How Anyone Can Make an Ecommerce Business
As remote work gains popularity and technology facilitates easy digital transactions, entrepreneurs migrate online. With a functional website creator, crafting a successful ecommerce business and website design is now easier than ever. We’ve included everything you need to know about ecommerce business, web development, marketing, and more—so you can launch your ecommerce business today.
In this guide, you’ll learn all the following:
- Starting an Ecommerce Business
- What is an Ecommerce Business
- How to Start an Ecommerce Business
- Ecommerce Business Ideas
Across cyberspace, business is booming.
As customers increasingly prioritize convenience, brick-and-mortar stores are falling out of fashion.
Managing a business—and harnessing profits—from behind a laptop sounds appealing to most, but many interested entrepreneurs simply don’t know where to begin.
Ecommerce combines two of the most intimidating endeavors: web design and launching an independent business.
But with the right resources, both are relatively easy.
Starting an Ecommerce Business
The emergence of new virtual channels for commerce has led to an unprecedented differentiation phenomenon: in products, pricing, and branding.
As a result, consumers are increasingly turning to cyberspace to acquire new products—creating more demand for differentiated items and services.
Is Ecommerce for You?
Ecommerce is an excellent way to supplement your income—or replace your current job altogether.
As emergent technologies make it increasingly easier to start an ecommerce website, anyone can benefit from joining the market.
Advantages of Ecommerce
ecommerce boasts many advantages over traditional retail. Some include:
- Low overhead costs
- The ability to work from home
- Easy scaling
- A wider customer base
- Easily accessible sales and marketing metrics
- Streamlined payment systems
- None of the responsibilities and expenses of a brick-and-mortar shop
Disadvantages of Ecommerce
ecommerce businesses face many of the same challenges as physical retail stores. However, you can overcome most challenges with the correct information and guidance.
Some challenges include
- Lots of competition
- Security issues
- Lack of personal touch: the “human element.”
- Relies on Wi-Fi
- High reliance on your website (also a pro)
- Regulations and taxes
How To Get Started
Although starting an ecommerce business is relatively simple, it’s an iterative process, meaning you will consistently refine and adjust different features of your business plan.
For now, all you need is an idea and the guide included below.
What is an Ecommerce Business?
Ecommerce, or electronic commerce, refers to buying and selling products and services or transmitting data and capital over the internet.
The term refers to many transaction types, including business-to-business, business-to-consumer, consumer-to-consumer, and consumer-to-business. It falls under the umbrella of the more significant online business industry (colloquially referred to as “e-business”).
Although many online retail companies began as brick-and-mortar and ecommerce sellers, many have transitioned to the web.
The sector has gained traction since the Covid-19 pandemic. Online retail represented only 14% of the total retail sector, reaching 18% in 2020. Since then, the industry has experienced steady growth.
Ecommerce Business Types
Experts classify ecommerce businesses by business type, product or service, and revenue model.
There are twelve eCommerce business types, though this number includes governmental transactions.
Of those, four are most relevant to emerging entrepreneurs.
A B2B model entails transactions between businesses. These include transactions between manufacturers and retailers and those between wholesalers and retailers.
The B2B model is increasingly standard as differentiation and specialization extend the supply chain.
Examples include car part manufacturers selling to dealers (like Honda, Chevrolet, etc.) or wholesale clothing suppliers providing items to small businesses for resale.
This model describes most of the businesses we interact with daily.
Amazon is a B2C company, as are most major retailers, banking platforms, travel services, and peer-to-peer sites (Craigslist, eBay).
Within this model, consumers sell products or services to businesses. For instance, an Amazon author technically “sells” her book to Amazon and collects affiliate revenue from sales.
C2B businesses were once rare, but the internet facilitates such transactions, and such models are becoming increasingly popular.
C2C transactions occur between consumers. Examples include yard sales and used car exchanges.
Most C2C transactions use third-party websites to facilitate their exchanges, such as Facebook Marketplace, Etsy, eBay, etc.
Although “ecommerce” typically refers to the sale of physical goods, it can also include the exchange of services, data, information, or finances.
