It is a big question of how to start e-commerce business in India, for every individual business owner’s right there to start an online business.
Since 1994 when amazon started an eCommerce business by selling books online, till 2021 there are thousands of websites that started an online business and converted them into brands in the market. And right now there are a lot of businesses starting online businesses and want to grow in the eCommerce industry and capture a brand in the market. But there are also people worrying about how to start eCommerce business in India.
So I have some questions for you below here
- Do you want to know how to start an eCommerce business in India?
- Do you want to sell products online?
- Do you want to grow your business online and earn money online?
If yes, this article is worth reading for you. In this article, I will give you step-by-step guidance on how to start an eCommerce business in India.
I just want to start with great lines or a quote that impressed me and always it will be in mind whenever I think about any business.
“If your business is not on the internet then your business is not a business” ~ Bill Gates
These words are not just casual words by bill gates, those words became true in this modern life era to start an eCommerce business In India.
So you need to always think about the words or the lines of the great people because there is great knowledge and experience behind them.
So, keeping in mind that starting a business in modern life has become too much to think about whether to start an online or offline business.
So the decision will always be in your hands to choose the right path. But if you ask me I always go with the ecommerce business because people are always hanging in online and the rise of smartphones changed the lives of people.
So keeping aside starting an online business is not much hard but as well as not so easy to enter into the ecommerce world.
But always remember When you start to do any new thing it will always be hard, but when you are in the process of doing it you will feel it is not as hard as I thought, but in the end, you will realize it is so much easier than anything.
So the starting point will be hard and sad but the ending point will be easy and happy if you are the own boss for your business.
So let’s see
How to start eCommerce business In India
The eCommerce business is nothing but just taking the offline business to online business.
If you are good at commerce or a traditional business, you will be a step forward to start your online business and will be successful in the eCommerce business.
To clarify, the terms commerce or traditional business, or offline business refer to the same thing. And the terms eCommerce business or online business refers to the same thing. As I always jump to one of these words.
So starting an online business will be everything like an offline business, but you will do it online using the internet.
So in the offline business. These are the things you will consider whenever you start the business.
- Choose the product
- Business plan and market research
- Choose the brand
- Legal documents and business
- Marketplace to run the business
So until here, these five categories are the same and applicable for eCommerce business. Apart from these five categories, there are three more categories that come under the eCommerce business
- Shipment and Logistics
- Payments and Gateways
- Marketing Online.
That’s it done as simple as that. Haha…
I know it is easy to say the word simple, but there is always a pain behind everything happening right out there.
So now let me take you to step by step guide on how to start eCommerce business in India.
Check Here: Types of eCommerce business and Benefits.
Choosing the Niche or Product
The first step to start any business is to pick the right product in the market whether it is offline or online.
There are a lot of products right out there in the market but finding the best product is the easy way to succeed in the eCommerce business.
I can say that 50% success will be on the quality of your product or service which you choose from the market.
I know choosing what to sell is difficult, but if you cross this phase with successful product selection, you are in the market to compete and make your business more profitable.
There are two types of buyers that are in the market which depend on human psychology.
- Impulsive-based buying
- Intensive-based buying
These products are easily purchasable by customers there will be no need for much research before buying these products.
And the costs of these products range between 100 – 2000 rupee.
People will purchase these types of products by scrolling or seeing the product if they like it. Customers never take much effort to research impulsive based buying.
Product examples are:
Decorative Items, Blankets, wall paintings, etc.
These products are not easily purchased by people. There will be much research behind that product before purchasing the product.
And the costs of these products range between 2000 rupees above.
In modern life doing research has become very easy. There are so many different marketplaces out there like Amazon, Flipkart, snap deal, etc.
So if the people want to buy these types of products. They do research about the costs, features, design, etc on scrolling different platforms and if needed they do offline research by visiting any nearby store.
Product examples are:
Refrigerators, Microwaves, Televisions, Washing Machines, etc.
