How to Start an E-Commerce Business: A Step-by-Step Guide

What You’ll Learn: Find out how to start an e-commerce business from the ground up. Get step-by-step details and expert insights. 

Looking for a new venture, wanting to start your own business or interested in growing your current brand? Starting an e-commerce business could be the answer. Today, it’s more accessible than ever. It allows entrepreneurs to launch and grow entirely online without a physical storefront. To be successful, however, it’s important to define a clear niche and develop strong branding. You’ll also need to ensure you have quality products and smart pricing to gain customers. Automation, SEO and marketing can also help you streamline and grow your e-commerce business.  

You need specific traits to launch a successful business. These include resilience, adaptability, passion, creativity and confidence. You also need a marketable idea, a detailed business plan and funding to get started. One thing that isn’t necessary in the modern age, though, is a brick-and-mortar store.

Instead, you can set up shop completely online by starting an e-commerce business. This business model is more popular than ever. It’s a type of company where all of the transactions happen online. You might be interested in starting an e-commerce business from scratch. Or, this could be a fruitful side hustle for a full-scale online brand. 

Many digital tools are available to bring your e-commerce business ideas to life. But accessibility doesn’t mean instant success. The e-commerce industry is growing fast, and to stand out, you need a thoughtful approach paired with consistent hard work.

This guide walks you through building an e-commerce website. We’ll also offer insights from successful entrepreneurs and share tips for e-commerce success.

What Is an E-Commerce Business?

An e-commerce business is any model that allows you to sell goods or services online. You can sell as an individual or as a company. As an individual, you might want to monetize your favorite hobby of creating gorgeous handmade jewelry. Or you could launch a digital course or offer a subscription service. No matter what you’re offering, setting up an e-store is at the heart of building an e-commerce website.

Let’s start by going over some common e-commerce models:

• Dropshipping: You sell the product, but a third party handles inventory and fulfillment.
• Private label: Sell products produced by a third-party, but that are sold under your brand name. This includes control over product, packaging, and other details. 
• Print-on-demand: deal for creatives, this model focuses on customized goods. They are printed and shipped only after purchase.

As an aspiring business owner, understanding how the e-commerce industry works is vital to your future success. Each model comes with different operational requirements, cost structures and customer experiences.

E-Commerce Business Ideas to Get You Started

When you’re brainstorming e-commerce business ideas, start with what you know. Are there underserved communities that you’re passionate about or specialized hobbies you’ve been dabbling in? Maybe there’s a specific issue in your industry that you can solve with a better product or experience. 

As you’re thinking about how to start an e-commerce business, consider different ideas and areas of interest. E-commerce business examples in promising niches include:

• Sustainable home goods
• DIY hobby kits
• Holistic health supplements
• Pet products with a mission
• Digital downloads like planners or templates

Don’t make your final decision based on trends. See what ideas spark your inspiration. Then evaluate product-market fit and consider how scalable the business could be.

Starting an E-Commerce Business From Scratch: First Steps

Before setting up an e-store, the most successful entrepreneurs get clear about their goals. It’s also key to approach the beginning stages with intention.

Here’s a quick step-by-step to follow when starting an e-commerce business from scratch:

• Choose a niche: Go narrow before going broad. An underserved group will be more loyal if you meet their specific needs.
• Conduct market research: Study competitors, pricing and gaps in the market.
• Identify your target audience: Define who they are, what they value and where they spend time online.
• Plan your product offering: Will you offer a single item, bundles or a wide selection?
• Select a business model: Decide between dropshipping, private label, print-on-demand or manufacturing.
• Order fulfillment: Understand the pros and cons of in-house shipping, third-party logistics and on-demand models. 

Consider Your E-Commerce Platform

This is also the time to consider your e-commerce platform. You want to build an e-commerce website that reflects your brand and is easy for customers to navigate. There are different elements and different platforms.

Basic options include:

• Choosing an all-in-one builder, such as Wix or Shopify
• Using a website builder that supports e-commerce, such as Squarespace
• Starting an e-commerce site on a platform, such as WordPress and using CMS plug-ins 

Each of these options might depend on your time, technical knowledge and preferences. 

