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Steps To Start An Ecommerce Business
Step 1: Research Your Product Niche
Step 2: Sourcing Your Ecommerce Products
Step 3: Conduct Competitor Analysis
Step 4: Build an Ecommerce Business Plan
Step 5: Define Your Brand
Step 6: Find Out About Business Permit and License Requirements
Step 7: Build Your Ecommerce Store
Step 8: Buy a Domain and Hosting
Step 9: Choose a Payment Gateway
Step 10: Get a Business Account
Step 11: Promote Your Business
Are you looking for more flexibility, income stream, or control over your vocational destiny?
If you said yes, then starting an ecommerce business might be the perfect solution.
Ecommerce not only gives you the freedom to work from anywhere and anytime, but it also comes with a huge earning potential. After all, billions of people are buying products online. In some instances, new ecommerce stores have the potential to generate over $60k in profits within three months!
Sounds amazing? Stick around because we’ll show you how to start your own ecommerce business, including steps for launching your own store and promoting it once you're set up.
Let’s dive right in!
You might wonder whether you stand a chance amongst the ocean of ecommerce startups on the web, considering there are already over 26 million ecommerce businesses worldwide!
However, the ecommerce market is only going to grow. Global ecommerce sales are projected to hit $6.3 trillion by the end of 2023. 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.
Let's look at the step-by-step guide on how to start an ecommerce business.
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 doing the following while picking your products:
Some techniques to use when brainstorming product ideas include:
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:
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, Google your niche to see who’s ranking on the first page, and use 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 example,
- Statista: A website that provides market data, research, and statistics across 170 industries and 150+ countries. It can be your go-to source for digging into your target audience's size, growth, demographics, and preferences.
- Google Keyword Planner: A free tool that helps you find keywords related to your niche. It provides insights into traffic potential and the niche's competition.
- SocialSprout, SEMRush, and SocialBlade These are online tools for more in-depth competitor research. They can help you analyze your competitors' performance on social media and search engines. Assess their traffic, engagement, followers, content, keywords, and ads.
Finally, you could hire someone to do the work with you by utilizing an online freelance marketplace like Fiverr.
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.
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.
To give you a starting idea, here are some of the top ecommerce products on the market
Once you’ve validated your product ideas, now it is time to source your products.
There are several great options to explore, such as:
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. Besides, the dropshipping market worldwide is expected to reach $476.1 billion by 2026, so finding profitable dropshipping business ideas will give you a competitive edge.
Consider integrating your online store with a dropshipping platform like AliExpress or Sprocket.
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.
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.
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.
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:
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
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:
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:
After building a plan and defining your brand, now you should know all about your business industry and structure. The next step is to find out whether you need a business permit or any kind of license requirements. Some businesses need one, and some don't. This depends on your local government's regulations and the business model you wish to use.
Types of permits and license a business may need are
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:
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
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 ease of use.
There can, however, be a few drawbacks to using such a platform:
To help you get started, Shopify offers a free trial for businesses interested in their platform.
If you don’t want the hassle of setting up your own ecommerce store, consider buying an existing store that already has a customer base and revenue. There are plenty of ecommerce websites for sale online.
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.
Using existing platforms is a convenient and low-cost way to start selling online.
You can use popular marketplaces such as Etsy, Amazon, and eBay. These are websites where you can list your products alongside other sellers and benefit from the site's large customer base. However, you have to pay listing fees, commissions, and transaction fees to the platform. You also have less control over your branding, pricing, and customer service.
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:
Some domain name registrars also offer hosting solutions such as:
For your reference, here are a couple of other costs you might need to factor into your budget:
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 favours 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 favourite 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 that offer “buy now, pay later” options or payment in instalments. If your store provides premium products at a higher price, this can make your products more accessible to buyers who 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.
Now that you have a payment gateway in place, choosing where the money is going is as important.
Some business owners may think that using a personal account for their business is more convenient and cost-effective than opening a separate business account that comes with additional fees. They may also believe that their business sales are not high enough to justify a business account.
However, having a business account, or even multiple business accounts, can actually be more profitable in the long run. A business account can help with accounting and bookkeeping, support cash flow management (which is vital for any business), and comply with legal regulations in some states.
Now that you have launched your ecommerce store and listed your amazing products, it's time to make the world know that this store exists. There are various marketing and sales strategies that you can use to promote your online stores, namely
Use social media platforms like Facebook, Instagram, Twitter, and TikTok to showcase your products, build your brand awareness, engage with your audience, and drive traffic to your website.
These are some of the tricks when using social media marketing to promote your business:
Paid advertising methods like Google Ads, Facebook Ads, Instagram Ads, and YouTube Ads can be another way to quickly reach a large and targeted audience.
Some tips for successful advertising are:
Simply put, Influencers are people who have a large following on social media and they can influence their followers' opinions and purchase decisions. You can work with influencers who match your target market to boost your brand awareness. You can ask them to review your products, create sponsored posts or stories, host giveaways or contests, or share discount codes with their followers.
SEO is about getting your website to show up on the first page of search results on search engines like Google when people search for terms related to your products and services. It involves optimizing your website's content, structure, speed, security, and mobile-friendliness.
Starting an ecommerce business in 2025 is still a smart and rewarding move, if done right. With the right niche, solid research, a clear plan, and the right tools, you can build a business that gives you the flexibility, freedom, and income potential you're after.
While the journey requires effort and strategy, the steps we’ve outlined, from validating your product ideas to launching your store and promoting it, will help you start strong. Take it one step at a time, stay focused on your goals, and always be ready to adapt.
