Ecommerce Business Models
Before deciding on the steps needed to launch an ecommerce company The Entrepreneur has to determine a suitable business model. There are two methods an e-commerce company can be started, either by being an existing seller on an eCommerce platform or launching the first ecommerce site. For the majority of entrepreneurs who are who are starting a business in e-commerce selling using an established ecommerce platform is the best option. Established platforms for e-commerce like Flipcharts, Snapdeal, Amazon provide a framework for companies can sign up with them and sell their products with their technological marketing and delivery capabilities. This makes selling online an easy task and doesn’t require any effort to web development, maintenance of websites as well as digital marketing. To learn more about how to sell on Flipchart or sell on Snapdeal go to India Filings Learning Center.
The idea of starting an e-commerce company by creating your own website is a different method to begin an ecommerce business. This is, however, more complicated and requires more effort. Although launching an online store is possible using tools like OpenCart or Magento however, the challenge is in attracting customers to the site. So, beginning an e-commerce business through the launch of a website is recommended for business owners who are looking to market niche items or who have a long-term plan for the establishment of a huge, profitable e-commerce company that is supported by investors in private equity.
Business Registration
After the Entrepreneur has settled on a business strategy Business registration is the initial step in realizing the dream of the Entrepreneur into a reality. The majority of e-commerce businesses require a lot of equity capital in order to begin and grow, because Banks in India generally do not like lending to e-commerce businesses that are just beginning. It is therefore recommended to establish an e-commerce business by forming an Private Limited Company since it gives the following advantages: 1)) protection from liability as well as 2) transferability 3) the ability to incorporate equity investors or private equity partners and four) the legal status of a separate entity. Whatever the capital investment within the company, if it is a private limited the company is registered with a capital limit of Rs.1 lakh. Then, the capital can be raised as additional investment is made is made in the form of private equity or bank loans to invest.
It is not recommended to establish an e-commerce company in an limited liability partnership (LLP) or One Person Company (OPC). LLPs are not able to allow equity investments in the business and OPC cannot allow the use of more than one promoter. The best company to start an online business is a the private limited company.
Opening a Bank Account
After registering the business entity opening a bank accounts follows to beginning an e-commerce business. If there is a Private Limited Company was incorporated and registered, opening a bank account for the company’s name the company is easy. The business owner can approach any bank with a copy of PAN Card, Memorandum of Association, Articles of Association and Certificate of Incorporation of the company to establish an account with a bank. If another company was formed, then you may consult the article ” Opening a Business Bank Account in India” for more details on opening the bank account.
Tax Registration
After getting a PAN Card for the business and opening an account at a bank after which the tax registration is required for the company. If the company plans to sell products or goods in India the VAT or TIN Registration is required from the State Sales Tax Department. If the business plan to provide online services Tax registration for services is required.
If the company plans to sell products online using marketplaces such as Flipchart or Snapdeal and Snapdeal, the VAT or the TIN registration is required in order to complete the registration procedure. After obtaining registration for TIN, copies of the documents like PAN Card copy, Certificate of Incorporation for the Company and a cancelled check can be provided to start selling online on Flipchart and Snapdeal. If the company plans to sell products or services on the company’s own site, the use of a payment system may be required to begin the ecommerce venture.
Payment Gateway for Ecommerce Business
An online payment gateway permits for the processing of debit and credit card net banking, and cash card transactions via the website of an e-commerce. To obtain the payment gateway needed for an online store The following documents should be presented to the provider of payment gateways:
- Account at the bank in the name of the company
- PAN Card of the business
- Certificate of Incorporation
- Memorandum of Association
- Articles of Association
- Identity Proof
- Address Proof
- Website Terms of Use
- Website Privacy Policy
After the above documents have been provided after which a Payment gateway can be set up to the online business in order to allow online payment. Below are a few examples of the payment gateways.