This is a handy step-by-step guide to starting an eCommerce business from 0 to massive success. In this guide, you will find great tips to make educated decisions at each point, ensuring that you build an eCommerce business you always wanted.
The eCommerce industry is booming at a large scale and is estimated to reach $5 trillion in 2022 and $6 trillion in 2024.
What do you think is the major contributor to this massive growth? Don’t make it complicated, folks! The answer is simple: the smartphone & internet are paving the way for comfort and convenience.
This unbreakable combo is effortlessly revolutionizing the eCommerce niche and has also motivated every aspiring individual to start their own eCommerce business.
By starting an eCommerce business, you can sell ‘n’ number of products and build strong customer relationships. This is because the eCommerce business model is easy to set up and scalable as it offers more expansion opportunities.
So when is the good time to start your eCommerce business?
It is NOW! But remember to lift your eCommerce business off the ground, you must create a well-planned, smart, and focused strategy that requires analyzing and blending various touchpoints.
But, don’t worry! I’ve done the hard work for you and compiled this guide by delving deep into the eCommerce market and trends.
Table of Contents
What is Ecommerce Business?
Ecommerce stands for Electronic Commerce, i.e., any business that facilitates buying or selling of goods or services via the internet can be considered an Ecommerce Business.
Ecommerce is most often considered to sell products via a website, but it refers to any online transaction between two parties on the internet.
Today, we are all using Ecommerce Businesses in one form or another. Here are some of the most common examples of Ecommerce Businesses –
- Retail: Selling goods online directly to a customer. E.g., Amazon, Walmart, Flipkart, etc.
- Wholesale: Selling goods in bulk to retail store owners who then sell to customers. E.g., – Alibaba
- Crowdfunding: Raising or collecting money online for a product, service, or charity. E.g., Kickstarter, GoFundMe, etc.
- Service Providers: Selling services such as consultancy, accounting, content writing, and other online services via the marketplace or own websites. E.g., UpWork
- Ticket Booking: Selling online tickets for events, Hotels, or transportation. E.g., Booking.com, AirBnB, Expedia, etc.
- Subscriptions: Selling products or services with a recurring payment system on a regular basis. E.g., Netflix, Spotify, YouTube Premium, etc.
These just scratch the surface when it comes to the types of eCommerce businesses available in the market. However, I hope these examples help you understand an eCommerce business.
8 Steps to Start an Ecommerce Business
Now, in this section, I will walk you through a step-by-step guide to starting an eCommerce business from scratch.
Ready? Let’s get started.
Step 1: Choose your market niche
A niche market is a subset or segment of a larger market that focuses on a specific product. For example, beauty & cosmetics is a broad area, whereas choosing face skincare for females will narrow down your niche.
Choosing a niche is vital as it structures your foundation. If you step into a broad market that can easily overpower you, you’ll end up becoming the pinch of salt in the vast sea, easily going unnoticeable.
To start your eCommerce business from scratch, you must figure out your target audience’s unique needs & preferences. You must focus on building your brand that can readily solve your customer’s pain points to constantly stay on top of their minds.
At this point of time, you might be figuring out how to choose a particular niche to know what kind of eCommerce business you’ll be running. Ask these questions to you to understand what will be your cup of tea;
- What kind of product will I sell – physical or digital?
- If your product is physical, how will you handle supply & logistics?
- In what way my product solves the specific needs of my customers?
- How should I bridge the gap between what I offer and what my niche requires?
- What kind of eCommerce business model should I rely upon? Which one serves more profit?
- If my chosen niche has zero competition, what does it signify? Should I go for it or not?
- What should be my initial investment for getting started?
These are some critical questions that can help you refine your thoughts and decide on the best niche for your business.
Step 2: Do your Market research
Once you have decided on the niche for your online store, the next step would be to do market research to know your target customers and understand the market demands.
For instance, if you have chosen clothing and fashion as your product niche, you must analyze the market to find the gap in the market.
Here are a few ways to do market research to understand the viability of your eCommerce business –
- Understanding the target audience’s characteristics, where they live, and their income level
- Identifying the success and barriers of your eCommerce business entry
- Use Google Search or Google trends to assess the impact of your product
- Analyzing how your competitors engage with their customers and knowing the key proposition that makes them successful
- Deep dive into understanding your niche market’s estimated size, demands, and how it can contribute to your brand sustainability
- Brainstorming on positioning your product’s pricing levels
- Analyze whether your product will fill the existing gap in the market
- Strategically think about whether you need eCommerce software to handle and operate your eCommerce business
If you can create a template that covers all these aspects widely, then you’re set on the right path.
