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A Complete Guide To Start Your Online Ecommerce Business In India

As per Statista, India is one the fastest growing ecommerce markets globally. This one reason is enough for you to think about starting your own ecommerce business in India. People are consuming things widely using online shopping. Therefore, starting an ecommerce business is in India is easier than setting up physical distribution, plus it is highly scalable.

In fact, ecommerce companies are creating new revenue records when it comes to online shopping. As per industry analysts, the festive season sale for 2018 for leading ecommerce companies like Amazon India and Flipkart, is estimated to have generated a whopping INR 15000 crore sales over roughly five days. That translates into 64% year-on-year growth approximately as compared to USD 1.4 billion (around Rs 10,325 crore) in the year 2017.

Now, before moving on to how to start your e-commerce business in India, you need to think about a few questions:

  • How many products you are planning to list on my online store?
  • What is your total budget? How much percentage are you willing to invest for the platform?
  • What market segment you would be starting with?
  • Do you need a custom platform or a pre-built platform would suffice the need?
  • Do you have the budget to maintain a dedicated resource to handle the ecommerce web development part?
  • and more…
“We were not thinking about numbers then, but we knew something big can be built out of ecommerce”

Binny Bansal and Sachin Bansal,the founders FlipKart

Here’s your quick guide on how to start E-commerce Business in India.

Know how to register Ecommerce Business in India, Online business startup cost, Payment Gateway for E-commerce Business and more.

Step 1: Business Plan and Business Model
Step 2: Establishing Your Brand & Business
Step 3: Ecommerce Registration in India
Step 4: Bank Account
Step 5: Ecommerce Website Design and Development
Step 6: Payment Gateway for Ecommerce Business
Step 7: Ecommerce Business Shipping Solution
Step 8: Attract Customers to Your E-commerce Store
Step 9: Marketing Your Products Online

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Let’s get started.

If you are about to start your own business, let us start by congratulating you…Congrats!

Step 1: Ecommerce Business Plan and Business Model

Just like any traditional brick and mortar store, you need to have a proper business model and planning to set up your ecommerce store.  If you don’t have a proper business plan, chances are that your ecommerce platform may struggle due to massive competition.

Again, the choice of products is an important factor that determines the structure, benefits and long term success of your online store. Your products can be anything that ranges across different categories.

There are two types of Business Model for you to choose from: a single vendor or multi-vendor ecommerce store. You can either go for a single product line or have multiple product lines based on your budget and resources.

Business Model 1: Own Products on Own Portal (Single vendor)

Single vendor marketplace refers to a site where a single vendor/seller sell products to multiple customers. You can say its more like one to too many relationships between the vendor and the customer.  Now let’s see what are the key advantages of a single vendor marketplace.

Advantages of Single Vendor Marketplace

  • It involves only 2 entities viz a seller and the customers
  • Its easier to create and maintain a relationship with one supplier as compared to 2 or more
  • Administrative and other supplementary costs are lower when you have just one supplier
  • For attractive pricing, the volume can be increased
  • Its easier to streamline and incorporate systems with a single supplier
  • You can have more control over the inventory levels

In addition to this, when you want to sell your own products on an online portal, first of all, you need to make GST registration. The percentage of GST tax differs from state to state.

Business Model 2: Ecommerce Marketplace Model (Multi-vendor)

A multi-vendor marketplace refers to a site where multiple vendors/sellers sell their products to multiple customers. It is many to many relationships between the sellers and the customers. Also, all sellers/vendors need to be registered to admin’s (your) site in order to sell their products through your ecommerce store. Now let’s see what are the key advantages of a multi-vendor marketplace.

Advantages of Multivendor Marketplace

  • It involves 3 entities viz admin, seller and the customer
  • In case, either one your supplier is bought by your competitor or faces financial/business issues, you have at least 1 supplier you can rely upon
  • It’s easy to manage demand fluctuations when you multiple suppliers with whom to adjust order volumes
  • Again, a multi-vendor store increases your ability to overcome supply disruptions, if any

Additionally, when you want to implement a marketplace model wherein sellers will have to register themselves on your portal, in such cases, you are required to provide payment gateways and logistics services to sellers. Here, you need to make Service Tax Registration.

Step 2: Establishing Your Brand & Business

Now that you have decided the products you will be offering, your target audience,  and whether you will be going for a single/multi-vendor ecommerce business, the next step is to establish a brand that connects with your persona.

As you identify your persona, building an ecommerce brand gets easier. For instance: if your target audience is corporate businesswomen interested in living a sustainable life, you might want to dodge girlie colours and images.

Consider factors like:

  • the brand name
  • colours of your brand
  • your company logo
  • the typeface/fonts to be used
  • your total budget, etc.