The first step to starting an ecommerce business is deciding what you want to sell.
Most ecommerce businesses engage in the practice of selling goods or physical objects. For example, you may choose to sell printed T-shirts, hand-made jewelry, water bottles, or LED lights.
Selling services online is also common. It entailed providing a service (e.g., therapy, medical advice, web design, web development, etc.) and delivering the service remotely (or in person).
Selling information is also expected and provides added benefits to an ecommerce business (avoiding the hassle of shipping and packaging). Many people sell courses, ebooks, PDFs, or documents online.
Selling data is a relatively new practice and can be complex for beginners. It entails selling your data or collecting data from third parties and reselling it.
The world of finance relies profoundly on the internet. eFinance includes banking services and trading apps like Albert, Vanguard, and Acorn.
Types of Ecommerce Revenue Models
A revenue model determines how the ecommerce business will earn profits by processing orders, carrying inventory, and packaging and shipping products.
Choosing a suitable revenue model is essential, and we will discuss the process further below.
Drop shipping allows companies to manage payments, customer relations, and website management while outsourcing shipping and tracking products.
White labeling is purchasing items from a supplier and reselling them under a different brand. The ecommerce company typically innovatively markets the item and distributes the product to the consumer.
Under this model, a company designs a product and has a third-party manufacturer produce it. The manufacturer may send it back to the store or manage the sale themself.
Private labeling is best for companies that may be new to the market or do not have sufficient space or capital to manufacture goods.
Wholesaling entails buying and selling products in bulk. Wholesale companies typically have warehouse space and sufficient capital to invest in large product quantities.
Subscription services collect money from consumers regularly (e.g., weekly or monthly) and assemble packages of pre-existing products to send to consumers.
How To Choose a Business Type and Revenue Model
The best way to learn is by example.
Determine what you want to sell—you can follow the steps below—and look into other businesses that sell similar products or services. Revenue models often depend on how much space and capital you have to invest in your ecommerce business.
Ask yourself the following questions:
- What are you selling, and for how much?
- How much money do you need? How much do you want to earn? What is the minimum amount you can make to sustain your ecommerce business?
- Who is your product for? Who is most likely to purchase it? What is the value your customer will place on your product?
- What type of purchase experience do you want to offer? How willing are you to undertake complex tasks like shipping and tracking packages?
Once you have answered the above questions, you are ready to create your own ecommerce business.
How to Start an Ecommerce Business
The steps to starting your own ecommerce business are relatively straightforward. Use this guide as a checklist to create and launch your own profit-generating business.
Step 1: Research and Brainstorm
You may already know what you wish to sell online. If so, research similar businesses and identify their major characteristics. Pay attention to:
- Web design
- Website builders that companies commonly use
- Revenue models
- Product quality and available purchase quantity
- Financial statements and documents available
If you don’t know what you want to sell, start thinking about it. Consider your favorite ecommerce websites, or research the most profitable small businesses. Ask yourself the following questions for clarity:
- What are you passionate about? How can you turn this into an ecommerce business?
- Is there a product or service you wish was available online that isn’t?
- What do you hope to offer to people?
- Is there a product or service that would be easy to sell or one that complements your current career or position?
Once you have identified your business type and model, you are ready to move on to step 2.
Step 2: Narrow It Down
Due to the sheer availability of products and services, your success depends upon your ability to differentiate your product and market it to a target audience.
This process entails identifying your niche or focus market.
To identify your niche, you’ll want to hone in on 1-of 3 characteristics of your target market—2 is ideal. For example, you may have written a book catering to young women (1) in the fashion industry (2).
Ask yourself the following questions:
- Identify several characteristics of your target market. Determine how your product or service will benefit them.
- Does your product already exist? If so, how can you differentiate it from others?
- Is your niche too specific? You don’t want to design an item for 18-22-year old jewelry designers in Arkansas, for example, since your customer base will likely be too small.
Step 3: More Research!
Starting an ecommerce business is an iterative process; you will likely have to undergo several trial and error procedures before identifying your ideal product and target market.
