ideal e-commerce business strategy and business plan. “E-commerce is a technique, not an industry”, as Tobias Lutke asserts.

There are two different business model options available. E-Commerce Business stores with multiple vendors or just one vendor are both options.

In order to do this, depending on the budget you have allocated for your e-commerce business, you may go for a single product line or numerous product lines.

Single-vendor marketplace

A single seller who is selling their goods to several buyers is the only entity involved in this form of E-Commerce Business model, which is advantageous. In order to do this, paying just one supplier results in cheaper administrative costs, better transaction tracking between the two companies, and increased control over the available inventory.

Multi-vendor marketplace

This type of business strategy calls for numerous vendors to offer their goods to numerous customers, each of whom must register with your website. Following this type of e-commerce business model has the benefit of providing you with security when it comes to closing a deal. For example, if one of your suppliers is unable to sell their goods for any reason, you still have other options. You can deal with demand changes in this way while simultaneously avoiding a disturbance in the supply chain.

Branding of E-Commerce Business

The next stage is to come up with the ideal name for your brand after deciding the business model you want to use to develop your e-commerce business and after narrowing down the product or products you want to sell as well as the target demographic you want to sell to.

Your brand name should be brief, simple to remember, representative of your company, distinctive, and typically devoid of any other meanings in other languages. Additionally, you should create a finalised design for your business’s logo.

Company formation

The next step is to create your company after choosing a name for your brand and its logo. There are typically four types of well-known businesses in India:

  • Sole proprietorship (no limitation of liability)
  • One-person company
  • Limited liability partnership (LLP)
  • Private limited company

Naturally, the type of formation you choose will depend on whether you want to run the business solo or enlist the help of additional partners. This is crucial since you must file tax returns and have a tax ID number if you chose a corporate or partnership-based structure. This type of online business must have an Employer Identification Number (EIN) in order to create a business bank account and file business taxes for the upcoming fiscal year. Your firm is uniquely identified by its EIN.

However, if you chose the lone proprietor type, you are exempt from needing a tax ID number. Instead, you can use the Social Security number assigned to you.

Registration of E-Commerce Business

One of the most important steps in launching your e-commerce company in India is to register it and fulfil all the legal requirements.

  • Apply for a Director’s Identification Number (DIN) via the DIN application (DIN 3 form), which can be downloaded from the Ministry of Corporate Affairs’ official website. You can also apply for a DIN online by simply enclosing and uploading the required paperwork.
  • Make sure you have your Digital Signature Certificate and Permanent Account Number (PAN).
  • Once you have the DIN, you may submit an application to the Registrar of Companies (ROC) to see if the name you have chosen for your business is available. You can also do this by looking for it on the Ministry of Corporate Affairs’ official website.
  • You have six months to incorporate the suggested company after getting a confirmation of the name. By paying a fee, you also have the choice of renewing the company name.
  • Apply for the Professional Tax, Shops and Establishment Licence, and Goods and Service Tax (GST) certification—all required for Payment Gateway Integration (PT).
  • To officially register your company under the Company’s Act of 2013, you must first apply to open a Provident Fund (PF) with the appropriate Provident Fund Organization, register with the Employees’ State Insurance Corporation for employee health insurance, and then submit an application for Certification of Company’s Incorporation.

Bank account

You must create a bank account for your company once it has been formally registered under the Act. Any bank may be used to open the account, but it must be done so under the company’s legal name.

If you have decided to operate your online business under the proprietorship model, you must register for GST before you can create a bank account under the name of your company.

In this scenario, you can post the goods you’ll offer on your e-commerce website once your bank account is prepared in order to get and manage a payment gateway.

Building E-Commerce Business website

You have the option of building your website from scratch or using a pre-built platform. Both have significant advantages, but starting from scratch is typically the better choice.

Using a pre-built platform

Using a pre-built platform like WordPress or Wix has the benefit of providing you with ready-made templates that are tailored to the type of online business you want to operate.

For instance, if your online business is in the fashion industry, the template should be vibrant, have enough room for a lot of visual information, and include a page for shipping orders. Instead of wasting time and resources creating this website from scratch, you can simply edit the pre-made template to suit the look you had in mind and add all the information.

