A Step-By-Step Guide On How to Start eCommerce Business

You know when you’re cozied up on the couch, scrolling, and suddenly you’ve added that pair of sneakers to your cart? That’s the power of eCommerce. 

Online shopping is huge now. It’s simple and quick, and who doesn’t love browsing through cool stuff from the comfort of their home?

It’s also one of the best ways to build a seven-figure business. There are countless stories of business owners who have built brands from scratch and made big bucks.

And starting an online store isn’t as tricky as it sounds. There are plenty of tools and platforms out there that make it easy for anyone to set up shop.

If you’re thinking about starting an eCommerce business, this guide is for you. We’ll cover the essential elements and practical steps to get started.

You’ll also find a bunch of free resources to help you with everything from business models and product selection to packaging and customer service.

Let’s get into it!

Understanding eCommerce

In simple terms, eCommerce means buying and selling things over the internet. From that impulsive shoe buy to the pizza you ordered last weekend, if it’s online, it’s eCommerce.

The last decade has seen huge changes in how people buy things. More and more people are choosing to shop online. That’s why eCommerce sales have exploded. Retail eCommerce sales worldwide are predicted to hit $8.1 trillion by 2026:

There’s a big opportunity for people to start their own online stores. If you’ve ever thought about selling something, now is the time. You can make a lot of money with just a few great products.

Benefits of eCommerce

The internet has made reaching customers and selling products easier than ever. Here’s why setting up an eCommerce business can be a great idea.

24/7 sales

Unlike traditional brick-and-mortar stores, an online store operates around the clock. You can make sales on autopilot.

Reach more customers

The whole world can be your marketplace. While physical stores are limited to a specific location, eCommerce has no boundaries. You can sell to customers across the country and around the world.

Cost-efficient

Starting an eCommerce business requires much less upfront investment than a physical store. You don’t need a prime location on main street, a lot of staff, or a huge inventory to get started.

If you choose a dropshipping business model, you only need a laptop and an internet connection.

Easy to start

There are a bunch of tools that can help you set up an online store. We’ll show you how in the rest of this guide.

Choosing your niche and target audience

The first thing you need to do is establish the basics of your online eCommerce business. 

• What you want to sell
• Who would want to buy it

Focusing on a specific niche and audience will make everything from product selection to marketing much easier.

Choose a niche

Think about the market segment you want to target. An eCommerce niche can be anything from eco-friendly gardening to handmade jewelry.

Here’s how to discover a winning niche:

Find your passion

What are the things you like and spend your free time doing? Turning your hobbies into a business makes you more likely to enjoy the journey and be successful. For example, if you’re into music, you could sell instruments or DJ gear.

Research

Blindly following your passions isn’t the best way to start a business. You need to make sure there is demand. That’s where the research process comes in.

You can use keyword research tools or Google Trends to gauge the current interest in your chosen niche. This will show the number of people searching for the topic over time.

It’s also important to investigate the competition. Some niches are already oversaturated with sellers. Check out the stores and marketplace vendors already selling products in your niche. Look at their strengths and weaknesses. Are there ways you can improve on what they’re doing or offer something different?

Identify your ideal customer

Who will buy your products? Try to picture the kind of person who’d want what you’re selling. Here are the key aspects to consider:

Demographics

• Age
• Gender
• Income level
• Education
• Location

Interests

• Hobbies
• Lifestyle
• Values and beliefs

Where do they hang out online?

• Social media platforms
• Forums and communities
• Blogs and websites

What problems are they trying to solve?

• Needs
• Wants
• Pain points

Once you have a good idea of your ideal customer, you can create a “buyer persona.” This is a fictional representation of your ideal customer. You can even give them a name! Whenever you make a decision about your store or products, think about your buyer persona and ask, “Would they like this?”

A buyer persona, sometimes known as a customer persona, are like detailed character sketches of your target audience, constructed from insights gathered through research and data analysis. To create them, delve into demographics, behaviors, interests, and pain points of your audience.

