These days, many people engage in what is known as “electronic commerce,” or marketing their products and services online. Engaging in e-commerce means conducting business dealings, such as the purchase and sale of goods and services and the exchange of money, entirely via the internet.
Below is a step-by-step process for starting an e-commerce business in Kenya:
1. Write a Business Plan
A business plan is essential for many reasons. It’s a strategic tool you can use to plan for the growth and expansion of a business. You can share it with potential investors to raise money. You will be able to identify a potential weakness that could impact your business.
2. Do Market Research
You should make sure you do your research before you start a business. Find out what products and services you will sell and look into the market, target audience, expected costs, and competition.
During the market research process, you should ideally survey potential customers. It’s most likely that customers will purchase your goods or services.
3. Finding Goods or Services to Sell Online
Most stores resell physical goods bought from suppliers. If you are thinking of taking this route, it’s vital to identify products people are inclined to buy online. Some customers like single bulks, so you also need to plan for single items for your customers. The products need to have good profit margins.
4. Calculate the Startup Cost
To start an online business in Kenya, you should come up with the expenses. If you are launching the company with your savings or raising capital, it’s essential to figure out the startup costs. Cash flow issues may cause businesses to fail.
Some startup costs include office supplies, licensing and permits, equipment, branding, and website setup.
5. Seek Feedback on Your Business Idea
It would be best if you input ideas to make your business firm. You can ask people questions or conduct a market research survey to test your ideas.
Keep everything simple at the beginning, and make sure you use as many channels as possible to market your business so it can grow.
6. Branding Your Business
You can instantly identify a business name, a logo for your business, and branding colors. Customers need to recognize your company across various marketing platforms easily.
As you build a brand that people love, you can think of other unique attributes that set your business apart. The company may also be fantastic thanks to the people it seeks to associate with.
Requirements for Starting ECommerce Business
If you want to start an ECommerce business in Kenya, you must have the legal requirements for starting an online business in Kenya, such as:
1. Licensing and permit
2. Company registration name
3. Employer identification number (EIN)
4. Sales tax permit
E-commerce is the sale of physical products online, but it can also describe any commercial transaction that is facilitated via the internet. The internet powers it. Customers use their own electronic devices to go to an online store, look around, and place orders for goods or services.
6 Examples of E-Commerce
The following are six examples of e-commerce in Kenya:
1. Wholesale
It refers to selling goods in bulk to a retailer that sells them directly to consumers.
2. Dropshipping
Dropshipping involves selling products manufactured and shipped to the consumer by a third party.
3. Retail
They are selling goods directly to a customer without any intermediaries.
4. Crowdfunding
Crowdfunding is the collection of money from consumers before the product is available to raise the startup capital necessary to bring it to market.
5. Physical Products
These are the physical items that need to be restocked and shipped to customers whenever they are requested.
6. Subscription
This usually means that a product or service is bought automatically every month until the subscriber decides to stop.
5 Advantages of Starting an E-Commerce Business in Kenya
1. Speed of Access
Online business is much faster than other business methods since a computer is used to run the services. Its transactions can take a few clicks and less than five minutes.
2. Availability
An e-commerce site continuously operates (24/7) apart from scheduled maintenance. It enables the customers to browse at their own pace.
3. Easy to Access
Website visitors can browse product category pages in real time and use the site search to find the product and its fixed price.
4. Lower Cost
This type of business avoids the costs of running physical stores, such as rent, cashiers, and inventory. It also incurs shipping and warehouse costs.
5. Several Payment Modes
Buyers like personalization, and the same goes for payment for their orders. Its marketplaces permit multiple payment modes that include:
1. Cash on delivery
2. Card on delivery
3. Net banking
4. Debit card
Type of ECommerce
There are four types of e-commerce, as elaborated below:
1. Consumer to Business (C2B)
C2B is the type of online business where consumers make their products and services available online for companies to bid on and buy them.
2. Consumer to the Administrator (C2A)
Under this type, transactions are done online between consumers and public administrations or government bodies. The government buys goods or services from individuals, but individuals frequently use electronic devices.
3. Consumer-to-Consumer (C2C)
This type of e-commerce is where consumers trade their goods or services with each other online. The transaction is generally conducted through a third party that provides an online platform.
4. Business to Administration (B2A)
This type of transaction is done online between companies and public administrations or government bodies.
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