No matter which you choose, you ultimately need to purchase and register your domain name, design your store and optimize product pages. 

You’ll also need to consider how you’ll handle payments, decide on shipping options and make those clear on the website. All of these aspects may differ depending on the types of products you are selling, your specific platform and the e-commerce model you choose. 

How to Start a Successful E-Commerce Business

Building a thriving business requires more than a good idea. It calls for execution, adaptability and relentless focus. If you stick with these essential strategies, you’ll maximize your chances for success. 

Build a Memorable Brand Identity

Your visuals, tone and messaging should consistently reflect your mission. From packaging to product photos, aim for cohesion and emotional resonance.

When developing her brand identity, Kristina Barron, founder of Kristina Barron Photography, focused on creating a strong visual presence on social media, which fuels the online traffic to her website. 

Focus on Product Quality and Customer Experience

Your customers should come to your e-store the first time for your quality product. Plus, they should return for the exceptional experience. 

Simon Elliott, founder and operations director of CLIFTON, a global custom clothing label, says, “Our success comes from giving customers creative control over their clothing, while ensuring high-quality, well-crafted products that reflect their personal style.” Elliott’s model also offers customers a totally customized experience. This combination drives repeat business. 

Choose the Right Pricing Strategy

Price communicates value. Make sure you understand your cost of goods, competitors’ pricing and what your target customer is willing to pay. You need to consider what you’re offering. For example, is this a one-time payment in exchange for a high-quality product, or are you utilizing an ongoing subscription-based model? 

Don’t be afraid to change things up or expand. “Our business started as a subscription box…” says Bryan Gerber, co-founder and CEO of Hemper. “Building out our production capabilities sparked the opportunity to expand the business…. We added several new product types to our repertoire… and even began private-labeling for other businesses.”

He adds, “The subscription box had gotten really popular, and we used that as a springboard for the business to really take off as we diversified our offerings.”

Embrace Automation

Many successful e-commerce businesses fully embrace automation. Barron focused on automation between her website and fulfillment providers early in her journey, and Consider automating everything you possibly can. Effective automated solutions will maximize your productivity and your profit while creating a seamless customer experience. 

Invest in Marketing and SEO Early

Barron also invested in SEO (search engine optimization) early on. Staying consistent in your efforts is her best advice to industry newcomers. 

SEO helps you develop your e-commerce site with searchability in mind. To facilitate this process, use tools to research the most relevant keywords to your target audience. Start building your e-commerce site around those keywords to attract organic traffic to your site.

Managing and Growing Your E-Commerce Store

Once your store is officially live, your focus shifts from launch mode to maintaining momentum. Here are some decisions that are likely to come up as you grow your store:

• Inventory management: Avoid overstocking by tracking sales trends and restocking based on actual data.
• Customer retention: Use email marketing and loyalty programs and prioritize fast customer service to keep people coming back.
• Analytics: Track which products perform well and which promotions drive sales. Let data guide your decision-making.

“I treated my art like a business,” says Barron, “setting up a CRM, tracking customer data and learning from every launch.”

Thriving in the E-Commerce Industry

As a newcomer, you might be asking yourself, ‘How does the e-commerce industry work?’ This is a space that moves quickly. It’s important to stay relevant and customer-facing. Keep these tips in mind:

• Stay close to your customers; be in the online spaces where they are, such as social media and forums. 
• Use feedback to refine your product; listen to your customers. Their satisfaction will drive your success.
• Don’t get pulled in every direction by trends. Stay focused on what works for your product and your target audience. 
• Double down on what works. When you have a successful launch, for example, examine every aspect, replicate what worked and ditch what didn’t.

When something unexpected happens, embrace it. “Your initial vision may open doors that you hadn’t seen before,” explained Gerber, “and those new doors might just be the most important ones to walk through.”

Following these tips can help your business thrive, no matter the economic climate or other outside factors.

Photo by PeopleImages/Shutterstock