Remember that conducting market research is the best way to psychologically understand whether your customers will buy what you sell or not.
Step 3: Choose your product
By now, you should know who your target consumers are and what kind of products you want to sell.
Selecting the right product to sell paves your way to building a successful eCommerce business. Even if you have a great product idea, but if it doesn’t catch up with your target audience, it becomes futile. So deciding how you execute your product idea acts as the cutting-edge.
Here are a few tips to help you pick the right products for your eCommerce business –
- Type your product name in all relevant search engines and even in marketplaces like Amazon/eBay to analyze what people are talking about it.
- Ask yourself whether your chosen product can adapt to all trends or just fade away. Anticipating this aspect is very important while selecting the product.
- Analyze whether your customers get benefitted from using your product.
- Make a thorough keyword analysis to know how it maps with your target audience’s search intent.
- Analyze how much cost goes into your product packaging.
- Identify whether your product requires regulations.
- Decide how you’re going to scale up your product, whether you’ll be limiting it to a specific geographic location or improving it globally.
- Consider the charges incurred for logistics. If it’s digital, calculate the amount of bandwidth required to sell your product.
The next step would be to find product ideas and validate them. Find answers to the following questions to validate your product idea!
- What will be the estimated or total number of likely buyers for your product?
- Is your product worthy enough to create high demands in the market? (Think about the key needs and customer pain points)
- If you increase your product price to a medium/high level, will customers still choose to stay with you? (Profitability Analysis)
- How can customers identify your product? Whether it is the logo, color, or any other means? How potentially can you brand your product?
- What creative design aspects can you apply to the excellent UI appeal of your products?
- How are your competitors working vigorously on their branding strategy?
In a nutshell, the product validation ideas revolve around these four main factors as stated below –
- Market Size & demands
- Pricing Control
- Branding Possibilities
Step 4: Decide Your Business Model
Ecommerce businesses can be categorized into various business models, which you can read here in detail.
For now, you need to decide how you want to sell your products – via your own eCommerce website or marketplaces such as Amazon, eBay, and others.
To help you make a decision, let’s dive into each type and see what can work the best for you.
Option 1: Sell on your own Online Store
This means that you can sell your products over the internet. You can develop a full-fledged eCommerce website with robust products management system, user interface, and payment methods.
Another way is to choose one of the best eCommerce platforms like Shopify, BigCommerce, or Wix to build your online store. On the flip side, if you want to sell digital products, you can consider digital-focused eCommerce platforms like Sellfy, which let you easily manage and sell digital goods.
If you sell physical products, you’ll have to maintain a proper inventory management system. It is the core element for the success of an eCommerce business as it determines how efficiently you can fulfill consumer demands.
Pros of selling on your website –
- 100% control over products and customer experience
- Higher branding and marketing possibility
- Ability to scale up based on your product-market fit
- Collect customer data
Cons of selling on your website –
- High Initial investment
- Technical skills required
- Inventory management
- Driving traffic at initial levels can be tough
Option 2: Sell on Marketplaces
A marketplace is a vast platform where multiple vendors and brands can sell their products. On such platforms, you already have access to a huge consumer base, ready to make purchases – you just have to ensure that your products are visible to them.
You can sell in different product categories that expand your revenue portfolio. For a successful business, you must deliver quality products and get more positive reviews that will boost your product visibility and generate more sales for you.
Pros of selling on Marketplaces –
- Get access to an already established customer base
- Low initial investments
- No technical knowledge required
- No involvement in customer communications
Cons of selling on Marketplaces –
- High commission rate charges
- Heavy competition among sellers from similar niche
- Restrictions on selling specific products
- No instant payouts
- No access to Customer data
- Expensive on-site advertising
Now that you’ve got a clear idea, you can choose whether you want to start by creating your own eCommerce site or selling products at popular marketplaces such as Amazon, eBay, and Walmart.
In short, if your priority is brand positioning, marketing, and delivering a great on-site customer experience, then you should consider selling from your online store.
On the other hand, if you are looking for instant product visibility, mass sales, or the absence of inventory management, then opting to sell on the marketplaces will be the best for you.
Deep down, it all depends on your projected eCommerce business framework, which we will discuss in the next step.
