The 2020 Pandemic changed business forever and fueled an explosion in the ecommerce industry. While ecommerce brands prospered, established brands shuttered their doors.
Now, it seems like everyone’s got their idea for an ecommerce business. And in an era where everything sells online, you really can’t blame them.
How much easier is it to just set your store up on the internet over a brick-and-mortar business?
Starting an ecommerce business is easy, but being around next year is much harder. In this beginner’s guide, you’ll learn everything you need to survive in thrive in an ecommerce business.
We’ll discuss everything you need to know to make your online store a success, including:
- How to research for ideas
- Choosing your business model
- Finding your target audience
- Officially creating your company
- Sourcing your products
- Creating a brand identity
- Starting your online store
- Getting traffic to your store
- Analyzing and optimizing your performance
You’ll know everything you need to start a successful ecommerce business when you’ve finished reading this guide. You won’t need too much; just a couple hundred dollars and an internet connection.
Let’s get started, shall we?
Disclosure: This article is reader-supported, meaning I may make commissions on purchases at no cost to you
1. Research and Plan
Before you jump to start an ecommerce business, you need a solid business idea that actually works. Take it from me: I completely winged my first couple of ventures, paying the price with inventory that nobody would buy that I eventually gave away to friends.
I was always one of those kids who could barely study for a test and ace it in school. But, it turns out the same principle doesn’t always apply to a new ecommerce business!
Coming up with a business idea is easy — coming up with a good one is much harder. So let’s start with the basics, and really think this one out.
Success in the ecommerce space comes down to selling one of two items:
- Commoditized goods that set themselves apart
- Niche products in high demand
Let’s define these terms in detail.
Commoditized goods are already in high demand with a large customer base. These make up the majority of ecommerce business sales because they’re things everyone needs.
I’m talking about everything from clothes to frying pans, with fierce competition and operating on razor-sharp margins most of the time.
You’re probably not an Amazon or Walmart with billions of dollars at your disposal for marketing, so why even bother with telling you about this? Because anyone can break into a commoditized good with innovation.
Example: Pillow Cube
There are more brands of pillows than you can shake a stick at. Who makes your hotel pillow? You probably have no idea. In any ordinary circumstance, you’d be insane to try to compete with the big fluffy behemoths.
But PillowCube is not ordinary.
PillowCube created a niche product in a commoditized market: the perfect pillow for side sleepers. They arrived directly at the intersection of niche and broad appeal and found their success with the help of some very creative marketing.
Even a small ecommerce business can break into a big market if they do something unique.
Niche goods target a small, concrete customer base. You sell one or more unique items and directly target a specific demographic you’ve found with market research.
Pictured: beard oil, a product targeted specifically at men with beards (a niche!)
Niche goods allow substantially more freedom to set the price tag since you’re not directly competing with other ecommerce businesses.
For example, if you’re making ultra-premium sweaters that are hand-woven with sheep’s wool from the peaks of the Himalayas, nobody can tell you what price to sell at besides you and market demand.
Niche products are great because they allow a merchant to focus on selling just a few products, as opposed to a massive inventory. Other ecommerce business ideas might have broader appeal but more risk and stress involved.
For example, Chewy has to figure out how they will sell leashes, collars, beds, toys, and more, with each category and product having its unique marketing strategy.
However, if you’re selling premium niche products, you have a few products you can make as great as possible with minimum stress.
Take a look at this template website on Wix’s Editor X:
The store has four simple products that they can maximize marketing for. I love that you can simply name it “cleanser” and “lip balm.” For me, that is so much more calming than having to scroll through 10,000 lip balm brands on an online marketplace like Amazon.
Plus, when a company specializes in something specific, people automatically assume it to be a premium product and pay extra money.
Niche products enable you to create a beautiful, minimalistic website and marketing strategy that creates a relaxing atmosphere with no hint of sensory overload (a colossal rookie mistake in this industry).
Choosing Your Products
Choosing your product comes down to one thing: solving your customer’s problem.
It’s pretty obvious, but people aren’t going to buy something they don’t want or need. When I first started, I sold things I thought people would like. I didn’t find success until I took a calculated approach to things.
- Stick to things you’re passionate about: If you’re the kind of person to stay inside all day, don’t start an outdoor equipment company because you think it will make money. Instead, you want to like what you’re doing because that’s when you do your best work.
- Think of daily problems you can solve for others: Spanx began with a fax machine saleswoman who couldn’t find pantyhose with seamed toes. She’s now a billionaire! Everyone with a daily problem is a potential customer.
- Keep a watchful eye on trends: Many successful e-commerce businesses have been born from Google Trends. Remember fidget spinners? People made millions on those during that strange time.
Those three principles have turned people from paupers to patricians and will continue to do so until the end of time. Always be realistic about whatever industry you’re eyeing and whether or not it’s going to be practical to compete with established brands.
At the same time, do have faith in your ability to succeed. Ecommerce business success boils down to a combination of both logic and emotion. So don’t tell yourself, “I’ll never be able to…” because as long as you combine smart decisions with hard work, you CAN.
Research hard, and you’ll find a brilliant business idea and make money online.
Brainstorm and Define Your Purpose
Condense the idea of what your business is into a brief but exhaustive summary. Concise summaries tell readers what your business is really about. Include things like:
- Your business’ purpose
- Your business goals
- The products/services it sells
- Your target demographic
- Sales channels
Feel free to revise this as we go along; we’re going to expand upon each of these concepts as we go. If you haven’t decided on your business yet, that is fine.
You need to understand your competitors to develop a feasible entry strategy into your target market. You can not only learn how you can beat them but take inspiration from their strategies. Look for things like:
- Popularity: The more popular they are, the more critical it is you understand them. You can quantify their popularity by using tools like Ahrefs to analyze their domain authority and website traffic. Also, look at their quarterly/annual performance reports if they have one.
- Business Model: Are they B2C? B2B? Who do they sell to, and why?
- Monetization Strategy: How do they make their money? Subscriptions or one-time payments? Are they a luxury brand making fat margins or a marketplace making many razor-thin profits like Amazon?
