How to Sart an E-Commerce Business in 2024 (Full Guide)

Ever wanted to be your own boss and sell things online? E-commerce is booming! In 2022, people spent a whopping $5.7 trillion shopping online. That’s a huge opportunity for you to turn your ideas into cash.

This guide makes starting your e-commerce business simple. We’ll walk you through everything, from finding great products to selling to building your online store and getting your first customers.

Ready to ditch the daily grind and become your own boss? Let’s get started!

In this article, we’ll walk you through the steps of starting your own online business. We’ll also talk about the expenses you might have to deal with along the way and share some tips to help you make your business a success. Finally, we’ll recommend some affordable courses that can teach you the skills and knowledge you’ll need to start your online business.

1. Choose your eCommerce niche

In eCommerce, the most successful sellers focus on tiny, super-specific niches. Think of these niches as unique corners of the market that other businesses don’t serve. The narrower your product niche, the fewer rivals you’ll have, increasing your chances of success.

Your business model should reflect your eCommerce niche since not all models will work with all types of products. For example, dropshipping won’t help sell hand-knitted sweaters, and few people would buy a subscription for artisan coffee tables.

You want to find a niche that is both large enough to contain a robust target audience and small enough that it doesn’t include many competitors. Touchland is a great example—they transformed hand sanitizer from a first-aid item into a chic beauty staple.

The best way to identify your niche is to start with a product market and whittle it down from there. To choose a product market, start with target products that:

• You’re capable of creating (at high quality) 
• You enjoy creating (even at scale)
• Have a small market/minimal competition
• People want or need
• Are profitable

Narrowing down your eCommerce niche:

Once you’ve found a product market that interests you, it’s time to refine your focus. Let’s take an example: imagine you enjoy making clothes in your spare time and want to turn it into an online business. Initially, you might think about targeting the vast clothing industry. However, this industry is super crowded with many competitors, making it tough for individual eCommerce sellers to succeed.

So, what’s the solution? You need to pinpoint a unique product category within the broader clothing industry. Here’s how to do it:

1. Start Broad: Begin within a wide market, like clothing, where you can create products.
2. Find a Less Competitive Segment: Look for a subcategory within that market that has fewer designers and retailers. For instance, consider the pet fashion industry; it has less competition.
3. Narrow it Down Further: Even within pet clothes, you can narrow your focus to “pet clothes for dogs.”
4. Add Your Unique Twist: Differentiate your products from existing retailers. If you make pet clothes yourself, your niche could be “handmade pet clothes for dogs.”
5. Go Even Deeper: To stand out further, specialize in something like dog clothes for special occasions, such as weddings and engagements. Specificity makes your business less prone to competition.

Now, in this example, we’ve reached a pretty specific niche. But in reality, you can keep drilling down even further. You might narrow it by size, theme, or specific clothing items, like “floral-themed wedding bow ties for small and medium dogs.” There’s no real limit to how specific you can go.

Remember, your niche isn’t set in stone. As your product gains traction, you can reinvest in marketing, and audience targeting, and maybe even hire some help. With growth comes the ability to capture a larger market share.

2. Determine your shipping strategy

When I think of small eCommerce businesses, I think primarily of some of my favorite niche Etsy shops selling things like taxidermied squid jewelry and D&D dice with real mushrooms inside. (I am a very fun person to know at Christmas.)

