An All-Encompassing Guide to Starting an eCommerce Business

Building an eCommerce business is not easy–especially if you have all these great ideas but don’t know where to begin. You may find it equally challenging and exciting. Learning about selling and marketing, building an eCommerce website, and all about product selection, validation, and production can be challenging.

Need a leg-up against other upcoming eCommerce stores? We’ve got you covered!

TooMrkt’s highly experienced experts have been helping businesses reach their eCommerce website & business goals–from ideation to launch and post-launch. 

We’ve compiled all the essential information to help you get several steps closer to launching and marketing your eCommerce store. 

So, what are you waiting for? Let’s jump right in!

What’s an eCommerce Business?

eCommerce businesses use online platforms, marketplaces, and websites to sell products or services to their customers. They can be multi-million dollar enterprises or even small, home-based operations.

Some eCommerce stores follow successful strategies for local success, after which they look for options to expand globally with minimal overhead costs. 

The 6 eCommerce Business Models

• Consumer-to-government (C2G)
• Consumer-to-business (C2B)
• Consumer-to-consumer (C2C)
• Business-to-government (B2G)
• Business-to-business (B2B)
• Business-to-consumer (B2C)

Should You Start an eCommerce Business? 

While the eCommerce sector is thriving and growing, it’s not too late for you to enter this well-established business niche. These websites and stores are easy to set up and manage while maintaining low overhead costs.

According to a 2022 research article, eCommerce accounts for about $3.3 trillion in sales (22%) and is expected to reach $5.4 trillion by 2026. You can start your eCommerce store as a side hustle because it allows:

• Flexibility in terms of time
• Flexibility for customers
• Passive income
• Remote work
• Opportunities for growth & global expansion
• Opportunities to scale products
• Easy access to customer data
• Reduced overhead costs

The 10 Crucial Steps to Follow

Here’s how you can launch, market, and enhance your eCommerce business:

1. Find Your Niche & Products

Finding your specific niche will help you understand the needs and requirements of a particular market segment, and, consequently, assist you in focusing on all aspects of your target market, segment, and audience.

Here are some questions to ask yourself to identify a suitable niche for your business successfully:

• What do my resources and budget look like?

Your resources and budget will help you determine whether or not you should partner with manufacturers, consider the dropshipping business model, or handle in-house production. These factors will also help you gauge whether or not your eCommerce store will be able to manage a steady supply and other product-related costs.

• What are my hobbies and interests?

If you’re struggling to find a business niche, it’s time to look inward into your hobbies and interests. If you can find a niche closer to things and activities you enjoy, you’ll find it relatively easier to invest your resources and attention into your business.

• Are there any particular niches that are currently highly profitable?

There may be niches that are currently or predicted to be highly profitable in the eCommerce market. We recommend boiling down your search to those with attractive growth potential, high demand, and relatively less competition. Here are some eCommerce trends you should know before you pick your niche.

• Where does my expertise lie?

It’s a great idea to start within a niche where you already have sufficient experience. Your knowledge in that particular niche will equip you to understand and cater to the consumer demands for various product types and closely monitor and understand your target audience.

In addition to this, also refer to the 6 primary eCommerce business models (discussed earlier) to make an informed decision. Choosing a specific business model will further help you in sub-categorizing your selected niche.

The next step involves evaluating each shortlisted niche’s competition and demand. Here are some ways to do that:

• Competitive research: Who are the top players in each niche, what marketing channels do they use, how do they influence purchase decisions, and which products do they sell?
• Industry leaders’ advice & insights: Are there any industry leaders you can interview to gain expert advice and insights pertaining to your niche’s growth potential, challenges, trends, customer preferences, and market dynamics?
• Research reports analysis: Which credible research reports are readily available for you to understand your niche’s growth potential?

If you’ve selected an oversaturated market, it’s also essential to identify and choose a unique product category. 