- Target Demographic: They’re not going to tell you outright who they target since marketing strategies are trade secrets that are often costly to develop. However, you can get a pretty good idea by looking at their advertising.
- Mission Statement and Vision: What is their purpose, and where are they going?
A deep analysis of your competition will do wonders for you in creating a business plan that works. Unfortunately, many new-blood entrepreneurs have this protagonist complex where they think things will just work out for them with a bit of elbow grease.
Plan, analyze, and stay realistic, or else you’ll get a taste of reality. There is no mercy in the business world. In an era of peace, the strategists and enthusiasts of warfare have moved from the battlefield to the marketplace.
The most profitable business idea is the one that actually sells—remember that.
2. Your Business Model
Congratulations, you’ve already completed the complicated part: figuring out what to sell. Now all you need to do is figure out how to sell it.
Let’s discuss some of the classic, established business models and then get into the nuance. First up:
Business to Consumer
B2C is what we call “traditional retail,” and it’s probably the model you’re most familiar with. Your customers are Tom, Glenda, and Harry, the people you see walking around on the street.
B2C is generally the “easiest” model because you’re selling products with a generally low order value (relatively speaking) and only worried about one customer at a time (as opposed to a large organization). As a result, you may not sell in bulk, but you make more total sales.
Business to Business
B2B businesses sell to other companies. The stakes are high, but so are the profits. The exact purpose of the exchange varies: maybe they’re buying your products in bulk because they want to sell them at a higher margin (I do this!).
Maybe they’re using the product themselves (ex., when the government orders Windows 10 licenses).
The B2B model is fun because once you’ve got a customer firmly in your grasp, they become a golden goose of high-value orders. Take a consulting business, for example. Once they have a client, they’re like to make tens of thousands of dollars from them.
The drawback is that you’re fighting a raging storm of bureaucracy and board deliberations until they deign to choose your ecommerce business over all the others.
It can be a struggle to start, but it can be well worth it if you can make it work. For example, I have a friend whose company makes organic household cleaning items.
It took them some time to get stores to pick their product up, but they started taking off at light speed once they did.
Direct to Consumer
D2C companies sell directly to their customer while going through exactly zero intermediaries.
Many of these businesses will outright refuse to sell wholesale, B2B or otherwise, to maximize margins and quality control. Instead, they want to maintain a firm grip every step of the way.
These businesses are prone to building loyal fan bases that can snowball. Only after established success and careful deliberation do they ever consider selling to stores for resale.
Companies like Apple or LEGO maintain a firm grip on quality control and customer care with this model. That quality assurance has enabled them to keep a premium brand no matter how much they expand. That is extremely valuable.
Consumer to Consumer
C2C might sound confusing at first since you’re asking yourself where the business appears in this relationship. However, this is a service you probably use relatively often in the form of eBay or Craigslist.
These services host interactions between consumers and profit from listing fees, transaction fees, subscriptions, or advertisements. If you’ve ever used a platform to sell an online course, you used a C2C business.
Alternative Ecommerce Business Models
There are a few revenue models I want to touch upon that exist in their own category while technically still falling under the big four that I just discussed above.
These have erupted into huge industries on their own, and you’ll recognize these services in your daily consumer habits.
Dropshipping has exploded over the last ten years, with thousands upon thousands of people trying their hand at it. This model allows you to sell various products on your website without maintaining any physical inventory.
How is this possible? It works like this:
- You establish a relationship with a supplier: This can be done personally or via an automated service like Modalyst or Oberlo.
- You list their products in your store: Once your supplier has agreed to dropship to your customers, you place their item on your store just as if you had it in your possession.
- The supplier fulfills your customer’s order: First, your customer buys the item displayed on your website. Then, you pass the order to the supplier and pay them for the order + fulfillment. Your cut is the difference between the total amount you paid to the supplier and what your customer paid you.
This model is great for the small business owner because it minimizes the risk involved in a new venture.
For example, do you want to start your own cooking ware online store? No sweat, you’re only out a couple hundred dollars and your time if your ecommerce business doesn’t “pan out” for you (see what I did there?).
On the other hand, you can make tremendous profits with the right touch.
Fulfillment by Amazon (FBA)
FBA is reminiscent of dropshipping since someone’s taking care of fulfillment for you, but it’s completely different.
With the FBA model, you give your product to Amazon, and they take care of storage and shipping for you (and we know how great their shipping is!). So it’s kind of like reverse dropshipping, in a way.
There are fees to pay, but the benefits are immense. My friend has made a killing in both increased sales and decreased storage and fulfillment costs by moving his product onto Amazon. Plus, he has the peace of mind that comes with Amazon’s unreal fulfillment speed.
You don’t even need to have an established business; you can create a product and start selling it on Amazon right off the bat. Customers buy your products on Amazon, and you make easy money online.
3. Your Target Market
Your business model may be the bread, but your marketing is the butter; it’s what makes everything come together in a delicious, profitable package. Therefore, you must know your potential customer before you design your store since your theme/aesthetic is a marketing strategy in and of itself.
Marketing is a multibillion-dollar industry, but it’s not as hard as you might think. Of course, a million companies out there would love to help you with it, but it’s not difficult to do it yourself with the right tools.
First, you need to get to know your potential customer before you even try to sell anything to them. Here are some established methods used by everyone in the industry:
Conduct Customer Surveys
Oh boy, I love surveys. No, really.
They’re an incredible way to understand your customer, and it’s so easy too. All you do is create a list of questions you want answered and an incentive for the customer to complete them.
Now, if you’re following my guide step-by-step, you don’t have your store yet, and obviously, we can’t put the cart before the horse. However, there are still plenty of ways to incentivize survey answers.
For example, you can create a Facebook advertisement for your survey with a gift card raffle entry incentive. Something like,
“Complete this brief consumer survey for a chance to win a $50 Amazon gift card!”
Ensure the people answering the questions must enter their email before submitting their answers. Once you have a certain amount of entries, give the gift card away to one lucky winner and keep the email list to use for your business (just make sure you have the customer’s permission).