But eCommerce selling includes far more than traditional consumer retail. A lot rides on your choice of eCommerce sales channel. Depending on your needs, you may find that one of these options suits you best:

• Direct-to-consumer (DTC): DTC shipping occurs when an e-commerce store produces and ships its items directly to consumers. This approach steers clear of go-betweens and third parties in your sales process. 
• Dropshipping: Dropshipping is an eCommerce model where you sell products without carrying any inventory. When customers order on your site, you contact the supplier and have them ship the product to the customer. Dropshipping is a popular eCommerce business model because you don’t need to spend much money upfront.
• Print on demand: Print on demand is similar to dropshipping, but instead of shipping products from a supplier, you have your products printed and shipped by a print-on-demand service. This type of business works for selling custom-printed products like T-shirts, mugs, and stationery.
• Retail arbitrage: Retail arbitrage involves buying products from physical stores and selling them online at a higher price. This type of eCommerce can be profitable, but it requires more work than dropshipping or print-on-demand. You also need to find a niche where you can ensure customers won’t go to the source to make their purchase at a lower price.
• Wholesaling: Wholesaling is an eCommerce approach where you sell products in bulk to retailers. The benefit of wholesaling is that you can get discounts on the products you purchase, which allows you to sell them at a higher price and still make a profit. However, this requires a large initial investment since you’ll need to stock inventory in bulk quantities.
• Subscriptions: Subscription eCommerce businesses sell products or services on a recurring basis, most commonly in the form of a monthly box of curated products. However other types of subscription businesses exist, such as online courses and members-only clubs.
• Private label: Private-label businesses pay a third party to make their product for them. If you private label, you have complete control over the good’s specs and packaging. Private labeling takes a lot of research and investment to form the right business relationship. 
• White label: White-label stores buy items in bulk from a manufacturer. After receiving them, you rebrand the items with your company’s name and logo. While this costs less than private labeling, you have less control over the products you buy in bulk. 

After picking a channel, you need to work out the shipping logistics. If you use an eCommerce website builder, check if it offers shipping label printing or adds shipping costs to customers’ orders. On your end, gauge how much it costs to ship goods, and decide if there are places you can’t afford to send goods. 

3. Create a business plan

Once you’ve decided on your product niche and how you’ll handle shipping, it’s time to craft a business plan. Think of a business plan as your blueprint for turning your ideas into a well-structured strategy. It will guide your investment decisions and outline how you’ll connect with customers. A good business plan typically consists of six key parts:

1. Business Description: This section provides information about your company’s structure, industry, and background.
2. Mission Statement: It’s like a declaration of your core values and the goals you aim to achieve as a business.
3. Competitor Research: Here, you’ll delve into your competition, their strategies, and what sets you apart.
4. Business Roadmap: This is a timeline that outlines how you plan to grow your business over time.
5. Product Descriptions: Here, you’ll provide details about the product or service you intend to offer and explain how you’ll deliver them.
6. Financial Projections: This section involves estimating your pricing, sales strategy, profit goals, and any details relevant to potential investors.

Creating a comprehensive business plan helps you clarify your vision and ensures that you’re well-prepared for the journey ahead.

4. Set up your eCommerce store

You’ve found your market, honed your niche, picked your product, and you’re ready to start generating inventory and selling it to your customers. It’s time to choose a platform and set up your eCommerce store.

Setting Up Your eCommerce Website:

The platforms mentioned each with specific setup requirements.

1. Standard Website Builders (e.g., Wix, Weebly, Squarespace, WordPress): These builders allow you to create a complete website. This is ideal if eCommerce is just one part of your business plan, like if you’re a professional photographer who also sells prints alongside other services. In this case, your website will have sections for your store, but it should also include pages with your bio, portfolio, booking info, class recordings, and anything else related to your profession.
2. Dedicated eCommerce Platforms (e.g., Shopify, WooCommerce): If your main focus is eCommerce, these platforms are better suited. They offer similar features to standard website builders, such as About pages, image displays, and blogs. However, they go a step further by providing specialized eCommerce tools like shopping cart software. These tools can boost your online selling and help your store thrive.

Ready to get started? Check out these step-by-step guides for creating your online store on the platform of your choice:

5. Market your business

With your eCommerce shop all set up, it’s time to throw everything you’ve got into ensuring it succeeds. You can’t wait for your customers to come to you—you need to find, reach, and convert your target audience.

