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And they collect them all. One by one - lots of data with little or no value or connec-tion to one another. These are the leaves. Useful, but only if attached to the three.

Then come the little branches. You read a book and one chapter mentions online commerce orders. Another mentions products that might be successful if sold online. So you collect these little branches but just like the leaves, they have little value on their own.

What are the big branches? They’re things like information on potential suppliers, picking and packing, registering the business and the likes. These, and other branches build the knowhow usually not seen by the untrained eye, but valuable nonetheless. And it’s all connected.

The leaves, the little branches, the large branches - they build one piece. One vision. To build a successful online store, you need the whole tree. You need the larger vision and you need to understand how things connect.

This guide is the trunk, the branches and most of the leaves in this tree of knowledge. Study it, apply the concepts and you can build the successful online store you’re dreaming about.

Make no mistake: starting an ecommerce website is easy. Building an ecommerce business is harder. But building a successful ecommerce business is almost impossible if you don’t have the right mindset.

This guide axes through the unessential and helps you understand the big picture. Once you’ve done reading these ebook I hope you will have the right mindset, the complete vision and the right know how to building your online business. You are the lumberjack sharpening your axe and the tree holds the building blocks of your future ecommerce business. Let’s start chopping.

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Chapter 1: Finding your market, planning and discovering the right business model

“Give me six hours to chop down a tree andI will spend the first four sharpening the axe.”

Abraham Lincoln

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If you are reading this, you're probably thinking about opening an online store and you need some help to get your business up and running. The good news is this is the right place. This guide contains all the information you need to get your business off the ground and turn it into a success.

I'll guide you through the most important steps in starting an online store. You'll notice that, just like a car, the things that make an online store are usually under the hood. Of course, an effective web store and a carefully crafted logo are important but even more important are the products you sell, where do you get them from and how you fulfill your promise of sending them to your customer.

To get an overview of what are the main aspects of starting and growing your store, I’ve put together a list of the things you need to get right. There are ten areas you need to focus on and these are:

• Finding your niche and understanding your market. Building The Plan; • Finding the right business model; • Registering your business; • Finding suppliers, developing a supply chain, pricing the products; • Developing a fulfillment operation (pick, pack, ship and handling returns) and preparing for customer care; • Building a brand identity and building your web store; • Posting products and adding relevant content; • Adding sales channels to your business; • Marketing your store; • Testing and fine tuning;

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Lots of bullet points, don’t you think? Of course they are: an online store is still a business and businesses are not simple. If you're trying to build a business because you need money fast or because you're tired of your day to day job, you might want to reconsider.

The truth is building your store or any other type of business is hard work. Seems obvious, right? If it were easy, everyone would be running their own business. It's hard but if you are ready to take on this challenge, prepare yourself with grits and start chewing as much info as you possibly can. The more information you have and the more data you gather, the more likely you are to succeed.

This guide will work as a framework, an outlook on what you have to do to maximize your chances for success. Depending on your current location and specific market factors, you may need to adapt as you go but you can rely on this framework to guide you through.

So let's dive in:

1. Finding a niche for your web store. Building The Plan.

There are three very important things to take into account when starting your online store and looking for your niche:

• provide value for other people • provide the type of value that other compa nies don't • provide value for lots of people

The first thing you have to understand is that your business has to provide value for other people. Just as people do, businesses strive for purpose. Without providing value in a clear and straightforward way, you cannot expect your business to be successful.

Find out what people need or want. A combination of both is great but if you have to choose, go for need – it is way better in the long run. Find out how you can supply these products or services. This is the value.

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The second thing you have to take into account is that other online stores may pro-vide the same kind of value. Do your research. Google the type of products you want to sell. Check Google Trends* to see how the terms for your products have evolved throughout the years. Compare the number of product searches with the number of companies providing the same type of value you're planning on offering.

There is a dynamic between demand and supply that you cannot ignore. You are looking for a market that is booming but there are not yet that many competitors. And that's where the third point comes in: you have to provide value for lots of people.

You may like hoodies for cats very much. But it is probably not such a great idea. You are addressing people in your country (don't think you're going international just yet), who own cats, who think that dressing up cats is a good idea and who like hoodies. A pretty small market, don't you think?