Step 5: Write your business plan
By now, you should have got a clear picture of your niche, target customer base, type of product, and where to sell it. After figuring this out, the next important step will be to craft an ideal business plan for your eCommerce venture.
Your eCommerce business plan should be able to answer the following questions,
- What is my unique selling point? Is it worth uplifting my business?
- How will I source products for my store? – In-house manufacture, Wholesale or Dropshipping.
- Who are my target audiences – B2B or B2C
On that note, let me outline the six essential parts to be included in your eCommerce business plan –
- Executive Summary – A clear-cut overview of your business’s goals and objectives.
- Company Description – Explaining what your company is all about – who you are, your expertise, and your offerings.
- Market Analysis – Analyzing your target market, understanding how it impacts your business and contributes to solving your customer’s problems.
- Products & Services – Explain your product/service sourcing, features, pricing model, benefits, and promotional channels.
- Logistics and Operational Plan – It should encapsulate your suppliers, shipping, fulfillment, and warehousing details. This information is crucial as it contributes to capitalization and investment.
- Financial Plan – Draft policies on how you will manage customer transactions, cash flow, expenses, investment, and invoicing to stabilize your business’s financial performance.
Before writing your business plan, keep your goals and audience in mind. These factors will guide you in every stage of your business growth. Try not to make any guesses and present only data-backed information.
Step 6: Register Your Business
Once you have your business plan ready, you should get your business or company registered and give it a legal structure. The process differs in every country and state. So, you should consult a legal expert to understand the process before taking further steps.
For starters, you can follow these three steps to register your eCommerce business –
1. Pick a business name (store name)
Your store name is how your customer and market players will know your eCommerce business. Let it be simple, creative, and easy to remember.
Even the popular online store builders like Shopify and Wix lets you brainstorm uncommon store names via their name generators.
2. Decide legal structures
Choosing the proper legal structure will impact how you pay taxes, handle liabilities, and it represents the level of control you have over your business.
The following are the different types of legal structures stated as per the laws and regulations,
- Sole Proprietorship
- LLC (Limited Liability Company)
Deciding on the right legal structure for your company entirely depends on how you want to operate your business. So, I highly recommend consulting a legal expert to help you make the right decision and get proper legal documents for your company.
3. Apply for licenses
Based on the law of your land, you may need a license to sell certain kinds of products such as food, beverages, medicines, and others. So, consult a legal expert or visit government websites to gather all the related information and apply for licenses if required.
Remember, if you do not get proper permits, you might be levied with heavy penalties or be at risk of jurisdiction trial. So, it is always better to comply with regulators rather than risk your life and business at a later stage.
Step 7: Create your store
Finally, choose the most suitable platform to create your online store based on your business plan.
If you want to sell on marketplaces, you should build your store on preferred marketplaces, as discussed above. On the other hand, if you want to start an online store for free, you should read this guide on creating a free online store.
However, if you are considering creating a robust eCommerce website with some investment, here are our top three most recommended eCommerce platforms that you can consider to host your site. –
1. Shopify – User-friendly Ecommerce Platform
Shopify is a simple and intuitive eCommerce platform that lets anyone launch their eCommerce business. All you have to do is choose a responsive theme, customize your store, add products, integrate payments, and you’re set to go. It is as easy as that!
But one thing is that Shopify offers minimal customization options. You can integrate page builders like GemPages or PageFly that enhance the customization capabilities of the site. Moreover, you can improve your store functionality by integrating tons of apps from its app store.
- Shopify vs Shopify Plus: Which is best for you?
- How to set up a successful Shopify store
- Best Shopify apps for new stores
2. WooCommerce – Free WordPress Ecommerce Plugin
If you have a WordPress site or are skilled at WordPress, WooCommerce can be the perfect eCommerce platform for your business. It is a robust and easy-to-use eCommerce plugin that brings all the eCommerce features such as product management, payment processing, and more on WordPress.
- How to create an online store with WooCommerce
- Best WordPress Plugins for Ecommerce sites
- WooCommerce SEO Guide
3. Wix – Easy-to-use Ecommerce Platform
It is a super-simplified platform that provides robust features to build and manage the store. You can start a drop shipping business and sell eBooks, subscriptions, or any product. It is best suited for small catalog product stores. The stores developed on Wix allow you to sell physical and digital goods.
Apart from these, there are several eCommerce platforms available that you can choose from. You can also check our list of the best eCommerce website builders to find the most suitable platform for you.