Consider Finding Existing Products You Can Improve

After identifying your sub-niche, it’s time to get to your product ideas. Doing so will help you better understand market demand. You can conduct keyword research to find the volume of searches for your selected products, their keyword difficulty, and the cost per click (CPC).

2. Conduct Competitive & Target Audience Research

You’re not ready to build your eCommerce store just yet. After shortlisting your niche and products, it’s time to research your competition and target audience. This will help you gain deeper insights into any gaps in the market or unmet needs that you should use to base your offering around.

a. Research Your Competition

There’s no harm in finding your inspiration from well-established, new, or upcoming competition in the market. Not only can you improve upon what they’re doing right, but you can also look at their mistakes to note down what to avoid.

Evaluate your competitors’ content types, social media channels, and best-selling products and take a deep dive into their strengths and weaknesses. You can also utilise tools to verify their top-performing pages, traffic cost, organic traffic, and most successful keywords.

To turn your competitor analysis into a top-notch investigation, you can also evaluate their paid search keywords and PPC ad copy traffic and positions.

b. Research Your Target Audience

Your target audience comprises individuals to whom you want to direct your marketing efforts and services or products. These individuals are defined by specific traits, such as their goals, challenges or pain points, interests, age, and gender.

Studying your target audience will help you understand their purchasing patterns, shopping behaviours, pain points, and challenges. You can then base your advertising and marketing campaigns, offers, and messaging on this information and truly resonate with your intended customer base.

In particular, narrow down your research to your audience’s behavioural, demographic, and socioeconomic data. It’s easier to evaluate this data as a starting point, especially if you use the available online tools, and create campaigns, marketing materials, and product descriptions around it.

3. Verify Your Product & Niche Picks

Next, take some time to validate your product and niche picks. There are a few questions you can ask to confirm and verify efficient selection.

Questions to Validate Your List of Products

• How will my products adapt to changing consumer preferences or market conditions?
• Are there any regulatory or legal constraints for the selected products?
• What are the distribution, manufacturing, or sourcing challenges?
• Is the product scalable in terms of market expansion and production?
• Can I maintain a healthy profit margin but offer competitive prices?
• What does the product demand look like?

Questions to Validate Your Niche Selection

• Is the niche scalable and sustainable? Are there any potential threats to the niche?
• What is the level of competition and what are the barriers to entry?
• What does this niche’s performance look like in varying economic cycles?
• Are the customers in this market price-sensitive?
• What’s the potential size of your customer base?
• Does this niche have a consistent product demand?

4. Source Your Product

There are four different approaches to sourcing products for your eCommerce business. 

a. Find a Local Manufacturer

If you want to create unique products based on your specifications and needs but lack the required resources, you can find a local manufacturer for your eCommerce products.

b. Use Print-on-Demand or Dropshipping

Dropshipping is relatively easier as it requires you to focus your attention on the sales and marketing side of the business, while the suppliers you’ve partnered with take care of the shipping, packaging, storage, and manufacturing of the products.

c. Build or Create Products

Manufacturing your own products requires significant resources, time, and money. However, this approach also gives you complete control over product quality.

d. You Can Also Resell Existing Products

Reselling products requires adequate storage space and upfront investment. You’ll likely need to purchase products in bulk from wholesalers. 

Your approach to product sourcing will be a key deciding factor in the next steps you need to take. For example, if you choose to build or create your own products, you’ll need to rent a manufacturing space, hire people, and purchase equipment. You’ll also need to work on product design, development, and manufacturing.

5. Create Your Business Plan

Your business should integrate your eCommerce firm’s operational structure, financial projections, target market information, marketing and sales strategies, and your company’s overall goals.

The primary purpose of this document is to create a roadmap for your business, act as a reference point in future, and address vital business-related questions. The following is a list of everything your business plan needs to have:

• An executive summary
• A company overview
• Problems your business/products help solve
• Consumer benefits
• Market size and growth
• Competitor analysis
• Business model
• Logistics and operational plans
• List of intellectual property (optional)
• Marketing strategy
• Company and business roadmap
• A brief introduction to your company and team (organisational structure)
• Financial plan

6. Register Your Business

Once you’ve created your business plan, you’re all set to pick a name for your company and register your business. Moreover, take care of any other legal requirements linked with establishing an online store.