So remember: the lower the market size, the lower your chances for suc-cess are. The higher the market size, the higher are your chances at building a great business.

See the graph on the next page to get a glimpse in how would you better position your company.

* https://www.google.ro/trends/explore

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You have two great combinations that you can choose. Both need as many customers as possible. You should strive for a market where there are plenty of people ready to buy your product.

The ideal situation is the one in the lower right corner. That's where few compa-nies will compete with you and there are plenty of customers willing to buy your products. However, to be able to position your online shop there, you need to identify a need before the competition . You need to get as much market share as possible. That’s not easy - emerging markets need to be nurtured. As a pioneer in an emerging market, you'll need to market your products and your brand, advocate product usage

and purchase. You will have to build market and that is no easy feat for a startup.

The upper right area shows a combination of many competitors and many cus-tomers. These are established markets and you're more likely to succeed if you prove yourself better than at least a part of the competition. Great customer service, con-stant communication and slight adjustments to the business model will allow you to compete against established leaders.

The PlanOnce you have discovered the kind of product(s) you will be selling it's time to start building The Plan. The plan is not a business plan. Before you have a business plan you have to know where you wanna go with your online store.

There are nine big questions you need to answer. You have to be as pragmatic as possible when answering these questions because when you start building your online store there won't be any place for wishful thinking.

Each of these questions will require a deep analysis before having an answer. When you answer these questions, you will have a clear view of what you can achieve:

• What are you selling? • Who are the competitors? • Who is the customer? • How do you get the customer to buy your products? • Who supplies the merchandise? • How much will the products cost and what is the profit? • What are the costs you expect? • How are you going to cover the costs? • How much revenue are you expecting in the first 3-5 years?

Answering these questions will get you thinking and preparing for the future. But they are more than that. They are the basis for starting your store and the basis for build-ing a business plan.

Find information to support your expectations. Question your own assumptions because the market will surely do so. Answer these questions and you are likely better prepared to starting your online shop. Remember, "failing to plan is planning to fail".

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You have two great combinations that you can choose. Both need as many customers as possible. You should strive for a market where there are plenty of people ready to buy your product.

The ideal situation is the one in the lower right corner. That's where few compa-nies will compete with you and there are plenty of customers willing to buy your products. However, to be able to position your online shop there, you need to identify a need before the competition . You need to get as much market share as possible. That’s not easy - emerging markets need to be nurtured. As a pioneer in an emerging market, you'll need to market your products and your brand, advocate product usage

and purchase. You will have to build market and that is no easy feat for a startup.

The upper right area shows a combination of many competitors and many cus-tomers. These are established markets and you're more likely to succeed if you prove yourself better than at least a part of the competition. Great customer service, con-stant communication and slight adjustments to the business model will allow you to compete against established leaders.

The PlanOnce you have discovered the kind of product(s) you will be selling it's time to start building The Plan. The plan is not a business plan. Before you have a business plan you have to know where you wanna go with your online store.

There are nine big questions you need to answer. You have to be as pragmatic as possible when answering these questions because when you start building your online store there won't be any place for wishful thinking.

Each of these questions will require a deep analysis before having an answer. When you answer these questions, you will have a clear view of what you can achieve:

• What are you selling? • Who are the competitors? • Who is the customer? • How do you get the customer to buy your products? • Who supplies the merchandise? • How much will the products cost and what is the profit? • What are the costs you expect? • How are you going to cover the costs? • How much revenue are you expecting in the first 3-5 years?

Answering these questions will get you thinking and preparing for the future. But they are more than that. They are the basis for starting your store and the basis for build-ing a business plan.

Find information to support your expectations. Question your own assumptions because the market will surely do so. Answer these questions and you are likely better prepared to starting your online shop. Remember, "failing to plan is planning to fail".

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2. Finding the right business model for your online shopYou're probably thinking the eCommerce business model is pretty straight forward. You post some goods online, someone orders them and then you ship them and collect the big bucks.

Well, guess what - even though logistics and operations may look the same in all ecommerce business, the differences can have a huge impact on how you're building yours.

