How to Set Up Your Own eCommerce Business in the United States
It’s safe to say that we’ve entered the age of eCommerce. New brands are popping up from all corners of the world, and many of our old favourites are making the transition from brick-and-mortar stores to online shopping - and that’s not including eCommerce behemoths like Amazon, which have fundamentally changed the way we shop forever.
The rise of eCommerce was perhaps always predictable. Above all, society has continuously been shifting towards what’s most convenient, the easiest and most efficient. We’re now at a point where many budding entrepreneurs are considering bypassing physical stores entirely in favour of running an eCommerce business. Their reasoning is simple: online stores are cheaper to run, have no capped growth limitations, and reach the global market.
But this doesn’t mean that starting and running an eCommerce business is easy. There’s still more than enough paperwork to keep you busy, competition is steep, and the complications from selling overseas can be troubling if you don’t know your way around them.
Why the US?
Despite it being an incredibly competitive market, there’s a lot of money to be made if you manage to crack just a small slice of the US eCommerce pie. According to a recent report, nearly US$1 in US$5 spent on retail purchases during the first half of 2021 came from online orders. In fact, eCommerce is expected to reach the US$200 billion mark by the beginning of Q3 (up 40% year over year).
While the US market can be hard to tap into as a non-national, eCommerce in the country is open to anyone anywhere in the world. Read on for our actionable guide for setting up your very own eCommerce business in the United States of America.
#1: Find your Niche
Starting an eCommerce store from anywhere in the world requires a well thought out plan - no matter what industry you’re wanting to enter. The very first step you should take is to ask yourself the following questions:
- What exactly am I planning to sell?
- What market am I intending to sell to?
- What scale am I starting out at?
- Are there any licenses I need to get?
- How will I source my products?
- How will I fulfil my customer’s orders?
- Who are my competitors?
Having a clear answer to all of these questions means that you are on the right track. The world of eCommerce is incredibly competitive, and only those who can navigate the online world swiftly and effectively can reap the full rewards. Finding a niche - or gap in the market - is how many young brands find their success. Following this, they are able to increase brand awareness, making a name for themselves, and then diversifying into other related products and services.
#2: Find a Business Model that Suits your Business
eCommerce is not a business model but merely a type of business. There are countless types of eCommerce businesses, including B2B service providers and B2C eCommerce businesses. Beyond this, there are subscription services, dropshipping models, online marketplaces that aggregate a number of other brands, and many, many more.
The type of business model you choose should complement the niche you have chosen and the goals you have set for your eCommerce business.
#3: Create a Name for your Business
After these two steps, you should start with the actual creation of your business. The first thing you’ll need to do is create a name for it. Take time with this step, as it’s not something that can be changed easily — you will have to go through a thorough rebranding process which can reverse some of the work you’ve done to build brand awareness.
A good brand name should be catchy, memorable, and meaningful.
#4: Get All the Necessary Licensing
General licenses allow you to operate your business in specific countries or cities, and the requirements vary depending on where you want to sell. However, there are several other licenses that you will need to look into depending on what you are selling. Alcoholic beverages and pharmaceuticals are two examples of products that require their own licenses.
#5: Build Your Website
Once you have all the legal requirements sorted out, you should get to work building your website. As an eCommerce company, this is the equivalent of your storefront, so it needs to be the best it can possibly be.
There are several website hosting companies that can make building your website a breeze — think Magento, Shopify, WooCommerce, and more. Each of these will allow you to customise your website and make it individualised together with the reliability and customer service safety net they offer. You’ll also gain access to a whole range of payment options, as well as insightful data that helps you keep track of your eCommerce business’ performance and make adjustments when and where necessary.
#6: Organise Your Business Finances
Lastly, no business can operate without a bank account. The typical route for new businesses is to head to their local bank and open an account. This method has been the norm for decades, but it is by no means the best and simplest option for eCommerce businesses. Traditional banks have endless paperwork and strict criteria, making it difficult for new businesses to get up and running. In addition to this, they charge high transaction fees when converting currencies and selling overseas, making it difficult to squeeze a profit margin that allows growth. Not to mention it may prove very difficult to open a US bank account if you are not a citizen.
Virtual banking solutions are the perfect combination for eCommerce businesses. They offer up to 8x lower rates, allow seamless cross-border transactions, and enable you to buy and sell like a local in countless countries. This happens through one single, consolidated account that can be accessed entirely online, 24/7.
eCommerce is the future of business. If you have any questions about starting your own or virtual banking solutions, don’t hesitate to get in touch with us at Currenxie today.