You will also need to apply for any required safety, environment, and health permits, sales tax certifications, and trade licences.

7. Build Your eCommerce Store

If you don’t have any technical development expertise, you can hire experts who can help you build your online store as per your needs and requirements. Here are some steps that’ll give you a general idea of what it entails:

a. Selecting Your Domain Name

As a part of the URL, your domain name will help identify your business. While you can choose the same domain name as your business name, it’s not entirely necessary. You can use a domain name search service like Instant Domain Search or a domain name registrar like GoDaddy to check your domain name’s availability. 

b. Set Up Payment Methods

Your eCommerce business’ primary goal is to make online sales. Therefore, to accept payments from your customers, you’ll need to set up a payment gateway. This front-end technology streamlines the processing of secure and efficient online transactions. Razorpay and Stripe are two of the most popular third-party eCommerce plugins available.

c. Choose a Website Layout

Create a list of all elements, themes, and features your website needs to have to enhance customer satisfaction and engagement. Once you have a clear idea of the specific elements you want to integrate, you can start building SEO-optimised pages, such as the homepage, products page, About Us page, FAQs page, contact page, and policy pages.

d. Select Your Web Host & Web Builder

Several eCommerce website builders allow individuals with practically no technical experience to create and manage their online stores. However, there are several cons to consider. These builders make it trickier to transfer your website, they may contain several security concerns and performance issues, and impose numerous customisation restrictions.

For these reasons, we recommend partnering up with an eCommerce expert who can help you set up your own website, complete with all security protocols, easy migration, performance analytics, and room for future customisations.

8. Create a Logo

You’ve likely selected a business name by the time you reach this step. Now, it’s time to create a simple yet eye-catching logo. Remember, your logo should be timeless, versatile, and relevant. 

Your brand image (discussed later on) also plays a vital role in logo creation. After you’ve created your brand image, here are the steps to follow to create the perfect logo:

• Discover logos you like
• Choose a specific logo style (handmade, fun, modern, vintage, or  classic)
• Choose the type of logo you want (combination marks, mascots, abstract logo marks, pictorial marks, wordmarks, monograms)
• Choose a colour scheme
• Select a font
• Create the outline shape for your logo
• Fine-tune your design

9. Select Shipping Strategies

There are numerous shipping and fulfilment aspects of the business that you’ll need to take care of as you near the launch of your new eCommerce store. Your shipping strategies should include the designing of your packaging materials, packaging materials, shipping labels, and drop-off to specific shipping facilities.

Here are some additional factors to consider before you lay out your shipping strategies:

• Shipping methods and rates
• Product weights
• Preferred packaging
• Packaging source
• Tracking and insurance needs
• Selecting a fulfilment warehouse

In addition to this, you should also spend some time defining your key performance indicators (KPIs) upfront. Doing this upfront will give a good idea of what measures of success you need to track. 

10. Adopt Suitable Marketing Strategies

With everything else out of the way, you can finally focus on strategies to attract potential customers to your store. There are three primary tried-and-tested marketing types that you should base your strategies around.

a. Social Media Marketing

Social media marketing, as its name suggests, integrates marketing strategies for different social media platforms. Social media marketing strategies can help you drive traffic to your website, build stronger connections with your audience, and increase your brand’s visibility.

In addition to posting high-quality, relevant content, you should focus on customer interaction, building & nurturing a community, and increasing your content’s discoverability.

b. Paid Advertising

Channels, such as YouTube, Instagram, Google, and Facebook, put your content right in front of your target audience as paid ads in exchange for a fee. Investing in paid advertising increases the chances of your target audience discovering your eCommerce store.

PPC, also mentioned earlier, is one of the many paid ad models. This specific model requires website owners to pay channels for running their ads (targeting a specific keyword) each time a user clicks on them.

