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Practical Guide on How to Start an Ecommerce Business in 2023

What is an eCommerce Business?

eCommerce business is a type of business where goods and services are bought and sold over the internet. To make these online transactions happen, eCommerce businesses will send money and information digitally.  With online retail sales expected to reach almost $5 trillion worldwide in 2021, there has never been a better time to start a business online.  If you're a skilled entrepreneur or craftsperson, you've probably dreamed of starting your own eCommerce store and building a business that gives you a sense of accomplishment and freedom. In this guide, you'll learn how to do each step.  We've made a complete plan for starting a business by putting together Shopify's most popular content. These blog posts, guides, and videos are organized by the most important tasks you'll need to do when researching, starting and growing a profitable e-commerce store.

How to start an eCommerce business?

1. Look for ways to sell products and decide what to sell

  eCommerce Business  

Choosing a product to sell

The first step in making an online store is deciding what products you want to sell directly to consumers. This is often the hardest part of getting a new online business up and running. In this section, we'll talk about ways to find product opportunities, the best places to look for product ideas, and popular e-commerce products you might want to think about.

Evaluating your idea

How do you know if a product idea you have will sell once you have it? In this section, we'll talk about a few ways that active entrepreneurs have tested their product ideas and the possible market for them.

How do you get your product?

Once you've come up with a good product idea, the next step is to figure out where and how you'll get your products. In the next four posts, I'll talk about the different ways to get your products and the pros and cons of each.

Sell your retail products online

Many small stores have a hard road ahead of them. If you move your brick-and-mortar business online, you can get cash flow, build a stronger business, and weather this storm. You'll need to find a good ecommerce platform, like Shopify, to build your store on.

2. Research your competitors carefully and write a business plan

   

Find out about your competitors

You've found your product, thought about how successful it could be, and found a supplier. But before you do that, you'll need to learn a lot about your competitors so you know what you're up against and how to make your business stand out from theirs.

Creating a business plan

Now that you've learned everything you can about your competitors, it's time to write your business plan. A business plan is like a map that helps you organize your ideas and thoughts. It's important for figuring out what to focus on and how to reach potential customers. A business plan also talks about your company's mission statement, which shows investors and employees what your brand stands for.

3. Choose a name and logo for your online store and set it up

   

Pick a name for your business

In addition to finding a product to sell online, it can be hard to choose a name for your business or brand and a domain name that fits and is available. You can do these important tasks with the help of these blog posts.

Making a logo

Once you've chosen a name that stands out and registered a domain that goes with it, it's time to make a simple logo. We'll show you several ways to make a great logo for your new business in these resources.

Learning about Search Engine Optimization (SEO)

Your online store is almost ready to be built. But before you start, you should learn the basics of search engine optimization (SEO) so you can set up your site and pages so that Google and other search engines can find them easily.

Putting up your store

Now that you know more about search engines, it's time to use a website builder to set up your store. There are many important things to think about. Here are some of the most important things you should read to help you build high-converting product pages, write compelling product descriptions, take beautiful photos of your products, choose your ecommerce color palette, and much more.

Choosing where to sell your products

One of the best ways to find new customers is to sell through the same channels they already use. The right mix of sales channels will depend on your products and your target market, but there are a lot of great options that can help and support your self-hosted store.

4. Decide on your shipping strategy and set sales and marketing goals

    As the opening of your new business gets closer, there are a few shipping and fulfillment things you need to get ready for. It's also a good idea to define your key performance indicators ahead of time, so that once your project is up and running, you know what to look for in terms of success. 

5. Implement your business

   

Getting your first client

Now that you've launched, you have to work hard to get people to buy your products. Many new store owners should think about selling their physical products in person, but the rest of digital marketing depends on doing one thing well: driving targeted traffic. Next, we'll talk about some different ways to market your business that will help you in the first few months.

Getting your store known

You're well on your way now, and you've probably already made a few sales. It's time to get serious about marketing your store and put some money into it. The posts below will help you focus on your best ecommerce marketing strategies or try new ones to bring in more traffic and turn that traffic into sales. 
  • EMAIL MARKETING ESSENTIALS
  • DRIVING TRAFFIC FROM SOCIAL
  • DRIVING TRAFFIC AND CONVERSIONS FROM PAID ADS
  • OPTIMIZING FOR HIGHER CONVERSIONS
  • USING ANALYTICS TO UNCOVER INSIGHTS

How much does it cost to get an online store up and running?

You can start an ecommerce business for as little as $100, which is enough to pay for a subscription and a theme for your store. Ecommerce businesses are cheaper than traditional stores because they don't need as many licenses and permits and you don't have to pay rent for a storefront.  For example, if you run a dropshipping business, it will probably cost less to get started because you won't have to pay for raw materials, inventory, or manual labor. You don't have to pay for things until a customer buys them. Whether you make your own products by hand or work with manufacturers, you'll need to pay for equipment, materials, and labor up front.  Many people who start an e-commerce business do so with very little money. We asked 150 entrepreneurs and 300 small business owners in the US about their up-front costs to find out more.  According to our research, new ecommerce store owners can expect their business costs to add up to $40,000 in the first year. This money is paid back to the owner through profit margins.  Among the categories of costs were: 
  • 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, owners of businesses 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
Now, this doesn't mean that you have to spend $40,000 to open your online store. The amount spent in the first year was very different depending on the industry, the type of ecommerce business, and whether or not it was a full-time job.  Also, you don't have to have $40,000 in cash on hand to start an ecommerce business. Many entrepreneurs (66%) use their own savings to fund their business. (Respondents could choose more than one source of funding.) They also got money from family and friends (23%) and took out personal loans (21%).