Now that you have the idea about your brand and business, the next step is the registration of ecommerce business in India.

“In the beginning, e-commerce was really about getting commodity products online as cheaply as possible. Now, we’re moving into the more exciting phase of eCommerce, where it’s about emotional products – the things people really cherish”

Jason Goldberg, Founder and CEO of com

Step 3: Ecommerce Registration in India

Registration of ecommerce Business in India depends on the type of your business model. Here’s your step-by-step procedure to register ecommerce business in India. The legalisation of an online seller is similar to offline.

Essential Documents

You/promoters who intend to be the directors in the company need to apply f0r Director’s Identification Number (DIN) and therefore need to have Permanent Account Number (PAN) and Digital Signature Certificate. You can easily download the DIN application (DIN 3 form) from the official website of Ministry of Corporate Affairs. You can also apply DIN online, it is convenient as you just need to upload and attach essential documents.

Now that you have your DIN, Directors (you) can apply for the availability of the proposed name of your company to Registrar Of Companies (ROC).  You can also check the availability of the proposed name online at the official website of the Ministry of Corporate Affairs.

Again the shareholders need to fill in the MCA-21 form available on the (mca.gov.in.portal) for the same.  once you receive confirmation on the name, you can incorporate the proposed company within 6 months; else, the name can be renewed by paying a fee.

Procedure

1. Get Directors Identification Number (DIN)

Obtain Directors Identification Number (DIN); it may take a day to receive it from the Government Authority  or you can also obtain DIN online on the official website of the Ministry of Corporate Affairs

2. Digital Signature Certificate

Apply for the Digital Signature Of Directors of the proposed company. Here are more details on how to obtain Digital Signature Certificate for your ecommerce business.

3. Filing application for Company Name to Registrar of Companies (ROC)

File an application to the respective Registrar Of Companies (ROC) to Obtain approval on the company’s name.

4. Company Registration

Once you receive the company name confirmation, fill an application for the company’s registration to same ROC of the state, where the company has its headquarters.

Documents required for Company Registration:

  • 2 passport size photo
  • Identity and Address Proof– Adhar Card, PAN Card, Driving License or Passport (of the person on whose name company is to be registered)
  • PAN Card
  • Electricity Bill or Sales Deed Copy of property owned
  • A copy of Bank Statement or a cancelled cheque
  • Rent Agreement, Electricity Bill or No Objection Certificate (NOC) to the property where business is to be conducted
  • Security (in the form of a Fixed Deposit) or a Guarantor (in some states) for GST Registration
  • Memorandum of Association (MOA)
  • Articles of Association (AOA)

You can also incorporate a company online using the link here.

5. Apply for Goods and Service Tax (GST), Shops and Establishment Licence & Professional Tax (PT)

When you start an ecommerce business you are required to register your company with GST and other Taxes under the Government of India. This is crucial for all the business owners. Since July 1, 2017, the Goods and Service Tax (GST) has replaced the Central and State indirect taxes such as VAT, excise duty, and service tax.

NOTE: VAT/CST is now converted into the GST (Goods & Service Tax) Registration.

If the seller and consumer are from the same state then both CGST (Central Goods & Services Tax) and SGST (State Goods & Services Tax) is applicable. However, if the seller and consumer are from different states i.e. if the transaction is inter-state then IGST (Integrated Goods & Services Tax) is applicable.

Apply for GST Certification

GST certification is a must for Online Portal and can be obtained via the official website of Government of India. You can register for GST here.

Documents Required for GST Registration:

  • Photo of Applicant
  • Proof of Professional Address
    > Any other Certificate/document issued by Government
    > Any other Certificate or record from Govt department
    > Consent Letter
    > Electricity Bill
    > Legal ownership document
    > Municipal Khata Copy
    > Property Tax Receipt
    > Rent / Lease agreement
    > Rent receipt with NOC (In case of no/expired agreement)
    > SEZ Approval Order
  • Proof of qualifying degree
  • Proof of designation of the post held at the time of retirement* (Applicable for Retired Govt Officials only)

Know more: Good & Service Network (GSTN)Central Board of Indirect Taxes and Customs (CBIC) – Govt. of India, and Department Of Goods and Services Tax -Government of Maharashtra, here.

Apply for Shops and Establishment Licence

Get a Shops and Establishment Licence (in case you want to have a physical store or an online store and you plan to hire employees). Also, it’s a necessity in case of Payment Gateway Integration.
Use the link to know detailed procedure about registration of Shop & Establishment Licence.