These customer personas humanize your target market, providing a deeper understanding of their needs and preferences. By empathizing with your customers and customizing your marketing strategies accordingly, you can enhance engagement and achieve better business results.

Planning your eCommerce business

The next step is to create a plan. This will set your eCommerce business up for success. First, you need to decide on your business model.

Different eCommerce business models

There are a lot of different types of ecommerce business models. Each has pros and cons, and some are more beginner-friendly than others.

Here’s a quick breakdown of your options:

Dropshipping

Dropshipping is one of the easiest ways to get started. Instead of buying in bulk, you sell products without actually holding any inventory. Once an order arrives, you buy from a supplier, and they ship directly to the customer.

Pros:

• Minimal startup costs
• You don’t have to handle order fulfillment

Cons:

• Profit margins are typically smaller than other business models
• Less control over shipping times

Traditional wholesale

This is the standard eCommerce business model. You buy products in bulk at a discount, then sell them individually in your store.

Pros:

• Higher profit margins
• More control over branding and fulfillment

Cons:

• Higher startup costs
• More risk

White labeling

You buy generic products in bulk from a manufacturer or distributor and add your own branding before selling them to your customers. 

Pros:

• Cost-effective way to increase range without manufacturing products
• You can add your own branding

Cons:

• Your product won’t be unique
• Limited product control

Private labeling

Partner with a manufacturer to produce items exclusively for your brand. You can create your own product design and packaging.

Pros:

• You’ll be the sole seller of your items
• Higher profit margins

Cons:

• More upfront investment
• Commitment to large orders

Print on demand

Print on demand (PoD) works a bit like dropshipping. You can add your designs and branding to custom t-shirts, mugs, and more. When an order comes, your PoD partner prints your design on the product and ships it to your customer.

Pros:

• Create custom products
• Low upfront costs

Cons:

• Smaller profit margins
• Longer delivery times

The right business model for you will depend on your budget, skills, and how much time you’re willing to invest. Dropshipping or print-on-demand might be the best fit if you have a limited budget. If maximizing profits is a priority and you have the budget, consider traditional wholesale or private labeling.

The essential components of a strong eCommerce business plan

Once you’ve established your business model, you need to write a business plan. A comprehensive business plan will help you avoid many of the common reasons why new businesses fail.

It gives you a clear road map of how the business will operate, grow, and thrive. 

Here are the key components you should include:

Market research

If you did your homework when choosing a niche, you should already have a solid foundation of market research. You need to know what types of products you plan to sell, your target audience, and your main competitors.

Products

We’ll cover how to choose viable products later in the guide. For now, you should have a rough idea of the types of products you want to sell and how much people are willing to pay for them.

Financial outline

How much do you think it’ll cost to start your store? Think about costs like setting up your website, inventory, and marketing. This will help you work out how much you need to make in sales to break even. 

Marketing strategy

Start to plan out how you’ll promote your store. This might include social media campaigns, Instagram marketing, paid ads, and SEO. We’ll explore the different marketing channels you can use later in the guide.

Operational details

How will you manage orders? What’s your shipping process? If a customer wants to return a product, how will that work? Establishing these processes now will make things smoother once orders start rolling in.

Goals and milestones

Set targets for yourself. Maybe you want to reach 100 sales in the first month or grow your Instagram account to 1,000 followers. Having clear goals gives you something concrete to work towards. It’s key to staying motivated. A recent AdWeek survey found that 73% of businesses see goal setting as highly important for staying motivated:

Setting up your online store

Launching an online business is much easier than it used to be. There are a bunch of tools to help you create a professional store without any coding knowledge. But there are a few things you need to get right.

In this section, we’ll explore the different platforms you can use and some practical tips to help you make sales. You can also sell on third-party marketplaces. Check out our guide on eBay alternatives to discover the best places to sell online.

eCommerce hosting options: key features and pricing

Hiring a web designer is expensive and complicated. The best way to build your first store is to use an eCommerce platform. Here are the big players you should consider:

1. Shopify

Shopify is one of the leading eCommerce platforms. It’s known for its user-friendliness and extensive features. You’ll find everything you need to start, run, and grow your business.

