Starting an Ecommerce Business: Your Comprehensive Guide
Many people dream about starting an ecommerce business, but the realities of building an online store can feel daunting. In this article, you’ll learn the five basic steps to launch an ecommerce store, how much it’s likely to cost, and extra tips for starting your business.
What is an Ecommerce Business?
An ecommerce business is a venture that sells products or services over the internet. It typically involves online transactions where customers can browse a virtual storefront, add items to a digital shopping cart, and complete purchases through secure payment gateways. Ecommerce businesses range from small, niche shops to large online marketplaces, leveraging various platforms to reach customers globally.
Start an Ecommerce Business in 5 Steps
From home-based side hustles to the biggest brands, ecommerce lets entrepreneurs reach customers all over the world for a minimal cost. Follow these five steps to start your ecommerce business:
Find product opportunities and choose what to sell
Research your competition and write a business plan
Choose a business name and set up your online store
Choose a shipping strategy and set marketing goals
Launch your business
1. Find Product Opportunities and Choose What to Sell
The first step to building an ecommerce store is knowing what products to sell to consumers. This often is the most challenging part of starting a new online business.
Evaluating Your Idea
Once you have an online business idea, how do you know if it will sell? Use these links to help validate your product ideas and potential markets.
Sourcing Your Product
After landing on a solid product idea, your next step is figuring out how to source your products. Explore various methods for acquiring products, along with the pros and cons of each.
Sell Your Retail Products Online
Shifting your in-person business online can help you generate cash flow. Use these articles to build a resilient on-and-offline business.
Looking for inspiration? After losing her job, Hannah Perry turned her dream of starting a cotton candy company into a reality by going viral with her Rainbow Floof Cake.
2. Research Your Competition and Write a Business Plan
You’ve found your product, evaluated its potential, and sourced a supplier. Before launching your ecommerce business, you’ll need to research your competition to know what you’re up against and how you can differentiate your brand.
Writing a Business Plan
With your competitive research complete, it’s time to write a business plan. This is your roadmap for bringing your ideas to life. A business plan helps prioritize tasks and highlights your company’s mission statement to show investors and employees the core values of your brand.
For example, behind every entertaining MrBeast YouTube video is a solid business plan that supports Jimmy Donaldson’s global ecommerce empire.
3. Choose a Business Name and Set Up Your Online Store
Aside from finding products to sell online, another early task in forming an ecommerce business is building your brand. You’ll need to pick a name, design a logo, and choose an available domain.
Creating a Logo
Once you’ve selected a memorable name and registered a domain, it’s time to craft a simple logo. Here are several options for creating a great logo for your business.
Understanding Search Engine Optimization
Before you jump in, make sure you understand the basics of search engine optimization—the process of ensuring your website appears in Google search results.
Building Your Store
It’s time to build your online store. Find essential reads to help you create product pages with captivating descriptions, beautiful photography, and a pleasing color palette.
Build an online store now
Create your store in minutes with Shopify’s drag-and-drop editor. Choose from mobile-ready themes designed for your industry and add extra features with apps. Learn more.
Choosing Your Sales Channels
One of the best ways to reach new customers is to find them where they already shop. The right mix of sales channels will depend on your products and target market.
4. Choose a Shipping Strategy and Set Marketing Goals
As you get closer to the launch of your new business, remember to set up shipping and fulfillment. Read guides on how to create your shipping strategy.
Scale your shipping and operations
Ready to handle higher order volumes and complex shipping needs? Try 1 month of Shopify Plus for $399 and unlock advanced automation, bulk operations, enhanced shipping solutions, and dedicated support to streamline your growing business. Try Shopify Plus.
It’s also a good idea to define your key performance indicators upfront. Once you launch, you’ll know what measures of success to track.
5. Launch Your Business
Now that you’re set up, it is time to focus on marketing your products. The key to successful digital marketing relies on driving targeted traffic. These articles will help you get started:
Marketing your store
Email marketing essentials
Driving traffic from social media
Driving traffic and conversions from paid ads
Optimizing for higher conversion rates
Using analytics to uncover insights
How did workout clothing brand Gymshark become a billion-dollar ecommerce business? It began by analyzing its sales data and harnessing the power of community with influencer marketing campaigns.
