Research Paper on "Starting an Online Retail Business"

Research Paper 7 pages (2396 words) Sources: 1+

[EXCERPT] . . . .

Starting an Online Retail Business

The retail industry supplies an exciting way of life for almost twenty five million people who earn their living in this sector of the U.S. economy. Retailers offer the goods and services that people need, from food, auto parts, apparel, home furnishings, appliances and electronics to advice, home improvement and skilled labor. Retailing is one of the fastest-growing divisions of the economy. As one of the country's largest employers, the retail industry offers outstanding business opportunities for everyone. At least one-third of the half million or so new companies that are started every year are retail operations. "The entrepreneurs behind these ventures risk their capital, invest their time and make a living by offering consumers something they need or want. Most retailing involves buying merchandise or a service from a manufacturer, wholesaler, agent, importer or other retailer and selling it to consumers for their personal use" (How to Start a Retail Business, 2007).

Online Retail Business

Every year, more than one hundred million Americans buy goods from the online retail marketplace, one of the fastest-growing sales channels in the United States. Since the beginning of the decade, income for the Online Retail & e-Commerce industry has grown at an outstanding rate, outperforming most brick and mortar retail industries (Online Retail in the U.S., 2012). The future of ecommerce looks bright. "After topping $200 billion for the first time, online retail sales in the U.S. are forecast to reach $327 billion by 2016, a study from technology and market research firm Forrester says. Overall share of the retail market is expected to increase from 7% to 9% during that period" (Indvik, 2012).

More customers are shopping online every day. "Last year, 167 million consumers -- 53% of the U.S. population -- purchased something online. That number is expected to grow to 192 million, or 56% of the population, by 2016. It is also projected that consumers' average yearly online spending will increase from $1,207 per person in 2011 to $1,738 per person by 2016" (Indvik, 2012). Consumers are also becoming more and more comfortable buying a wider diversity of categories online. "In a 2001 survey, Forrester found only three of the 30 retail categories were able to attribute more than 20% of sales to online channels. That number grew to eight categories in 2011, and is expected to increase to 14 categories by 2016" (Indvik, 2012).

Costs of Starting Online Retail Business

Online retail businesses are a well-liked option for entrepreneurs with minimum capital to spend up front. In addition, online retail is a great business to run as a home-based, solo, parent or part-time entrepreneur. It can also be an incredible outlet for ones creative talent or hobby. Starting an online retail business can take a comparatively small amount of capital if one manages their budget prudently (Martin, 2012). Some of the main ingredients of an online retail start-up are: constructing a vibrant website; generating a top-quality, market-tested product; and developing an inventive marketing strategy. But above all, one should make sure that they understand their market and their unique selling scheme very well, because the competition is pretty stiff in cyberspace.

Steps to Start Up

The first thing that needs to be done is to choose which products one is going to sell. They should then be bought from online discount sources or a local discount store such and resold (Hodgkins, 2012). Alternatively, one can develop a product such as jewelry, ceramics or a woodworking product and sell them online.

The second step is to get a website. One should start their online retail business by selling the product through a website. One should buy a domain name at a hosting service. One can purchase a domain name for a very low price which offers free pages on a website for their use. One should choose a domain name that fits their business (Hodgkins, 2012).

The third step is to design the website by choosing a template. The majority of hosting companies provide free templates when one buys a domain name from them. When designing website pages, one should type descriptions associated with the products they are selling (Hodgkins, 2012). Keywords should be used in the descriptions. Keywords are words or phrases used in the substance of the website for potential customers to find the business.

The next step is to set up the ability to accept payments. One way to do this is to use a payment processor. PayPal and Google Checkout are two online payment processors that are easy to use. One simply uses one of their checkout systems and allows potential customers to use their credit card to pay for products or services (Hodgkins, 2012).

The next step involves marketing and advertising. One should submit to search engines. One should start by submitting their website domain name to any and all search engines on the Internet. Yahoo, Google and Bing are a few of the main search engines. Search engines scan the website and look for relevant keywords related to the website, allowing potential customers to find the site (Hodgkins, 2012). One should market their site by listing it in all directories that can be found on the Internet relevant to the product being sold. One should join related forums and blogs, post regularly and mention the website whenever they can. One should also add their website name to their signature line in their email account, so it's included in all the emails that they send out.

Advertising should be done by listing the website name on business cards, fliers and brochures. Fliers should be posted that briefly list what is being sold, on local free bulletin boards at supermarkets and libraries. One should make brochures offering a discount on a product, and hand delivers them to homes in the neighborhood. This allows consumers outside of the Internet to visit the website to buy the products for sale (Hodgkins, 2012).

Impact of e-commerce

E-commerce is growing at a rate of around thirty percent a year, and is showing no signs of slowing down. In fact, taking into account the fact that a number of main consumer brands and chains have not yet come up with complete online retail strategies, the scope for future growth is even greater (Future of Ecommerce, 2004). While the impact of the Internet is already noteworthy, it is expected that it will increase even further in the coming years. This will be stimulated by both the growing consciousness of the significance of the Internet across business and government, and rapid growth in the amount of Internet users.

Experts forecast a promising and glorious future of ecommerce in the 21st century. In the near future ecommerce will further substantiate itself a major tool of sale. Successful ecommerce will become a view completely inseparable from the web, because e-shopping is becoming more and more accepted and natural (Future of Ecommerce, 2004). At the same time relentless rivalry in the area of ecommerce services will strengthen their development. Therefore prevailing future trends of ecommerce will be the increase of Internet sales and evolution. Each year number of ecommerce deals grows a lot. Sales volumes of online stores are more than comparable with those of brick-and-mortar ones.

The quantity to quality propensity of ecommerce is also becoming more and more apparent, as the Internet has barred geographical factor from the sale. So it doesn't matter any more whether a store is situated in New York or London or in a small town. In order to survive, merchants will have to adjust rapidly to the new environment. In order to attract more customers e-store-owners will have not only to augment the amount of available services, but to pay more attention to such fundamentals like attractive design, user-friendliness, attractive goods presentation, they will have to opportunely employ modern technologies for their businesses to become parts of ecommerce future (Future of Ecommerce, 2004).

How to Set Up and Manage an Online Business using atomicmall.com

Atomic Mall is a universal online marketplace, where buyers and sellers from around the world can congregate and trade with each other. Fundamentally, it's the web's newest and coolest place to purchase or sell anything. At Atomic Mall, the goal is to put the excitement back into online shopping and auction bidding. Their attitude is that sellers shouldn't have to spend a fortune just to get their items listed. With no promise of sale, this frontloaded advance used by some sites is a big risk for a lot of sellers. Atomic Mall offers a selling platform with no up-front listing fees, and two account echelons which feature no membership fees and a free storefront. At Atomic Mall, they think getting ones unique products seen should be as risk-free and pain-free as possible (Atomic Mall -- FAQ, 2012).

Atomic Mall includes a fairly wide-ranging array of ecommerce and inventory management features that permit many sellers to utilize their main internet presence for the showcasing of their products and services.… READ MORE

How to Reference "Starting an Online Retail Business" Research Paper in a Bibliography

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