In recent years, work-life balance has been a frequent subject of conversation, with more of us disillusioned by the traditional 9-5 workday.
If that sounds like you, you might consider starting your own ecommerce business. If your online store does well, not only will you have complete control over your work week, but there’s a huge earning potential. In some instances, new ecommerce stores have generated over $60k in profits within three months!
If that’s piqued your interest, stick around, because we’ll be showing you how to start your own ecommerce business, including steps for launching your own store and how to promote it once you're set up.
Let’s dive right in!
The ecommerce business is still a viable business venture in 2023. It is still expected to account for about 22% of global retail sales this year, which amounts to $6.51 trillion.
There are 26 million ecommerce businesses worldwide, and this number is also expected to grow.
Building an ecommerce business plan is never easy, but a good start is to know what you want to sell. Everything else will follow.
The impact of payment gateways for ecommerce stores is often understated. By providing the right payment gateways, conversions of E-Commerce stores can increase by 30%.
Is Ecommerce Still Viable in 2023?
If this question is already on your mind, you’re on the right track. You might wonder whether you stand a chance amongst the ocean of ecommerce startups on the web. After all, there are already over 26 million ecommerce businesses worldwide!
However, the ecommerce market is only going to grow. In 2023, ecommerce is expected to account for 22% of global retail sales, reaching a transaction value of $6.51 trillion! In other words, there’s still immense demand for ecommerce stores and services, so you should still be able to carve out a place for yourself in the ecommerce industry.
We’re not here to tell you that creating a successful ecommerce business is easy. However, if you commit to the steps in this article and continue researching ways to promote and improve your online shop, there’s no reason why you shouldn’t establish a viable brand. Needless to say, the best ecommerce businesses are those that put in the effort to optimize their websites, research their products and audience, and stay on top of trends.
Research Your Product Niche
The first thing to do when starting an ecommerce business is to find a product to sell online.
Beginning with a small selection of products catering to a specific niche is the best way to start. For the uninitiated, a niche is a smaller segment of a larger product type. For instance, fashion is a large market. However, it has many product niches, such as sustainable wear, vintage apparel, handmade items, etc.
Although you might expand your product catalog later, for now, it’s wise to hone in on a few items. Namely, because it’s easier to establish yourself as an expert in a smaller niche, which goes a long way to building credibility and trust with potential customers. It’s also easier to narrow your digital marketing efforts as you only focus on a specific customer base. This increases the likelihood of running a profitable business quicker than you would be selling wares across multiple product categories.
So, with that in mind, consider the following while picking your products:
Brainstorm Your Interests
Is this a product you feel excited about? You’ll spend hours nurturing your online business, which won’t always be smooth sailing. However, weathering the storms is undoubtedly easier when you’re genuinely passionate about the products you’re selling. This passion will also shine through your digital marketing and customer communications, which goes a long way to creating a more authentic brand!
Opportunity: Validating Your Product Ideas
Once you have a few product ideas you’re excited about, you need to validate them to ensure enough demand. There are many ways to validate a business idea.
But before doing this, it’s wise to identify who your target audience might be because you’ll be better positioned to validate your product ideas. Identifying a target audience involves understanding the characteristics, needs, and behaviors of those most likely to buy your product. We might gain insights into these areas by researching different demographics, interests, values, and lifestyles on Google and social media. This can help us spot underserved audiences where your product might thrive.
With your potential target audience in the forefront of your mind, you can now do the following to validate your product ideas:
- Market and competitor analysis: How much are people paying for products like yours? What’s the size of your target market? You can kickstart your market and competitor analysis by looking at your competitor’s social media engagement, and market statistics, Googling your niche to see who’s ranking on the first page, and using tools like Google Trends and Google’s Keyword Planner. These are just a few of the many ways to get a feel for the popularity of different niches, forecast future trends, and discover new keywords. There are a variety of online tools and services you can use to fuel your market analysis. For instance, to find market data, try Statista; for keywords in your niche, there’s Google Keyword Planner; for more in-depth competitor research, there’s SocialSprout, SEMRush, and SocialBlade. Finally, you could hire someone to do the work with you by utilizing an online freelance marketplace like Fiverr.