So it is better to choose impulsive based buying products if you want to start and succeed in the business. Later if you’re successful you can choose intention-based buying products.
How you can choose the product
- There Should be demand in the market for the product.
- It is better to choose a unique and high-Quality product.
- The product size should be small so it is easy to deliver.
- Choose the product which gives you a minimum of 250rs + margin.
- Then the product price range must be below 2k-3k to get the customer base.
- The product weight should be less, So the shipping charges will be minimum, and also it will be easy to ship.
Check Amazon Product Research here!
Business Plan/ Market Research
In this second phase where you need to make a business plan to enter the market.
To start your ecommerce business in India there should be market research behind the scenes.
A lot of people make a business plan very fast and while executing the plan they will make changes.
Basically, 90% of startup businesses fail because of the no-good business plan and lack of implementation of the plan.
In this phase, you make a plan for how to set up your business and run it according to the plan.
The things that come under this phase are
Market research is one of the first steps to take in the business plan. Whether it is offline business or online business, market research is important.
Here basically, you do research about how online business is in demand in the market and how you can capture the position in the market.
And you also do research on the market competition for your business. So that you can implement new things for your business and grow in the market.
Product research is the second step in the plan you need to implement to start your ecommerce business.
Here you will do research about the product demand in the market that you have chosen early.
And you also do research about the product price of your competitors to launch the product.
Doing research on how to sell the product and how to acquire the people to the product comes under product research.
In this step, you make a budget plan for your business. According to the budget, you will plan to start your ecommerce business.
There are two types of business models according to your budget either you can opt for a Single vendor or a Multiple vendor ecommerce stores.
Single vendor marketplace.
In this business model, there will be only one seller who can sell to multiple customers.
Here it only involves two entities, a single seller who sells his/ her products to multiple customers.
The main thing you need to look at here is that it is easy to maintain the transaction between two entities.
The operation costs are low because you only need to pay one supplier and you can easily control or handle the inventory more effectively.
Multiple vendor marketplace
In this business model, there will be multiple sellers who sell to multiple customers.
Here you own a platform, where you sell your own unique products or you allow other individual sellers to sell their products on your platform.
Multiple sellers need to register with your platform to sell their products online. Here you charge a commission per each sale that happened on your platform by sellers.
The advantage of this business model is that if one of the suppliers is unavailable to sell his/her products there will be other suppliers back to maintain the sales on your platform.
So what you need to choose
If you have a low budget you can go with a single vendor marketplace, but if your budget is huge you can go with a multiple vendor marketplace.
In my point of view, it is better to start with a single vendor marketplace for the startup online business.
In a single vendor, you could earn high margins, but in multiple vendors, you earn commission through sales that happened successfully by individual sellers who register with your site.
Where to sell
This is the last step in the business plan to do research on choosing the right place to start the business.
While in offline business we always look for a good marketplace like huge rush areas, junctions, etc where people can easily find out about our business and come in.
In the same way, you need to do research for the online business like where people hang out more, huge demand for the customer base, strong online presence, customer-friendly marketplaces.
Choosing the right platform makes your business run for a long time and will generate huge profits.
Create Your Brand
This is the third stage where you need to create your own brand name after a good business plan.
A brand is nothing but an identity in the market or trust for the people to purchase easily from you.
To give you clarity Branding and Personal brand are slightly different from each other but the main goal is to build trust and identity in the market.
Ex: Apple is one of the brands in the market it has built trust with people. If any new releases from Apple, people will buy blindly because of the impact that made across the world.
Apple, Nike, Google, Microsoft, etc represent brands for their particular industry.
For example, Elon Musk has his own personal brand rather than his own company Tesla, SpaceX.
Elon Musk, Jeff Bezos, Ratan Tata, Warren Buffet, etc represent personal branding rather than their individual industry brand.
The things that come under branding are
- Choose a unique brand name
- Brand name should be short and easy to remember
- Reflective on your brand
- Designing your brand name
The other things like your brand’s design, the color of your brand, your brand’s logo, everything comes under branding.