I'll walk you through the 4+1 main segments of ecommerce business model. Than we'll look through different implementations of the B2C model (business to con-sumer), the one you're probably aiming for.

B2C eCommerce

B2C (Business to Consumer) Ecommerce model is the most popular form of com-merce online.

Online retailers (aka "The Business") will stock goods, post them online and sell directly to the customer ("The Consumer"). The Consumer will reach the web shop, browse and hopefully buy the items posted online. When this happens, the opera-tional team will be notified. They pick the merchandise from the warehouse shelf, pack it and ship it to the consumer.

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Most of the online shops you are familiar with are focused on this type of ecommerce business model. Some examples you might be familiar with are Walmart.com,Target.com or HomeDepot.com.

But B2C is not just for the big players. Many eCommerce startups employ this type of business model. For example Bonobos.com and WarbyParker.com are doing just great selling directly to the consumer. And who are they?

Bonobos is a fashion ecommerce retailer for men. The company manufactures and sells its own line of men wear. Its main selling point: making shopping easier.

WarbyParker.com sells stylish eyeglasses and sunglasses directly to the consumer. It is a great example of finding the right type of product at the right time and packaging it with the right type of social activism twist. When you buy a pair of glasses from them, a social mechanism makes sure that part of the money you've paid go to those in need of eyewear in the developing world.

How come Amazon, the largest online retailer isn’t listed here, under B2C? Glad that came up. See, Amazon has started as a B2C business but since then it evolved past a single model. Most of its sales are still directed at the end consumer but Amazon also ships items to businesses (B2B eCommerce) through its Amazon Supply outlet. It also brings other sellers (businesses and consumers) in contact with its own customer database. This means Amazon is indeed the largest online retailer in the world, but it's not just a B2C eCommerce website.

B2B eCommerce

Another business model you might look into is the B2B eCommerce model. This model allows Businesses to sell merchandise to other Businesses through an online outlet.

Why mention this model? Couldn't those listed above just allow businesses to buy from their shops?

Yes they could and most do. But here we have a different type of company, different type of products and most of all – different number of items purchased and different pricing.

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Say you're a company manufacturing hoodies for cats. Supposedly your market is not as popular as the smartphone market and your factory can only ship 1000 beautiful cat hoodies every year. You could, of course, open an online shop and ship these hoodies directly to the consumer. But you'll find out that it implies development costs, marketing costs, customer service costs and you just want to be in the factory all day, trying to finally manufacture the perfect cat hoodie.

Along come Business A and Business B. These companies are retailers and have an established commerce operation, with a huge database of customers and they think they can sell 500 hoodies this year. And they want everything you manufacture.

Before these companies came along you've done the math and thought: "My cost for each manufactured hoodie is 10$. I'll sell these hoodies for 20$ and make a nice

profit." But then you went on and started selling on your own and saw that including marketing, shipping and other expenses your cost rose up to 18$ and you're actually only making 2$. Not that much, is it?

But now both Business A and Business B decide they can offer you 15$ for each hoodie and they are going to buy everything you manufacture. On one hand they are offering you less than your asking price but in the end you’re earning 5$ instead of 2$ so you decide you're better off selling directly to Businesses.

This simplified scenario is the basis of the B2B ecommerce business model. It means that businesses (either manufacturers or wholesalers) sell directly to businesses and offer incentives to those that buy in bulk. The usual incentives are lower prices, extended payment conditions, free shipping or custom manufacturing.

Some of the most popular B2B ecommerce sites are Quill.com, AmazonSupply.com and of course AliBaba.com, the largest B2B marketplace, connecting businesses in China to buyers all over the world.

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Say you're a company manufacturing hoodies for cats. Supposedly your market is not as popular as the smartphone market and your factory can only ship 1000 beautiful cat hoodies every year. You could, of course, open an online shop and ship these hoodies directly to the consumer. But you'll find out that it implies development costs, marketing costs, customer service costs and you just want to be in the factory all day, trying to finally manufacture the perfect cat hoodie.

Along come Business A and Business B. These companies are retailers and have an established commerce operation, with a huge database of customers and they think they can sell 500 hoodies this year. And they want everything you manufacture.