- Run focus groups: Approach members of your target audience to see if they’d provide feedback on your product idea and comment on what they’re lacking in their niche. You could use tools like Collabito or Discuss.io to help with this.
Set Yourself Apart From the Rest
Building on the market analysis point mentioned above, it’s important to gauge whether there’s any leeway to set yourself apart from the competition. Product differentiation happens on different levels. For example, your strategy could be based on price, product performance, and design, the customer service you provide, your marketing campaigns, product packaging, etc. These are just a few suggestions, but hopefully, you get the idea.
How Will You Source Your Products?
Once you’ve validated your product ideas, you’ll need to figure out how to source your products.
Here are some options to explore:
- Dropshipping: Dropshipping is an ecommerce business model where you sell products manufactured and stored by a third party. You only pay for the item when a customer order comes in. Your dropshipping supplier will handle order fulfillment and shipping on your behalf.
Dropshipping suppliers often offer hundreds of products, some of which are even customizable. As a first-time seller, this model is appealing because you don’t have to invest in inventory or warehousing. If this is a fulfillment model you’re interested in, consider integrating your online store with a dropshipping platform like AliExpress or Spocket to add products to your ecommerce site.
- Sell your own products: Perhaps you’ll sell your own handcrafted items. If so, you’ll need to consider things like warehousing, shipping costs, the cost of materials, etc., and factor that into your ecommerce business plan.
- Working with a manufacturer: You engage a third party to create and potentially distribute products. You can find high-quality manufacturers online. But always check their reviews and contact them directly to get a sense of their professionalism. Also, before signing the dotted line, consider how the manufacturer’s location might impact shipping times and the customer experience.
- Working with a wholesaler: Typically, wholesalers purchase products in bulk and sell them to other businesses at lower costs. The downside is that although you might save money in the long run, you’ll have the initial financial outlay and warehousing costs that come with purchasing a significant amount of inventory upfront. You can find high-quality wholesale companies by contacting local trade organizations or researching wholesale markets online like Alibaba.
As you’ve probably gathered, how you obtain your products will come with its own unique advantages and disadvantages, which, of course, will impact your product’s profitability.
Therefore it’s crucial to get a clear idea of these expenses ahead of time so you can decide whether your product ideas are viable.
💡Tip: When sourcing for products in your niche, always look out for trends and analyze your market before making an investment
Next up, you’ll need to complete a thorough competitor analysis. Put simply, competitor analysis is where you identify competing ecommerce stores in your niche/industry. During this process, you'll look at their marketing strategies, products, pricing, what they do well, what they are not, etc.
This will help you identify opportunities within the market and avoid making the same mistakes. Your competitor analysis should include the following:
- Who are your competitors
- What is their USP (Unique Selling Point)? - for example, do they sell something no one else does? Do they offer unique loyalty programs? Etc.
- How competitors price their products
- How competitors handle shipping and return policies.
- How do they advertise? Which platforms do they use to engage their customers?
- What do customers say about them in reviews? Are there any pain points with the product that you might better address?
With the help of Google and social media searches, you can find much of this information online. Alternatively, you might engage the service of a market research company. There are also competitor tracking tools that notify you when a competitor updates their websites or social media. Example tools include SimilarWeb, Attest, and BuzzSumo.
Build an Ecommerce Business Plan
Now it’s time to write your online business plan. This should be a go-to document that guides you while launching your ecommerce business.
So with that in mind, below are a few things your ecommerce business plan should cover:
- An executive summary of your ecommerce business plan. This should summarize the essence of your ecommerce business, USP, target audience, and critical business finances.
- A description of your ecommerce company.
- Your mission statement and core values.
- A SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats).
- Your business’s legal structure - e.g., sole ownership, partnership, limited liability company (LLC), corporation, or cooperative.
- Your chosen ecommerce business model, for example, dropshipping, working with a manufacturer or wholesaler, etc.
- The results of your market and competitor analysis.
- A list of your products and services (this should detail the products you’ll start with and those you plan to add to your catalog in the future).
- A clear marketing plan (more on this below).