Once you have a general idea of what you want to sell (and to whom), look into the current behaviors of your target market.
Find Your Target Market
First, you’ll want to find your target market and determine what they’re already buying.
Find a business that targets the same audience as yours, and research the answers to the following questions. Data is sometimes available online, but you may need to inquire directly with the company.
- What are the company’s website traffic patterns?
- How much did the company spend and make in the last 2-3 years?
- What is their customer loyalty rate (customers who make repetitive purchases)?
- How long do users spend on the business’s website?
Find Your Competition
Look into any businesses that may rival yours and determine whether you have something unique to offer—or a marketing plan to rival theirs.
If you don’t, you may need to consider promoting your product differently or identifying additional product ideas.
Step 4: Legitimize Your Ecommerce Business
Your brand is the ethos of your ecommerce business and will profoundly influence customer behaviors.
Though you can always change and refine your brand, begin with a clear picture of what you want your brand to convey to customers.
Choosing a Name
Choose a brand name that is easy to remember yet unique. If you pick something generic or short, like “Daisy” or “The Market,” someone else is likely to have chosen it.
Your brand name should be:
- Evocative of what you are selling
- Short enough to remember
- Unique enough to differentiate from other brands
If you’ve chosen a name and it is not available, consider alternative spellings for your business (for instance, instead of “the market,” you could name your business “the mrkt”).
Your store name does not need to be the same as your brand name, though you may consider using something similar to avoid confusion.
Register Your Business
Registering your business marks an essential step in legitimizing your business.
Most ecommerce businesses operate under an L.L.C. You need to do this to avoid liabilities and legal issues.
Step 5: Obtain Documents and Licenses
To run a business, you’ll need the necessary documentation and accreditations.
Although you can use a full-service website, you may also wish to acquaint yourself with the process.
You can visit the Small Business Association’s learning portal and choose one of their many courses on the subject.
Get an EIN
Your EIN is your business’s identification number. You’ll need this to open a business bank account, file taxes, and legally operate.
You can obtain your own EIN or use a third-party website to handle all of your documentation. Keep in mind that third-party websites will charge you for their services.
Obtain the Necessary Licenses
You may need additional licenses for your small business. Again, a full-service website can help, but you can also visit the Small Business Association’s page to determine your needed licenses.
Licenses differ depending on the state you are operating in, so make sure you’re looking at regulations in your state.
Step 6: Gather Your Products and Promotional Materials
You will want to start with a small amount of product and basic promotional materials since your marketing approach (and inventory) may change as you learn about the ecommerce marketplace.
For now, consider the following.
Find Your Vendors
If you are selling a product, you’ll need to find a wholesale vendor. There are many wholesale vendors worldwide, and you should research and read reviews before choosing one.
Your vendors will depend on the type of business you are operating.
Perfect Your Brand
Start thinking about your brand’s logo, colors, and imagery.
Dozens of websites can help you choose a logo and brainstorm brand design, or you can hire a professional designer to help you.
You begin to think about consumer-facing elements—such as your website. You want to select a logo and colors with this in mind.
Develop Basic Marketing Materials
Start thinking about marketing your product.
Again, you can externalize this process and hire a professional, but it’s best to start small, so you can shift course if necessary.
Brainstorm your brand’s vision and mission, promote on social media (whether using your own or a separate business account) and create visuals to entice customers.
You can create flyers and promotional materials for free on Canva.
Step 7: Finalize Your Ecommerce Business Plan
Your business plan is the blueprint for your ecommerce website.
There are thousands of templates available online, but you can consult the SBA’s business plan resources to determine the details of your plan.
Learn the basics of business financing. You can find resources on the SBA website or seek related Youtube videos. At a minimum, you should project a few key metrics like spending, profits, and your break-even rate (when you are earning as much money as you are spending).
Your business should also eventually have its bank account since many items are tax deductible. You can call your bank to inquire about business accounts.
You may want to use a third-party shipping service to manage your inventory.
Companies like ShipBob often offer free inquiry sessions and quotes.
Step 8: Create and Launch Your Website
Your website is your ecommerce storefront.
