How to Start an eCommerce Business in India – Detailed Explanation

Wondering how to start an eCommerce business in India? It may be an overwhelming procedure but this blog has broken down the process for the benefit of our readers. 

Opening an eCommerce business in India is a very lucrative business option because people want to be able to buy everything at the tip of their fingers.

And especially since the pandemic, everyone has adapted to the online world now more than ever. But, with the increasing competition in the eCommerce industry, it is vital you do a good job and stand apart from your competitors.

In this blog, we will walk you through the process of how to start an eCommerce business in India right from scratch along with some tips and tricks to grow your eCommerce business once you have established it.

So let’s get started with understanding what an eCommerce business actually is. 

What is an eCommerce business?

eCommerce which stands for electronic commerce is the buying and selling of goods and services on the internet which also includes the transfer of money. Today almost everything can be bought or sold online, thanks to eCommerce.

 Here’s a list of some successful e-commerce businesses in India: 

  • Amazon
  • Nykaa
  • Flipkart
  • Myntra
  • Snapdeal
  • Ajio

Check This Out: Amazon’s Case Study on their Digital Marketing Strategies & Campaigns

Now without further ado, let’s take a look at how to start an eCommerce business in India.

How to start an eCommerce business in India

#1. Choosing the Right Business Model

This is the first and foremost decision that you must make. There exist two main types of eCommerce business models to go for. 

The first being the single-vendor model. Under this model, you will be accepting a supply of products from a single supplier. This model is highly recommended if you’re new to this line and have a small team. 

Under the single-vendor model, only your team and the supplier will be involved. This ensures hassle-free communication and transactions of goods and money. It will further become easier to track the inventory, etc. 

The second model is the multi-vendor model. Here, there will be multiple vendors selling their products by registering with your website. The plus point here is that you will never have a lack of supply in products which is an important factor for a successful e-commerce business. But a very well-coordinated plan and communication are needed for smooth functioning. 

Another thing to consider while setting up the model is that you can sell products manufactured by yourself where all proceeds go to you, whereas if you register suppliers then you only get a commission on the sales.

Note: You must also decide if you’d like to sell a single product line or multiple product lines 

#2. Creating your Brand

Now, this part may get a bit heavy. In this step, you need to come up with a name and a logo for your brand. The name of your eCommerce store is very crucial as people are going to identify you with that. 

Thus, have something catchy, quirky yet easy to remember and pronounce. Decide on a name that also reflects your brand. To avoid getting into any issues, prefer a name that has no other alternative meaning in another language. 

As for the company logo, hire a good designer and sit down with them for a meeting. Explain your business values and what you have visualized and ask for logo samples based on that. 

#3. Company Formation

Once you have your company and logo locked in, there’s an even more important decision to make. What kind of company do you want to register yourself as? The options are Private Limited, Sole Proprietorship, LLP, and one-person-company. 

In layman’s terms, you need to decide if you want to run the company on your own or do you wish to bring in partners for the same. 

If you want to go for a partnership formation, you will be required to file tax returns yearly and have a valid tax ID Number. And because the business’s medium being online, you need to procure an EIN (Employer Identification Number) to open a bank account for business transactions and tax returns.

On the other hand, if you opt for the sole proprietorship plan, you will need a social security number. It is best to hire legal help to get through this stage of the business. 

#4. Closing in all the legalities 

This step gets a little tedious but is also one of the most important steps which cannot have any errors. It is the final registration of your business and opening a bank account in the name of your business. 

For the registration:

  • You have to apply for the Director’s Identification Number (DIN), which has to be downloaded using the DIN application (DIN 3 form) from the official website of the Ministry of Corporate Affairs. You can also do this online, all you have to do is attach and upload the necessary documents.
  • Ensure that your Permanent Account Number (PAN) and Digital Signature Certificate are available.
  • After receiving the DIN, you can apply to the Registrar of Companies (ROC), & check if the name you have chosen for your company is available. Go to the official website of the Ministry of Corporate Affairs and check the same.
  • Once you get confirmation on the name, you can incorporate the proposed company within six months. You may also renew the name of the company in the future, by paying a certain fee.
  • Next is to apply for the GST certification, Shops, and Establishment Licence – this is necessary in cases of Payment Gateway Integration – and Professional Tax (PT).
  • You also have to apply to open up a Provident Fund with the respective Provident Fund Organization; then register with the Employees’ State Insurance Corporation to avail medical insurance of the employees and lastly apply for the Certification of Company’s Incorporation, wherein your company will be officially registered under the Company’s Act, 2013.