- To assist with tailored campaigns, offers, products, etc., segment your audience into clear groups that share the same characteristics.
- Information on logistics and operations. I.e., who are your suppliers, which shipping carriers will you use, etc.?
- A financial plan outlining your predicted business costs and income sources.
Define Your Brand
While going through the above steps, you’ll likely already have started getting a feel for the brand you want to create. But before going any further, let’s define what a 'brand' means.
In a nutshell, your ‘brand’ is your business’s identity online and offline. I.e., it’s what potential customers will associate with you most strongly. The more memorable your brand, the more likely buyers will remember you.
Branding is a long-term marketing strategy requiring careful thought and execution. Still, there are a few basic steps you should take while laying the foundations of your ecommerce business:
- Choose a business name. Ideally, this should be something memorable that people can quickly type into Google. It should communicate your products, services, or values, immediately evoking the associations you want with your brand.
- Design a logo. Again, this should encapsulate your brand identity.
- Choose the font(s) you’ll use across your customer touchpoints.
- Decide which colors best represent your brand.
- Identify your brand voice. Does your brand have a sense of humor? Will your brand's tone of voice be casual? Or are you more technical and formal sounding?
Building Your Ecommerce Store
Now you know what products you’re selling, who your audience is, and what tone you want to hit in your branding, it’s finally time to create your online store. There are several ways to achieve this:
Using an Ecommerce Platform
Ecommerce website builders are typically SaaS solutions. They usually provide intuitive drag-and-drop interfaces from which you can build your site. You can generally drag elements like images, headers, galleries, buttons, etc., and drop them where you want them to appear on your web page.
It’s also worth noting that most platforms come with various pre-designed templates that you can customize. So, fear not; you should have a solid starting point!
On top of this, most ecommerce website builders come with integrated online shopping carts and selling features.
As a general rule, the best ecommerce platforms to use usually incorporate features such as
- Basic marketing features, like email marketing, popups, discounts, gift cards, and abandoned cart recovery.
- Search engine optimization (SEO) features
- The ability for customers to create accounts on your business website
- An extensive app market
You don’t have to look far to find feature-rich platforms. Shopify is incredibly popular, but you can also use WordPress’s free WooCommerce plugin. The latter might be the best option if you have some coding smarts. Alternatively, Wix is undoubtedly worth considering if your focus is the ease of use.
There can, however, be a few drawbacks to using such a platform:
- Added or hidden costs, including transaction fees.
- Depending on your choice of ecommerce platform, it can be challenging to optimize SEO.
- Again, depending on your chosen ecommerce platform, transferring your online store to an alternative solution might be tricky.
Buying an Existing Store
If you don’t want the hassle of setting up your own ecommerce store, consider buying a pre-made store. There are plenty of ecommerce websites for sale online.
Hiring a Professional
Or, you can hire an expert to construct your ecommerce website for you. Typically, this is the most costly option, but it ensures a unique and professionally styled website that matches your exact vision.
Buying a Domain and Hosting
Although some ecommerce platforms offer free subdomains, you need your own domain to establish a professional-looking online presence. This is a web address customers can type into their browser to locate your store.
Depending on your chosen ecommerce builder, you might also need to purchase web hosting. Every website on the internet is hosted on a server. Think of web hosting as paying “rent” for your online store to live on a secure server.
If you’re using a popular platform like Shopify, chances are your hosting is included with your software subscription. However, you’ll still need to purchase a domain, which may set you back between $10 and $20 a year, and if it is a popular domain name you could be looking at higher prices.
Take some time to pick the right domain because the right name goes a long way to creating a more memorable, credible brand.
Keep in mind the potential hidden fees, such as renewal costs, once an initial special offer for registration has expired. It’s also important to remember other details like the expiry date of your domain registration so you don’t forget to renew it. You don’t want someone to swoop in and grab your domain!
Alternatively, if you’re using open-source software like WordPress coupled with its ecommerce plugin, WooCommerce, you’ll need to buy your own hosting. Depending on the size of your store and your needs, this could range anywhere from $5 to $25 per month.
