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Starting an Online Business in India - Things you may Keep in Mind | Seller Blog

Starting an Online Business in India - Things you may Keep in Mind

Find out some of the factors to be considered before starting an online business

08/06/2023
Starting an Online Business in India - Things you may Keep in Mind
As one of the fastest-growing sectors in the past decade, e-commerce sector has managed to become something where many Indians interact with on a daily basis. While traditional businesses usually cater to a local/ nearby customer base, it may be possible for businesses carried out on e-commerce to reach a higher number of potential buyers across different geographies. As a concept which is comparatively more accessible and convenient for customers as well, it is no surprise that selling and buying online has taken over the country by storm.

Expected to grow at a rate of 31.4% in the 2023-2028 period with total e-commerce sales worth around ₹3.36 trillion in 2022 alone, the Indian e-commerce market has a huge potential for further growth. Sounds exciting, doesn't it? But this excitement may often come with a series of questions, the most common being-

Factors which could be considered before starting an online business?
Factors which could be considered before starting an online business ?
One of the ways of doing business online can be by simply signing up on an e-commerce marketplace and registering your business entity as a seller. Different marketplaces have several guides and instructions that you can follow as you start your registration process. Growing your business can depend on a variety of factors that you need to take care of from the very beginning.

But that begs the next question - What are the factors affecting the growth of an online business?

Well, we have compiled a list of things that might be of importance for your consideration if you want to start and grow your online business. So let's not waste any more time and get started right away!

To Get Started
Certain elements including the following three can potentially play an important role in ensuring that your business gains the necessary momentum to take off once you launch it online.

1. Creating a Business Plan

A business plan is the first and foremost step to ordinarily take into account while preparing to launch your business. Setting realistic goals, deciding your business approach, assessing the customer base, determining the products you intend to sell etc. are few aspects that may form part of your business plan. Creating a business plan can be beneficial, as it can help in anticipating and avoiding any potential obstacles you may face while selling online.
Creating a Business Plan
To create a business plan for selling online, you may start by figuring out what you want to achieve as an entrepreneur. Then, you may proceed to creating a plan for approaching customers for potential sales, and thinking about any problems you might face and how to solve them. These may include financial planning, sourcing of products and other similar factors.

As a beginner, you may have several ideas in mind and the confidence to successfully use those ideas to build a business. However, a business plan will most likely act as a foundation for your online business, as it should possibly cover all the points you need to consider once you get started.

According to a survey, creating a business plan creates a 30% greater chance of growth for any online business. So it may be worthwhile to develop a plan before diving into your selling journey.

2. Studying your Target Market

Many sellers can end up making the mistake of thinking their products can be sold to everyone, which leads them to advertise their business to a huge number of people. But this may often result in loss of resources, efforts, and in some cases, loss of potential customers. The only way to avoid this is to research and find your target audience beforehand. Each product category can have its own customer base, which is the only group of people your business needs to reach primarily.

To find your target market, you may figure out who your ideal customers are based on factors such as their age, gender, interests, spending capacity, behavior etc. Once this is done, you may have a general idea of the type of people you need to target for selling your products. Marketing your business to people who fit your customer profile may likely result in better sales.

3. Planning the Expenditure For your Business

While this ideally comes under your business plan, creating a functional and realistic expenditure can play an important role in helping your online business be prepared for unforeseen scenarios. Many businesses often make the mistake of not setting up a clear plan on expenses and end up making expenses that could affect profitability.
Planning the Expenditure For your Business
There could be a variety of businesses that one can start quickly- with or without an investment. So why is this important to plan the expense part if you don't have an investment at all? Well, creating a business expense plan essentially might help you realise your growth potential upfront and lets you take affordable risks.

4. Sourcing Products

A business involved in selling products may require to determine if they will be creating/ manufacturing the products, if yes, what will be the source of raw materials, or if they will be procuring products from third-party sources. While one may often look for cheaper options, it may be vital that any raw material used for your products is of good quality. By sourcing products from trustworthy suppliers, a better quality and variety of products offered to customers may be assured.

Additionally, building relationships with suppliers may lead to better pricing and terms, which can help the business save money and improve profitability. However, conducting thorough research while sourcing products can also be important. This is because acquiring them at competitive prices can help the business stay competitive in its market, stand the opportunity of attracting more customers, and potentially increase sales.

