The first thing you have to do is to think long and hard about narrowing down on the world-perfect e-commerce business plan and e-commerce business model.
There are two types of business models that you can opt for. You can go with either a single vendor or a multi-vendor e-commerce store.
To this end, you can choose either a single product line. It has multiple product lines based on the budget you have set for yourself for your e-commerce business.
The advantage of going for this type of e-commerce business model is that it only involves two entities. A single seller who is selling his or her product to multiple customers. To this end, it is not only easier to keep track of the transactions between the two entities. Administrative costs are lower when you have to pay just one supplier, and you also have more control over the inventory at hand.
This kind of model calls for multiple vendors to sell their products to multiple customers, with the vendors all being required to be registered with your site.
The advantage of following this kind of e-commerce business model is that it gives you security in terms of making a sale – for instance, if one of your suppliers is unavailable to sell his or her products for whatever reason, you have others to fall back on. This not only helps you deal with demand fluctuations but also helps prevent a disruption in the supply process.
It is important to note here, that within this as well, you can choose to either sell a unique product yourself – either through your own online business or a similar platform or can choose to allow other sellers to sell their products on your store.
In the first situation, you could earn high margins. In the second, you will earn a commission, every time one of the sellers registered with your brand makes a successful sale.
Brand your brand
Once you’ve decided on which business model you wish to follow in order to build your e-commerce business and have narrowed down on the product or products you wish to sell, as well as the target audience you wish to sell to – the next step is to come up with the perfect name for your brand.
The kind of formation you wish to go with is, of course, depending on whether you wish to run the company independently, or want to bring in more partners. This is important because if you’ve opted for a corporate or partnership-based structure, then you are expected to file tax returns and have a tax ID number. Online businesses of this model require an Employer Identification Number (EIN) to open a business bank account. So, that business taxes can be filed in the next financial year. EIN is a unique number that identifies the world of your business.
If you have, however, opted for the sole proprietor model, then you need not have a tax ID number. You can use your allotted Social Security number instead.
Register your e-commerce business
Now comes one of the most crucial parts of starting your e-commerce business in India. Registering and completing all the legal formalities for the same.
Apply for the Director’s Identification Number (DIN), which can be downloaded using the DIN application (DIN 3 form) from the official website of the Ministry of Corporate Affairs. You can also apply for DIN online, by just attaching and uploading the necessary documents.
- Make sure you have your Permanent Account Number (PAN) and Digital Signature Certificate.
- Once you have received the DIN, you can apply to the Registrar of Companies (ROC). To check for the availability of the name you have chosen for your company. This can also be done by checking for it on the official website of the Ministry of Corporate Affairs.
- After receiving a confirmation on the name, you can incorporate the proposed company within six months. You also have the option of renewing the name of the company, by paying a certain fee to the world corporate.
- Apply for the Goods and Service Tax (GST) certification, Shops, and Establishment Licence. The necessary in cases of Payment Gateway Integration – and Professional Tax (PT).
- Apply to open up a Provident Fund (PF) with the respective Provident Fund Organization. Register with the Employees’ State Insurance Corporation for medical insurance of the employees. And finally, apply for the Certification of Company’s Incorporation. Where your company will be officially registered under the Company’s Act, 2013.
Opening a bank account
Once your company is officially registered under the Act. You will need to open up a bank account for the same. The account opens with any bank but opens in the official name of the world company.