Later, once your website is up and running, 15% percent off coupons or raffle entries can not only help you get the information you need but potentially earn you a new customer!
There are several business software applications designed for this exact purpose. For example, you can use Google Surveys or dedicated services like SurveyMonkey. You can get your new survey in the hands of customers in a couple of ways:
- Email: This will allow you to survey your current customer base and give them an incentive to check out your store again
- Advertising: Make a Facebook advertisement for your survey; make sure that your incentive is prominent so viewers can click on it. This method will do two things for you: gather your critical information, and get new customers.
Now, what questions should you be asking exactly? Two kinds:
- Demographics: I’m talking age, gender, country, income — the works. You need to understand who your customer is.
- Psychology: You also need to understand your customer’s motivations. For example, if I were making custom dog leashes, I would ask the customer, “What is your biggest gripe with dog leashes you use?”
Get a few people from your target consumer group to discuss ideas relating to your business category. A few people bouncing ideas off of each other can lead to tremendous things.
If I were going to start a wine subscription service, I would get some of my mom’s friends together and discuss how I could realistically convince them to pay their hard-earned dollars every month for a wine of my selection.
I highly recommend these, even if they take some effort to put together. Talking to real people about your ecommerce business idea will let you know if you’ve struck gold or not.
Time to get out of your comfort zone! In your online survey, ask participants if they’d be willing to join an online call to discuss a few questions you have in detail. This can be enormously insightful, trust me.
You can, of course, also interview people in person. Even strangers!
Create a Hypothetical Buyer Persona
Now that you’ve done the research, I want you to create a profile of what your typical customer might look like. So you’re going to make a little Wikipedia page for them:
- Give them a name: “ex. Ronald the Doctor,” or “Stacy the Hair Stylist”
- Attach a picture to make it that much more relatable
- Give them a personality description
Let’s say you’re selling a wine subscription service in this scenario.
- Ronald the Doctor is a 42-year-old ER doctor with a refined palate enabled by a generous salary. At least half of his vacations include winery tours, and he holds a monthly wine-tasting party with his friends. He does not buy cheap wine and loves trying new things.
- Stacy the Hair Stylist uses her income to supplement her husband’s salary, making them comfortable middle-class members. When financially prudent, she and her husband enjoy fine dining both at home and abroad. In addition, she keeps a smaller selection of wines to sample with friends at home.
Your backstory for any one of your buyer personas can be as specific as you wish, but remember that the purpose is to create a biography of your typical customers that you can leverage for effective demographic marketing.
We’re going to talk about advertising later, don’t worry. However, that comes after you’ve created your store.
4. Create Your Company
To start selling, you’re going to register your business in one form or another since ecommerce business platforms and payment processors will require relevant tax information. The exact requirements will vary based on your location.
You may need to complete a new business formality, such as registering a business license or creating an LLC.
This doesn’t have to be a big deal. If you’re just doing business under your own name, you can register as a sole proprietorship.
However, I’ll just go ahead and tell you that it’s generally in your best interest to register as an LLC, LLP, or S-Corp, and you’ll soon learn why. The kind of structure you choose will play directly into your business strategy.
Heads-up: all of my business insight will concern US law since that’s where I operate. So if you’re not in the US or the EU, you should consider filing your business in the United States.
This will go a long way in creating trust between you and potential customers since they know your business will operate under US law.
When you’re new to this, it’s super easy to make a mistake without realizing it. So my recommendation for outsourcing the legal stuff is LegalZoom, which has helped create millions of ecommerce businesses and keep them compliant.
Reminder: none of this legal advice, and I am not a licensed law practitioner. This is all my personal opinion.
If you’re self-employed with no additional employees, you may consider a sole proprietorship. This business structure is helpful for people who aren’t in a position to form a proper LLC.
It’s the easiest type of business to set up, especially given that many states don’t even require registration unless you’re operating under a name other than your legal given title.
However, the pros of a sole proprietorship are not without cons.
First of all, you’re liable for everything that happens because, as far as the law is concerned, it’s you personally doing business for your customer. Secondly, you always have to worry about self-employment tax no matter your income.
Limited Liability Company (LLC)
When you create an LLC, you eliminate your liability in all business dealings by officially separating your personal assets and your business. This is something you can either do yourself or have a lawyer (or legal service, like LegalZoom) do for you.
Your LLC begins when a registered agent (the LLC representative) files organization articles with your home state. This requires paying a fee (a few hundred dollars), plus whatever your lawyer requires if you go that route. I used a lawyer to create my most recent LLC and paid about $750.
As the owner of an LLC, you’re the ship’s captain. You can do it all on your own, or you can hire staff (be they employees or contractors) who will officially be engaged with your company.
Additionally, you’ll need to get an EIN — an Employer Identification Number. It’s like your business’s social security number; the government uses it to identify your business in tax dealings. You need this before you hire employees.
At first, you won’t be filing your LLC taxes separately but as personal income, which will receive the self-employment tax.
However, once your company starts making money, you can pay taxes separately as an S-corporation and save a tremendous amount via the related mechanics that come with that structure.
Limited Liability Partnership (LLP)
LLPs are generally just as simple to create as LLCs, though they’re much different. While an LLC only requires one or more members, an LLP by definition requires at least two. LLPs will define at least one partner who takes legal responsibility for the partnership’s actions.
If you’re starting an e-commerce business, you’ll most likely register as an LLC. LLPs are generally reserved for legal firms.
All of these business structures (LLCs, LLP, et cetera) fall under one of two types of corporations:
Every business that incorporates automatically is categorized as a C-corp unless they’ve already applied to be an S-corp with the IRS. The primary difference between this and S-corporations is that you have to pay taxes twice: once on your salary and again on company profits. Take it from me; this sucks.
Call it an incentive to grow your revenue as fast as possible.
Another thing: you use C-corps to take your business public and sell stocks to investors. So if you become an s-corp, you might outgrow it if you decide you want to list your company after raising enough capital.
As hinted at before, you create an S-corp by applying with the IRS after forming your C-corp.
S-corps are amazing because you only have to worry about paying income taxes on the salary you award yourself from your company. However, the tax bonus comes with substantially more complex filing, so you’re looking at spending some big bucks on accounting services.