All the visible elements of the company give the identity of the brand in consumer’s minds.
Once you have created your brand with a name and company logo, the next step is to register your ecommerce business in India.
Registering your eCommerce Business In India
Once you’re done choosing the right business model and good company name and logo, the next first step is legally making the business registration to start your ecommerce business in India.
For the startups in India, there are four popular kinds of companies
Proprietorship is for a single person business registration who can run his/her business individually.
If you want to start individually as a startup it is better to choose sole proprietorship.
And it is easy to start and you will be the single entrepreneur or owner of the business. You will have complete control and it is low cost for the formation of business.
Documents required for proprietorship and for additional GST are
- Pan card + Aadhar card
- Voter Id or Driving License
- Passport size photos
- Rent agreement or Electricity Bills(No issues if it’s in other names)
In partnership, registration is for those two or more individual persons who join together to start up a business as a partner.
If you have more budget you can bring a partner in and more capital will be brought into the business. If you have more budget you can choose partnership registration.
So it’s a perfect business formation for two-person to start. And partners share equal responsibilities of the business.
Documents require for Partnership registration are
- Partnership Deed
- Pan card + Aadhar card(of both)
- Voter Id or Driving License(of both)
- Electricity Bill or Rent agreement and NOC.
Private limited company
Every big company right out in the market is first started as a private limited company and then converted into a limited company. It is one of the oldest legal entity formats in India.
If you register your business as a private limited company you will get access to do your business in India as well as across the world. Because it’s a proper company registration where your business is registered with the ministry of corporate affairs.
The advantage of a private limited company is you will get a lot of funding from the investors like Venture capital (VC), Angel Investors, or family members who will become shareholders in the company.
It is a separate legal entity and you can run your business across the globe. And it is easy to transfer shares and also builds credibility.
Documents Requirements for Private Limited Company are
- A minimum of two directors are required ( Directors are not partners. They are higher-level officers)
- Basic KYC Documents of the Directors
- Address proof of office( can be residential-electricity bill or Rented agreement, etc)
Limited Liability Partner
LLP is a popular business formation when compared to partnership and sole proprietorship. It is also a better option to start up a business in India with LLP.
Here It is the mixture of both partnership and private limited company where owners can enjoy both features and limited liability.
But the thing is owners cannot raise the funds easily when compared to Private limited companies from angel investors or VC.
Steps for forming LLP and Documents required are
- Designated partners should obtain the Digital signature certificate at first.
- Apply for the DIN(Director Identification Number) of all the designated partners which can be downloaded by using the DIN application form (DIR 3 form) from the ministry of corporate affairs.
- Once you have received the DIN, Now you can apply for registration of name for your business. For checking the availability of the name you can go through the ministry of corporate affairs official website.
- After receiving the confirmed name of your company, you can incorporate the proposed company within six months. The form used for Incorporation is FILLIP(Form for Incorporation of Limited Liability Partnership).
- The last step is to file an LLP agreement, It governs the mutual rights and duties among the partners. LLP agreement should be filed within 30 days of Incorporation using form 3.
Documents Required are
- Pan card + Aadhar card (of partners)
- Address proofs of partners ( Voter Id/ Driving License)
- Residence proof of partners (Electricity Bill)
- Digital signature certificate (Any partner)
- Photocopy of partners
- Office address proof
One person company
Nowadays OPC is gaining a better option for forming the company.
It is ideal for startups where only one owner or founder exists for the legal status of the company.
Here It looks the same as a Private limited company but both are two different structures governed by the companies act.
You can enjoy all the common features of PLC where liability is limited.
The process for registering an OPC is similar to LLP.
Each of the above organizations has its own advantages and disadvantages you can choose according to your interest.
Otherwise, you can seek a piece of legal advice from a legal professional which is the best choice for your business. You can use Vakilsearch.com where you get step-by-step guidance from professionals for forming a company.