Pros:

• Easy for beginners
• Comes with hosting
• Built-in security

Cons:

• Monthly subscription fee
• Extra fees per sale

2. WooCommerce

WooCommerce is a free plugin for WordPress that turns your website into an online store. It’s super flexible and provides almost unlimited customization options.

Pros:

• The basic plugin is free
• Highly customizable
• Large community to help out if you get stuck

Cons:

• You need to handle hosting, backups, and security
• Can be difficult to use if you’re not familiar with WordPress

3. BigCommerce

BigCommerce is a fully hosted eCommerce solution. It offers a huge range of features without needing external apps or plugins.

Pros:

• Ton of out-of-the-box functionalities
• Great for businesses of all sizes
• No transaction fees

Cons:

• Monthly subscription fee
• More complex to use than other all-in-one platforms

4. Wix eCommerce

Wix is well-known as a website builder. But it has significantly increased its eCommerce capabilities over the years. You can easily create a professional-looking store without any technical skills.

Pros:

• Intuitive drag-and-drop interface
• Lots of stylish design templates
• Includes hosting and security

Cons:

• Monthly subscription fee
• Transaction fees

5. Square Online

Square Online is a relatively new eCommerce platform from the same company that makes those little card readers for mobile payments. The biggest selling point is that it offers a completely free version. 

Pros:

• Simple builder that gets you selling quickly
• Seamlessly integration with Square POS for physical sales
• No transaction fees

Cons:

• Limited customization options
• Free plan is very limited

Things to keep in mind when choosing a platform

So, what should you look for when choosing a platform?

Here are the key considerations:

Your budget

Some platforms have upfront costs, while others have transaction fees and monthly charges. You can find free options, but these platforms often limit the number of items you can sell or include ads on your store.

Technical skills

How confident are you with web design? If you have experience with WordPress, you could save some money and take advantage of the customization offered by a plugin like WooCommerce. If you’re a beginner, a platform like Wix or Shopify is much easier to use.

Features needed

Consider what you need now and what you might need as your store grows. Think about things like payment options, product listings, and marketing tools.

Support

Check if the platform offers customer support, online resources, or a community forum. You don’t want to be stuck waiting days for an email response if something goes wrong.

Tips for creating an attractive, user-friendly website

Most website builders will offer a range of templates to help you create a store that looks great. But there are some key things to keep in mind to make sure your store is set up to work well for shoppers.

1. Mobile responsiveness

Over 55% of website traffic comes from mobile devices. And 76% of consumers say they make purchases on mobile because it saves them time. You need to make sure your store looks good and offers a great experience on all screen sizes.

The easiest way to do this is to choose a responsive theme or template. This means your store will automatically adjust to the visitor’s device.

2. Fast loading times

A slow-loading store can kill your conversions. A recent study found that for eCommerce businesses, conversion rates drop by 0.3% for every additional second it takes your website to load.

You can check your site speed using Google’s PageSpeed Insights. The tool will also provide recommendations on how to improve site speed. Generally, large files like images are the number one cause of slow loading times. Make sure you compress your images using a tool like TinyPNG.

3. Simple design

Less is more when it comes to web design. If you clutter your pages with too many graphics, images, and other elements, you can confuse visitors and cause them to lose concentration. Keep your design simple by spacing out elements and using a consistent color palette.

4. High-quality product pages

Your product pages will make or break sales. In a recent survey, product descriptions and images were ranked as the two most important elements of the online shopping experience.

Use clear images to give your customers a better understanding of what they’re purchasing. In the description, be detailed and thorough. Mention the product’s features, benefits, and any specifications.

