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With the growth of the internet, more and more people are starting to do business online. One way to do this is by creating an e-commerce business, selling goods and services over the internet. While this is an easy, flexible, and creative way to do business, you still need to take some critical formal steps when starting an e-commerce business. This article will outline some essential steps to take when starting an e-commerce business in New Zealand, including having a good business plan and choosing a business structure. It will also discuss advertising considerations and how to analyse your online presence.

Have a Good Business Plan

Firstly, make sure that you are the right person to start an e-commerce business. Do you feel comfortable and confident using the internet? Moreover, do you have an excellent work-from-home setup? Do you have a good business idea, an understanding of the goods or services you want to sell, and an idea of which forum you want to use? 

There are several types of New Zealand e-commerce businesses that you could start. You will need to consider what kind of e-commerce business you want to run to determine how to start. Additionally, you could sell products through your own website or existing online marketplaces like TradeMe or Shopify. Do you want to sell products you manufactured yourself? Or do you want to sell products that someone else has created? Where are you going to source these products? 

Choose a New Zealand E-Commerce Business Structure

Secondly, you need to decide on a business structure. Choosing a business structure is essential for tax purposes, income, and how you conduct business. If you are setting up a business by yourself, you could operate as a sole trader. This is a quick and easy way to set up a business. However, it means that you are effectively the business. Therefore, if the business faces financial challenges, your personal assets may be required to help your business. However, if you set up a company, you are creating a separate entity for your business. Therefore, your personal assets are not at risk. However, creating a company can be time-consuming, expensive, and requires regular upkeep. If you have a person that you would like to go into business with, you could create a business partnership.

If you wish to become a sole trader, you simply need to register for a New Zealand Business Number. Moreover, if you want to create a company, you will need to register with the Companies Office. 

You will need to pay tax on any income that you make from your business. Make sure that you keep good records of any money that you withdraw from your business to ensure that you can file for taxes correctly. Additionally, if you believe that you will be earning more than $60,00 a year, you may need to register for GST. 

Advertise

If you are selling goods online, people will not be able to simply walk by your retail stores and have a look at your products.

It can be challenging to stand out in a full market, so you must create a solid online presence. You will need to get creative and utilise social media to advertise your online store.

Consider who your customer is and how they use the internet. If your ideal customer is a young crowd, social media will likely be an effective form of advertising. Looking at paying for Instagram and Facebook advertisements could be helpful to advertise your business. You will also need to develop a solid social media presence and website image to effectively promote your business. 

Analyse Your Online Presence

If you are running an e-commerce business in New Zealand, it is essential to know how your website is doing. You will not be able to simply eye up foot traffic like you would in a traditional brick-and-mortar shop. You can use Google Analytics, or another source, to see:

  • how many people are visiting your site;
  • which parts of your website are most popular;
  • what people are purchasing; and
  • if people are new or returning. 

This will allow you to refine your online presence, delete content that is not useful, create more popular products, and discover what people are finding eye-catching. 

Additionally, you should adapt your online content to make your business easier to find. This is known as search engine optimisation (SEO). SEO will ensure that your business pops up higher in your search results. Understanding and applying SEO can be a specialist skill, so it is a good idea to ask a professional about how to make SEO work best for your business. 

Key Takeaways

Starting an online business is a great way to develop a creative, flexible, and easy way to do business. However, there are a few challenges that come with creating an New Zealand E-Commerce business. When creating an E-Commerce business, make sure that you:

  • have a good business plan;
  • choose the right business structure;
  • well-advertise your business; and
  • analyse your online presence. 

If you need help with starting an e-commerce business, our experienced e-commerce lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0800 005 570 or visit our membership page.

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Frequently Asked Questions

Is there just one type of e-commerce business?

No, there are a considerable number of ways that you can operate an e-commerce business. You can manufacture your goods to sell, sell someone else’s goods, develop your marketplace or sell through an existing one. 

Can I advertise my business however I want?

You need to make sure that you comply with New Zealand advertising laws and accurately represent your products when you advertise them online. Additionally, if you pay someone to advertise your products online through a forum like Instagram, you need to ensure they indicate that they have been sponsored to advertise your products.

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