Step 8: Market Your Business
You cannot expect customers to flood into your store once it’s set up. You’ll have to promote your eCommerce business using a wide variety of marketing techniques to build customer relationships and generate repeat purchases.
You can market your business in two different ways,
- Organic Marketing (SEO, Social Media, Email Marketing)
- Paid Advertising (PPC, Influencer, and Affiliate marketing)
Let us look at different marketing methodologies that you can leverage for your eCommerce business to market and drive awareness among consumers –
1. Social Media Marketing
Whether your goal is to build brand awareness, personally communicate with your target customers, or want to sell products, social media is the best go-to platform. Even the forecasts suggest that the value of social commerce sales will reach 2.9 trillion US Dollars by 2026.
Now let’s see a short description of how every social media platform contributes to your marketing efforts,
- Facebook & Instagram – These are the most popular social media platforms with a whopping number of users. They let you promote your eCommerce store with innovative visuals and valuable content and enable you to set up shops integrated with selling capabilities.
- Twitter & LinkedIn – If you want to build a solid professional image for your eCommerce brand, you can go with Twitter and LinkedIn. You can exhibit your thought leadership and well-versed authority, so your audience will know that you’re the best in your niche.
- Youtube – Youtube is a great platform to drive traffic to your eCommerce store via videos. You can use this platform to post videos about your brand and your workplace to gain more trust and transparency.
- TikTok – With the forever growing user base, TikTok is one of the most powerful platforms to stay on top of trends. You can advertise your products and visualize how your content is performing. Besides, tapping onto a large customer base is effortless with TikTok.
- Pinterest – Pinterest is the ideal social platform to attract more customers visually. It simplifies the buying journey as customers search for your product, pin their favorite items and proceed to checkout. To succeed in Pinterest marketing, you must make the first impression as the best one.
Now, remember that not all platform is ideal for your business. So, try to figure out where your target audience spends most of their time and where you can deploy your resources more efficiently.
Pick at most two platforms as your primary marketing channels where you will focus most on getting more followers and traction for your products.
2. Search Engines
Every customer journey begins with the search, right? So it is essential to optimize your eCommerce store for SEO and get it higher on search results for relevant keywords. This will boost your visibility and thus drive traffic to generate more sales for your business.
SEO takes time, but it is worth the time as you can generate more sales organically and thus spend less on paid marketing, which will increase your profit margin.
To succeed at this, you primarily have to focus on the three factors: quality content, link building, and proper keyword strategy.
- Ultimate eCommerce SEO Checklist
- Beginner’s Guide to eCommerce keyword research
- Effective eCommerce link-building strategies
3. Email Marketing
Email marketing is not dead. It is one of the most useful channels to build and grow your audience, nurture customers in their journey and apply powerful automation to boost customer engagement. In fact, 79% of B2C marketers rely on email marketing to improve their promotional efforts and build a sales funnel.
To begin with, you can get started by choosing an eCommerce email marketing software per your marketing requirements. Or, if you ask for my recommendation, I would go for Omnisend, an easy-to-use email marketing software with advanced automation features and tools. You can read our Omnisend review to determine if it matches your needs.
Going ahead, here are a few guides that you must refer to –
4. Paid Ads
Do you know that 65% of all high-intent searches result in an ad click? That’s the power of running paid ads.
You can leverage Google ads, Facebook/Instagram ads, Youtube ads, and other platforms to run paid campaigns and reach more target audiences to create awareness and generate more sales.
With paid ads, you can target highly-potential consumers on search engines and other platforms. Once such users enter your conversion funnel, you can implement different marketing strategies to drive through it and convert them into paid customers.
5. Affiliate Marketing
With affiliate marketing, you can create partnerships with reputed third-party affiliates to widely promote your brand. The ultimate benefit of using eCommerce affiliate marketing is expanding your niche target audience base. It helps improve your sales and ROI without much investment, which is a great advantage.
6. Influencer marketing –
Influencer marketing is a lucrative strategy to acquire more customers by collaborating with popular personalities from similar niches to promote your products among their followers.
The key to the success of your influencer marketing is choosing credible and authoritative influencers with an engaging follower base across social media channels.
Ready to start your eCommerce business?
Ecommerce businesses are expected to grow in revenue in the next few years. So, if you are interested in starting your ecommerce business, today is the best time to get started.
In this guide, we covered almost every aspect of starting an eCommerce business from scratch. However, to run an eCommerce business and grow it smoothly, you will need the best tools in your arsenal. So, here are a few handpicked tool lists that you might want to check out next –