For this reason, web design and development are valuable skills to have—or to hire.
Avoid spending money on a professional at first. Website builders offer streamlined services to get you a basic, functional, and attractive website.
Your website can be one or more pages, but it should have:
- A home page
- A navigation tool
- An “about me” section
- Information on your product
- A” contact” button or banner
- A purchasing portal
- Carefully curated aesthetic elements (images, colors, fonts, etc.)
Consider the following essential aspects of an ecommerce website.
As always, look for websites that have quality user interfaces. Identify which elements are essential to you.
You can also read more in-depth about the psychological and behavioral impacts of different website elements— a topic both exciting and relevant.
Web design refers to the front end of your website: the visual elements visible to your customer. Take the time to choose relevant and complimentary colors, visible and legible fonts, and images or animations that speak to your brand’s character.
This term refers to the functional elements of your website. If you create a site from scratch, you’ll need to learn to code and develop familiarity with development software.
Using a website builder, you don’t have to worry about the minutiae and can simply select features you like.
Step 9: Advertise
It’s time to promote your website. Consider the following essential marketing tools.
Automated Email Marketing
Your email list is your greatest asset.
Use email marketing to promote coupons and upsells, send coupons, confirm emails, and more.
You can send emails manually, but you will save time using an automated service like Mailchimp.
Social media is the best (free) way to promote your business.
If you use your account, ensure the rest of your content is appropriate and represents your brand well.
If you create an alternate account, post consistently and offer valuable information and content that users will enjoy.
You can create videos or virtual flyers to advertise your company and submit them to high-traffic ad managers like Facebook, TikTok, or Instagram.
Search Engine Optimization (SEO)
SEO refers to your business’s prevalence on search engines.
You can boost your SEO using the following research-proven methods:
- Popular keywords: include terms in your text that will draw interested users to your website.
- Update your content regularly.
- Create robust metadata: metadata is the first thing users will see (typically a title and description). Use relevant and attention-grabbing keywords to draw users onto your site.
- Add links to other relevant websites.
- Use alt tags: alternative tag descriptions will help users find your website using different terms.
Step 10: Keep Learning and Scaling
You’ll want to continue learning and analyzing your metrics to maintain or grow your business.
Expand Your Customer Base
Most ad managers provide insight into how your ads are doing. You should check this regularly to see how much attention your ads garner. Often one keyword can make a big difference in the number of clicks your ad generates.
Build Brand Loyalty
There are many ways to build customer loyalty. Reliable avenues include offering sales and discounts, promoting giveaways, expanding offers, and consistently adding new content to your website.
Measure Growth—and Scale
Consistently check sales, website traffic, and other metrics to let you know how your ecommerce business is doing.
This consistent checking allows you to determine when to scale your business and expand into new markets.
Ecommerce Business Ideas
If you struggle to identify your niche, consider the following highly profitable markets.
This category is broad. You can sell yoga video subscriptions (information) or seasonal snack boxes (products).
Courses and Education
E-learning is also a rapidly growing industry; Forbes estimates the sector will increase to $325 billion by 2025.
Consider what you have to teach others and sell it!
Health and Beauty Products
Health and beauty products are among the most lucrative in ecommerce. Demand never wavers since people always purchase these. Furthermore, some products are easy to make at home (like soap).
Meal delivery kits are also top-rated.
With expanding diets and food preferences, you can identify your niche (paleo, vegan, etc.) and fill it!
Many creatives struggle to make ends meet.
Ecommerce is your chance to monetize your craft—and have fun doing it. You can create your website or sell it on a third-party crafts website like Etsy.
Consider selling used or vintage clothing online. There is a high demand for quality clothes, and fashion resale is also a booming industry.
Coaching or Mentoring Services
It’s easier than ever to provide services around the world.
Consider tutoring, coaching, or mentoring online. You’ll enjoy low overhead costs and minimal website maintenance.
Before You Begin
It’s time to get started!
As you go, remember that managing a business is a challenging (but rewarding) endeavor and that you will experience highs and lows.
Use this guide to keep you on track and informed.
This article was written in cooperation with Adcore