5 Tips for Starting an Ecommerce Store
Now that your business is up and running, read these five tips to set expectations and stay focused on the most important aspects for growth:
Forget about year-one profitability
Know your target audience
Sell an in-demand product
Experiment with marketing and advertising
Invest in outreach and link building
1. Forget About Year-One Profitability
Starting an ecommerce business is a marathon, not a sprint. Don’t measure business success by profitability in your first year. Give yourself a runway of 18 to 24 months for your business to get off the ground. Spend your first year testing, reiterating, and reinvesting your sales back into your business.
2. Know Your Target Audience
Understanding your target audience is crucial. You want to get your products in front of the right customers—the ones who will actually buy on your site.
3. Sell an In-Demand Product
Create or sell a product with proven market demand. Top retailers like Allbirds and Bombas sell top-tier products that resonate with their audience.
4. Experiment with Marketing and Advertising
After launch, it’s important to try different marketing strategies to understand where your audience hangs out and best responds to your content.
5. Invest in Outreach and Link Building
Having an outreach and link-building plan can help boost your SEO rankings in Google. The sooner you have an approach to link building in place, the sooner search engines will recognize your website as an authority in its niche.
How Much Does It Cost to Start an Ecommerce Business?
Starting an ecommerce business can cost as little as $100, which is spent on a domain and purchasing a theme for your store. Ecommerce companies cost less than in-person stores because they don’t require the same amount of licenses and permits, and you don’t need to pay rent for a retail space.
If you operate with a dropshipping business model, it will likely cost less to start because you only pay for products after a customer purchases them.
According to a survey of 150 entrepreneurs and 300 small business owners in the US, many ecommerce entrepreneurs learn how to start a business on a shoestring budget.
Expense Categories
Product: raw materials, inventory, supplier, manufacturing, patents, etc.
Operating: incorporation/legal fees, additional software, business insurance, accounting, etc.
Online Store: website/platform subscription, hosting/domain, contract developer/designer, etc.
Shipping: packaging, labels, etc.
Offline: stall/table fees, rent, gas, etc.
Team/Staff: salaries, benefits, perks, etc.
Marketing: logo, branding, ads, printed materials, business cards, etc.
In the first year, business owners spent:
11% on operating costs
10.3% on marketing costs
9% on online costs
31.6% on product costs
8.7% on shipping costs
18.8% on team costs
10.5% on offline costs
Start Your Ecommerce Store
Building your own successful ecommerce business is as exciting as it is challenging. You’ll learn about choosing a product, evaluating its viability, figuring out how to get it produced, building an ecommerce website, and marketing and selling to new audiences.
Hopefully, this ecommerce business guide provides you with a roadmap on your journey. As always, the best advice anyone can give is to get started and enjoy yourself along the way.
Illustration by Cornelia Li
From first-time sellers to global retailers, Shopify works for everyone. See plans and pricing.
Ecommerce Business FAQ
What is an Ecommerce Business?
Ecommerce is the buying and selling of goods or services online. Ecommerce business is conducted through an ecommerce store or online marketplace, social media, or a mobile app, enabling businesses to offer convenient shopping to a global audience.
How Do I Start an Ecommerce Business?
Research what products you’d like to sell or can source to sell, select a business name, register your business with the government, and obtain permits and licenses. Then choose an ecommerce software and create your website, load your products onto the site, launch, and start marketing your business.
What Are the 4 Types of Ecommerce Businesses?
Business to Consumer (B2C): Selling goods or services to individual consumers.
Business to Business (B2B): Selling goods or services to another business.
Consumer to Consumer (C2C): Selling goods or services to another consumer.
Consumer to Business (C2B): Selling products or services to a business.
Is Ecommerce a Profitable Online Business?
Yes, the ecommerce industry is profitable. Successfully starting an ecommerce company is a marathon, not a sprint. It can take 18 to 24 months for your business to get off the ground.
Is It Hard to Start Your Own Ecommerce Business?
No, starting an ecommerce company is easy, with platforms like Shopify enabling brands to go online in just a few days. However, it requires hard work and continual market research to improve your business. Read this guide on how to start an ecommerce business before you set up a store.