5. Streamlined checkout process

The easier it is for shoppers to complete the checkout process, the more sales you’ll make. Try to make it as short as possible and only ask for the information you need to complete the order. You can also offer a guest checkout option for shoppers who don’t want to create an account.

Sourcing and managing products

Products are the most important part of any successful ecommerce business. It doesn’t matter how good your marketing is, you won’t make any sales with poor products.

In this section, we’ll unpack what makes a good ecommerce product and how to manage your inventory.

How to choose products to sell

Here’s the thing: you can’t expect every product you sell to be a hit. But that’s okay. The key is to learn, adapt, and keep your customer’s needs at the forefront.

However, there are some consistent characteristics of a winning product. You can identify those ingredients by following the steps below:

1. Understand your audience

Think about who you’re selling to. What do they like? What are their needs or problems that you could address? By putting the needs of your target audience first, you can narrow in on the products they will like and buy.

2. Research market trends

You can get an idea of demand using Google Trends. Type in your product idea and see how many people search for it over time.

This will help you determine if there is consistent demand, whether the product is trending, or is more seasonal.

3. Profit margins are key

You want to sell products, but you also want to make some profit. Make sure you pick products that leave you with a good profit after you have covered all your expenses.

Check out our guide on eCommerce pricing strategies to learn the best ways to maximize sales while locking in high profits.

4. Check out the competition

Spend time on Google, Amazon, and eBay to find out who sells similar items. How are their sales? Is there room for another player? If you can find a unique angle or offer something extra, you could carve out your own space.

5. Use tools

The easiest way to find winning product ideas is to use the right tools. SaleHoo Labs simplifies product sourcing by analyzing data from online marketplaces like eBay and Amazon. You can adjust the sell rate, average price, and competition filters to narrow in on high-profit items with minimal competition.

SaleHoo Labs also provides information about potential suppliers for each product. You can find vetted suppliers to source your products.

6. Think about shipping

Consider shipping costs and logistics when choosing products. Large, heavy items can be expensive to ship. On the other hand, small and light items are cheaper and easier to handle.

7. Start small

It’s always a good idea to start with a small batch of products. You can see how well the product sells and get some customer feedback before committing to a large order. And make sure you get a sample product to judge the quality before you commit to a large order.

Strategies for efficient inventory management

Managing inventory is all about being organized. You want to make sure you don’t carry too much inventory or run out and miss out on sales. A recent study found that 30% of consumers feel that stockouts hurt the shopping experience:

With the right strategies, you can minimize losses and maximize profits. Here are some practical tips to keep your inventory in check.

1. Use the right tools

There are a ton of inventory management tools out there. They can help you track products, alert you when stock is low, and even forecast future demand based on past sales.

Check out our list of AI eCommerce tools to discover the best platforms for managing your inventory.

2. Regularly check stock levels

Tools can be helpful, but you should also carry out physical stock checks. Make sure your records match what’s actually in your storage.

3. First-in-first-out (FIFO)

This is a basic inventory management principle. It means selling the oldest items first. It’s crucial if you’re selling items with an expiry date.

How to get sales from your eCommerce business

With your eCommerce store up and running, the big question is: How do you drive sales? 

In this section, we’ll reveal the best ways to generate sales and the importance of content across your marketing channels.

eCommerce marketing channels

There are many different ways to reach your audience online. Each channel has its strengths, and you’ll need to rely on more than one to generate consistent sales. A recent survey found that 67% of eCommerce companies felt that an omnichannel strategy was very or quite important:

You’ll need to test, analyze, and determine which channel combination works best for you.

1. SEO (Search Engine Optimization)

SEO is about improving your website to rank higher in search engine results. When someone searches for products you offer, you want your site to show up on that first page. A recent study by Bright Edge found that SEO is responsible for 53% of traffic for the average website:

The most important elements for SEO are content and backlinks. Use keyword research to find out which terms potential shoppers are searching for, create awesome content, and focus on getting backlinks from reputable websites.

