How To Start Ecommerce Business In India (2022)

By admin Business, Ecommerce, Startups, Tech, WooCommerce No Comments on How To Start Ecommerce Business In India (2022)

start ecommerce business in India 2022

Let us start by saying Congratulations for initiating with your own eCommerce business.

The ecommerce industry in India is thriving the next wave of change in the Indian economy and if you are thinking to start an ecommerce business in India then there’s no better time than now!

“If your business is not on the internet, then your business will be out of business” – Bill Gates

Success of Amazon, Flipkart, Snapdeal, Nykaa, Myntra, Tata 1Mg all showed us that ecommerce is the future. Still not convinced? well, let’s take a look at the numbers!

“All it takes to create a successful ecommerce business is a great vision” – Jack Ma


Is eCommerce profitable in India?
In case you are wondering, is ecommerce profitable in India, then here’s all you need to know about ecommerce business scenario in India. According to Statista, considering the increase in internet users and favorable market conditions, Indian ecommerce industry has a massive potential. India’s ecommerce market is growing at an exponential rate, above all, the ecommerce industry in India is estimated to reach 200 billion U. S. dollars by 2027.

E-commerce market value India 2014-2027
E-commerce market value India 2014-2027

source: Statista

Moreover, globally, the ecommerce industry in India is ranked 9th in cross-border growth, as per Payoneer report. The Indian ecommerce is estimated to increase from 4% of the total food and grocery, apparel and consumer electronics retail trade in 2020 to 8% by 2025.

Learn more about ecommerce shopping trends in India here.

This opens up the new opportunity for anyone who wants to start an ecommerce business in India. So, let’s get started.

“We were not thinking about numbers then, but we knew something big can be built out of ecommerce,” –  Binny and Sachin Bansal, co-founders of Flipkart

Before moving on to how to start your ecommerce 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?

Here’s a step-by-step guide on how to start ecommerce business in India

Step 1: Start with a business plan and model

Step 2: Build your brand

Step 3: Register your ecommerce business

Step 4: Open a bank account for your business

Step 5: Ecommerce Website Design and Development

Step 6: Select best payment gateways for ecommerce business

Step 7: Ecommerce Business Shipping Solution

Step 8: Attract customers to your ecommerce store

Step 9: Promote your ecommerce business

Let’s see these steps in detail.

Step 1: Start with a business plan and model

The first step to start any business is to have a great business plan and an ecommerce business is no exception. Develop a business plan and decide which ecommerce business model you want to opt for.

“Ecommerce is not an industry; ecommerce is a tactic” – Tobias Lutke

There are two types of business models that you choose: single vendor or a multi-vendor ecommerce store.

But what is it? Let’s find out!


Single-vendor marketplace

A single vendor ecommerce or marketplace is a website that has a single seller who sells it’s products or services to multiple customers. Thus, it involves two parties in this buying and selling process – the seller and the buyer. The key advantage of this marketplace are that it is easy to keep track of the transactions between 2 parties, the administrative cost and the supplementary costs are much lower, and you can have more control over the inventory as compared to multi-vendor store.

Multi-vendor marketplace

As the name suggest, a multi-vendor marketplace is one that has multiple vendors selling their products to multiple customers, but all the vendors are required to be registered with your ecommerce site. The main advantage here is that in case one supplier or vendor is unavailable for some reason, you always have other vendors to fall back on. This allows you to deal with the fluctuations in demand while preventing disruption in the supply.

Other important thing to note here is that either you can sell a unique product through your own online store thereby earning high profit margins or on a similar platform. Or allow other sellers to sell their products and earn a commission every time a registered seller makes a successful sale on your store.

List Single-Vendor Marketplace Multiple Vendor Marketplace
Complexity Handled by vendors Handled by customers
Cost Lower costs, high volume discounts High costs
Implementation Challenge Low High
Product Procurement Lower Higher
Product Upgrades Slower and more comprehensive product upgrades Faster and less comprehensive product upgrades
Survival Large vendors are more likely to survive Small vendors may be at risk for shuttering

Now that you have decided whether you want to start a single-vendor or multi-vendor marketplace, you need to figure out whether you want to have a B2B or B2C eCommerce store. These can be explained as below.