When you search for a specific keyword on Google, the first portion of the search engine results page (SERP), typically highlights paid ads. You can spot these ads with the “Sponsored” or “Ad” tags attached.

c. Search Engine Optimization (SEO)

SEO helps websites in organically enhancing their website’s visibility in search engines, such as Google and Yahoo. One of the significant elements that play a big part in improving visibility is relevant keywords.

You can find your potential customers using search engines to find products similar to those you’re selling with the help of SEO optimisation. You can use tools to search for the specific keywords your target audience is searching for, their search volume, and keyword difficulty and intent. You can also specify your search based on location.

10 Additional Tips to Help You Kickstart Your Business

The following are some eCommerce business tips and strategies that will help you elevate your company after launch:

1. Consider eCommerce Marketplaces

Marketplaces can help eCommerce stores significantly improve their reputation and reach. As a result, these stores enjoy higher revenue and sales. Marketplaces such as Walmart and Amazon drive billions of customers to their websites each month.

Their vast product selections, customer-centric approach, and the trust they’ve built over the years make them a prime choice for online shoppers. 

2. Utilise Influencer Marketing Techniques

It’s essential for eCommerce stores to collaborate with influencers with the same or similar audiences who share the interests of your customer base. Influencer marketing campaigns increase brand awareness and drive more sales.

In addition to this, it has the potential to open new gates to an untapped market, niche, or target audience segment. You can partner with influencers to engage with their follower base and benefit from the trust they have built.

Here are some key points to remember:

• Ensure the influencer[s] have the time for efficient and personal collaboration
• Your interests and values should closely align
• Their followers should share some similarities with your target audience
• They have a high engagement rate

3. Build a Customer Loyalty Program

You can grow brand advocacy and loyalty, foster long-term relationships, and encourage ongoing business by rewarding your customers. Create a customer loyalty program that makes it worthwhile, through benefits and incentives, for your customers to interact with your brand.

An added benefit of the customer loyalty program is customer retention, which enhances repeat purchases from existing customers–consequently driving more revenue and sales.

4. Don’t Forget to Optimise Your Website

A relatively easier and quick way to increase revenue and sales and convert your website’s visitors into paying customers is website optimisation. Without optimisation, you’ll likely struggle to convert your readers into buyers–even if your website has a lot of traction.

Here are a few examples of how to optimise your website:

• Present multiple payment options
• Enhance your website’s navigation
• Increase page speed
• Make your eCommerce website mobile-friendly

5. Utilise eCommerce Analytics Tools

Want to know how your website’s visitors are engaging with your products and store and which audience segment is mostly viewing which product types? You’ll find your answers by reviewing the demographics.

Furthermore, by evaluating the specific search terms people use to land on your website, you can understand how your target audience mostly finds your products. Here are some other analytics you should run for better business performance and strategies:

• Breakdowns of your customers by their marital status, gender, education, income, and age
• Top, most commonly purchased product combinations
• Brands or products your customers are reordering
• Products gaining the most conversions and clicks on strategic search terms

6. Capture & Highlight Customer Reviews

Reviews are a powerful eCommerce tool that helps build credibility and trust amongst the target audience. Your reviews should be displayed in a way that they’re visible to search engines and customers shopping for similar products as the ones you’ve listed.

You can also integrate third-party tools that automatically request customers for their reviews, which can consequently increase your future sales. 

7. Use A/B Testing for Enhanced User Experience

A/B testing allows businesses to test various offers and value propositions to find the best combination for products. It helps them determine things like which product descriptions or titles will appeal most to their customers.

You can run product page experiments utilising tools, such as Amazon’s Manage Your Experiments tool to find the content type most likely to drive more sales. Such tools can help you determine the right combination of bullet points, descriptions, images, and titles to accelerate conversions.

8. Work on Your Brand Image

Your brand image represents how your customers perceive your brand, how they feel about it, and what they think about it. This impression is carefully created through brand identity, brand awareness, and brand messaging.

