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How to Start an Online Business in India?

Before creating a business plan, choose what kind of online business you want to set up in India. Do you want to start a B2B business like that of Flipkart or C2C like that of Quikr or OLX? A B2B is the kind of business model where the seller is retailer or the supplier/manufacture and the buyer is a regular user. In a C2C business model, the buyers as well as the customers are regular users.

C2C business model

In this type of model, the users upload the pictures of the items that they want to sell, like their used cars, furniture, etc to other customers who are willing to buy them. In this type of online business model, you are not a business owner but an individual who wants to buy and sell goods online. No permission is required to register to these websites and start selling your products if you are individual customers.

It is easy to start a C2C business

A C2C online business model need not have a payment gateway either as only listing of the products and space to register as a user is required. start an online businessA C2C online business is low cost and does not require a lot of investment in terms of starting a website providing this service. All you need is a dedicated web server, a fully functional website, a web URL, a technical team on the server side, an operational and a management team for sales and promotion. You could be housewife sitting at home, wanting to sell used items. These kinds of websites give anybody a scope to sell their items for free by registering on this website.

Starting an eCommerce business

A B2B model for an eCommerce website requires a lot of investment. You have to invest in lining up the following processes.

  • Making a list of products from individual sellers and brands you want to sell
  • The categories that you want to sell
  • Website design and layout
  • Functionality and testing
  • Payment gateway facility and other check out options
  • Acceptable bank cards and coupons if any
  • Logistics and supply chain management for deliver or return of goods
  • Operational management to ensure the smoother functioning of all the ecommerce related activities on the website
  • Marketing and promotion team for branding and promotion of the ecommerce website on a variety of platforms.
  • Financial management team that takes care of bookkeeping and auditing
  • Technical teams to rectify modify the code to ensure that every aspect of this eCommerce website is functional all the time.

Be careful while operating an eCommerce business

Once you have all the teams set up, you can contact retailers and brands to sell their products on your website and quote a margin for the profit you make. All these details also go into the business plan. You are not allowed to sell any items considered illegal in India. If you want to sell items from a foreign brand, they are first required to register with RBI, comply with their rules and guidelines for selling their products before setting up an online retail store on your website.

Legal Requirements

Even, if you start an ecommerce company, you must have a physical business establishment and register in the required categories to set up an office, and also comply with the guidelines of cyber law for selling goods. You need the following to set up an online store.

  • Business name and domain registration
  • Business entity registration, i.e. if it is a sole proprietorship, LLC, or a private limited company
  • All employee registration details for health and insurance.
  • Current account set up with a bank.

You need to have a good payment gateway if you want to start your own eCommerce website

All the registrations and licenses will be done in a month’s time. You have two options to set up a payment gateway. One is to choose a payment gateway option which requires no fee to set up. But the transaction rates for this gateway will be very high. The second option is to pay a fee to set up a payment gateway. For this, you will need to submit the ID proof and the address proof of your office. You will get a processed in ten to fifteen days for your website.

A dedicated customer support and a solid marketing strategy is very important

You will also need a customer desk and a toll free number so that the customers can reach your business for inquiries and feedback. You can choose many digital marketing options to advertise and promote your business in India as well as globally. The options to promote your online businesses are umpteen. Choose the best budget which suits you and helps you reach the targeted customers and get maximum conversions. Choosing a marketing model for your eCommerce business is as vital as choosing a business plan.

Choose your marketing model wisely

The marketing model and also how you sell your products must be defined clearly in the MOA (memorandum of associations) and AOA (articles of associations). If you define in the MOA that your ecommerce company is an IT company, then chances of getting direct investment from foreign companies is very high. So, if you define your company as an e-tailer or an IT company, it depends on the services you provide and the technology you use.

Start small and simple

Starting an ecommerce company does not require a lot of capital unless and until you wish to infuse latest technologies and storage capacity and many other technological tools to run your ecommerce websites. If you use a simple layout and let the merchants upload the products, then all you will be doing is providing them link and space to upload their products and sell. If you want to take the responsibility of creating the inventory for each and every merchant, the cost of maintenance, storage, and security will be very high. Choose your business and inventory model along with marketing model and create a business plan to find investors.

Spend your money wisely

It is easy to start an eCommerce company, as you don’t need a large physical space to set up your company. You could have a small office, but you could spend on server space and security of your website.


Sadiq Iqbal

Sadiq Iqbal is the Lead Author, Editor and Head of Operations at Business Definer. Sadiq has a Masters in Business Management as well as years of experience, working in various business management roles at multiple organizations. Since joining Business Definer, Sadiq has helped numerous founders and business aspirants solve their most difficult problems and get their entrepreneurship dreams kickstarted.

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