E-commerce has been an inseparable part of our lives for many years. Online shopping is fully integrated into our lives, and it is hard to imagine human beings without the privilege of click-shopping. Day by day, more and more people decide to step into the vast spheres of the internet and launch e-commerce sites.
The grass is greener on the other side of the fence. When you see thousands of successful examples of those who succeed in e-commerce, you suddenly think: “Why don’t I start an online store business?”
Prestige Auditors have an affirmative answer to that question. If your answer is the same as ours, then there is another question:
“How do I that exactly?”
Prestige Auditors is here to answer this question in detail, offering e-commerce business solutions to anyone who is thinking about setting up an online store.
Let’s dive deep and try to understand all the basics of e-commerce business management.
The first step in starting a small e-commerce business is writing a detailed business plan and identifying your unique selling propositions.
The next step in climbing the e-commerce ladder should be choosing your e-commerce niche.
You should start by identifying the most successful companies that succeed in this business. It will help you understand where to begin and where to set as your goal.
Now it’s time to determine your business model. There are five common e-commerce business models:
- Private Label
- Retail Arbitrage
- Online Arbitrage
Once you define which type of business model fits your need, you will need to structure your e-commerce business by forming a legal entity.
By forming a business entity, you are protecting your personal assets from your business assets.
For setting up an e-commerce business, there are three main popular types of entities among the business owners.
- Limited Liability Company (LLC)
- S Corporation
- C Corporation
We have detailed instructional material on these which you can find here.
Here is a brief introduction:
Limited Liability Company (LLC)
LLC is considered to be one of the most popular business entities among e-commerce sellers. By choosing this type of entity, you are provided with liability protection to separate your professional assets from your personal ones. Another advantage of this option is tax savings. By forming an LLC, you have to pay taxes only as an owner and not as the entity itself. Another advantage of using this method is that there are fewer reporting requirements to the IRS.
An S Corp is similar to an LLC in that it is also a pass-through entity, meaning you can separate your business from yourself and minimize risk. However, there are some differences between the LLC and S Corp. Compared to LLC, you can only have 100 owners in an S Corp, who have to be real individuals.
C Corp is a double-taxed entity. It means that both the entity and the owner of the business have to pay taxes. While less popular, the entity is still widely used, especially in cases where sellers want to set up a public company.
Choose the Best E-commerce Platform
There are several popular e-commerce platforms for starting an online store business. It all depends on your own preferences and the types of products you are planning to sell. The most popular e-commerce platforms include Amazon, eBay, Walmart, Target, etc. We can conduct an audit of your business and recommend the one which suits it the most.
Now it’s time to create your online store!
In this phase of creating your e-commerce business, you should concentrate on choosing an e-commerce store builder. Keep in mind that you have to consider such aspects as price, features, design, and registration of your domain name. If you do not have such skills or if you are unsure of how to proceed, you can use Prestige Auditors as an ultimate resource. Fill out our questionnaire and we will assist you in setting up your online business from scratch!