How to Start an E-Commerce Business: A Simple Guide to Starting an Online Business

Create an e-commerce business, find your items, design your website, and start selling.

An e-commerce company offers goods, services, and money over the internet. launching an e-commerce firm is similar to launching any other business in that you must design a business strategy, obtain licences and permissions, and set up dedicated financing. In addition, you’ll need to select an e-commerce website builder, source your items, and promote to online clients.

To get your e-commerce business up and going, follow these six steps.

1. Specify your e-commerce company concept.

The first step in launching a business is to fine-tune your concept. Selling real or digital items, as well as professional services, are examples of online company ideas. Whatever path you take, you’ll need to identify your e-commerce company strategy and produce a business plan outlining your specialty.

Throughout this phase, you will begin to ask a lot of questions, such as, “How will you get your products or services to your customers?” What kind of licences or permits do you require? How much will it cost to get your company up and running, and how will you pay for it? These issues should be addressed in your company strategy along with a plan for the upcoming months.

2. Establish your company

After you’ve decided on an e-commerce business concept, the following step is to prepare your organisation for success.

This comprises back-office procedures such as:

Making a decision on a business structure. Each of these entity types has benefits and drawbacks, so speaking with a lawyer may help you choose which is ideal for you.

Choosing a name for your company. To ensure that the name you are choosing is not already taken, check the websites of the United States Patent and Trademark Office and your local secretary of state. Check to check whether your desired company domain name is also available.

Requesting an employer identification number (EIN). You may request an EIN from the IRS online, via mail, fax, or phone, and it will be free. An EIN is not required for all businesses, but obtaining one might help you separate your personal and corporate funds.

Establishing a company checking account. Amiglix suggests that all business owners have a separate bank account for their company.

Obtaining the licences and permissions that your city or state requires. This will most likely comprise a company licence, as well as an occupational licence if you provide services. Check the website of your state or local government to see what is required in your region.

3. Find or create your items

Following that, you’ll need to find things to sell. If you’re selling tangible goods, you might have to build them yourself or collaborate with a manufacturer.

A critical choice at this time is whether to order things in bulk and retain inventories on hand. If this is the case, you’ll need to consider storage space as well as obtaining funds to order items in advance. You will, however, be able to send products yourself.

Others opt for dropshipping, in which things are created or sourced at the moment an order is placed. Dropshipping can reduce your overhead expenses in general, but it might be more difficult to manage because inventory levels and shipping are out of your control.

Other sources for e-commerce items include:

White-labeling is the practise of purchasing things in bulk from a manufacturer and then branding them with your company’s logo.

Paying a third party to print your company’s designs on items such as T-shirts, mugs, and posters is known as print-on-demand. Print-on-demand is similar to dropshipping in that a client puts an order, and the manufacturer then creates the product and distributes it straight to the customer.

Retail arbitrage is the practise of purchasing inexpensive things from retail vendors and reselling them at a profit in your own business. 

If you’re providing professional services, your company website might merely need to list and define what you have to offer. Still, you must choose how much to charge and how many clients you can visit every day or week.

4. Create your e-commerce website.

Your shop will be your e-commerce website. It is where your clients will learn about you and your company, view your items, and buy from you.

Using an online store builder is the simplest approach to create a website. These tools can guide you through the whole process of building a website, from purchasing a domain name to managing inventory and accepting credit card payments.

Shopify, Squarespace, Square Online, and BigCommerce are examples of popular e-commerce website builders. 

If you have a small business or are just getting started with online sales, a free e-commerce website builder can be a smart place to start. To sell an infinite number of products, however, and to have access to more potent toolkits that may help with things like shipping label printing, order management, and sales analytics — you’ll often need to pay a monthly fee. 

Many online shop builders, in general, should be easy enough for someone with no web programming skills to use. However, most allow you to hire a professional designer or developer if you don’t want to construct the website yourself.

The finest e-commerce platform for you is within your budget and acceptable for your degree of expertise.

5. Determine order fulfilment

The process of putting consumers’ goods into their hands is known as order fulfilment.