B2C ecommerce
Business-to-Consumer (B2C) ecommerce, also known as retail ecommerce, is a business model that involves sales between an online business and consumers. Popular examples of B2C ecommerce platforms are Amazon, Myntra, Nykaa, etc.

B2B ecommerce
Business-to-Business (B2B) ecommerce can be described as an online transaction that takes place between businesses. Since orders are processed online, it helps improve buying efficiency for wholesalers, manufacturers, distributors or other B2B sellers.

Step 2: Building a brand

Now that you’ve decided whether you want to have a single vendor store or multi-vendor store, the products you wish to sell, the target audience – the next step is to come up with the brand name.

Step 2 - Building a brand

Your brand name must be:

  • Unique and easy to remember
  • Reflection of your brand

Once the name is finalised, it’s time to create your company logo and brand that will distinguish your brand from that of competitors. Next step is the incorporation of the company with the Ministry of Corporate Affairs (MCA) under Companies Act 2013.

Step 3: Register your ecommerce business

Registration of Ecommerce Business in India depends on the type of your business model.

Depending on whether you wish to run your company independently or with partners, you can decide the structure of your company. In India, the most popular types of companies are:

  • Sole Proprietorship (unlimited liability)
  • Private Limited Company
  • Limited Liability Company (LLP)

Legalisation of an online seller is similar to offline.

Documents Required for Incorporation: 

  1. Identity and Address Proof– Adhar Card, PAN Card, Driving License or Passport (of the person on who’s name company is to be registered
  2. 2 passport size photo
  3. A copy of Bank Statement or a cancelled cheque
  4. Rent Agreement, Electricity Bill or No Objection Certificate (NOC) to the property where business is to be conducted
  5. A security (in the form of a Fixed Deposit) or a Guarantor (in some states) for VAT/ CST Registration
  6. Memorandum of Association (MOA)
  7. Articles of Association (AOA)
  8. Prospectus Statement (not required in case of a private company)
  9. Copy of import agreements (if applicable)
  10. Statutory declaration in Form I
  11. Copy of Letter of Register indicating approval of name
  12. Notice of situation of registered office (in Form 18) and particulars of Directors (in Form 32), etc.
In case you opt for a corporate or partnership structure, you are required to file tax returns and have a tax ID number. For online businesses, you need an Employer Identification Number (EIN) which is a unique number that identifies your business. Additionally,  the EIN is used to open a business bank account in order to file business taxes for the upcoming financial year.

Step 3 - Register your ecommerce business

Here are the legal formalities that you should complete while you register your ecommerce business in India.

Additional contracts required to start an ecommerce business:

  • Vendor Agreements
  • Service Level Agreements
  • Employment Contracts
  • HR Documents

 

Step 4: Open a bank account for your business

Once your company is officially registered, you can open a bank account for the business. You’ll need copies of PAN Card, MOA, AOA, Certificate of Incorporation and any other document requested by your preferred bank.

Step 4 - Open a bank account for your business

Step 5: Ecommerce Website Design and Development

Your business needs to be online to reach the ideal customers, and to do so you need to have your own ecommerce website. Before the ecommerce website design and development you must finalize the ecommerce platform for your online store.

You can either choose a pre-built platform or make your online store from scratch.

The benefit of using a pre-built platform such as WordPress or Wix is that these are ready-to-use templates.

However, often many entrepreneurs opt for a custom-made platform option since it offers the flexibility to design the entire website exactly the way you have imagined. Building your store from scratch allows you to customize the ecommerce website as per your business requirements. WooCommerce, Magento, Shopify are some of the popular options for those looking to create websites for their ecommerce business.

In fact, WordPress or WooCommerce is know as one of the best ecommerce platforms for a successful online store. As per  W3TechsWordPress powers 43% of all the websites on the Internet today (400M+ People) , which means WordPress powers over one-third of the web!