There are two main hosting types to consider:
- Shared hosting: This is the cheapest form of hosting. Here your site shares space and resources with other websites on the server. However, the drawback is that bandwidth is shared between several sites, so if you experience high traffic and/or require fasting loading speeds, there’s a limit on your site's resources.
- Managed hosting: This is a form of cloud hosting whereby your site gets dedicated resources from a vast network of servers. Resources are fully assigned to your site - i.e., they’re not shared. You can upgrade to access more resources from other servers. Your hosting provider will also configure and maintain basic server details for you and may offer features like regular website backups, staging environments, CDNs, software installs, and more.
Some domain name registrars also offer hosting solutions such as:
Other Costs to Consider
For your reference, here are a couple of other costs you might need to factor into your budget:
- Premium themes: If you’re using an ecommerce platform to design your online store, you may wish to splurge on a premium theme. Most come with a selection of professional-looking free themes. However, premium themes often boast more unique design features and functionality that help your web design stand out. Again, depending on your chosen platform, costs range from $50-100.
- Plugins and tools: Several platforms (most notably Shopify, WordPress, and Wix) offer extensive app markets where you can integrate extra functionality. Some apps are free, whereas others come with a price tag. Some of these tools might be vital depending on your marketing and selling strategies. So, for budgeting purposes, plan for the tools you’ll need to pay for on top of your ecommerce platforms subscription.
Choose Your Payment Gateways
When deciding which payment gateways to offer customers, you might be limited by your chosen ecommerce solution. However, it’s essential to carefully consider which payment processing methods you’ll use. Often, different countries have one or two dominant payment methods that are considered trustworthy. For example, India's most popular payment gateway is Razorpay, whereas Japan favors MONEI. In contrast, these gateways are little known in Europe or America, where providers like PayPal or Stripe are more common.
In other words, offering shoppers their favorite payment gateways is a great way to improve checkout conversion for ecommerce stores. In fact, providing shoppers with the top three payment gateways in their country can increase conversion rates by 30%!
You could also consider partnering with services like Klarna that offer “buy now, pay later” options or payment in installments. If your store provides premium products at a higher price, this can make your products more accessible to buyers that don’t have a lump sum of money to spend.
In addition, you may want to consider whether, in addition to more traditional payment methods, you’ll also accept cryptocurrency. Paying by crypto is also very quick, so you can accept transfers almost straight away and for lower fees than traditional payment gateways. Not only that but crypto can be used worldwide.
The downside is the laws around it are still uncertain. It doesn’t fall under the same regulations that apply to traditional legal tender. Therefore it is important to research the local laws and regulations to ensure legal compliance.
Not sure how to choose the right payment gateway? Read our blog on choosing 9 easy-to-use payment gateways for ecommerce.
As many as 73% of customers prefer shopping through multiple channels. As such, it’s difficult to avoid the question of omnichannel retail when opening your own ecommerce business.
Selling products on more than one platform is pretty simple. Plenty of ecommerce software integrates with other online sales channels:
When considering extra ecommerce sales channels to utilize, first find out how well these channels integrate with your chosen ecommerce platform and how much effort it takes to maintain them. For example, Shopify enables you to connect with other sales channels (like Facebook, Instagram, Handshake Wholesale, and sales through a buy button) to keep track of your products, orders, and customers from one place.
💡Tip: Selling your products on more than one online platform helps you reach a wider audience, avoid trade restrictions, and create more opportunities.
Marketing Your Ecommerce Store
With your online store up and running, promoting your brand will be your next focus. This continuous effort involves staying on top of the latest marketing trends and updating your marketing efforts accordingly. New social media channels like TikTok, BeReal, and Shuffles by Pinterest are constantly emerging. So, do some digging to see whether your audience uses these networks and whether establishing a presence there will be worthwhile.
Other top marketing trends for 2023 include:
- Using AI tools like the AI chatbot ChatGPT, launched in November 2022. This text-based solution can create human-like written content, such as chatbot answers for customer service questions, formulate complex responses to questions on online forums, and generate social media posts. This tool can also translate languages, provide text summarization, and more. ChatGPT currently offers a freemium version, although it’s already (according to its site) at capacity. That said, a paid version called ChatGPT Professional is due to be launched, and there’s already a waitlist.