3. Social media

Social media is the perfect place to showcase your products and engage your audience. A recent survey found that social media, such as Instagram marketing, has inspired 77% of people to shop even when they weren’t planning to do so:

You can use platforms like Facebook, Instagram, Pinterest, and TikTok to reach potential customers and tell your brand’s story. Set up a regular posting schedule, engage with followers, and consider using paid advertising to reach a larger audience.

3. Email marketing

Email marketing is an excellent way to inform your audience about new products and offers. It’s also a great tool for retargeting customers who have abandoned their carts.

Segmentation is key. You can segment your list of email subscribers based on their interests and behavior to make messaging more targeted. For example, you can reward loyal customers with a special discount or set up a welcome email sequence to get more reviews or followers on social.

4. Pay-per-click (PPC) advertising

PPC advertising is a type of digital marketing where you pay a fee every time your advertisement is clicked. Platforms like Google Ads and Bing Ads allow you to target searchers based on keywords. You can also leverage platforms like Facebook Ads to target specific audiences based on demographics and interests.

PPC can be a great way to test the demand for a new product and quickly bring in traffic. And because you only pay when your ad is clicked, a well-optimized campaign can be very cost-effective. 

5. Influencer collaborations

Influencer collaboration marketing can help you piggyback on the reach of individuals with a large online following. It’s one of the fastest-growing eCommerce marketing channels.

You’ll need to identify influencers with an audience that aligns with your target market. Make sure the influencer collaboration is a good fit for your brand. It’s also a good idea to spend some time checking out their posts and looking at the comments. This can help you work out if their follower numbers are genuine.

The role of content in eCommerce marketing

Ever heard the phrase, “Content is King”? It’s the title of a 1996 essay written by Bill Gates on the future of making money on the internet.

Content is the most important element of your eCommerce marketing strategy. It plays a vital role on almost every channel. And it’s getting more and more influential. A 2022 survey found that 70% of B2C marketers think that content marketing is more important now than in the previous year:

Investing in high-quality content can make your marketing efforts much more effective.

Educate your audience

Sometimes, customers don’t know they need your product until they understand their problem. You can use content like how-to guides and tutorials to highlight the value of what you’re offering.

Build trust and authority

When you share high-quality, informative content, it positions your brand as an expert. People see you as a trusted source of information. This can make shoppers more comfortable buying from you.

Engage and retain customers

Content can engage new customers throughout the buyer’s journey. You can increase brand awareness with entertaining social media content, such as creative Instagram marketing, drive sales with buyer’s guides, and keep your existing customers engaged with user-generated content.

Customer service and support

While many stores focus on ads and pricing, there’s a secret weapon that can help you grow your store: customer service. Taking care of customers can make them stay loyal and even spread the word about your business. 

Here’s why customer service is so important and how you can excel at it:

The importance of excellent customer service

If you’ve ever bought something online or in-store, you know how much customer service can impact your shopping experience. The way you treat your customers can set your business apart. 

Happy customers often become repeat customers. If they have a positive experience, they’re more likely to come back next time they need something you offer. A recent report found that customer service was the second most influential factor for customer loyalty:

Great customer service isn’t just about retaining customers. It can also help you generate more sales. Satisfied customers leave positive reviews. That positive feedback can drive more sales.

Strategies for creating a positive customer experience

So, how can you make sure your customers leave with a smile? Here are some strategies you can implement:

Clear and fast communication

Always keep your customers in the loop. A recent study found that fast response times were the most important attribute of the customer experience:

Whether confirming an order or updating on shipping status, aim to provide timely and clear communication.

Flexible return policy

Even if you sell high-quality products, things won’t work out sometimes. Returns are inevitable, no matter what you’re selling.

A transparent and fair returns policy can improve the customer experience. Make it clear when the item needs to be returned and when the customer can expect a refund.

Offer multiple contact options

Some people prefer emails, while others prefer a phone call or chatbot. Offering multiple ways for customers to reach out can enhance the shopping experience. It makes it easy for shoppers to get in touch when they have a query or a complaint.

