Inspiration strikes. You’ve got a genius business idea and you’re ready to share it with the world. But you have no clue how to even begin starting an online store. Sound like you? No worries–that’s where we come into play.
This guide will outline how to start an ecommerce business in detail. We’ll go over everything from choosing a business model to making your first sale. So without further ado, let’s jump into phase 1!
Phase 1: Plan everything offline first
When inspiration hits, it’s easy to grab your laptop and try to launch your ecommerce store right away. But going back to the basics and planning everything offline is the first step in turning your side hustle into a full-time business. Once you’ve identified a need in the market, validated that need, and developed your product or service idea, there are a few more things to consider before getting online.
Ensuring that you will be able to make a profit is key before starting an ecommerce business. One of the first things to do is to determine your business model. Do you want to offer subscriptions where customers pay a recurring fee at regular intervals for a product or service? Or would you rather create each product only once it’s ordered and then ship it?
When it comes to how to start an online business, picking a financially sustainable business model is essential.
Find a niche in the market
With the ecommerce space becoming more crowded and competitive, you need to identify what your niche is. This is the subset of the market that wants to buy your product because it fulfills their specific need, and aligns with their desired price range, product quality, and demographics.
Finding a financially sustainable niche allows you to rely on a steady revenue stream, build a customer profile, identify competitors, and determine your positioning in the market.
You don’t need to reinvent the wheel either–sometimes taking a classic approach and changing one element is enough to find a niche. Take New Zealand food delivery brand, Angel Delivery for example. They took the typical home meal-kit delivery business model and adjusted it by letting customers gift meal kits to friends and family during the highs and lows of life.
This slight alteration to the typical Hello Fresh or Goodfood structure opens Angel Delivery up to a whole new niche of gift givers who value food.
Once you know how you’ll make money and who you’ll be selling to, it’s time to solidify your branding. And we’re talking more than logos, colors, and fonts.
When it comes to branding, you need to consider both visible and invisible elements. Knowing what your brand stands for and what your values are is just as important as having a catchy slogan.
When deciding how to start an ecommerce store, there are 5 elements of branding to consider: your purpose, positioning, promise, personality, and identity.
Now it’s time to plan where customers will be able to purchase products or services from. These are referred to as your brand’s sales channels. When it comes to figuring out how to start an ecommerce business, you need to select a single channel, multi channel, or omnichannel sales approach.
“It's all about knowing your core values and listening to your audience! Your email and SMS list is more than just a marketing channel—within it, your customers are already giving you feedback through every click, reply, and buy. Your network is your friend; listen to your customers and respond to their actions.”
– Jimmy Kim, CEO and Co-Founder of Sendlane
Single channel is when customers are only able to buy products from one channel, such as your online store. Multichannel is when customers can buy from multiple channels, but each channel may operate independently. Omnichannel sales involve offering several different purchase channels that are coordinated to deliver a seamless customer experience across all channels. While striving for omnichannel sales and marketing is a good goal, it’s okay to start with one or two channels when you’re starting out.
Determining your sales channels is essentially asking yourself “Where will I be able to best reach my customers?”
How will you actually get your products to your customers? What geographic regions are you going to serve? Who will cover the shipping costs–customers or you? These are all key questions to ask yourself when thinking about how to start your ecommerce business.
To create your ecommerce shipping strategy consider the following elements: shipping rates and methods, product weights, packaging, carriers, and more.
Phase 2: Bring your store online
It’s now time to take everything you planned offline into the digital world. Whether you’re looking to bring your brick-and-mortar online or you are starting your first-ever business, there are a lot of things to consider on the digital front.
A website domain is the name of a website that typically comes after the “www.” part of a URL–it’s where customers can find you online. More often than not, it will be your store name, but if you have a generic name or one used by another company, you may need to add a word like “shop” or “store” to your domain.
Now that you’ve determined a brand name during the branding stage, it’s time to purchase your online domain. Typically, you purchase a domain and are charged annually to maintain the rights to that web address. Some ecommerce platforms offer plans that include the domain price but you can also purchase it externally on sites like Godaddy.com.
Using an ecommerce platform is a great way to quickly and efficiently start an ecommerce business. There are tons to choose from depending on your business needs. Some common ones are Shopify, Wix, and BigCommerce.
Shopify is one of the most common ecommerce platforms with various designs, tools, and features available to users with no website development experience. Wix is another great option and offers drag-and-drop templates, as well as Wix ADI which builds a website for you. BigCommerce is another option that is known for being extremely scalable with robust and advanced capabilities. All of these platforms offer free trials so don’t be afraid to try them out to see what suits you best.