You need to provide information like:

  • Name of firm
  • Address of Firm
  • Name of Manager, if any
  • Nature of establishment: nature of shop, like a clothing store, furniture store
  • Number of employees in an establishment
  • Day of the holiday, etc

Documents Required for Shop and Commercial Establishment Registration:

  • PAN/Aadhar Card/Driving License/Voter Id
  • Photo of owner
  • Photo of the shop along with owner (Just Click with Mobile Phone)
  • Rent agreement, if rented
  • Electricity bill

Apply for Professional Tax (PT)

Professional Tax is to be paid by every businessperson. Professional tax enrollment and registration is applicable irrespective of the entity type. Also, it may vary from states to state.  Therefore, apply for Professional Tax at the Profession Tax Office. Within a few weeks, you will receive Identification codes for Professional tax.

Documents required for Professional Tax Registration: 

  • Proof that describes the date of business started
  • Accounting records
  • Details of employees
  • Details of paid salaries
  • Address proof
6. Apply for Provident Fund (PF)

Next, apply for the Provident Fund (PF) with the respective Provident Fund Organization. Also, submit the essential documents of the employees in the process.

7. Medical Insurance Registration with the Employees’ State Insurance Corporation

Register with the Employees’ State Insurance Corporation for medical insurance of the employees. In case if your employees meet with an accident on the job, this plan would take care of the medical expenses on behalf of the company. Submit the essential documents of the employees to the regional office.

8. Apply for the Certification of Company’s Incorporation

Now that you have all the approvals, you can incorporate your business as a Private Limited Company, a Partnership Firm or a Limited liability Partnership. You need to apply for the Certification of Company’s Incorporation and register your company under the Company’s Act, 2013. You can read more about The Companies Act, 2013 here.
Also, you can download the respective forms for the registration of your ecommerce company here on the Ministry of Corporate Affairs portal.

  • Collect required documents as listed above
  • Registration form
  • Undertaking
  • Fee Payment

Step 4: Bank Account

Once your company is incorporated, you need to open a Current Bank Account in the name of your business with any bank. This acts as a proof of your Company’s Registration. In the case of Proprietorship, first, you need to obtain GST registration, in order to open a bank account in the name of your business. Also, having your company’s bank account is necessary to list your products on an ecommerce marketplace and/or to obtain payment gateway for a proprietory ecommerce website.

brand
“In eCommerce, your prices have to be better because the consumer has to take a leap of faith in your product”

Ashton Kutcher, Actor, producer, model, investor

Step 5: Ecommerce Business Website Design and Development

As you move on to the design and development of your ecommerce business website, you can either opt for a custom build platform or a pre-built platform.

Pre-built  and Custom-built ecommerce solution

A pre-built ecommerce solution refers to a set of themes/templates are created by business entities to meet the needs of a specific market. They are designed with a customer-centric approach that allows anyone to set up an online store with ease.However, a custom build platform is always a better option as it lets you customize the entire design of your of ecommerce store as per your business requirements.

One of our favourites is WooCommerce. The other popular alternatives are Magento, Shopify, Zepo, KartRocket, etc. There are many Ecommerce Service providers in India which makes it easier for you to set up your online business. Today, many Website Design and Development Companies offer you much needed support in the initial stages of your business, allowing you to upload product images and manage the content of your Ecommerce Website more effectively.

Your ecommerce website represents your company. It helps you reach a wider audience and also grow your business. Also, the cost of your ecommerce website depends on numerous features and complexity of your Online store. More than an expense, it is a one-time investment which generates maximum revenues for your business.

Know more about Things to know before moving to Ecommerce Website. Calculate Ecommerce Website Cost Estimate here.

For better results, you can also implement various digital marketing strategies to drive more organic traffic, generate leads and also boost your sales on your Online Store.

Why choose WooCommerce for your ecommerce business website

You must be aware of WordPress and its ease of use for publishing.  WooCommerce is a WordPress plugin that lets you add the ecommerce part.  It is developed by WooThemes and acquired by Automattic (the company behind WordPress).

It is self-hosted platform and thus, offers you more control over your site. It is simple and offers more customization through unlimited plugins.

Let’s see what are the benefits of choosing WooCommerce for your ecommerce store.

  • WooCommerce Is WordPress
  • WooCommerce is cheaper than hosted platforms
  • It offers unlimited customizability
  • It is professional yet simple to use
  • Scalable
  • Mobile-friendly responsive themes: It offers fast and responsive eCommerce experience for online stores of all sizes.
  • It offers huge flexibility
  • Better content marketing is possible
  • World-Class Content Management: Currently, WordPress offers a popular CMS  supporting over 51% of the top million websites and many ecommerce startups do opt for WooCommerce for similar/unrelated projects
  • Powerful Analytics: It offers built-in analytics that makes it easier to get clear statistical data like total sales, sales by date, average order totals, individual customer statistics etc. in graphs, without having you to leave the admin panel.
  • Apps Galore: There are hundreds of WooCommerce Extensions available, some are free/paid. You can find apps related to accounting, marketing, reporting, etc.
  • Woocommerce is highly secure

Step 6: Payment Gateway for Ecommerce Business

Once your online store is created, you are required to add a payment gateway to process customers’ payments. This allows you to accept credit card, debit card, net banking, internet banking payments from multiple banks and credit card companies. One more thing, a well-optimized ecommerce website helps you get the desired results quickly. It also helps you beat the competition, create more leads, and drastically increase your profits.