The printing of shipping labels is typically included as the first step in the fulfilment process by e-commerce website builders. Some also allow consumers to add shipping expenses to their items at the checkout.

If you decide to handle order fulfilment yourself, look into shipping costs to get an idea of how much it will cost. Look for an online shop builder that can assist with the shipping procedure, or look into shipping software suppliers like as Shippo.

It’s also worth noting that e-commerce may link you with clients all across the world. Make it clear on your website if you won’t ship to a particular region.

You may outsource order fulfilment to an e-commerce fulfilment center or utilize a service like Fulfilment by Amazon if you don’t want to manage it yourself. Fees for fulfilment services vary based on the size of your items, the distance they travel, and the amount you send.

6. Promote your online store

You’re ready to start servicing clients now that you’ve launched your online store — as long as they can discover your stuff.

Your small-business marketing plan may incorporate the following elements:

• Omnichannel commerce refers to the practise of listing your items on third-party marketplaces such as Amazon and Instagram. Some e-commerce website builders can assist with this.

• Influencer marketing is the practise of paying renowned social media creators to promote your business. 

• Paid social media advertisements or social media content.

• Search engine optimisation for your company’s website.

• email marketing to both present and potential customers.

Many e-commerce website builders offer marketing tools that may assist you with tasks such as creating social media advertising or sending emails to clients who have abandoned their carts. 

Consider investing in marketing tools if you want to create more sophisticated campaigns. These tools may assist you in creating email templates and campaigns, texting customers, tracking how specific customers respond to your emails, and much more.

How much does it cost to launch an e-commerce venture? 

The cost of launching an e-commerce business varies greatly based on what you intend to offer and in what volume. Your costs may include:

This is your e-commerce website. When invoiced annually, subscription options for online shop builders often start around $25 to $30 each month. You may also need to purchase a domain name if your e-commerce website builder does not offer one, and bear in mind that there are yearly costs to maintain your URL registered. 

Fees for payment processing. In general, the firm that handles your payment processing will take a 3% share of each online sale. 

Stocking up. Be prepared for considerable upfront expenditures if you want to buy merchandise in quantity – even before you start producing income. Inventory finance may be able to fill the gap for you.

Order completion. In general, you’ll have to pay a third-party provider to satisfy each purchase, with fees ranging based on the size and weight of the item. The more people that purchase at the same time, the less you’ll have to spend each item. Order fulfilment services may also involve warehousing, for which you will be charged on a per-item basis. 

Warehousing. If you acquire more merchandise than you can store in your home or garage and aren’t utilising an order fulfilment service that includes storage, you may need to invest in your own warehouse space.

The general operating costs of a firm. Monthly or annual costs for accounting software, company insurance, any workers or contractors you want to engage, and other expenses may be included. You may also need to budget for small-business taxes.

How to Start an E-Commerce Business 

establishing an e-commerce firm, like establishing any other business, may be intimidating. Here are some pointers to help you get through the change.

1. Begin with the basics.

If you’re not sure e-commerce is the proper path for you, start with a low-cost web business. This might imply using a free e-commerce website builder, purchasing a limited amount of inventory, or selling only one or two categories of things. 

Starting small can reduce the amount of startup investment required and make it easier to pivot if your first concept fails. As your business grows, you may upgrade to a more comprehensive e-commerce platform and increase your product line.

2. Develop a devoted consumer base

consumers who enjoy your items enough to buy them more than once and, ideally, consumers who will recommend them to their networks are essential for your e-commerce firm.

Having a good online brand presence might aid in gaining followers. However, the more information you can acquire from your clients, the more directly you can sell to them, whether that means launching an email marketing campaign, giving discount coupons through text message, or informing them of your booth location at an event in their area.

3. Make an investment in multichannel selling.

Loyal clients may be inclined to return to your website on a regular basis. However, in order to connect with fresh audiences, you might need to go where they are, whether it be on TikTok, Instagram, Amazon, or another platform. Begin with the platforms where your clients are most likely to be, then deploy the integrations and monitor their performance. Platforms can be added later if they match your company plan. 

Remember that selling in person is also a channel. Craft fairs, neighbourhood stores, and industry or trade events can help you meet new consumers while also making money.