Building a E-Commerce Business website from scratch

Many, however, frequently recommend the custom-made platform option because it allows you to visualise and build your entire website just as you had envisioned it in your head.

Some of the most frequently chosen solutions for people wishing to build websites for their e-commerce business include WooCommerce, Magento, Shopify, Zepo, and KartRocket.

Now, you need to remember that your website serves as the visual face of your complete company and is the hub of your online presence. Therefore, no amount of detail is too little. Everything should contribute in some way to your brand’s story, from the colour to the font to the images.

Payment gateway for E-Commerce Business

In order for your online business to be lucrative, you must set up payment gateways, which will enable the processing of credit card, debit card, net banking, and cash card transactions through the e-commerce website.

The following documentation must be submitted in order for your e-commerce business to be approved for a payment gateway: Bank account in the name of the business, PAN card of the business, Certificate of Incorporation, Memorandum of Association, Articles of Association, Identity proof, Address proof, Website terms of use and Website privacy policy.

You will receive a payment gateway for your online business after submitting all of these paperwork, allowing you to start accepting payments online. PayPal, PayU, and RazorPay are a few of the well-known payment processors.

Logistics solutions for E-Commerce Business

To operate a successful E-Commerce Business in India, you must take this step. The term “logistics” describes the procedure for delivering an order to a client or delivering products to a retailer. Until they are delivered to the concerned customer, this process also keeps track of the shipping goods that are en route.

In order to do this, logistics management practises include finding and selecting distributor businesses to partner with. The majority of e-commerce business owners prefer to contract out their logistics to a different company that specialises in shipping and storage.

For your e-commerce firm, figuring out the logistics is essential since it gives you a reliable, quick, and efficient way to track the delivery of your products at every stage. This can help you avoid missing products and successfully handle consumer inquiries about the anticipated arrival.

Marketing

SEO marketing

The future of smart marketing will continue to be ruled by the search engine optimization (SEO) marketing strategy.

The success of your e-commerce firm depends on your ability to capture the interest of potential customers online. Here’s where SEO tactics come into play. Your presence on search engine maps is aided by SEO. Furthermore, since 44% of online customers start their search with a search engine, you need to be visible to them.

Advertisements

Another strategy you might use to catch customers’ eyes is advertising. On websites like Facebook and Instagram, you may choose the “sponsored ad” option and pay a set sum of money to have your advertisement promoted on these users’ daily feeds. It is your responsibility to turn these users into potential customers after they click on the advertisement and are taken to your website.

What kind of products are best for E-Commerce Business?

The best products for E-Commerce Business are Fashion and jewelry product market, Beauty and Health products, selling of second-hand products, smartwatches, smartphones, smart home products, online educational courses, kids toys and games, selling Ebooks etc.

Documents Required to start an E-Commerce Business in India

  • Director’s Identification Number (DIN)
  • Permanent Account Number (PAN) and Digital Signature Certificate
  • Registrar of Companies (ROC)
  • Goods and Service Tax (GST) certification
  • Shops and Establishment Licence
  • Bank account in the name of the business
  • Certificate of Incorporation
  • Memorandum of Association
  • Articles of Association
  • Identity proof

FAQ

How much does it cost to start an E-Commerce Business in India?

In India, you need between 5 and 10 lacs in investment to launch an e-commerce firm. But the price varies according to the size, types, and categories of the product you wish to sell, as well as the type of business plan you use.

Is E-Commerce Business profitable in India?

The Economic Survey of 2017–2018 projected the Indian e-commerce market at $33 billion, representing a 19.1 percent increase over 2016–2017.
Furthermore, according to the Nasscom Strategic Review of 2018, which was published in 2018, the e-commerce market was valued at $33 billion in 2017–2018 but increased to $38.5 billion in 2018–2019, representing a noteworthy growth rate of nearly 17 percent, according to The Business Standard.
Despite baby steps in the right direction, India’s Ecommerce Giants are still losing more than INR 9.7K Cr. The major ecommerce platforms in India are competing not only for the largest share of the market but also to be the most profitable.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top