Concerning shareholders, S-corps can’t have more than 100. You may outgrow an S-corp if you hit the big time.
5. Product Sourcing
Now that we’ve figured out what products to sell and who to sell them to, you need to stock your inventory. I’ve included this step after my “Create Your Company” section because many of the companies involved in product sourcing are B2B and will only do business with registered companies.
You’re essentially getting your product one of four ways:
- You’re making it yourself (DIY)
- Purchasing wholesale
- Manufactured to order
Let’s examine each one in detail:
Do-it-yourself stores make their own products. From thousands of years ago, your ancestors were likely DIY salespeople who made their pottery, jewelry, and more to trade locally and abroad.
These kinds of businesses tend to be pure niche because you’re going to produce thousands of products yourself.
I recommend you look into made-to-order items because those are generally the best-selling DIY crafts across the board. For example, take a look at this Etsy product:
Bonus: pay attention to how they’ve titled their product. Terms like “Anniversary” and “Wedding Gift” are called “keywords” in the world search-engine optimization. You’ll learn more about this later.
Now I have no idea what the exact process of this product’s production is, but I’m going to assume it simply requires a laser-etching device and some cutting boards you can get from any number of suppliers.
Made-to-order products make bank. You can always charge a premium for something custom-made because the sentiment dramatically increases the perceived value of any item. People love things with their names on them because, in their minds, it’s truly theirs.
Your main startup cost in a DIY business will be time rather than money. The production quality is entirely in your court. Once you get some momentum, you can start looking for a good manufacturer to make your products for you.
This was actually one of my first businesses! I made handmade cotton-rope leashes for dogs. I used beautiful, high-quality cotton-rope made in my home state of North Carolina and bound it together with brass clamps. They were really nice!
If you’re doing DIY work, you want to really make something special to stand out. When you sufficiently impress customers, you can expect repeat buyers and new customers by word-of-mouth.
To make this work, you’ll need to find a reliable supplier for your manufacturing materials that produces both quality and economical work. Remember that you’re also in this to make money! Ensure that your net profit (profit after deducting the cost of materials and taxes) is worth the time you’re putting into it.
Also, think about where you’re going to store said materials and products. I started my first business at home in high school. My mother did not approve of me storing my product around the house. The Container Store is your friend.
Wholesale purchasing is when you buy premade, brand-name products in bulk. You would use this service for something like a pet store, where the overwhelming majority of your products will be sourced from established brands.
Many wholesalers also offer “white labeling” services, where they will apply your branding to general merchandise. You can negotiate for further customization to your liking.
Manufactured to Order
This is when you have a specific prototype or blueprint, and you work with a manufacturer to have that product brought to life according to your specifications. You can then purchase these customized goods in bulk to resell in your store.
Your experience with any particular will vary. Some only accept finalized designs, and some will help you create the product from start to finish.
It’s critical that you really study up on potential candidates for manufacturing before you start handing out orders. Check their online ratings and see if they’ll allow you to speak to other customers from your region as references. In addition, try to get a sample of your product before you finalize a large order.
Some other things to consider:
- Get a firm estimate production based on quantity
- Obtain a firm manufacturing and shipping estimate
- Understand shipping costs, try to get them waived for larger orders
- Ensure they have quality customer support
- Ensure they will quickly rectify any quality issues
- Sign a contract that you understand completely (read the fine print!)
As discussed earlier, starting a dropshipping business is a great way to start a store with minimal startup costs and inventory management.
In this model, your product is shipped directly from the manufacturer to your customer. You can combine this with the other three models to test out stuff you’d rather not invest too much money in.
For instance, you might opt to drop-ship $250 designer jeans since you don’t want to invest $5,000 in an order you’re not sure will sell. I wish I would have done this with one of my earlier businesses: I was left holding the bag on thousands of dollars worth of merchandise.
This may be intuitive, but make sure to sample both the shipping time and quality control of any potential dropshipping supplier. I’ve heard plenty of horror stories of people hearing their customers complain about defective products arriving weeks late. Do you know who the customer is going to blame? Not the supplier, YOU!
This is a good reason to look into working with larger-scale dropshipping marketplaces like Modalyst. These typically have high standards of service which means the supplier isn’t just worried about pleasing you, but also the marketplace. They also make it super easy to find products to sell online.
Are you ready to create your website and let your ecommerce business take you to financial freedom? No, you’re not. We need to figure out your brand identity, first.
Now, what even is branding anyway?
What is Branding?
Branding is your first and last impression. It’s your look and feel, and it’s the things that customers come to associate with your ecommerce business. This doesn’t just include material concepts like logos and domain names, but also customer care and quality control.
Before you even get started on your website or logo, think about what kind of business you are and how that translates to your visual design. Think about the atmosphere you want to communicate to potential customers.
Are you a premium, luxurious brand? Then you’ll have a sleek, posh look like Mr. Porter:
Are you a fun and family-friendly ecommerce business? Then you’ll have bright, inviting colors coupled with smiling faces like Target:
Attention to detail will make or break your business. In the website design section, I will berate you on the importance of getting the little things right. Even today, I saw another small business with a frankly embarrassing website. Plan out your design: you need to get this right.
Creating a Logo
Your logo is kind of your visual catch-phrase. Ever since they first came into being, companies have trained our brains to instantly recognize their thoughtfully designed logos every time we see it and know exactly who it belongs to. Suffice it to say, it’s crucial.
You really need to get this right. I can tell when someone just used a cheap free logo designer to create their logo from prefabricated designs and it tells me that they’re probably not really serious about their business, and I should look elsewhere.
Keep these principles in mind when creating a logo:
- Simplicity: Don’t make your logo to complex. Make it short and sweet, visually speaking.
- Purpose: Your logo should make it obvious what your company is about
- Scalability: Make a logo that can be used anywhere, be it on the top corner of your website or in print
- Distinctiveness: Make your logo stand out from the crowd
Think about the world’s most famous logos for a moment.