Most notable big name brands that use WordPress:

 “Websites promote you 24/7…No employee will do that.” – Paul Cookson, Author

Additionally, here are few things you need to consider before launching your ecommerce store:

  • Decide whether you wish to self-host it or hire a professional for ecommerce website maintenance services
  • Ensure multiple posts such as services offered by your business, product images and other details are updated on the website regularly.

Or you can avoid all the hassles and instead hire an ecommerce website development company aka ecommerce agency to take care of all your needs.

Step 5 - Ecommerce Website Design and Development

This is an all-in-one summary on which is the best ecommerce platform, and what makes each platform a great contender. To learn how to pick the right ecommerce solution for your store, we recommend reading this guide. 

No matter which platform you choose to opt for, it is important to make sure that your chosen option has following features:

  1. User friendly
  2. Mobile friendly website
  3. Robust catalog
  4. Flexible pricing & shipping options
  5. Website personalization
  6. eCommerce analytics
  7. Google Merchant integration
  8. Facebook integration
  9. Customer review system
  10. Automatic tax and account calculation
  11. Multiple payment gateway integration
  12. Single customer view, etc.

Recommended Read: Ecommerce Website Design Guide: How to Position Your Online Store for Growth 

What determines ecommerce website price?

The ecommerce website prices vary based on your design requirements, the experience of resources you hire, your choice of ecommerce platform, number of products, website features and customization requirements. On average basic ecommerce website with 100 – 1000 products may cost around 500000* INR – 3500000* INR, including the design, development, and any upfront costs (*note: ecommerce website price may vary from company to company).

You can get an estimate for ecommerce website here.

 

Step 6: Select best payment gateways for ecommerce business

Any ecommerce site is incomplete without the payment gateway integration. You must set up payment gateways for your ecommerce business to be profitable, since it allows the payment processing through credit cards, debit cards, net banking or cash card transactions.

You are required to submit following documents to get payment gateways approved for your ecommerce business.

  • Business bank account name
  • Business PAN card
  • Certificate of Incorporation
  • Memorandum of Association
  • Articles of Association
  • Identity proof
  • Address proof
  • Website terms & conditions
  • Website privacy policy

Step 6 - Select best payment gateways for ecommerce business

Once you submit all the relevant documents, you will be provided with a payment gateway option, using which you can activate the online payments.

Here are some of the most popular ecommerce payment gateways.

 

Step 7: Ecommerce Business Shipping Solutions

Ecommerce logistics or shipping refers to the process of shipping an order to your customer or transporting product inventory to a merchant. This process also allow you to keep track of shipped goods that are in transit until they are delivered to the customer.

To elaborate this further this involves:

  • Receiving and processing orders: Once a customer places an order on your ecommerce website, you’ll receive a notification, once the order is confirmed, then you can proceed with the product shipping
  • Picking and packaging the purchased products at the warehouse: You can partner with a 3rd party shipping company that can take care of your supply and distribution, allowing you to deliver package quickly.
  • Printing shipping labels
  • Managing returns: Hire trained customer care experts who can resolve customer queries on call and email. A toll-free number and support email should are important when you have an ecommerce store.

Before you move on to shipping solutions, choose the best shipping strategy for your store. Any successful online business implements several shipping methods into a complete strategy that works for their business. It is possible that you might be aware of these strategies, since a lot of popular online businesses, that we shop from, on a daily basis have been implementing these strategies already.

  • Free in-store pickup
  • Live rates
  • Same-day delivery
  • Free shipping
  • Flat rate and table rate shipping
  • Mixed and alternative strategies (this may include any combination of above strategies)

Step 7 - Ecommerce Business Shipping Solutions

Here’s are some of the best shipping companies in India for ecommerce businesses.

  • Aramex Shipping Company
  • Blue Dart
  • Delhivery
  • DTDC
  • FedEx
If you are keen to learn more about ecommerce shipping solutions, check out this guide, Ecommerce Shipping that Delights: How to Make Logistics a Competitive Advantage 

 

Step 8: Attract customers to your ecommerce store

“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, former CEO, Walmart

Once your website is launched, start attracting users to your site by generating brand awareness. You can start with any of the following ways to generate traction to your site.