- Utilizing social listening tools like Sprout Social and Hootsuite. These tools help identify what people say about your brand online so that you can interact with them to improve brand awareness.
- Publishing short-form video content to instantly grab your audience’s attention. TikTok remains a firm favorite, with users spending an average of 45 minutes at a time watching TikTok videos. There are also Instagram Reels and YouTube Shorts to look out for.
We’ve covered a few top marketing trends for this year; below, we’ll dig into some tried and tested online marketing methods. Of course, there are many ways to promote your online store, so we won’t be able to cover them all. However, here are a few key strategies to consider:
SEO optimizing your online store is vital for driving organic visitors to your ecommerce website. Below we’ve supplied a few SEO tips (this is by no means an exhaustive list), but it should provide a decent starting point:
- Improve your site loading speed by compressing your images, reducing the number of plugins you use, using web caching, etc.
- Use clean URLs (web addresses optimized for search engines and human readers alike). Instead of including jumbled letters, a clean URL consists of the content’s title.
- Submit sitemaps to Google - This file tells Google what pages and content are on your site and how they link to one another. It allows search engines to crawl your site more efficiently.
- Add title tags, meta descriptions, and image alt tags containing the keyword you’re looking to rank for
- Don’t overstuff content with keywords so that it reads unnaturally. Google’s algorithms are getting wise to websites that don’t provide users with a good experience and will penalize you accordingly.
- Invest in a content marketing strategy - i.e., add blog content that provides value to your audience, such as how-to articles, videos, tutorials, case studies, etc. Companies who blog have, on average, 434% more indexed pages.
You can use tools like Surfer SEO to enhance your website’s SEO. Among other features, this platform enables you to research keywords and access guidelines and content suggestions to boost your text’s SEO-friendliness and readability.
Consider running your own ecommerce affiliate programs to reward brand ambassadors when they introduce your brand to others. Affiliates should receive a shareable link that prospective customers can use to buy one of your products. Then, when a customer makes a purchase using that link, the affiliate gets a commission. This mutually beneficial arrangement is a great way to encourage word-of-mouth marketing.
If you have the budget, consider investing in paid marketing campaigns (Google, Facebook, Instagram, etc.) to improve your store’s visibility.
For example, Facebook advertising empowers you to target niche audiences defined by a list of demographics, locations, and behaviors. You can also target users who have previously engaged with your business. Finally, Facebook even allows you to target lookalike audiences. These customers might be outside your usual target demographic/haven’t engaged with you before but share several interests/behaviors with your loyal customers.
Email marketing should be one of your staple ecommerce marketing strategies. After all, the average expected ROI for email marketing is an impressive $40 for every $1 you spend.
Start collecting emails via a subscription form on your website. You can make this more enticing by offering something in exchange when visitors sign up - like free downloadable guides or product discounts.
Once you have subscribers, send updates about upcoming releases, and promotions, keep them in the loop with company news, thank them for their patronage, encourage loyalty with discounts, etc.
The most effective way to tackle email marketing is to use an email marketing automation tool (like MailerLite, Sendinblue, or Mailchimp) that enables you to create automated email funnels. One example of an email funnel is simple welcome automation. So, once a new subscriber signs up to your mailing list, you automatically send a welcome email and follow up (a few days later) with product recommendations or a discount to get started.
Are You Ready to Start An Ecommerce Business in 2023?
So, there you have it; this brings us to the end of our guide on how to start an ecommerce business.
Of course, starting an online business isn’t easy, so we encourage you to continue your research. Including looking into professional and trade licenses you might need, different ecommerce business models, social media marketing strategies, etc.
It takes continuous learning to stay ahead of the curve and maintain a successful ecommerce startup. Visit our blog about ecommerce for more resources to help get you started!
Is ecommerce still a good business to start in 2023?
The ecommerce business is still a viable business venture in 2023. It is still expected to account for about 22% of global retail sales this year, which amounts to $6.51 trillion.
What products or services should I sell online?
How do I choose the right ecommerce platform for my business?