These don’t even have text, yet you know exactly who they belong to. It’s definitely okay to have a subtitle, but it should be able to stand on its own when necessary.
Now I hear you saying, “That’s great insight and all, but how do I actually go about creating a logo in the manufacturing sense.”
Well, it varies. In my case, I was very fortunate to have taken a graphic design class for multiple years in high school. Those skills have stuck with me, and I’ve continued to develop them as I’ve created content for my businesses over the years.
However, I recognize that most of you may not have experience in graphic design or even know what InDesign or Illustrator is.
In this case, your options are two-fold:
- Download Adobe Creative Cloud and learn
- Hire a freelance graphic design specialist to do it for you
I recommend just hiring somebody to custom make one for you in the short term. However, in the longer term, you may be interested in learning how to create graphics yourself to save money.
7. Create Your Ecommerce Store!
Congratulations, now that you’ve completed all the steps necessary to create a business with a real potential to succeed, you’re finally ready to make your website. You should be proud!
The overwhelming majority of online merchants choose to use website builders to create and maintain their platforms. Even huge businesses, like Amazon and Apple, leverage these services. They’ve made starting an ecommerce business easier than ever!
Consequently, I’m going to recommend you do so as well. Of course, not all of these services exist equally, so I’m going to guide you through the website builders I believe are the absolute best in my immense experience. As a general rule, we’re going to be looking for:
- Speed: This is extremely important. Your page loading speed has a noticeable effect on your search rankings. My desktop website loads extremely fast, with my mobile page lagging slightly behind due to slower processors in phones.
- Uptime: Your website needs to be up all the time. Downtime is very, very bad. It should not happen at all in an ideal scenario.
- Free trial: Don’t sign up for any website builders that don’t allow you to test their services for free.
- Customer support: You need customer support that is available quickly and at good quality. Stay far away from any service with lackluster support at any pricing plan, whether it’s free or premium.
- Third-party application support: You want a website builder with extensive third-party app support, which are tools you will often be using. For example, I use an application that displays a pop-up whenever someone new hovers near the exit button.
- Customizability: Suffice it to say, you need a website builder that gives you lots of creative flexibility.
- In-house analytical tools: All of your candidates for website building should offer extensive in-house analytical tools to understand traffic
- Support for third-party analytical tools: All of you will be using services like Facebook Pixel and Google Analytics to understand further how your website is doing around the web.
- Custom code support: Sometimes, there will be more niche applications that don’t have applications built for your website host. That is okay, as long as your website builder allows you to insert that code yourself easily.
- SEO optimization: Make sure your website builder optimizes all of its pages for SEO! SEO optimization is essential and will make or break your business!
- SEO tools: Make sure that lots of SEO tools are available to optimize your website further. While they may have good SEO as a whole, certain websites lack customizability, which is very, very bad.
- Marketing features: Do they have many tools available to help perform market research? They need to. I’m talking discounts, promotions, email tools, social post makers, and more.
- Payment processing flexibility: Do they give you lots of options with payment processing? Some payment processors may prohibit using their product for the particular service you want to vend. Some may have unreasonably high fees. You need lots of options and be able to change them out at any time.
Now that we established what we’re generally looking for, I’ll talk about the website builder that I believe is the best on the market for doing business online.
Build Your Store With Shopify
Good ol’ Shopify is pretty much the OG of e-commerce website building and has spared no expense in perfecting its product. As a result, they’re used worldwide by massive brands like Redbull, KYLIE, and more. Speaking for small businesses, more entrepreneurs have used their platform to achieve financial freedom for themselves than any other service.
Shopify has beautiful website templates, making it simple for you to create a sleek and stunning store. In addition, they have a very extensive set of third-party apps and integrations, which will give you all the tools you need to optimize every facet of your online store with none of the technical expertise.
Shopify is my #1 recommendation for you to start an ecommerce business with. They’re also the ideal platform for dropshipping due to their extensive aforementioned third-party app support, if that’s your game.
I’ve tried other store builders and can say for sure that Shopify is the best choice for your own ecommerce business. They always keep up with the latest industry trends, too.
Alternative Sales Channels
You may also be interested in listing your products on alternative sales channels like Amazon, eBay, Etsy, and Facebook as part of your business strategy.
If so, good news! Shopify has native support for these applications, so you can easily add your products automatically without any headache and manage all your sales channels from one place. So what you want to do is create your online store, then add your products to other sales channels using their tools.
8. Getting traffic
Creating the most fabulous ecommerce store in human history is meaningless if nobody sees it. You need traffic, my friend. It’s the people visiting your website making the purchases rather than the people who are not.
There are two types of traffic:
- Organic traffic
- Paid traffic
Because these subjects are so broad and require more explanation than a simple breakdown, I’m going to break them up into two parts.
8.1: Organic Traffic
Organic traffic comes from people seeking out your products and services of their own volition without any paid advertising. This is the best kind of traffic.
Search engines make a clear distinction between paid and unpaid listings, and customers who see your website appearing in their organic search results will almost invariably assume your trustworthiness.
Organic traffic will take time to build. However, the return you get on your time and money investment makes it well more than worth it.
There are several key methods that industry leaders rely on to garner organic traffic over time:
- Search engine optimization
- Content marketing
- Social media
- Link building for high SE rankings
- Remarketing to their existing base
Naturally, we’ll expand on each one of these in further detail.
Search Engine Optimization
Search engine optimization is building your website’s content in such a way that it ranks as high as possible in search engine result pages (SERPs). If your business has any sort of physical presence, you’ll need to think about local SEO too.
SEO will make or break your business, so you need to learn to treat them like a significant other. You need to treat them well and learn all about them. Sometimes, you also need to know where the boundaries lie. Do all this, and you will become a master at the complex dance of SEO.
SEO is a profound, constantly evolving subject I could write an encyclopedia about, but that would be out of the scope of this guide. However, for the sake of preparing you for the world of ecommerce business, I’ll give you a brief introduction. I encourage you to check out other articles on my website for more detailed information.