Personalize when possible

The small things can make a big difference when it comes to customer service. Always use a customer’s name in communications and try to remember their past purchases or preferences. You can also personalize the product packaging or include free gifts to enhance the customer experience.

Legal and compliance considerations

Before you launch your eCommerce business, there are a few legal considerations you need to be aware of. Understanding and complying with these regulations protects your business. It can also help you to build trust with your customers.

Tax and legal requirements

Starting an online store means you’ve got to follow specific rules about taxes and how your business runs. Getting this right from the start is super important to avoid any issues later.

Here are the key things you need to know:

Business registration

First, you’ll need to register your business. Depending on where you’re based and your business structure, this could be as a sole proprietorship, a partnership, or even a corporation. Check your local regulations to see which business structure best fits your store.

Sales tax

You may need to charge a small sales tax on customer purchases. This depends on where you’re based and the location of your customers. In the US, individual states have their own laws on sales tax.

The easiest way to stay compliant is to use an eCommerce platform that handles this for you. If you’re self-hosting, get some local professional advice to ensure you comply with the law.

Import/export duties

If you’re selling internationally or importing goods in bulk, make sure you know of any applicable duties or tariffs. Each country has its own rules. It’s a good idea to check what the costs might be. This will help you avoid any unexpected bills or legal trouble later. 

Licensing and permits

You’ll likely need a license from your state or city to operate a business. You’ll need to check the guidelines on your local government website to see which applies. 

Some products also require special licenses and permits to sell. Make sure you’re aware of any that might apply to your products.

Returns and refunds

Many regions have specific laws on returns and refunds. Generally, you’re only legally required to accept a return if a product is damaged or defective. However, most businesses offer a more generous returns policy for eCommerce sales. Your returns policy is a legal contract, so it should be clear and visible on your website.

Data protection and compliance

There are also data protection laws and consumer protection laws you’ll need to consider. Your customers trust you with their personal information when they make a purchase, so you need to keep their data safe. This includes using secure payment gateways and ensuring your website has encryption. Following best practices for customer privacy is vital.

Privacy policies

Having a clear customer privacy policy on your website is often a legal requirement. You need to outline how you collect, use, and protect customer data. There are a lot of third-party plugins and apps you can use to add a customer privacy policy to your store.

Cookie policies

If you plan to use tools like Google Analytics to track store visitors, you’ll need to inform them. Getting their consent to use cookies is a legal requirement in many regions.

Compliance with regional consumer protection laws

There are several regional laws you have to comply with if you plan to sell to consumers in that region. For example, the European Union has the General Data Protection Regulation (GDPR), and California has the California Consumer Privacy Act (CCPA). Make sure to follow these rules so that you don't break any customer protection laws.

Start building your eCommerce store in 2024

Let’s wrap this up. We’ve covered a lot of information, so here’s a quick recap of the key points:

• The right niche and target audience are crucial
• You need a business model and a plan for growth
• Take time to choose the best hosting platform for your needs
• Research is key to finding lucrative products to sell
• Drive sales with an omnichannel marketing strategy
• Excellent customer service creates trust and long-lasting relationships
• Make sure you comply with laws and regulations

There’s a lot that goes into starting an online store. But the ecommerce industry is booming. Launching a small business and selling to a huge audience of potential customers has never been easier.

One of the first lessons you’ll learn is that having the right tools and resources can make a huge difference. And that’s where SaleHoo can help.

The SaleHoo Directory is a comprehensive index of over 8,000+ vetted suppliers from around the world. Whether you’re looking for niche products or trending items, you’ll find wholesalers, dropshippers, and manufacturers that can help you.

If dropshipping is your chosen business model, you’ll love SaleHoo Dropship. You can access a curated list of the best products on AliExpress and add them to your Shopify store in just a couple of clicks.

And if you have any questions about starting an eCommerce store, reach out to our 24/7 support team. We’ll be happy to help you with free advice and guidance on what to do next.