Step 8 - Attract customers to your ecommerce store


Content Marketing

Content is the king, which is 100% true. Today, content plays a very crucial role for any business. If you are good at writing, start creating high-quality blogs related to your niche or hire marketing experts to help you create a customized content strategy for your store.

Boost Your Organic Social Presence

Social media penetration in India has sky rocketed during and post pandemic. You can leverage social media platforms like Facebook and Instagram to increase you brand visibility. Posting consistently on social platforms where your target audience spends most of their time is the most effective way to get exposure. And, if done correctly, it will also help you expand your brand globally. You can keep your followers updated with new products and experiment with give ways to attract more following.

You can do it yourself or hire a professional ecommerce marketing agency for your business.

SEO Marketing
Search engine optimization (SEO) marketing strategy allows you to dominate search engine results pages (SERPs) and gain organic traffic for your ecommerce site. You can start optimizing your website content like headlines, product descriptions, meta data, internal link structure, navigational structure, etc. using ecommerce SEO techniques to make your online store more visible in SERPs and ultimately attract more customers.

Picking the right keywords for SEO

Optimizing ecommerce website content using SEO is okay but how do you pick the right keywords?
You can use free tools like Google Keyword Planner, Google AutoSuggest, Ubersuggest, SEMRush to identify and track keywords that will help your content rank better on most search engines.Word of mouth
Initially, if you don’t have many resources to invest in advertising, you can opt for word-of-mouth strategy.

Ask your friends, family, and customers to recommend your brand to their friends and families.

You can also partner with professional bloggers and request them to review your brand. This will help you get traction to your store.

Utilize and build email list
Having a strong email marketing strategy is a plus for your ecommerce business. Collect as many email addresses as you can  customers, prospective customers, people interested in your brand/events, etc. You can use this email list to promote different products and offers regularly.

 

Step 9: Promote your ecommerce business

Step 9 - Promote your ecommerce business

Advertisements
Ads are a great way to grab the customer attention. You can use paid ads option to show up first in search engine results pages.

Social Media Paid Campaigns
Social media paid campaigns are another option that you can leverage to promote your business. Use platforms like Facebook and Instagram paid campaigns to reach your target audience.

Influencer’s Marketing
Influencer marketing has become popular recently. You can hire influencers who are best in the game to promote your products and brand.
Recommended read: How to Promote Your Online Store: Marketing Strategies to Build a Robust Ecommerce Channel

FAQs

 

What are the 4 types of e-commerce business models?

The 4 types of ecommerce business models are B2C (Business-to-Consumer), B2B (Business-to-Business), C2B (Consumer-to-Business) and C2C (Consumer-to-Consumer).

Is it profitable to start ecommerce business?

Undoubtedly, ecommerce business in India is profitable.

What is the future of e-commerce?

According to Statista, Indian ecommerce industry has a massive potential. India’s ecommerce market is growing at an exponential rate and the ecommerce industry in India is estimated to reach 200 billion U. S. dollars by 2027.

Which is the largest e-commerce company in the world?

Amazon.com, Inc. is the world’s largest e-commerce company.

What are the requirements for ecommerce business?

Requirements for ecommerce business:

Step 1: Start with a business plan and model
Step 2: Build your brand
Step 3: Register your ecommerce business
Step 4: Open a bank account for your business
Step 5: Ecommerce Website Design and Development
Step 6: Select best payment gateways for ecommerce business
Step 7: Ecommerce Business Shipping Solution
Step 8: Attract customers to your ecommerce store
Step 9: Promote your ecommerce business

 

How much does it cost to start an e-commerce business in India?

To start an e-commerce business in India, on average, ecommerce website with 100 – 1000 products may cost around 500000* INR – 3500000* INR, including the design, development, and any upfront costs. (*note: ecommerce website price may vary from company to company).

You can get an estimate for ecommerce website here.

Must have tools for ecommerce startups – Recommended by Sorted Pixel

 

How to start e-commerce business in india pdf

Download complete guide on How to Start ecommerce business in India pdf.

  • Share:
0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
0
Would love your thoughts, please comment.x
()
x