How to Start an E-Commerce Business

How to Start an E-Commerce Business
by: avex02/07/2018

Quick Summary So, you’ve decided to start an e-commerce business in 2018? First off – congratulations, this is a big endeavor, and if done properly, it can be quite lucrative. To help you get started, here is a breakdown of what you need to know to be successful. Step 1: Have a Product Idea? Fantastic! But – how […]

So, you’ve decided to start an e-commerce business in 2018?

First off – congratulations, this is a big endeavor, and if done properly, it can be quite lucrative. To help you get started, here is a breakdown of what you need to know to be successful.

Step 1: Have a Product Idea?

Fantastic! But – how do you know your product idea is any good? Before you spend any money on developing your idea, you should do a few things to ensure it’s something people want.

First, understand what problem your product uniquely solves. This is best done through interviewing potential customers, and listening to the pain points they are currently experiencing. Does your product solve these pain points?

Don’t make the mistake of explaining the benefits, features and pricing of your product at this early stage. The best way to start an e-commerce business is to focus your conversation on gaining a comprehensive understanding of what your potential customers need, and take note of how your product would fill the void in the marketplace.  

Develop Buyer Personas

Using the information collected during your customer interviews, write a detailed personality profile for each type of customer you are targeting.

These personas will be elemental in helping you develop your branding and market positioning later. So, take this step seriously and write thoughtful profiles that capture the motivations of your potential customers.

Once you’ve completed this initial product and customer research it’s time to analyze the market you wish to operate your e-commerce business in.

Step 2: Market Research & Business Plan

After your initial conversations with potential customers has proved to be successful, you are ready to take a deeper dive into researching the market landscape.

This can be done by conducting research on some of the most well-known e-commerce mega sites, like Amazon and EBay to learn what people are searching for, and what they are saying about specific products.

Then, look at what smaller e-commerce brands are doing to be successful. Small brands tend to have smaller budgets, and this usually prompts a uniquely creative approach to engaging their customers.

Market Research

Many new entrepreneurs enter the e-commerce world full of excitement and ready to make their first sale.

It is critical, however, to research your idea and ensure that there is a market demand or interest, BEFORE you put energy into developing your product, sales platform or marketing material.

Otherwise, you could pour a lot of time and money into offering a product that nobody is interested in. And that’s the reality for a lot of new business owners who skip this important step.

To start an e-commerce business, you must identify your competitors. Find a product like yours, and read the good reviews and not-so-favorable reviews.  This is where you’ll find an opportunity to make your product superior to the competition.

Other popular ways to gain insight into what potential consumers are interested include research through social platforms like Instagram and Pinterest, and free marketing tools like Google Keyword Planner, or Google Trends.

Once you have done some initial research (and recorded your findings), you should have a better idea of the market landscape, the need that your product can fulfill, and who to target your marketing towards.

Business Plan

Your marketing research should be used to develop a thorough business plan.  

Business plans generally include the following sections:

  • Executive Summary
  • Company Description
  • Product/Service Description
  • Market Analysis
  • Strategy & Implementation
  • Organization/Management Team
  • Financial Plan & Projections

This will take a few times to get right. It’s important to surround yourself with people who can give you feedback on what needs to change. To start an e-commerce business is no easy feat, and it’s likely that you won’t nail your business plan the first time you make one.

Creating a detailed business plan can keep you on track with your business goals, and can also help you secure a business loan should you need it.

Successful Smaller Brands – What You Can Learn

Many small brands are making their mark and growing revenue exponentially by having a clear insight into their market, and by effectively communicating their unique value proposition to their customers and building a brand that commands attention.

One company that has developed an attention-grabbing brand is e-commerce clothing success story, Reformation. The brand combines large, crisp product images with cheeky copy to create a bold and witty brand voice that appeals to a hip, fashion conscience customer base. This brand proves you shouldn’t be afraid to develop a voice that is authentic, even if a bit off-beat.

Small brands, by their very nature, also able to quickly pivot marketing directions when necessary. When e-commerce brand Orabrush, found that their tongue scraper was harder to market than they anticipated, they went back to the marketing drawing board. They ditched the expensive infomercials and advertising and opted to try something new – low budget videos with a heavy dose of humor. This creative new direction has netted them more than 1 million orders.

Smaller brands may not have giant budgets to compete in the marketing arena with larger more established brands, but that’s OK. Customers will respond to creative marketing that shows personality and relatability.

Step 3: Supply Chain – Who Will Make Your Product?

Now that you’ve completed market research and developed a business plan, you’ll need find a manufacturer or supplier who can help you get your product to market for a competitive price.

Consider where you want to have your product produced – does your target market have a sensitivity to overseas production? Do you?

Everlane, a successful apparel store has built its brand on “radical transparency” and offers customers information about where and how products are made.

Typically, products made in the USA receive a favorable response from US based consumers who feel good about supporting American producers – however, there is often a tipping point where affordability can outweigh sentimental values.

Manufacturers in your local area may offer you a deal or discount just for being nearby. 

