What Are The Advantages Of Opening An E-commerce Business In India?
- Low-cost of operations, as you do not necessarily need shops to sell your products and services. You can save your rental costs, maintenance costs, and the costs of legal compliances before renting or owning properties. Certain E-commerce businesses, like Meesho, simply provide a platform for other businesses to sell their products and services and save on the costs of inventories as well.
- Wide customer base, not specific to a location: Depending on how well you market your products, you can sell them to customers anywhere in the country. Expanding your customer base need not require you to change the location of your business.
- No intermediaries: Manufacturers can sell their products directly to their target buyers, including end-users or customers using E-commerce platforms. Avoiding intermediaries like wholesalers and retailers allows manufacturers to receive a 100% share in the selling price of products. Additionally, not having intermediaries decreases the cost of products for customers.
- Potential to earn high profits: Because there are hardly any restrictions on expanding the customer base, E-commerce businesses have the potential to earn higher profits from their ever-increasing customer base.
- 24*7 services: E-commerce businesses can operate 24 hours a day without the physical presence of workers and staff. This is certainly not possible in the case of physical retail shops. Increasing the time for business operations increases the sale of products and services, thereby increasing the revenues of the business.
- Customer data: Customers lack the option of providing feedback about products and services sold to them in physical retail shops. This option is available in form of “reviews” on E-commerce websites and is helpful for businesses to improve product quality in the future. Reviews are also helpful for other fellow customers in making an informed decision while buying.
- Convenient for customers: Customers can avoid visiting shops and place orders for products and services from the comfort of their homes. They can make payments online and receive their orders at their doorsteps within a week. An online mode of purchase is extremely convenient for customers.
Types Of E-commerce Businesses That Can Be Opened In India?
- B2B business: Both buyers and sellers are businesses. For example, IndiaMart sells industry-specific machinery and hardware to businesses in the health, pharmaceutical, food, electrical, and a variety of different industries.
- B2C business: The customer or the end-user buys the products or services sold by a business. Almost all e-commerce businesses operate as a B2C. Prominent examples include Amazon, Myntra, Nykaa, Flipkart, Meesho, etc.
- C2C business: Customers sell used items to other customers for second-hand use. For example, at OLX, customers can sell used and old products to any interested customer.
- C2B business: may include businesses that buy products from customers, usually for recycling purposes. For example, Amazon buys old laptops and electronic gadgets from customers in exchange for new ones.
How To Start An E-commerce Business In India?
- Choose your type of business: You must decide on a model for your business before establishing it. For this purpose, you may choose among B2B, B2C, C2C, C2B, and B2A business models. Deciding your business model beforehand will help you choose your target buyer, and your industry, build a network of distributors and delivery channels, and determine other similar needs for your business.
- Choose the location of your business headquarters or office: Certain E-commerce businesses which carry out both manufacturing and retail operations need to search for suitable locations to set up their factories and inventories based on the proximity of suppliers of raw materials or finished goods. If the E-commerce business simply provides a platform for retailers or manufacturers to sell their products and services and does not require factories or inventories, the location of its headquarters or office will probably not affect its business operations.
- Decide the name, logo, and brand for your business: The brand of your business should be based on its nature of operations (merchandise or services), target buyers, and the products/services sold. The name and logo of the business must communicate its brand voice and should not violate any trademark rules to mimic the names and logos of existing businesses (Section 4, Trademark Act 1999). Make sure you register the name and logo of your business as a trademark, to protect its originality and uniqueness. For this, you may avail of the quick and cost-effective services of SetIndiaBiz in Trademark registration for new and existing businesses.
- Build a Website, buy a domain name and purchase necessary tools: An official website is the most significant tool for running an E-commerce business. All sales, marketing, and payment operations for products and services are carried out through the website only. You would require a web development team to build, maintain and consistently update a bug-free website.
- Stock inventory and build a supply chain, if required based on the nature of business operations.
- Build delivery networks: Build your own delivery networks throughout India or outsource delivery services to 3rd parties to deliver products and services at your buyer’s doorsteps.
- Choose your legal status: E-commerce businesses may get incorporated as LLP, partnerships, private or public limited companies based on their scale of operations. Usually, small businesses register as partnership firms or LLP as they run operations on a smaller scale, receive lower investments and earn lesser profits. Therefore, sharing the liability of the business is advisable for them. However, e-commerce businesses that run operations at a larger scale and earn huge profits, register themselves as public or private companies.
- Register and incorporate your company: To operate as a separate legal entity, you must register your business and apply for its incorporation. SetIndiaBiz has years of professional experience and expertise in providing registration and incorporation services to new and existing businesses.
- Open a current bank account for your business: E-commerce businesses must have separate current bank accounts to facilitate online payments and transactions on the sale of their products and services. Such accounts must be enabled with net banking facilities to enable returns refunds to buyers when required.
- Get necessary approvals and licenses: Like any other business, E-commerce businesses need to obtain certain approvals and licenses before beginning their operations in India. These include obtaining a PAN card, GST registration, obtaining EIN number, obtaining a license under the Shops and Establishment Act, Business Operation License, Industry-specific license, Home Occupation Permit for running the business from home, Seller’s permit, ESIC, EPF, and license for employing contract labour. You can avail of the services provided by SetIndiaBiz regarding all post-incorporation legal and tax compliances, including getting necessary licenses and approvals for your E-commerce business.
- Collaborate with payment gateways and banks to enable online payment using UPI, net banking, debit/credit cards, and e-wallets on your e-commerce website.
- Build a marketing channel for your business: E-commerce businesses market and promote their products mostly on digital and social media platforms. However, print and broadcast media are also effective channels for marketing products by e-commerce businesses.
- Build Customer feedback and grievance channel: The advantage of selling and promoting your products and services online is that the customers actively share their experiences of using the products and services. This helps the businesses resolve customer grievances in no time, and understand consumer needs and demands to improve and upgrade the quality of products and services in the future.
- Launch your business.