Continuing, here’s an excellent infographic from Moz that illustrates what exactly makes up a search-optimized website:
For anything else to happen, a search engine’s “crawlers” (our name for the bots that index the web) must have access to your website. These crawlers have evolved from rudimentary to highly complex in the present age and continue to develop as search engines do everything they can to provide the highest quality and most relevant content to their users.
If your website is online and publicly accessible, Google (and other search engines) most likely have seen it — and are actively seeing it — by now. The only exceptions would be brand new websites, websites that aren’t linked to by other websites, websites with code-blocking search engines, and penalized websites.
In any case, you’re going to want to verify your website’s visibility with Google. To do this, sign up for a free Google Search Console account. Then verify ownership of your website with Google, and you’ll be good to go. In addition, GSC will give you access to very detailed information concerning which of your pages exist in the Google index. You’ll be using this tool a lot throughout your career, so this is two birds, one stone.
Oh, and why do I talk about Google so much? Because over 90% of internet searches take place there. As it stands, nobody even comes close, even though there are dozens of competitors. Of course, that doesn’t mean you shouldn’t occasionally take a few minutes to OK everything with Bing, Yahoo, and Yandex.
A Word on Technicals
Google cares very much about how your website performs regarding technical performance metrics. Therefore, you need to make sure that your website:
- Loads fast: Google cares very much how fast your website loads since it correlates directly to user satisfaction. Several website builders, like Wix, have native applications to measure your loading speed precisely and provide recommendations to improve it. Many third-party platforms will assist with this, like Ubersuggest.
- Provides a great UI on all devices: It’s critical that your website looks good and functions well on desktop, tablet, and mobile. Most people visiting your website will be doing so on mobile devices; you have to get this right.
- Has optimized URLs: Google loves clean, organized, and intuitive URLs. Look at my URL for this page or any other: each one tells you where you are in short, simple, and understandable terms. Also, notice the presence of keywords in the URL itself.
- Has optimized titles and descriptions: Go ahead and search for something generic on Google, like “graphics cards.” You’ll notice that each page in the top 10 results has a title and description telling you quickly what exactly you should expect on the website, featuring the keyword(s) that you searched for.
These things have a very tangible impact on your search rankings and click-through rate (CTR). If you grow large enough, you may need to hire dedicated IT support for your business.
The next step — compelling content — ties in directly with the next section.
Have you ever searched for an item you were considering purchasing, only to end up reading a blog post about it since that’s what appeared in your search? And on that blog, did you notice that they were selling the product and had their own online store? Maybe even after you read that blog, you bought their product.
That’s content marketing. That store set up a blog to discuss topics relating to their business and then directly tied it into their store.
The coolest part is that Google led you to their blog for free because Google genuinely believed that the blog’s content was high-quality, informative content relevant to your query.
That’s the power of content marketing, and that’s 100% why your ecommerce business needs to have a blog filled with high-quality content. The website builder I recommended to you has the functionality to build high-quality blogs optimized for SEO, so nothing stops you.
Now let’s talk about keyword optimization. If you don’t know, keywords are the ideas, topics, and concepts that people use key phrases and words to search for online. For example, “online business software” and “how to build a blog” are keywords/phrases.
Use tools like Ahrefs and Ubersuggest to find keywords you can be competitive for based on your domain ranking. You can also use these tools to discover how expensive it would be to pay for advertising to these keywords.
Integrating these keywords into your content is as simple as using them. Put the keywords and phrases you’re targeting in your title, URL, description, headings, and body. Just make sure you’re always using them in a way that sounds natural.
By now, I think everyone has an idea of how powerful social media can be for an ecommerce business. It’s pretty much essential.
You should have an active presence on all the popular social media websites, whether directly or through influencer marketing. Here are my top choices I think you should be using and why:
Facebook is the second most popular business channel in the world. Billions of dollars worth of merchandise are purchased thanks to Facebook every year. Lucky for us, Facebook is super business-friendly. You can even set up your product to sell directly from Facebook!
Instagram is my personal favorite because it’s so visually oriented. Unlike Facebook or Google, Instagram posts generally take up the entirety of the user’s focus, thanks to its post format. Instagram also offers direct shopping integration but is selective in the brands allowed on their store, so you’ll have to wait until you have more momentum to apply to their program. This is also the best place to use influencer advertising.
The best way to leverage Twitter is through their famous “retweet” feature. If you create engaging content, people will naturally and organically retweet it and share it with their followers, who in turn may retweet and share it with their followers. Many companies also run support accounts on Twitter because it allows them to easily update their followers on issues without any intrusion.
Though you can have a business profile, LinkedIn is more for your professional connections than for customers. The primary use of LinkedIn is to establish relationships with other professionals in your industry. You can then leverage these relationships for guest blogging, partnerships, and more.
I like Snapchat posts for a similar reason I like Instagram’s: they’re hard to miss. Keep in mind, while the above platforms are ubiquitous across the world with a wide variety of demographics, Snapchat is really only popular in the United States and other select countries with people aged under 35. If you’re selling something targeting a more mature audience, you could be forgiven for skipping this one over
Keep in mind, there is a right way and a wrong way to do social media. Make sure you’re leveraging all the business features these platforms offer. Facebook and Instagram both offer special business profiles you can use to gain access to in-depth analytics, promotional features, and more.
Search engines like Google figure out how important and trustworthy you are by figuring out how many websites across the web link to your website. The way Google sees it is that if many websites are referring to you, then those websites think your content is high-quality and worth sharing, and so should they.
Suffice it to say, Google’s opinion of your website directly translates to search rankings. Consequently, you need to build links to your website! Ignoring this is a massive SEO mistake, no matter what anyone else tells you.
There are dozens of ways to build links across the web, but I’ll list just a few here to get you started:
Create high-quality, sharable content
This is the most important step of all. When you create quality content that people derive true value from, people will share it organically. Whether it’s blog posts, infographics, products, or anything else, make it high-quality. People will share it across the web, and you’ll see links pile up naturally.
As I said earlier, you should definitely have a blog on your website. After publishing a few principle posts illustrating your writing quality and depth of knowledge, reach out to other professionals in your niche to ask if you can publish an article on their blog. What they get is free, high-quality content for their blog, and what you get is a do-follow link to your website, increasing your domain rating and giving you some of their traffic.