Create a website
Once you decide on an ecommerce platform, it’s time to create your website. The first steps involve choosing a theme or template design that matches your brand identity. This will present a cohesive experience for customers.
When you’re just learning how to start your ecommerce business, start slow. You can experiment with your ecommerce platform by adding a few products. Once you’ve gotten more comfortable you can add more advanced features like pages, widgets, or plug-ins.
“My top tip when starting an ecommerce business is never to forget the customer. An ecommerce store exists to serve every step of the customer purchase journey, from immersing them in a beautiful on-site experience and the benefits of your product to making the ability to checkout and purchase easy. Another key area is the after-sales process, consider using automated flows to check in, immerse customers in more products, or write a review. Brands that leverage a strong post-purchase experience often see much higher retention of their customer base as it tends to build a loyal following and a great customer experience.”
– Nic, CEO of Charle Agency
Plug-ins are available through app stores within ecommerce platforms. This allows you to add elements to your store such as social media feeds, reviews, or loyalty programs. No matter whether you pick Shopify, Wix, or BigCommerce, be sure to check out Smile.io in the app store 😉
Online payment methods
The next step is one you’ll be pretty interested in–collecting payments from customers. Most ecommerce platforms offer their own native payment structures which are built-in or add-ons to your plan. These are good options when you’re just starting out to keep things simple.
Another option would be to set up an Internet Merchant bank account and use a payment gateway like Realex or Sagepay to process online payments. These are additional costs above and beyond the ecommerce platform plans. Or you could integrate third-party payment providers like Stripe or PayPal on your website.
As with everything involved in starting an online business, the key is trying out different options, determining which is best for your business, and continuously evaluating its effectiveness.
Phase 3: Start selling your products
The final stage (and arguably the most exciting phase) is selling your products. This is when you really dive into building strong customer relationships, which is essential for long-term success.
Acquisition and marketing
Now that you have an ecommerce website, it’s time to turn it into a brand that customers fall in love with. This all starts with acquiring your first customer.
Marketing and promotion are key in this phase. Determine the marketing channels you will use to acquire, engage, and retain customers. Some common channels include social media, email, rewards programs, paid advertising, referral programs, SEO/ organic traffic, content marketing, and more. Start experimenting with a few and slowly add in more as you figure out what resonates best with your customers.
Your brand marketing should be continuously evolving no matter what stage your business is in. We talked to the team from Dopps, a well-established sustainable cleaning brand, about their marketing. “Experimentation is key! In an online world where algorithms and trends are changing rapidly, it can be easy to feel like you’re never getting it quite right.”
When we have leaned on the creativity of our team and let our Dropps humor come through, that’s where we’ve found the most success.”
– Jonathan Propper, CEO of Dropps
You should be aiming for an omnichannel marketing strategy in the long-term. This means that no matter where customers interact with your brand, they should receive the same message and experience.
This is about keeping track of your products–knowing what’s coming in and going out in real time. For small businesses, this can be relatively simple. If you own a candle business and hand-make 10 candles and then sell 3, you can easily track that you have a remaining inventory of 7 candles. However, this gets a bit more complicated as you scale and offer more channels.
Most ecommerce platforms offer built-in or plug-in inventory management solutions. You can keep track of your inventory from all sales channels in one unified system. This will help enhance your customer experience because your website will always automatically be up to date and alert both you and your customers if a product is unavailable.
Customer relationship management
When you’re a new brand it can feel tempting to try to attract everyone and anyone under the sun. However, it’s actually more profitable and sustainable in the long run to maintain existing customers. The goal you’re striving for is creating a brand community of brand advocates.
“Definitely focus on creating a community around your brand. The more people you have that are not just a customer but an actual part of your community the stronger your brand will become. So make sure you are taking care of these people by keeping them engaged and rewarded!”
– Chris Venturini, CEO of Detour Sunglasses
Customer relationship management is all about how you will keep track of your customers’ interactions with you to deliver them optimal experiences. Again, many ecommerce platforms have these built in so you can track customers’ journeys and send personalized communications.
Putting it all together
Starting a business is an exciting decision but it’s normal to feel overwhelmed. If you follow these three phases–offline planning, online set-up, and selling products, then you should be on the right track. Use this guide as a starting point and then continue experimenting until you discover what works best for your customers.
Editor’s Note: This post was originally published on September 6, 2022, and was updated for accuracy and comprehensiveness on May 10, 2023.
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