Before these companies came along you've done the math and thought: "My cost for each manufactured hoodie is 10$. I'll sell these hoodies for 20$ and make a nice

profit." But then you went on and started selling on your own and saw that including marketing, shipping and other expenses your cost rose up to 18$ and you're actually only making 2$. Not that much, is it?

But now both Business A and Business B decide they can offer you 15$ for each hoodie and they are going to buy everything you manufacture. On one hand they are offering you less than your asking price but in the end you’re earning 5$ instead of 2$ so you decide you're better off selling directly to Businesses.

This simplified scenario is the basis of the B2B ecommerce business model. It means that businesses (either manufacturers or wholesalers) sell directly to businesses and offer incentives to those that buy in bulk. The usual incentives are lower prices, extended payment conditions, free shipping or custom manufacturing.

Some of the most popular B2B ecommerce sites are Quill.com, AmazonSupply.com and of course AliBaba.com, the largest B2B marketplace, connecting businesses in China to buyers all over the world.

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B2B2C eCommerce

So you think of new sales channels, the type of opportunities where your cat hoodies can sell even better if exposed to a larger number of customers. Kinda like Amazon or eBay.

Larger retailers, such as Amazon, offer you the possibility of selling on their own website. You supply the goods and post them on the Amazon Marketplace, for exam-ple, and next thing you know -bam! – your cat hoodies can be purchased by Ama-zon's customers. Depending on your decision you can either fulfill orders on your own (receive orders from Amazon, pick, pack and ship yourself) or just let them handle the logistics, through their Fulfillment by Amazon* program.

C2C eCommerce

We've covered businesses selling to customers and other businesses. Shouldn't con-sumers sell to other consumers too? They do and this area is actually booming.

Consumers meet other consumers through online marketplaces. By far, the most popular is eBay.com, the place where anyone can sell and buy anything. Even though eBay hosts businesses also, let’s just focus on the individuals selling their items through these type of systems.

The online marketplaces enabling C2C eCommerce help sellers post their goods online and buyers to find them.

There are many mechanisms in place to handle these transactions, things such as product showcasing, selling, payment and feedback. But if we were to look at what makes C2C marketplaces work this has to be the network effect and peer review. The network effect means that the more people engage in trading goods in a marketplace, the more people will come and more successful the marketplace will be. This effect also ensures seller and buyer lock-in: the more people are buying or selling, the harder it is for someone to leave the marketplace. The reason – where else will this person find so many customers or merchants?

The second big feature that defines C2C marketplaces is peer review. When you're buying or selling through this type of systems, you really don't know who's on the other end. And because relying on sheer luck and having faith in the good character of people is not the most effective way to go, marketplaces introduced peer review.

* http://services.amazon.co.uk/services/fulfilment-by-amazon/features-benefits.html

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When someone buys from a merchant and they get what they asked for, they offer a positive review. When they don't, and things take a turn for the worse, they slap the merchant with a negative review so others know the merchant is not to be trusted.

The same goes for the merchant. If the customer doesn't pay up or somehow tricks the merchant – there's always a bad review at hand to get things leveled.

Once these reviews start piling up, they start working as a certificate of good standing (or bad standing). If you are a honest merchant or customer, you won't leave the marketplace that stores this certificate. Reviews are a valuable asset helping members trade in better conditions.

Why mention all these? Because building a C2C marketplace is really, really hard and expensive. For example eBay lost $100 million trying to enter the Chinese market before giving up to AliBaba. It's that kind of expensive so I would rather advise against building a general C2C marketplace if you're a startup.

You could, however find a niche where individuals are willing to trade with one another and cater to that specific niche.

For example: Etsy.com is famous for building the biggest handcrafted C2C ecom-merce community. Uber and Lyft bring individuals in need of transportation in contact with those able to provide these type of services. In fact, Andreessen Horow-itz, one of the leading Venture Capital firms lists Online Marketplaces* as one of the most promising directions for startups.

C2B eCommerce

Yes, C2B (Consumer to Business) eCommerce is an actual business model, though not exactly as you’d imagine. It might look a little off but there are great ways to start an C2B eCommerce business. There are also some great established services that help connect individuals to the businesses in need of their products or service.

* http://a16z.com/2015/01/22/online-marketplaces/