Use Ahrefs or a Google search to find websites that mentioned your brand, but did not link you. Find these websites’ contact information and email them asking them to link directly to your website (after you thank them, naturally). This will be more relevant later in your ecommerce business journey when you have more traction
Leverage your network
If you already have relationships with anyone in your industry, you have a potential goldmine of backlinks. Get in touch with them and discuss where it might be appropriate to include a link to your website on theirs. They’re doing you a big favor, so try to do it in a way that helps them out, such as with guest posting.
General link bait
Sometimes brands create content for the sole purpose of having it shared while relating it to their business in some way to translate that popularity into sales. If you want an example, just look at essentially any Super Bowl ad. As is a tradition in the United States, advertisements for the Super Bowl generally are manufactured for the sole purpose of entertainment, or to send a powerful message. These ads are often remembered for years (if not decades), and are watched by millions of people far after the Super Bowl is concluded. For this reason, the ads often have little or nothing to do with the company’s actual product because in this case, all they care about is being popular and having their advertisement shared.
A word of warning: never try to game the link-building process by purchasing sponsored posts or links. This may have worked in the early 2000s, but since then Google has spared no expense in covering all their bases in their pursuit to make sure that all search results are legitimate and high-quality. If you use shady tactics to boost your rankings, Google will find out and they will penalize you.
Don’t let anyone tell you otherwise, especially people trying to charge you for rank boosting (see Google’s policy on paid backlinks). If you pay someone to link your website (or vice versa), make sure to use a NF (no-follow) link that Google will know not to contribute to your ranking.
Oh, and if you see someone offering DF (do-follow) sponsored posts on their website, don’t try to guest blog for them. You don’t want to risk Google thinking you paid for a DF link by association.
Retargeting Your Existing Customers
Repeat customers make a vast portion of sales in successful ecommerce businesses. This isn’t an accident; it’s accomplished by effective remarketing.
Here are a few ways you can effectively recapture the attention of your previous customers and turn them into repeat buyers:
Email marketing boils down to creating beautiful emails and sending them en masse to your contact list of customers, which you will build over time. Your emails can be for new product announcements, sales, promotions, and more. There are many email marketing services available to help you accomplish this effectively. The website builder I recommended to you has excellent native email marketing applications.
There are various services you can use to specifically target people who have already expressed an interest in your brand. Have you ever Googled a product or visited a brand’s website only to have their ads displayed to you constantly over the next few days or weeks? Yeah, it’s not on accident. Those are retargeting ads.
Doing a good job is the all-time best strategy to turn customers into repeat buyers. Your customers will come back if your product, customer service, and overall experience are top-notch.
8.2: Paid Traffic
Now let’s talk about paid traffic and advertisements. Examples of paid advertisements are banners, promoted videos, and sponsored search results across the web. Businesses at every level use these to accelerate (or kickstart) their growth while building organic clout simultaneously.
From my background in ecommerce business, I know that marketing, done right, will grant returns orders of magnitude higher than the investment.
Think about these iconic advertising campaigns:
- Nike’s “Just Do It” Campaign
- Progressive Insurance’s “Flo” campaign
- California’s “Got Milk?” campaign
- Coca Cola’s “Share a Coke” campaign
- Apple’s “Get a Mac” campaign
Think only corporate brands with big marketing departments can do it? Think again.
Ever heard of Dollar Shave Club? Their brand is so ubiquitous and memorable you probably think it dates back to the 1800s. But, nope, it was started in 2012 and began with one incredibly iconic commercial:
Some of these campaigns defined the companies that made them for years to come, and many of them would not be in the same place they are today if not for these campaigns. What if these companies had forgone advertising instead of building just on word of mouth? They might not still exist.
Shunning marketing can be a deadly mistake. I can tell you from experience that there have been many good ecommerce businesses with solid ideas and well-designed stores that never got off the launch pad thanks to underbudgeted and ineffectual advertising.
Some people believe that creating compelling, memorable advertising like the examples above is like trying to catch lightning in a bottle, but that’s simply not true.
We can examine each of these and evaluate the fundamental principles that make them successful. Now, let’s think; what do all of these advertisements have in common? They are generally one of two things:
1. Hilarious yet informative
The advertisements for the “Got Milk,” “Dollar Shave Club,” “Get a Mac,” and “Progressive Flo” campaigns are hilarious. Rather than just make you chuckle or smirk, these advertisements go out of their way to provide clever and quirky humor that you don’t forget while conveying to you a message at the same time. Some of these ads are so funny that I send them to my friends even though I don’t care about the product itself. You can’t put a price on an ad like that
2. Inspirational and profound
The “Just Do It” Nike campaign inspires you to stop messing around and pursue your dreams. The “Share a Coke” campaign encourages you to get together with your friends and spend quality time with them (over cans of coke, naturally). They managed to convey these messages that weren’t cliche and genuinely stuck with you (their catchy slogans were undoubtedly conducive to this). These ads aim right for sentiment
When creating ads, go above and beyond. Don’t run another “Buy now, 15% off!” advertisement your customer has already trained their brain to ignore while browsing. If you want to succeed, you need to stick out.
Now let’s talk about where you should run your ads. There’s a seemingly infinite amount of channels, so I’ll guide you through what I believe are the best from all of my experience.
Besides being a great place to garner organic traffic, social media is a viral medium for digital marketing. As your business grows, you might find that social media marketing plays a critical role in your ecommerce business.
Others businesses choose Snapchat to get the attention of youth, and business software companies may use LinkedIn to target professionals. Your choice of platform(s) is entirely contextual for your product. In any case, I recommend you start with the Facebook/Instagram ecosystem due to its tremendous resources and versatility
Video advertisements are generally the most effective type of ads, and it’s not hard to imagine why reflecting on some of the examples I provided to you. With that in mind, there is no better channel for your video advertisements than YouTube.