Opening a Bank Account
Once you have completed the process of forming the company the next further step is to open a current bank account to start your ecommerce business in India.
Here you will open a bank account in the company’s official name but not on an individual person. You can opt for any bank to open an account.
The thing here is you can use your personal bank account for business transactions but it is better to open a current account in the company’s name because you can track business transactions easily.
Here you will open a bank account in the company’s official name but not on an individual person. You can opt for any bank to open an account.
The process will be everything the same for the above-listed companies except for sole proprietorship. In a sole proprietorship, you need to apply for GST registration where you will be allowed to open a bank account in the name of your online business.
Documents required for opening a bank account
- Pan card + Aadhar card
- Business formation documents
- GST registration (only for proprietorship)
- Ownership agreements
- Identification of authority those who have authority to operate the bank account
Once your bank account is ready now, you can list the products you want to sell on the ecommerce website.
Choosing what platform to sell on (Marketplace)
The right platform or marketplace gives you a solid customer base and huge profits.
To start an ecommerce business in India there are two ways to open your store online.
- Create your website
- Choose a marketplace
Creating your own website
In simple terms, your own website is nothing but the same as an offline physical store taking it as an online store by creating your website and listing your products on the site.
And your website will be visible to your customers and it will be the face of your company or business. The customers will see the products and services on your site and buy them. So your website will be the key element to start your ecommerce business.
There are a lot of tools and ways in the market to create an online ecommerce store. Some of them are
Shopify right now is one of the most popular and well-known software or tool to create your website and start your ecommerce business.
Here it is easy to use and has better templates to design your website. And also there will be better add-ons and apps in Shopify.
You can literally create your website using Shopify in minutes or within hours but they don’t allow for more customization.
Shopify is not a free tool, it is available as subscription-based for a month in three different plans. So if you want they will provide 14 days free trial for customers to know how it works.
Woo-commerce is a free WordPress plugin where you can install it in WordPress and customize your site easily.
If you already have a WordPress account you can install the Woo-commerce plugin and customize the things as per your requirement.
In this eCommerce world, you need a professional website so it is better to look for a designer.
It is easy to develop an ecommerce store on WordPress by everyone. But the thing is your store should be attractive, optimized, fast, and secure. So it is better to hire a professional designer by investing some money.
There are a lot of freelancers in the market so you can look for a good designer by seeing what they have done before and also you can go through some of the testimonials of them.
So I prefer Woo-commerce because you can have a lot of customization and you have a lot of freedom to design your store as your own boss.
Choosing the marketplace
There are a lot of marketplaces in the ecommerce world, where you can start your ecommerce business in India by selling your products on those platforms.
Before entering into the marketplace you need to find which marketplace has a solid customer base and which is more convenient for customer satisfaction from every point of view.
Some of the popular platforms right now are Amazon, Flipkart, eBay, Snapdeal, etc. You can read more about online selling platforms in India to get some views about marketplaces.
If you have low investment I recommend you to start selling on one of the marketplaces by your own research by listing your products on those platforms.
The thing you need to know is that you need to accept their terms and conditions to start selling on their platforms.
Here you need to understand the marketplace algorithms to list your product on top and getting high rating reviews on your product will build trust for other buyers.
And later If you got some experience and if you got some returns you can invest in creating your own website and capture the market.
Now the next step in how to start ecommerce business in India is payment gateways.
Check How to sell on meesho here!
Payment Gateways for your Ecommerce Store
A payment gateway is a must for an ecommerce store. And it is one of the most important steps to start your ecommerce business.
If you list your products on marketplaces then every marketplace has an existing payment gateway infrastructure.
If you own an ecommerce store you need to add a payment gateway. It allows the processing of Debit cards, Credit cards, Netbanking, and cash card transactions on your website.