Ultimately, sourcing the right products may be critical to building a strong reputation for the business and keeping customers satisfied. Therefore, investing time and effort into finding reliable suppliers and sourcing the right products to ensure the success of your business after launch may be worthwhile.

5. Creating a Strong and Efficient Logistics Network

Creating a Strong and Efficient Logistics Network
Your business is ready to take off since you received several purchase orders. But all this means nothing if you can't ship your products to your customers on time. This is where setting up a strong logistics network comes into play. Logistics means the activity of storing, transporting and delivering goods to your customers, taking care of returns etc.

A study conducted by Convey Inc. found that about 84% of customers wouldn't return to a seller after a single poor delivery experience. Naturally, this means that your business growth is directly impacted by the quality of your logistics partner. Some popular options for sellers operating in India include shipping through Government backed India Post, or other third party service providers, which are used by sellers across India.

Implementing the below-mentioned factors, amongst others, to start scaling your online business right after you launch, can be a good idea.

1. Tracking and Analysing Your Business Data

A great way to know what needs to be improved or changed within your online business is to track your growth as a seller. Ideally, this can allow you to measure your performance, identify opportunities, and make informed decisions based on real-time data.
Tracking and Analysing Your Business Data
To start tracking your business data, you may do so by identifying your key performance indicators (KPIs), which are metrics that reflect your business goals. For example, your KPIs might include conversion rate, website traffic, customer retention rate, and revenue.

These may sound like complex concepts but are simple metrics that could potentially be very advantageous for an upcoming online business owner. Analysing your business data can help you discover valuable insights and make data-driven decisions.

2. Effective Advertising

Knowledge about any seller’s business amongst people could be an important factor for growth of business. One way to make this possible is leveraging the right advertising mediums for right target audience.
Effective Advertising
Marketing campaigns can serve as a major boost for sellers and their businesses by providing better benefits such as website traffic, multiple leads, and in some cases potentially increased sales. These generally involve promoting your products or services to your target audience through various offline/ online channels such as social media, email marketing, written content like blogs and more.

Marketing campaigns conducted digitally may often end up providing excellent results, and may also be cost-friendly. But the case could also be different for sellers who possess the requisite funds, since offline campaigns may also prove to be beneficial for business. Thus, by targeting your ideal customers through various channels, you may have a possibility to increase your online visibility, and potentially generate leads, boost sales.

3. Offering Discounts and Coupons

Offering Discounts and Coupons
Another example of a way to facilitate growth of your online business effectively is to appeal to your customers by incentivizing them. This could include offering them offers, discounts and coupons that may interest them in buying your products with more excitement. This may often help new customers become accustomed to your brand and potentially build trust at a quicker pace.

Means such as discounts and coupons can also help to retain customers and encourage repeat business. In fact, a study by Invesp found that customers who receive a coupon are 27% more likely to make a repeat purchase. However, it may be important to use discounts and coupons strategically. Offering too many discounts may devalue your products and possibly hurt your profit margins. It may be worthwhile to be mindful of balancing the benefits of offering discounts with the potential drawbacks it can offer.

4. Planning to Sell Globally

Planning to Sell Globally
Of course, as a beginner, your top priority might not be to attract foreign customers. But remember, one of the major advantages of selling online could be access to customers all across the globe. Whether you own a small business or a large-scale business, it is possible in today’s date to cater to an international audience. However, considering all expenses and risks associated with catering to the international customers before accepting orders from them may be a good idea.


Certain factors to consider while selling to an international customer may include shipping, international payments, communication, taxes and duties, customer service etc. Since it can be difficult to manage all this from India, you can also try to access some programs offered by e-commerce marketplaces, such as Global Selling by Amazon which essentially help you to expand your business to global markets

Choosing the Right channel
One of the final and most important things to consider while starting your online business and potentially growing is choosing the right channel or marketplace for selling your products. This can help determine your entire journey as an online seller, as your business will be affected by whichever channel you choose. But how do you know which channel suits you best?

Well, choosing the right channel could be possible be based on some major points including:

● Reputation
● Programs and Services Provided
● customer base

For instance, Amazon.in is one such e-commerce marketplace where more than 10 crore+ buyers transact from different third-party sellers, In order to become a seller on Amazon.in, you will be required to register as a seller and get started.
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