Why? A couple of reasons. Firstly, because your ads will be sound enabled. Other video ad platforms like Instagram have the sound muted by default, and sound is a massive part of what makes video ads effective. Secondly, you can make the first few seconds unskippable. That means you have a brief opportunity to make a good impression before your viewers have a chance to skip
Cost-per-click search ads
Search engines like Google offer advertisers the ability to automatically bid for special search placements in queries involving specific keywords. So, for instance, if I were advertising for the keyword “business cards,” my ads would come up when somebody used that key phrase in a search.
However, enough advertisers bid on that word to make it super expensive. If my conversion rate is high enough, then that’s perfectly fine. However, if I wanted to start with a less costly key phrase, I might try “what do business cards cost?” Google also lets you advertise your product directly into Google Shopping
Some brands pay famous social media personas to advertise their products. Influencership can go exceptionally well, such as Adidas sponsoring Lionel Messi. It can also be a disaster, like the time when a profile with two million followers couldn’t sell 36 t-shirts. It comes down to their follower engagement and the relevance of your product to their primary demographic.
For instance, I wouldn’t pay a gaming influencer popular with children to showcase my New Year’s Eve event. Carefully research the engagement your target influencers have with their followers. One time, I paid an account with hundreds of thousands of followers to advertise my website, and I was expecting hundreds — if not thousands — of hits that day. I’m not even sure if I got ten. Research!
Research the advertisement channels you think will be most effective for you, and do a little field research. The most influential brands will leverage several media at once for maximum reach. Also, it’s easy to set your budget with most online advertising methods, so you don’t lose more than you can afford.
With all that in mind, get started on your advertising journey as soon as you can. And as I said earlier, don’t forget to have fun with this! Advertisements are a wonderful place to let your creativity shine.
9. Performance Analysis
Once you have visitors on your site, hopefully making purchases, you need to understand their behavior to refine your customer experience further.
In e-commerce, we use a broad set of tools to analyze traffic, visitor behavior, demographics, conversation rates, and more. Solid market research is critical in ecommerce business success.
Both of the e-commerce platforms I recommended to you have great native sales and traffic analytical tools, such as exemplified here with Wix:
They also offer integration with other essential tools you’ll need, such as Google Analytics and Facebook Pixel, to measure conversion rates more accurately. As soon as you’re up and running, you should set up these integrations. All of them are extremely easy to set up.
If you’re selling on third-party channels such as Amazon, eBay, and Etsy, you’ll find native analytical tools present on those websites as well. Make sure you’re leveraging these powerful tools to their full potential.
Social Media Analytics
As I mentioned before, social media platforms generally have unique business profiles you can use to measure how your profile is doing in terms of reach, growth, and conversions.
Take a look at the picture above. This user knows that their most extensive customer base comprises millennials living in larger cities, most active after 8 PM. They can now use this data to refine their advertising, website experience, and more.
Good social media marketing tools can be game-changers by allowing you to hone in on your target demographic. They allow you to connect all your social media accounts in one place to create actionable insight.
Website traffic analytics software measures the critical metrics of visitor behavior that define the success of your ecommerce business. These essential tools will help you see where you’re doing well and where you need to improve.
The key metrics that traffic analytic software analyzes includes:
- Traffic source: Where are your visitors coming from? Social media? Google searches? Direct referrals? Those are traffic sources.
- Total visits: The total amount of hits/clicks your website is getting over time. They will also tell you (as best they can) which visitors are new and which are returning.
- Bounce rate: Bouncers are the worst kind of visitors: they’re the ones that enter and promptly leave your website without doing anything. Your bounce rate is the percentage of visitors that do this.
- Time-on-page: Traffic analytic software will tell you how long people spend on each page. Are the millennial shoppers from your Google ad interested in your hand-tooled leather bags? This is an excellent way to gauge interest in a topic relative to traffic sources, among other things.
- Conversion rate: Your conversion rate is the percentage of visitors that become customers or leads before leaving your website
- Exit page: These tools will tell you which page has the highest percentage of users losing interest and leaving your website. Tracking the visitor’s exit page is a valuable tool for refining your user experience
Shopify has native traffic analytics applications, but they’re relatively barebones compared to the more advanced software.
I’ll give you a few recommendations to get you started:
- Mouseflow: This tool, and others like it, allow you to view recordings of visitors using your website as if you were standing over their shoulder. I’ve found this kind of tool to be invaluable to refining weak points in my website
- Semrush: This is just a fantastic tool around, and it’s no slacker with traffic analysis either. This should definitely be a part of your toolkit
- Google Analytics: Get in-depth insight into your website’s performance straight from the biggest search engine at a price you can’t beat: free
There are many tools, but this article isn’t about listing all of them. Instead, I encourage you to explore and find the best tools for you. Your ability to effectively analyze the data from these tools will be a significant factor in your ecommerce business success.
I sincerely hope this has all been very helpful to you. I hope you recognize how sincerely I want to help you and how I want nothing less than for you to succeed. Many would-be “gurus” charge thousands of dollars for this kind of information, but I’ve given it to you for free (and at better quality).
This may be the end of my guide, but it’s the beginning of your journey.
Pictured: a road, upon which journeys often transpire
As I hinted at the beginning of my guide, I’ve had my fair share of failures before finding success. All this trial and error brought me the knowledge I’ve shared with you today. Building your business will take work, but it will become way more manageable if you break it down into the steps I’ve provided for you.
You may struggle at first — that’s okay. For example, you probably fell the first time you tried walking. But from all your attempts, you mastered the art of bipedal movement. You may also find your business to be a runaway success right off the bat — and I hope you do! I want to see you be your own boss and set your own schedule.
And remember: don’t forget to enjoy yourself! The best ecommerce business is the one that’s fun and lucrative.
If I’ve helped you today, I would be ever so grateful if you shared my content; that’s the best way to pay me back. Now tell me, what kind of business are you planning to start? Tell me in the comments below.
4 thoughts on “How to (Really) Start an Ecommerce Business in 2023”
Good job on this article! I really like how you presented your facts and how you made them interesting and easy to understand. Thank you.
Appreciate it, Eileen!
Best e-commerce article have ever read in my Life 😩😊😊😊😊😊😊😊
Appreciate it, Daniel!