Establish your branding

While your product brings customers in, your brand creates a unique identity around that product. If your competitors offer a similar product or service, branding creates an impression that helps you stand out. You can infuse your brand identity into your business through:

• Your business name
• An eye-catching logo
• Vibrant store design
• Marketing collabs with influencers 

With branding, it pays to stand out. Choose visuals, names, and marketing that emphasize what makes your product unique. Creating a brand that resonates can attract buyers without leaning on your product’s strength alone. Once you settle on a branding strategy, keep it consistent across all areas of your business. 

Target inbound sales leads

Inbound sales strategies are designed to draw people to you instead of the other way around—think search optimization (SEO), paid search, social media, email marketing campaigns, and content marketing. Across these channels, you’ll show how your product solves customer problems or enhances their day-to-day lives. 

Tip: Before generating inbound leads, come up with a buyer persona representing your ideal customer. By understanding the kind of person who would buy your product, you can map out their customer journey and find the best channels to attract them. 

Use what you’ve got

As a small business owner, your plate will be full most of the time. If you want to keep up, you need to efficiently use what you already have and draw multiple marketing materials from one asset. For example:

• Get into the habit of snapping and recording your day-to-day processes and behind-the-scenes moments. That way, you always have material for social media and website visuals.
• If you’re researching a topic related to your business, consider adding an extra step and turning your research into a marketing email or SEO post.
• Whenever you design a new marketing asset—an email layout, an Instagram Story, a blog structure—aim to turn it into a template you can reuse instead of starting from scratch on your next asset.

Marketing as a small business owner is a “work smarter, not harder” game. Get as much mileage as you can out of repurposed content. Staying efficient frees up time and attention you can spend on refining your business strategy and growing your company.

How to tell if eCommerce is right for you

In the same way that some kids are terrible at homework but are great test-takers, some personalities thrive under the pressure of relying on their business’s success for their survival. When it comes to employment vs. entrepreneurship, there is no objectively better, more flexible, more independent choice—there’s just what works better for you.

Here’s a quick self-screener you can use to see if you’re cut out for eCommerce selling:

• Do you like what you do? This is something you’re going to spend hours on, day in and day out. And you need to work hard to get your business off the ground. If you’re not truly passionate about your product, you’ll be miserable within a few weeks.
• Are you self-disciplined? It’s not easy being your own boss, especially in an industry as isolating as eCommerce. Traditional small businesses don’t have this problem when you can rely on coworkers and trust managers to keep you accountable. In general, it’s a lot easier to stay motivated when you’re interacting with customers or a small staff.
• Do you have a lot of commitments? Anyone who has ever tried to work remotely from their parents’ house can tell you that some people simply do not perceive solo work on a computer as “real work.” So if you want to run a successful online store, you need strong boundaries and a close relationship with the word “no.” 
• Can you take on the financial risk? Starting a store on the side while you hold a day job is one thing. If you’re making a complete leap to entrepreneurship, you’ll need to go a few months or even a year without much income. If you have lots of debt or a family to feed, this might not be the career for you.

Tips for starting an eCommerce business

Provided you’ve given it some thought and you’re ready to make the leap, here are some tips to help get the ball rolling.

Pick something you’re good at

It’s perhaps the most obvious of the six tips listed, but it still bears mentioning: when starting an eCommerce business, choose something that you can do or make well. If you choose something extremely unique and specific that no one else is doing, you may be fooled into believing the lack of competition will make up for poor quality. But the moment you gain popularity, if someone else can create your product better than you can, your business will be dead in the water.

Pick something you like

Choose something you enjoy making, looking at, and thinking about. More importantly, pick something you won’t hate after the 10th, 50th, 100th, or 1,000th time you’ve sold it. Selling can be tedious work, especially if you make your products yourself. Don’t build your business around a product market only to find that you can’t stand working in it.