Over time, a strong brand image would mean you have a strong business. Your customers will consider you reliable and trustworthy, and pick you over any existing or future competitors. The following are some steps you’ll need to follow to create a strong, consistent brand image:

• Determine your target audience
• Define your value proposition
• Create your visual identity
• Establish your brand personality and archetype
• Cultivate brand consistency

9. Avoid These Common Pitfalls When Selecting Your Products

Avoid some common pitfalls to ensure efficient and effective business growth when choosing your products. Choose products that:

• Have a long shelf life
• Are affordable for customers
• Have branding potential
• Are easy to package and ship

The following are a few examples of products that may be relatively trickier to sell for new entrepreneurs:

• Electronic or complex items
• Highly competitive products
• Bulky, heavy, or expensive-to-ship items
• Products with relatively lower profit margins
• Perishables and food

You should avoid selling the following product types altogether:

• Trademarked or Patented Products: There may be restrictions on the types of products you can sell based on the selling channels you’re using. To make sure you won’t run into any roadblocks, review the list of restricted products before you buy any inventory.
• Restricted Products: Avoid these products unless you’re the owner of the trademark/patent or are a certified reseller of the products.

10. Cross-Sell, Upsell, & Focus on Customer Retention

Cross-selling entails encouraging your customers to purchase products closely related to the complementary products they’re viewing or buying. In contrast, upselling is when you encourage customers to purchase a higher-end service or product instead of the one they are considering. Both these strategies can be used to boost profits.

Customer retention is another strategy that’s less expensive and relatively easier compared to those focusing on attracting new customers. Implement strategies for new services and products, give out exclusive discounts, and introduce loyalty programs to encourage customers to make repeat orders.

How Much Will It Cost To Start an eCommerce Store?

eCommerce companies don’t cost much compared to traditional brick-and-mortar stores. You won’t need to pay rent for a retail space or spend thousands on permits and licences. The starting cost can be relatively low. Dropshipping businesses can further reduce costs because they don’t require any manual labour, inventory, or raw materials.

The following are some categories of cost to consider:

• Marketing 
• Staff/team
• Offline
• Shipping
• Online store
• Operations
• Product

However, if you’re building your online store on an eCommerce store builder like Amazon or Shopify, it’s pertinent to mention that you’ll need to pay an annual or monthly fee for such platforms. 

With the restrictions on customisations and low-security measures on such platforms, as mentioned earlier, it’s best to build your own website or hire a team of professionals who can help build your platform from scratch with a one-time payment.

Wrapping Up

eCommerce stores can be highly rewarding. They allow owners to share their experiences, interests, and passions with others while generating a great income for them. Hopefully, this guide has set you on the right track to planning, creating, and launching a successful business.

Need expert advice on eCommerce businesses? Book a demo call with our experts to learn more!

Frequently Asked Questions

What’s the best eCommerce business to start?

The best eCommerce business for you would be one that closely aligns with your experience, expertise, interests, hobbies, and preferences. You won’t be able to run a successful, long-term eCommerce store if you’re not excited about it or invested in it.

What are the 4 common eCommerce business types?

The four most common types of eCommerce stores are customer-to-customer (C2C), customer-to-business (C2B), business-to-business (B2B), and business-to-customer (B2C).

How profitable are eCommerce stores?

eCommerce has become one of the most profitable businesses in recent years. In the first quarter of 2023, the sales for eCommerce businesses reached a whopping $272.6 billion. However, your store’s profitability highly depends on factors such as your marketing efforts and the competitive landscape.

How long does it take to set up an eCommerce store?

Investing in your own eCommerce store can reap high benefits, especially if you’re able to connect with a large consumer base. However, it also requires time to set up an eCommerce business and have it take off. Typically, it takes online businesses 2 years to get off the ground and start earning a profit.

What is an eCommerce business?

An eCommerce business is built on digital channels to sell services or products. While these businesses can later introduce physical stores, an online-first selling approach is their priority. These businesses make most of their sales through online digital storefronts.

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