Open your own online store in just 7 steps
From product selection to legal requirements, here’s what you need to know about building an e-commerce business.
8 min read
If you’re interested in creating a space to sell your own products without having to put down a large initial investment, then setting up an online store might be the perfect choice for you. It can seem daunting if you have no prior e-commerce experience, but opening an online store is much easier than you might think. Keep reading to discover how you can set up an online store of your very own and manage it successfully.
Before we dive in, what exactly is an online store? An online store is a store that sells its products over the internet, either through a website, app, or social media. Nowadays, most physical stores also have an online version that helps them reach more customers and generate more revenue on top of what they receive from their in-store sales. It’s no secret that e-commerce is an ever-expanding industry in Spain. Data from the Spanish National Statistics Institute (INE) shows that, in 2020, online shopping accounted for 23.5% of all purchases made in Spain. It’s interesting to consider not only the growing number of e-commerce consumers, but also the rapidly increasing revenue this sector generates. In just 10 years, Spanish e-commerce companies have gone from generating revenue around €6 billion in 2008 to over €41.5 billion in 2018.
The numbers may speak for themselves, but they don’t tell you much about how to open an online store on your own. They do, however, show that you’ll be breaking into a booming sector if you choose to go down this route. So, let’s find out how to set up an online store from the ground up.
7 steps to open an online store
Before starting your e-commerce business, you’ll have to ask yourself a few questions to help you build a solid foundation for success.
1. What do you want to sell?
It might seem obvious, but before you set up an online store, you have to decide what you’re going to sell. This is the first and most important step, so think about it carefully. Search, compare, and search again for information on competitors, market saturation, prices, revenues that other companies generate by selling similar products. These are just some of the things you need to consider. Other factors will come to light when you begin researching. The more information you collect, the better.
Once you’ve decided on the product, you need to think about what you’re going to call the store. Choose a name for your brand. Make sure it is easy to remember (and pronounce). Then, do a quick online search to check whether the domain is available. This will heavily influence your choice, so it’s vital that you make sure the domain is free before settling on a name.
2. To whom do you want to sell?
When setting up an online store,who you are planning to sell to is just as important as what you are planning to sell. Even if you have an amazing product, your store will fail if no one wants to buy it. So, now you have to think about which buyers you’re going to target. This goes beyond researching their age and geographical location. You have to consider their interests, socio-economic factors, cultural characteristics, buying behavior, the device they prefer to use when shopping online (computer, smartphone, or tablet), and so on.
Identify your target market and find out everything you can about it. The more you know about your potential customers, the better you’ll be able to connect with them, grab their attention, and market your brand.
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3. How are you going to sell?
Now that you have a product in mind, the next step is to think about how you’re going to sell it. To open an online store, you need to find an e-commerce platform to join. Although you can set up an online store without using pre-established e-commerce websites, this is a more costly and time-consuming option. You should only consider this option if you have the resources and skills required.
There are so many platforms to choose from: Shopify, PrestaShop, TiendaNube, Wix, WooCommerce, the list goes on. We recommend doing your own research and selecting the option that best suits your plans: do you want to pay for the platform or not? Do you have experience in web design, or would you rather be offered a simpler interface? Each platform offers different features that you’ll have to assess depending on your specific needs and wants.
At this point, you’ll also have to think about your prices and possible payment methods. Search online to find out your competitors’ prices, and factor in the costs for manufacturing the products (if you’re handling this step yourself) or buying them from a supplier. The margin between the production costs and the retail price will determine the revenue you’ll receive after the sale, so think long and hard about it.
Pay special attention to which payment methods you choose to offer. To give you an idea, data from the Cetelem E-Commerce Observatory 2020 (Observatorio Cetelem eCommerce 2020) shows that the most popular payment methods are PayPal (46%), debit cards (27%), and credit cards (13%). A simple and intuitive payment gateway will boost your sales and reduce “cart abandonment.” Don’t make the payment process too long with endless forms and unexpected errors. Get to the point—personal information, address, shipping and payment method. Ideally, all this should fit on one page.
4. When are you going to start?
You may only be in the ideation stage right now, but it’s crucial to set deadlines if you finally decide to commit to the project. Opening an online store requires a high level of organization as there are so many varying factors to consider. Think carefully and be realistic—what’s your start-up budget, what do you hope to achieve with this business, how are you going to manage the store (do you need more team members or is one person enough), what are your expectations in terms of profits (or expenses)? Make a list of all the questions that come to mind. Then, try to answer them as honestly as possible. This is a good starting point for managing future expectations. Once you know the answers to these questions, you can get a better sense of when you can expect to have your store up and running.
5. Where are you going to sell?
Selling online means you can reach a lot more people than you would in a physical store. At this point, you’ll have to decide on where you’re going to sell your product. This will affect a number of aspects of your online shop. For instance, will you sell only domestically or will you also ship abroad? This decision will affect your shipping and returns policy, exchange policy, and more. Decide on this when you complete your market research and have fully assessed which countries or regions may have potential buyers for your product.
6. Why do you want to sell this product?
You need to set yourself apart from everyone else when opening an online store—with your brand, your product, and your intentions. That is, you need to stand out with your value proposition. Why is your product valuable to customers? Clearly outline why you sell the products you sell, what your customers gain by buying them (apart from the product itself), and what motivated you to open your store in the first place. Write your USP (unique selling proposition) prominently on your site so that your visitors will instantly understand what you’re selling, why you’re selling it, and how it will improve their lives.
This doesn’t have to be overly complicated. It can be as simple as saying your products are handmade, sustainable, or they support a social cause. Make sure you choose something you really care about and not just a fleeting trend. Honesty sells!
7. Which requirements do you need to meet?
Last but not least, you’ll need to bear in mind the legal aspects involved in creating an online store. It’s best to seek comprehensive advice from professionals in the field, but there are a couple of things you’ll have to do no matter what.
Remember, you must register as a self-employed worker (autónomo) with Social Security, which is also known as “RETA” registration in Spain (registering in the Special Regime for Self-Employed Workers and Freelancers). You must also register with the Tax Agency under the e-commerce activity regime.
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Opening an online store is a full-fledged business venture. If you’re thinking of setting up your own small business, N26 has several bank accounts specifically designed to support budding entrepreneurs. From the free standard N26 Business to N26 Business Smart, or the more premium N26 Business You and N26 Business Metal accounts. Whatever option you choose, you’ll be eligible for a range of benefits like cashback on every purchase, innovative saving and budgeting tools, and more. Conveniently manage your finances straight from your smartphone, so you have more time for what really matters—growing your business.
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