Determining Your Business Structure - THE PLAN

This is the second most important question after what will you sell. Ask yourself why people will buy from you. What's going to be different from your competition? Will you be less expensive(very tough for a new business to do and survive)? Have the widest variety? An unlimited money back guarantee? Will you offer unparalleled customer service? Will you offer lightning fast delivery? Free or lower priced shipping? Maybe your post sales support for the complicated products you're selling is going to be amazing?

Ask yourself again why people are going to buy from you. Find a way to separate yourself from the competition. There are many ways. It could be anything from a projected attitude(you're not cool if you buy it anywhere else, or we're the true experts in what you want) to your reputation(best service in the business), to your unique product line(we are the only ones selling it, or the only ones selling them this way).

"Why will people buy from you?"

Avoid trying to compete on price with other online businesses. It's a no win situation for you, and maybe your online competition. The truth is, most people don't comparison shop different stores online anyway. The majority comparison shop against what their local B&M is charging. That's where one of your advantages comes in. While those physical stores have rent, employees, insurance and other overhead, and tend to price based on other local stores in the area, you can out price them because of your lower overhead. There are also traditional sales tactics like selling some products at close to cost in order to get people to buy other products you'll make a profit on at the same time(known as leading.)

Deciding your business information:

Once you've answered the question as to what you are going to sell, you need to decide things about your new business. What will be your store name? How about your company or corporation name? Should you incorporate or become an LLC?

If you're putting in the effort to set up up your e-commerce business, you should strongly consider incorporating or becoming a Limited Liability Company. Doing that will protect you and your personal assets from a variety of issues, including bankruptcy and lawsuits. Many banks and merchant accounts will not allow a business to start up accounts unless they are a legal company. A lot of manufacturers and distributors also will not sell to you unless you prove you are a company.

When picking out a store name, use your imagination and think of something easy for customers to remember and associate with you. It doesn't have to be directly related to what you are selling, but that could be helpful. Your goal is to create a brand. You want people to hear your company name and instantly think of your store. Keep in mind when creating your store name that you will also be picking a domain name for it from what's available online. The domain name is what people will be typing into their computer to get to your site. Depending on what you name your store, people will assume that your domain name is the same as your store name. Before making your final decision as to your store name, it might be a good idea to check if the domain name or a variation of it is available. A combination of store name and what you are selling can also make a good domain name.

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