Some popular online places to find a manufacturer for your product include:

  • Maker’s Row – products manufactured in the United States
  • Alibaba – products manufactured overseas
  • – receive quotes from manufacturers anywhere in the world

You can also hire an experienced agent to act as a middleman, connect you to reputable manufacturers and assist you with your product creation from start to finish.

Many manufacturers will also work with you to set up drop shipping directly to your customers.

Step 4: Validate your Product Idea with a Minimal Viable Product (MVP)

Before you start an e-commerce business, you need to validate your product idea. One of the least expensive and most effective ways to validate your product idea, whether it is a physical item or a service, is through the creation of a MVP. This can be a bare bones prototype of a product or a simple website landing page that outlines the most basic features and allows early adopters the ability to provide feedback.

At this point, you don’t need to have your branding or product name completely figured out yet – in fact, it’s almost better if you don’t, as you can always test ideas for these things later, and make a better decision based on what resonates most with people.

For now, just decide on a simple placeholder name and logo. If you aren’t a good writer, don’t pretend to be. It’s important that you get the message just right, so it’s worth hiring a professional to help you. You’ll need to develop copy that is both engaging to your audience and optimized for search engines (SEO).

If you already have an audience, pre-selling your product will be significantly easier. Perhaps you have a blog or a website where you can announce the upcoming launch of your new product and direct them to your landing page to start taking orders.

If you do not have an online audience, don’t worry, you can pitch to the people you know in person (in fact, you should do this even if you do have an online audience). Start talking to friends, family, co-workers, strangers – anyone really, who might be interested in what you are offering.

Then, do some research to understand where your potential customers spend their time online. Frequent the same forums and start up a conversation. Don’t be salesy, and be sure to offer insights and opinions that help you forge relationships with these people.

Step 5: Develop Branding

Brand reputation has a significant influence on the average American’s decision to complete an online purchase.

In fact, 67% of those surveyed consider this an important factor.

Compare that to the significance of social media recommendations and advertisements, which each rank around 20%, and it’s easy to see why developing a compelling brand is essential.

Texas based Beardbrand, is one company that understands just how much branding matters. The company spent more time (and money) developing its brand before jumping into marketing their product.

Their brand strategy involved redefining what it meant to have a beard. They targeted bearded men who cared about their grooming habits and did not identify with the old stereotypes around facial hair. In less than a year, the company was doing $120k in sales every month.

So, what’s needed to develop a solid brand?

Choosing a Brand Name & Developing a Logo

When thinking about what to call your e-commerce business, it’s important to develop some evaluation criteria as you (and everyone you know) brainstorms potential names. Think first about what you want your brand name to convey. Perhaps you want a name that will reflect the fun, youthful nature of your business, or maybe you’d prefer a name that sounds scholarly and important.

Some example criteria may be:

  • Would this name appeal to my target consumer?
  • Does this name evoke any visual images?
  • Is this name easy to spell (and understand when it’s spoken)?
  • Can I buy a URL domain with this name in it?
  • Does this name mean anything in another language?

Evaluating each name, you like against predetermined criteria can help you narrow down the list of potential names and eventually choose the one that is best for your brand.

When developing a logo, you’ll want to carefully consider fonts, colors and any similarities to existing brands.

Ultimately, your brand’s name and logo should aim to reflect the personality of your company and your team.

Your Unique Value Proposition

Good news, that time you took to develop thorough buyer personas is about to pay off. Now it’s time to look at those personas, and develop your brand’s unique value proposition – which is just a fancy way of saying, define the need your product fulfills.


What are your customers in need of? What problem are you solving? What will you be doing better than the competition?

Then, develop a statement the reflects your brand’s ability to be your customer’s best solution. An ideal value proposition statement will be concise and clearly communicate the benefits of your product or service while differentiating your brand from the competition.

Developing and Communicating Your Brand Story

Why does your brand need a story? Simple – because your brand story is the explanation for why you decided to start an e-commerce business in the first place (eh, besides untold fame and fortune).

Your brand story helps your customers relate to, and identify with your company.

Brand strategists recognize that effective marketing persuades us to buy into ideas, rather than products. What your brand communicates to can be even more important than your product itself. That’s why developing a compelling brand story that evokes authenticity, and reflects your company’s unique values, is critical for building a foundation of trust and loyalty with your customers.

Look at brands you admire and figure out how to do something similar – but better.  

Develop a brand story that reflects your ideal customer’s interests and experiences – and do it with your own personality and creative sensibilities – the authenticity will shine through.

And here’s a curveball – your brand story isn’t just what you tell people about your company – it’s also what people tell each other (reviews, social media, media media), and what your visual assets communicate. This is important to keep in mind as you create your brand story – in some ways, it will take on a life of its own.

Step 6: Choose a Sales Platform and Hosting Provider

When you are ready to set up and start an e-commerce business, you’ll find that there are a ton of platforms to choose from. Shopify, WooCommerce, and Magento are just a few of the mega giant platforms that will enable you to build an online storefront and accept payments. Shopify happens to be our favorite, and there are a lot of great tools that go along with it.

So, how do you decide?

Start by understanding your own business needs first, then try to match them with the providers who can do the best job accommodating them. Researching the features and benefits, as well as the shortcomings and drawbacks of each platform will allow you to make a smart decision.