Pick a small market with limited competition

eCommerce sellers can’t use the same logic and strategy that regular companies rely on to choose their target markets. You’re one person with one person’s resources and power. If you try to enter a market where you’re competing with full-sized companies and brands, you’ll be out-marketed and out-maneuvered every time. 

Remember to always be specific. Instead of lawn services, target the market for environmentally sustainable lawn care in one finite geographical location. Instead of publishing eBooks on finance, publish eBooks on investing for American women ages 18-24. Keep narrowing it down until you’ve found your product niche.

Pick something people want or need

This is common sense: you need to sell something people will buy. Even the biggest brands still mess this up every once in a while (looking at you, Colgate-brand frozen dinners and the Bristol-Myers Squibb nightmare that was the “Touch of Yogurt” shampoo). Don’t wait until after you’ve launched your product to match it to a potential customer market. You can get ahead by:

• Researching and narrowing down your target customers’ priorities and must-have features
• Reviewing the problems your customers need to solve and the enjoyable things they want to enhance
• Ensuring a large enough demographic of people in the market want what you provide

Pick something profitable

There’s no surefire way to guarantee a business will become profitable. Still, with some research, you can strengthen your odds. Ideally, you want to choose a product market with a strong balance between a large potential customer base and a small number of competitors. 

Tip: You’re more likely to succeed if your product is truly unique in some way. Go beyond how it looks and decide if your product delivers a feature or element that no competitor offers. 

Automate as much as possible

There are lots of opportunities to automate parts of the eCommerce process. Invest time in setting up automation at the outset, and you’ll save far more time and energy avoiding unnecessary busywork once your store gets off the ground. 

Most of the risks specific to eCommerce entrepreneurship come down to the fact that it’s an overwhelming amount of work for one person to handle. Automating your eCommerce business can materially increase the likelihood of your business’s success.

Here are a few guides on the kinds of automation that work best for eCommerce and how to set them up:

FAQ: starting an eCommerce business

Still, have questions about how to do eCommerce or where to start? Here are some answers.

What is an eCommerce business?

An eCommerce business sells products and services through digital channels. While eCommerce business owners can open physical stores, they lean into an online-first approach to selling. Typically, an eCommerce business makes most of its sales online through a digital storefront. 

What are the four types of eCommerce business?

eCommerce businesses fall into four categories:

• Business to customer (B2C): B2C websites sell to individuals much like physical storefronts. Online customers make a selection, check out, and have their products shipped to them. Some shoppers call this approach direct-to-consumer (DTC) eCommerce. 
• Business to business (B2B): B2B eCommerce occurs when businesses sell to each other online. They often base their model on higher order volumes and SaaS subscriptions. B2B sellers also tend to offer white-glove customer service and more customization options.
• Consumer-to-consumer (C2C): C2C marketplaces allow customers to sell to each other. Websites like eBay and Etsy host this kind of eCommerce. 
• Consumer to business (C2B): C2B platforms let individuals sell to businesses. In some cases, C2B involves companies purchasing a good or service from freelancers. Consumers can also write reviews, share affiliate links, or host ads on their websites for pay.

How profitable are eCommerce businesses?

eCommerce businesses become more profitable with each passing year, with sales reaching $272.6 billion in the first quarter of 2023.

Whether or not you’ll get a piece of the pie depends on other variables like the competitive landscape and your marketing savvy.

Turning business ideas into e-commerce success

Whether you want to expand into a new niche or start an eCommerce business from the ground up, automating the repetitive parts frees you and your team up to sell more products, keep your customers happy, and make your business dreams come true.

Explore how Zapier can help you automate your eCommerce business. Whether you want to automate payments, optimize your tech stack, or schedule repetitive orders, Zapier gives you more time to make the product you’re passionate about.

For more insight on managing a growing business, check out these guides: 

Eze

Eze Uchenna is the managing editor of the Ezechax blog. When he’s not working, you can find him enjoying a captivating television show or sharing fun moment with friends.