Guide To Ecommerce For Home Business Startups

If you're thinking of setting up a home business, the term 'ecommerce' may seem intimidating. Perhaps it conjures up images of Wall Street, company floats, and the excesses of the dot com bubble. Fortunately for prospective small business owners, the dot com bubble burst, and with it the myth that you need to be a large company with deep pockets to profit from ecommerce.

Last year, it is estimated around $170 billion was spent online (Credit Suisse). And this figure is only set to grow, as broadband becomes cheaper and more accessible worldwide. Small and home businesses still have ample opportunity to develop their own piece of that pie - provided they don't make some crucial mistakes.

The foundation of any successful business is a good idea. In ecommerce, this idea must include a viable plan to draw an income, and a website marketing plan that takes into account current best practices.

The first idea - a plan to earn income from the venture - may sound obvious, but this was a key failure in a lot of the dot com startups of the early days. A modern variation can be relying only on an income stream like contextual advertising without having any products to sell. Unless you're google, it's dangerous to rely only on advertising. A good ecommerce business idea will incorporate the sale of physical or intangible goods. Intangible goods can include ebooks, online videos, downloadable software, audio, or other electronic media.

Intangible goods have an advantage in that the profit margin is higher. But some niches and industries are better suited to the sale of hard goods.

The online world is more fickle than offline, in that a prime location is not quite as fixed. In the offline world, if you had the money, you could rent a retail space in a large shopping square and be guaranteed a certain amount of passers-by. In some ways this is true online, but in other ways it is not quite so accurate.

If you were relying on pay-per-click (PPC) advertising as a means of sending traffic to your site, this holds true. Deep pockets can buy more traffic. The flip side is that even with PPC, you can still get a good amount of traffic without blowing your budget. And it can be highly targeted, profitable traffic. In this case, a certain investment of skill is required to learn the system. Fortunately, there are a lot of good ebooks that explain it fully. Perry Marshall's is a good one.

PPC is not the only means of supplying traffic to an ecommerce site. Natural search results are the 'holy grail' of traffic because it is essentially free. Rank well, and you'll get a lot of traffic which you won't have to pay a dime for. With natural search, this scenario (big business, prime online real estate) doesn't have to hold true. Optimizing for natural search does take some skill, but it can certainly be learnt by the prospective home business owner.

Traffic and a viable means to produce an income are the two successful ingredients of ecommerce. Master those, treat your venture like a real business, and the income earned online can be significant.