An online payment gateway allows for processing of credit card, debit card, net banking and cash card transactions through the ecommerce website.

To get a payment gateway for an ecommerce website, the following documents must be submitted to the payment gateway provider:

  • 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
  • Website Privacy Policy

Once the above documents are submitted, a payment gateway will be provided for the ecommerce business to enable online payments. The following are some of the payment gateway providers, you can choose from:

Step 7: Ecommerce Business Shipping Solution

Logistics is a crucial part of your ecommerce store. Your online shopping portal is incomplete without a shipping solution. Once you receive an order you are also required to ship it to your customers. And, without a reliable shipping partner, shipping products to your customers might be a hard task.

The keynote here is that online shoppers love free shipping option. In fact, free shipping is one of the best ways to boost online sales. So, make sure you offer free shipping option to your customers.

You can opt for a courier service to deliver your products to customers. The growth in the ecommerce business has definitely benefited the shipping and logistics activity. So, get in touch with your shipping partners and decide the rates that would be charged and paid by you for shipping different quantities of products. This allows you to enhance the overall customer experience.

Here are some of the popular options you can choose from:

You can contact their local representatives and get the best deal possible. Plus, offering Shipment tracker and logistic solutions would be a cherry on the cake for your customers.

Here are some tracking options you can opt for:

Step 8: Attract Customers to Your E-commerce Store

Once you are all set, you need to attract customers to your ecommerce store. You are required to market your store. Keyword-stuffing is long gone, however, SEO is still popular and a must.  So, make sure to keep keywords and search terms in mind on each page of your ecommerce site including your URLs and Ad Campaigns. Additionally, think how you can drive more organic traffic to your store.

The top ecommerce sites invest heavily in digital marketing. You can also opt for such digital marketing for your ecommerce store as well. Also, stay updated to with the digital marketing industry and marketing tips. Think if you want to use sponsored content, social media, pay-per-click ads i.e. Google PPC Ads, or a combination of strategies to attract your target audience.

“You can’t just open a website and expect people to flood in. If you really want to succeed you have to create traffic”

Joel Anderson, CEO, Walmart

Step 9: Marketing Your Products Online

Just attracting traffic to your ecommerce store is not enough. You also need to market your products to your audience.  Your ultimate goal is to sell your products and not just drive traffic, right? So, make sure you think beyond your website and figure out expansion areas.

You can start by creating an email list, irrespective of what and how you sell. Once you have the email list, you can market your products (providing coupons) to customers by running email marketing campaigns.

You can also run a giveaway tactic to get traffic and subscribers quickly. It also helps you increase your brand awareness, product visibility, boost your sales, and establish credibility.  You must create engaging emails and respond quickly when it comes to customer service and quality issues.  Focus on building long term relationship between your company and customers.

On your ecommerce site, look at how and where traffic flows. Also, if you are losing would-be customers in the process. In case you are driving traffic to your store but have low sales, you need to fix the leaks in your sales funnel by properly optimizing each page. You can also use tools like Google Analytics to monitor and optimize every step of your sales process.

You can also go for partner/affiliate marketing to increase your brand awareness. Apart from that, you can also offer free samples of your product to bloggers in your niche in exchange for reviews. Customer reviews are very important when it comes to online shopping.

Wrap Up

Starting an ecommerce business is a great idea especially now that ecommerce industry is booming.  You need to have a clear view of the operations that would be required as ecommerce business climbs the ladder of success.  So, to match the increasing demands, be prepared with the necessary information and resources beforehand.

Of course, you will face the competition. So, make sure to frame and implement your ecommerce marketing strategies carefully. Promote actively if you want to commercialise your business model.

Here are some strategies that you can use to promote your ecommerce business.

  • Search engine optimization (SEO): You can optimise your ecommerce portal to meet the guidelines set by Google
  • Social Media Marketing: Figure out the right social media platform and start promoting your products and business on these platforms.
  • Paid Campaigns: Paid campaigns is one of the most popular technique to get your customers attention and boost your conversions.
  • Influencer Marketing:  You can also partner with the influencer’s in your niche and promote your products among the target audience.
  • Push Marketing: You can also promote your business and products using email marketing, WhatsApp, SMS, etc.

Know more about Ecommerce business here.