After the successful completion of the registration process, all you need to do is open a bank account in the official name of the company and you’re all set with the legalities section. You may need to submit the GST registration number during the setting up of the account to operate the payment gateway. 

#5. Make your eCommerce Website

Now it’s time you start building your eCommerce website. This is the most time-consuming step and has to be extremely detailed. Right from designs to images to the content that goes up, everything needs to be carefully curated for the website. The eCommerce website can make or break your business.

To build a website, there are 2 variations. You can either build a website right from the beginning using platforms like Shopify, WooCommerce, and more. It lets you build a website exactly the way you want. Here’s an Online Ecommerce Course that is highly recommended for anyone who wants to start their own eCommerce business.

The other option is to build it using pre-configured platforms like WordPress. Such platforms offer ease while building your website. You will save a lot of time by using the ready-made templates that such platforms offer. Sign up for this Online WordPress Course if you wish to understand this platform better. 

The end goal of both variations is to create a user-friendly and impactful website because that’s your point of contact with the consumers. Attention to detail should be the main focus when building a website. 

Also Check Out: Marketing Plan For A Shopify Store

#6. Setting up Payment Gateway

Payment gateways allow your customers to make payments online through their debit cards, credit cards, cash cards, and net banking. And because everyone prefers paying online today, it is very important to set up a payment gateway. 

PayPal and RazorPay are the 2 most popular payment gateways. 

To procure a payment gateway, all you have to do is submit the following documents – PAN card of the business, Website terms of use, Website privacy policy, Articles of Association, MOA, Identity proof, Address proof, Bank account in the name of the business & Certificate of Incorporation. 

#7. Logistical Needs

What is logistics? It’s the entire journey of the goods and services transiting from the supplier to your warehouse and then ultimately to your customer upon placing an order. For a smooth flow of this, big companies normally outsource this job to a transportation and packaging company. 

But in case if you have just started out, you can directly ship products to your customers. But in the long run, when you hope to expand, you will need a more professional approach towards this. The more the logistic processes are automated using software, the better it is for your company. 

Take Amazon as an example. From the time an order is placed till the time it is delivered all the updates of the package are sent to the customer as well as to the back-end team looking after the delivery. This ensures a hassle-free delivery for the company and an enriched experience for the customer. 

Now that we have covered the basics of how to start an eCommerce business in India, let’s see some additional tips on how you can get started and grow your eCommerce business.

Tips on how to grow eCommerce business in India 

  • Learn SEO

Search Engine Optimization is a must if you wish to rank your website higher on search engines. SEO is making the use of the right keywords and placing them correctly so that you rank higher organically when a user searches for something that you offer. Another way to show up on search engine result pages is the next point.

  • Search Engine Marketing

SEM is the process of bidding for certain keywords on search engines and ranking for those keyword queries. This is a very sure shot of a way of capturing the maximum impressions on search engines like Google. To carry out SEM, Google Ads is a very powerful tool. Learn Google Ads and master SEM.

  • Advertisements

Run advertisements on social media platforms like Instagram and Facebook, where most of your potential target audience is present. If you’re offering any discounts, promotions or sales, then make sure you advertise to the right people and for the appropriate number of times. 

Consumers are very likely to purchase products during sales but if you have just started out, they may not be aware of your brand, and thus, advertising is very important to build awareness as well. 

Your job won’t end at just creating an eCommerce store. It is equally important to make efforts every day to grow your platform. Thus, to learn more about how to grow your eCommerce business using digital marketing tactics, opt for this 3-month Online Digital Marketing Course and it will help you get kick-started with running a successful eCommerce business in India.

Register for this free masterclass on digital marketing basics and understand how it works. 

Bonus Read: Successful Marketing Strategies that have Helped Businesses grow

A common question that many budding entrepreneurs have is :

  1. How much will it cost to start an eCommerce business in India?

Well, there is no definite answer to this question as it highly depends on the resources you use. The approximate market value is somewhere between INR 1,00,000 to INR 4,00,000 per month depending on hosting plans, shopping cart software, employee’s salaries, transportation and courier charges, internet connection plans, office space rent, payment gateway fees, and advertising costs to name the least.

We hope this blog has helped you understand all that you need to know on how to start an eCommerce business in India. 

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