In order to set up a payment gateway on your ecommerce site, your website should have below terms
- Website uses (Terms and Conditions)
- Refund policy
Documents you need to submit for payment gateway are
- Bank account in the name of business
- Certificate of Incorporation
- Pan card of business
- Memorandum of Association
- Articles of Association
- Identity proof
- Address proof
If you submit all the above-listed documents successfully, then a payment gateway is provided for an eCommerce business to enable online transactions easily.
Some of the popular payments gateways in India are
Instamojo, Razorpay, PayU ( My favorites)
Here comes another crucial part to start your ecommerce business in India is shipment and logistics.
Finding Supplier and Logistics
The next step is to find a source for the product idea that you have selected at the beginning.
If you have your own product or homemade products then there is no need of finding suppliers.
A lot of sellers in the market don’t have their product so they tie up with suppliers to run the Online business in India.
Now, you need to contact the suppliers by doing some research online. Manufacturers, Wholesalers, Distributors come under suppliers.
So it is better to Contact manufacturers rather than wholesalers. Because you can make your own product on your brand directly with manufacturers and the cost for the product will be low when compared to wholesalers. ( you can negotiate)
There are a lot of marketplaces online in the market to find a good manufacturer. Indiamart, Alibaba, TradeIndia, etc are some of them.
Register with one of the marketplaces and do research and find the best three verified manufacturers. Now contact them separately and pick one manufacturer from three who is giving you better value for you and your product.
After manufacturing your product on your brand you can ship your inventory to your home or you can deliver the product directly to the customer depending on the business model that you have chosen.
This step is a crucial step for ecommerce business in India. You need to find a partner to ship your products to your customers.
The logistics involve the process of shipping the order to the customer and also tracking the order from picking up the product and successful delivery of the product to the customer.
In the market, there are a lot of companies and sites which provide courier services to Online businesses in India.
Some of the popular logistics companies are Pickrr, Shiprocket, Shyplite, IThink Logistics, etc
Here in every logistics company, there will be integrated courier services as well as integrated channel partners (ecommerce websites).
Delhivery, FedX, Ekart, BlueDart, etc are some courier services.
Shopify, Bigcommerce, Woocommerce, Magento, etc are some of the channel partners.
Before choosing the right logistics partner for your ecommerce business in India follows these steps.
- Availability for fast delivery
- Should have good customer support
- Look for the best pricing
- Look for the great service
- check whether if can handle multiple pickup points
- International shipment
- High security and technology
- Mostly check their track record (Clients review and ratings)
So it needs to do research before choosing the right logistics services because it is the phase where your item will reach your customer and make them satisfied.
Marketing Your Ecommerce Business In India
The final phase of your business has arrived. I mean that you have set up your business and your store is running but the thing is you need to attract the customers to your site to make a sale.
It is time to work now and you can’t sit back and expect customers to visit your store and purchase the product.
To build your customer base and online presence, the only way is to market your ecommerce business effectively. You need to target your audience and place your ecommerce store in front of them using marketing strategies.
There are three ways of marketing in the ecommerce world.
Start a Blog
The popular method in content marketing is blogging.
Start writing articles on your website in your niche/product and drive traffic to your blog using SEO.
People are always ready to gain knowledge on a particular product that they are looking for. So It will be great for SEO and the visitors can organically convert into your customers.
Start a Youtube Channel
The second popular method is starting a youtube channel in your niche.
If you’re good at presenting yourself in front of the camera and solving your audience’s problem it is better for you to build trust easily and conversion takes place easily.
Social media marketing
Another well-known content marketing is social media marketing.
Making your ecommerce business an online social media presence became mandatory. Instagram, Facebook, Linkedin, and Twitter are great platforms to promote your business for free and can easily grab the attention of the audience.
You can easily share ideas and photos and content related to your business on social media and build trust and drive your audience to your store and make them buy.
If you have some money to invest in marketing then is it better you can go for paid marketing. Here you can target a specific audience and drive your audience to your store. Paid marketing has become one of the popular marketing strategies in the ecommerce world.
Facebook is one of the most popular social media platforms with 2.91 billion active users on its platform globally.
