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How to run an E-Commerce Business – A Step by Step Guide
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Hope you could catch our previous article that gave you a gist of all the essential things you need to put in order before starting your e-commerce business. Taking it a step ahead, it’s time to consider all the things you'll need to successfully run your e-commerce business.
As a recap, you could take out a pen and paper and put a tick against all the steps that you have successfully completed:
If you are done with all of the above, it's time to finally set your baby free, watch it blossom and serve its purpose well. But the real challenge begins now and you finally get to witness if all your hard work, calculations and efforts have come through. However, you don’t have to wait for something to go wrong in order to set things right. Here are a few steps that will help you run your e-commerce business efficiently:
FIND THE RIGHT PEOPLE TO SPEARHEAD YOUR TEAM
Hiring the right team to fuel your e-commerce business is the most essential piece of your business puzzle. Without a team of skilled professionals who understand their roles and perform their tasks to the T, it is difficult to get the results you desire in this competitive field. So whom should you hire? What skills should they possess? What should they bring to the table? Read on to find out.
Essentially, you need a few core teams to run your business:
FOLLOW YOUR CUSTOMERS
You might have already figured the audience your website is going to reach out to. Now, try to go deeper and understand them better because even within your audience lies an audience that will connect better with the products you are selling. You need to find ways to track their behaviour - find out what they like, where they go, what their average day looks like, what their buying behaviour is, and then find a way to plug your product seamlessly into their life, so that it feels like a need rather than a want. Not only will this help you save tons of money on marketing, but it will also make your audience feel special.
Social media can play a big role in helping you find your audience. With the help of platforms like Facebook, Twitter, Instagram and Pinterest, you can easily find out what your audience likes, follows and would want to stay updated on. This will also help you mould your marketing language and visuals into one that your audience would willingly read or relate to.
Read Also: How to Finance your business
FAMILIARISE YOURSELF WITH LEGAL FORMALITIES
A series of legal issues need to be addressed before your e-commerce can be considered safe and effective. Key legal issues arising out of e-commerce transactions include protection for authentication and non-repudiation, which means that there needs to be a manner of authenticating the identity of the person entering into the transaction. Also, you need to make sure there is some form of protection so that the person who has entered into the transaction cannot retract the same at a later stage.
There are six laws with which regulatory boards in India govern e-commerce:
BE TAX EFFICIENT
Like every e-commerce company, your company is subjected to the regular provisions of the Income Tax Act, 1961. Here are the important things you need to pay attention to:
1) Goods and Services Tax
GST is a comprehensive indirect tax on manufacture, sale and consumption of goods and services throughout India, that replaces taxes levied by the central and state governments. It is applicable across all states in India.
The following taxes will be bound together by the GST:
According to Section 19 r/w Schedule-III of the MGL, threshold exemption is not available to e-commerce operators and so you will be liable to be registered irrespective of the value of supply you make.
2) Tax Collection at Source
As per Section 43C(1) of the MGL, as an e-commerce operator, you are required to collect (i.e. deduct) an amount out of the consideration paid, or is payable, to the actual supplier of the goods or services in respect of supplies of goods and / or services made through them. The amount so deducted/collected is called as Tax Collection at Source (TCS).
In terms of Section 43C (4), every operator is required to furnish an electronic statement of every amount collected as TCS towards outward supply of goods and/or services that were brought about through it during a calendar month. It should be calculated within ten days after the end of the calendar month.
The statement shall contain inter alia, the details of the amount collected on behalf of each supplier in respect of all supplies of goods and/or services brought about through the operator, and the details of such supplies during the said calendar month.
3) Matching in e-Commerce Provisions
As per section 43C (6), the details of supplies and the amount collected during a calendar month, and put forth by every operator in his statement, will be matched with the corresponding details of outward supplies put forth by the concerned supplier in his valid return filed under section 27 for the same calendar month or any preceding calendar month. If the details of outward supply, on which the tax has been collected, as declared by the operator in his statement, do not match with the corresponding details declared by the supplier, the inconsistency will be brought to your notice and that of your supplier as well.
Read Also: How to run Logistics business
Open a bank account exclusively for your business
Your e-commerce business needs a safe place where you can deposit your money for safekeeping, earn interests and gain handsome returns. When looking for the right account, look for one that offers you the most without committing too much. Kotak Bank has a range of business accounts designed to suit your needs. Get in touch with the relationship manager to get assistance and find the right bank account to fit your business needs.
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