Some things to consider when choosing a hosting provider:

  • Cost – both initial and monthly fees should be considered
  • Shared Server – if they host sites on a shared server, what is the impact?
  • Site Backups – is your site backed up regularly?
  • Reliability – does the hosting provider have frequent technical issues or downtime?
  • Security Features – you’ll need your site to be protected from threats and hackers.
  • Customer Service – is there a helpful and responsive customer service department?
    • Do they provide 24/7 support?

Some things to consider when choosing a platform for your online storefront:

  • Cost – again, consider both initial and recurring fees
  • Payments – what payment options can you offer your customers with each platform?
  • Usability – how easy is the platform to use? Will you be able to master the interface quickly or will there be a significant learning curve?
  • Integration Compatibility – are third party integrations easy to implement?
  • Scalability – when your customer base grows, can your storefront keep up?
  • Mobile Devices – your storefront MUST be optimized to work on mobile devices.
  • Security Features – since you’ll be taking orders and processing transactions, it is critical that your customer’s confidential data be secure.
  • Customer Service – again, it is important to have a helpful and responsive customer service department that you can contact any time, day or night, for help.

Take your time deciding on the providers that are best for your business needs. Investing time upfront, will save you time (and money) needed to correct any missteps later down the line.

Step 7: Develop & Execute Marketing Strategy

With your product ready to ship, and your new storefront ready to take orders, you’re now ready to develop and execute a marketing strategy that brings in the customers.

You’ve already developed buyer personas (good job!) so now you’ll need to develop a marketing strategy that speaks directly to these people in a language they’ll appreciate.

The quickest and easiest way to do this, is to outsource this task to an expert marketing strategist. While you may have expert knowledge about your product, a marketing strategist will have expert knowledge on how to reach your audience and communicate the value of your product.

Consider hiring a marketing agency to help you convey your brand story. Many marketing companies will work with you to execute strategies that are appropriate for your goals and within your budget.

A professional who is well-versed in social media and who has experience promoting similar products will be a great asset. Platforms like Instagram, Facebook, and Pinterest are among the most popular for brand promotion. It’s also important to utilize email marketing in your approach.

When you collaborate with a marketing team, you’ll want to understand their planned approach, including how they will handle tracking campaigns and the behavior of prospects and customers.

A great agency will help you start your marketing efforts slowly, analyze the results and refine the approach. It’s not rocket science, but in the age of viral media and advanced tracking techniques, digital marketing is more nuanced than you might imagine.

Step 8: Make a Sale

Well, all be – you made a sale! Making your first sale is a feeling of complete elation for any scrappy, work-hard entrepreneur – and it’s an excellent reason for celebration. Pop a cork, eat some cake, or dance a happy jig – you deserve a hardy pat on the back.

Now, back to work. If you want to start an e-commerce business, you have to put in the effort.

Step 9: Analyze the Data

Once you’ve gotten your feet wet with your first few sales, and your storefront has been in operation for a while, it’s time to analyze the behind-the-scenes data that has been collected on your marketing efforts and customer behavior.

Many shopping platforms allow you to directly integrate analytics so you can track important data on customer behavior and make informed decisions about your marketing campaigns more easily.

Hopefully, you’ve employed an excellent marketing strategist by now who can help you analyze this data and refine your efforts.

If not – if you’ve been going it alone up to this point, and are comfortable with your marketing prowess – then perhaps you only need help from an experienced analytics manager.

Find a professional who thoroughly understands the data collection tools you are using (perhaps they are KISSmetrics, RetentionGrid, or Google Analytics), and can offer expert insight into what it all means. Look for someone who can offer suggestions to improve your marketing campaign based on this data.

Step 10: Refine Marketing Strategy and/or Product

At this point, you should be feeling pretty good. You’ve implemented a marketing strategy, made your first sale, and analyzed the results.

Now, it’s time to make improvements. In addition to refining your marketing strategy, you should consider ways to improve your product itself. Pay attention to feedback from your customers – they know what they want and are the ultimate key to your success.

When looking to make improvements, ask yourself these types of questions:

  • Are your customers happy with your product?
  • Is there a way to improve product packaging or delivery?
  • Can you find a cheaper manufacturer of the same quality?
  • Have you received any general feedback that might be insightful?

These questions will help you start to hone in on ways to improve your product and your marketing efforts, streamline your expenses, capture more sales and grow your business. Understanding and refining your goals is the key to starting an e-commerce business.

Step 11: Repeat Steps 6-10

Now that you are a full-fledged e-commerce entrepreneur, your task is simple – keep doing what’s working and refining what isn’t. It’s also very important to continuously enhance your e-commerce customer experience, during and after launch.

Also, have fun – this business is a lot of hard work, but for those who dig-in, it can also be very rewarding!


Simply getting started with an e-commerce business is the hardest part of the process. But, as with most things, once you start, it gets easier.

Just take it one step at a time. Entrepreneurs are known for their exceptional qualities of patience, perseverance, and fearless optimism. Combine these traits with creative business and marketing strategies, based on solid data and analysis – and be prepared to succeed.

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