India is one of Facebook’s largest user bases with 350 million users, followed by the USA at 200 million users.
80% of internet users use Facebook and hence it has the best-targeted advertising in the world.
Facebook ads are also the cheapest form of advertising online and it allows you to target the audience based on age, gender, location, interests, and online behavior.
Facebook also helps you to build an audience and retarget them using the Facebook pixel.
Google is the popular search engine used by most people. People do not go to google to waste time and they come in for something if they want it.
Google gets 5.6 billion search queries per day. So search volume per day remains consistent over time.
So you can target your audience through keywords relevant to your product or niche. Here
conversions will be higher and quality is higher.
The average cost to run an ad is $1 to $2 per click. You can set a monthly budget for how much you are willing to spend on ads.
Youtube is also owned by Google. So you can run youtube ads using google ads. It can be considered as another platform to run ads.
Instagram is owned by Meta(Facebook), so the ads you run on Facebook can also be run on Instagram.
Instagram ranks as the fourth most popular social media platform with 1.38 billion users across the globe.
India is the most popular Instagram user base with 180 billion active users and ranks at the top followed by the USA at 170 billion users.
Here you can run ads same as Facebook you can target the audience by posting ads as stories or posts.
Email marketing is one of the most powerful marketing strategies in the market right now. Every business out there will be into email marketing apart from paid and content marketing.
It is known that 87% of marketers use email marketing to build trust and make sales through their content.
Here you collect your customer’s data(Email Ids, Names) by driving traffic to the store or site using paid ads or content marketing.
When you have your visitor’s details in your email database it is easy to retarget them by sending emails alternatively.
There are a lot of email marketing tools in the market where you can send bulk emails with one click.
The best marketing practice is email marketing where you do not invest a lot of money and you can easily build trust and convert them into potential customers.
So the above are the marketing strategies you need to focus on them. You can mix up both free and paid ads to get higher conversions.
At last, you should know that apart from setting up your ecommerce business, only the marketing and sales give you ROI (Return on investment). So you need to work to grab the customer’s attention and build trust and make the sales happen.
ecommerce business is one of the modern ways of making money online. It also gives you freedom where you can be your own boss and make money online as a side hustle or full-time income while doing something you really love.
So we are at the end of the extensive article, where I have covered all the topics on how to start an ecommerce business in India. As I know this is not a one-step solution to start your ecommerce business but I gave you an exclusive route map of what you should consider before starting the business. I hope you really learned something new from this article.
If you’ve found this article helpful, you can share it with your friends or family.
Thanks a lot for reading. If you have any queries you can mention them below. I would like to read them and reply to you.
How to Start ecommerce business in India FAQs
How much investment needed to start ecommerce business in India?
The investment will vary for different models to start ecommerce business in India. It depends on which type of business model you choose. Initially, you need a minimum of 1lakh to enter into an eCommerce business and it may increase if the business grows timely.
Do you need a license for an eCommerce business in India?
Yes, if you want to integrate payment gateways on your eCommerce store you need to register for a business license under the Shops and Establishment act.
How to register ecommerce business in India?
To register ecommerce business in India you need to choose which type of business model you will run according to that you need to go for a particular type of registration.
Here are some documents to be in hand for ecommerce business registration.
1. Adharcard + Pand card
2. Passport size photos
3. Rent agreement or Electricity bill
4. Partnership Deed( for Partnership Registration)
5. Digital Signature Certificate (for LLP Registration)
6. Voter ID or Driving Licence
7. Bank account.
Is ecommerce profitable business in India?
Yes, ecommerce is profitable in India, as internet usage is going high people are always hanging on to their mobiles. And they are just buying things with one click from their comfort zones because of their busy life.
Can I start ecommerce business from home?
Yes, you can start your ecommerce business sitting at home easily. You just need a laptop and an internet connection. You can build an online store, Digital marketing, and Delivery management of your product by sitting at home by working for a few hours.