Tips on how to start an online eCommerce store

It's exciting to start an ecommerce business. Whether it's your first one or your fifth, keep these tips in mind: 
  • 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

Forget about making money in the first year

Starting a successful e-commerce business is not a quick process. Don't judge your business by how much money it makes in its first year. Give your business between 18 and 24 months to get off the ground. Use the above budget guidelines to test, improve, and reinvest your sales back into your business during the first year.

Know your target audience

Most of your time won't be spent making or finding products. Instead, you'll spend most of it getting customers' attention. The hard part? You want your products to be seen by the people who are most likely to buy from your site. Understanding these people, also called your target audience, can help you reach them faster and make more sales.

Sell a product that is in demand

Make or sell a great product that people already want. If you look at the top stores like Allbirds, Tushy, and Bombas, you'll see that they all sell high-quality items. Eric Even Haim, CEO of the upsell and cross-sell app ReConvert, says, "Product quality is very important because a good product will sell itself." "Marketing is 10 times easier when you have a great product and a group of people who want it."  Eric says that new products don't have to be the "next big thing." You just need to "look for growing trends and markets where customers aren't being served well enough." Then step in with a great product and give them what they want!"  There are two places to look for market demand: 
  • Google Trends, where you can find out what people are looking for 
  • Trends.co, which uses data to find business opportunities and trends before they become popular. 
When you marry a great product with an audience who’s hungry for it, your marketing becomes 10 times easier.

Try out different marketing and advertising methods

After your business opens, it's important to let people know about it. You should try out different marketing plans to find out where your audience hangs out and how they respond best to your content.  Try out different ways to market online, such as: 
  • Affiliate marketing 
  • Instagram ads 
  • Website pop-ups  
  • Checkout upsells and cross-sells 
  • Organic search  
  • Content marketing 
  • Loyalty programs
Stephen Light, CMO and co-owner of the mattress company Nolah, says, "Your ability to experiment, test, and analyze your advertising and marketing strategies will determine your success." "The best way to avoid making assumptions about your audience that could hurt you instead of help you is to try different things."  Stephen says, "Especially when you're just starting out, you should be ready to do things wrong." Use the information you gather to make campaigns that bring in more traffic and make more money. "Optimizing your ad campaigns and keeping track of how your customers respond to them can also help you shape your website's features." 
Experimentation is the best way to avoid falling into any assumptions about your audience that could end up hurting you rather than helping.

Spend money on outreach and building links

Another tip for new online shops is to have a plan for reaching out and building links. These tips can help you move up in Google's SEO rankings.  James Taylor, an SEO consultant in the UK, says, "The sooner you have a plan for building links and bringing authority to your site, the sooner search engines will see your site as an authority in its niche."  "Search engines see a link from a trusted source as a vote of confidence in your website, so the more links you have from trusted sites, the more search engines will see you as an authority."  James advises new eCommerce store owners and marketers to spend money early on on digital PR and link-building campaigns. This sets the stage for long-term SEO success, so you can rank higher in Google, get more organic traffic, and make more sales.  "The sooner you have a plan for building links and bringing authority to your site, the sooner search engines will see your site as an authority in its niche."

Conclusion

Creating your own eCommerce business is both fun and hard. You'll quickly learn a lot about choosing a product, judging its viability, figuring out how to get it made, building an eCommerce website, and marketing and selling to new customers. The process can make you feel like you're putting together a hard puzzle, but it's still rewarding.  We hope that if you use these resources, you'll have a better idea of what to do next. The best advice anyone can give is always to just get started and have fun along the way.

Starting an eCommerce business: Frequently Asked Questions

How do I start an eCommerce business?

Find out what products you want to sell or can get to sell, choose a name for your business, register your business with the government, get permits and licenses, choose eCommerce software and build your website, add your products to the site, launch your business, and start marketing it.

What are the 4 types of eCommerce businesses?

  • Business to consumer (B2C): When you sell a good or service to a single consumer (e.g., you buy a jacket from an online retailer). 
  • Business to business (B2B): When you sell a product or service to another business, (e.g., a business sells wholesale products for another business to use). 
  • Consumer to consumer (C2C): When you sell a product or service to another consumer, (e.g., you sell vintage clothes on Facebook Marketplace to another consumer). 
  • Consumer to business (C2B): When you sell products or services to a business (e.g., an influencer or affiliate offers exposure to their audience in exchange for a fee).

Is eCommerce a good way to make money?

Yes, there is money to be made in eCommerce. Starting an eCommerce business is not like running a race; it's more like a marathon. Your business might not be up and running for 18 to 24 months. It's important not to judge the success of your business by how much money it makes in the first year.

Is it hard to open your own eCommerce business?

No, it's not hard to start an eCommerce business. Platforms like Shopify make it possible for brands to be online in just a few days. To start a brand, you have to work hard and keep doing market research to make your business better. Before you open a store, you should read all of our guides on how to start a business.  
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