How To Start An E-commerce Business

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The world of e-commerce has undergone a massive transformation in the past few years. Starting with the reliance on online delivery due to the COVID-19 pandemic, plus the increase of digitalization, e-commerce has been thriving. It had a total of $5.784 trillion in sales worldwide in 2023 and is expected to grow to an incredible $8.034 trillion by 2027.

Indeed, the e-commerce industry shows no signs of slowing down anytime soon. This is why many brands are raring to get their slice of the pie by starting their own e-commerce business.

Planning to start your own e-commerce business? We’ve got you covered! This article will lay down everything you need to know – from choosing the right niche, building your branding (with the help of our business name generator and logo maker tool), setting up your online store, and marketing your products.

Ready to know more? Let’s dive in!

Why Have An E-commerce Business? 

Whether you’re selling handmade crafts, trendy clothes, baked goods, furniture, or computer accessories, an e-commerce store can help take your business to new heights.

Some benefits of having an e-commerce business are:

  • Global Reach – Having an online store means you are not limited to your physical store or to just one location. You can be accessed by people around the world, which greatly expands your reach and the amount of potential customers. This is a greater benefit if your target audience is in Asia, as they’ve seen a huge growth of 25% in retail e-commerce sales in 2023. 
  • Lower Overhead Cost – An online store has lower overhead costs compared to a physical one. This is because you’ll save money on rent, utilities, maintenance or staff for a physical store. If you use dropshipping, you’ll save even more money as there is no need for inventory or storage space.  
  • Customer Convenience – Nearly everything is available online now. This convenience and accessibility are important for customers who may not have the time or energy to go to a physical store, which is why having an online store is crucial. 
  • Scalability and Flexibility – Businesses can now easily accommodate growth without the constraints of their physical space. You can meet a surge of demand for products, capitalize on trends by adding new products, or shift to a new market easily in e-commerce.
  • Ease of Use – This goes for both the business owner and the customers. For businesses, it’s now incredibly easy to set-up an e-commerce store with all the platforms and resources online. For the customers, it’s easy to find what they need with the multiple shopping apps available without even leaving their homes. 

How To Start An E-commerce Business

Starting your e-commerce store is made easier than ever with the huge amount of platforms available. Still, it can get overwhelming or confusing for beginners. This is why we are here to guide you.

Follow the steps below to jumpstart your business:

Decide on your business model

Before starting your business, it’s important to understand the e-commerce landscape and figure out what business model is ideal for you.

There are four major e-commerce business models:

  • Business to Consumer or B2C – a model where a business sells products to customers. This can range from anything like food, clothing, furniture, electronics, and more. This is probably what comes to mind when you think about an online store. 
  • Business to Business or B2B – this model is when a business sells a product or service to other businesses. These can be SaaS companies, office supplies companies, or those that provide professional services such as medical insurance, legal help, hiring, or sales consulting. 
  • Consumer to Consumer or C2C – these are sales or exchanges between two consumers, usually done in an online marketplace. Think of eBay, Craigslist, Etsy, or Facebook Marketplace. A person selling their old furniture on eBay is counted as C2C. 
  • Consumer to Business or C2B – this is when a consumer sells their product or service to a business. Freelancers offering their services on UpWork, Fiverr, or Toptal are considered C2B. 

Each of these business models comes with their own unique characteristics, challenges, as well as target audience. By deciding on your business model right from the start, you can tailor your business and marketing strategy accordingly.

Additionally, incorporating a robust pipeline management tool can significantly enhance your business operations and help you efficiently manage your sales processes as your e-commerce venture grows

To make things simpler for the article though, we will focus on B2C models as it is the most common e-commerce model type. 

Choose the appropriate sourcing method

If you plan to sell a physical product, the next step is to know how to source or create them. There are many ways how such as:

  • Creating the product yourself – This works for handmade or handcrafted products such as baked goods, candles, soaps, crocheted clothes, and so on. This gives you control over the number, quality, and time spent on the product.
  • Partner with a manufacturer – This is an option if you do not have the tools, expertise, or space to create the product itself. Let’s say you want to sell a mug. You can send over your design to a manufacturer and have them create it for you instead of creating the ceramic from scratch. Keep in mind that manufacturers require you to order in bulk, so make sure that you know that your product is sellable as this costs a lot of money. 
  • Resell products – You can also buy bulk products from a wholesaler and resell them in your store with a markup. For some items (let’s say coffee beans or whole grain oats), you can sell the product as is or repack them into smaller packages. Another way to do this is by sourcing the products yourself to resell. For instance, going to thrift shops to buy clothing for a lower price and then reselling them to your Instagram Store with a markup for your time and effort. 
  • Dropshipping – This is a great option if you do not want to deal with the logistics of stocking, manufacturing, and shipping items. Dropshipping involves partnering with a supplier that will create and ship the item for you. While this is easier especially if you are a beginner, it doesn’t provide you with a ton of customization and branding options since you are essentially just selling a supplier’s products and not “yours”. 

Once you have your items, you’ll also have to figure out your delivery method. You can ship the items yourself, rely on third-party couriers, utilize your e-commerce platform’s shipping options, use an e-commerce fulfillment warehouse, or do dropshipping. 

Know your niche

The secret to running a successful e-commerce business is by honing in on a niche. The market is vast and full of competitors. There are billions of products out there. If you target a specific niche or sell products catered to a specific target audience, chances are you’ll get more sales. 

But how exactly do you find your niche? 

First, think about what you realistically can produce or create. Think about your skills and expertise. Can you do this product at a high quality consistently? And of course, do you see yourself enjoying doing this even at a large scale?

If you’re not planning on creating the product yourself, take a look at potential manufacturers or wholesalers. Can you find a reliable and high-quality manufacturer that has the product you want? 

Next is to understand your market. Research about your target audience – who they are, what they like, what problems they encounter. Can your product answer at least one of their needs? Are there enough people that will potentially want your products? 

Next is your competitors. What products do they have? Is there a gap in the market that you can fill in? Is there an oversaturation for a specific product? Is there a trend that you can capitalize on?

For example, there are tons of chocolate cookies out there. But few stores sell vegan, sugar-free, or gluten-free cookies. A seller can target that for their niche.

Build your branding

Great branding can make a huge difference in setting you apart from competitors. This is crucial if you are just starting out, if you are a small business that wants to get your name out there, or if you are reselling products.

Think of it this way. With millions of stores, why should they choose you? What makes you better than the rest? How can they remember you compared to your competitors?

Your branding will answer that. Consider popular brands like Coca-Cola, Netflix, Apple, Walmart, or Louis Vuitton. They all have a specific vibe to them. With just one look at their marketing materials, you’ll instantly know it’s from them.

To get to their level, you’ll need a memorable name, a stunning logo, a cohesive visual identity, and a specific brand identity/brand voice that your audience can instantly associate with you.

Let’s start with your business name. Your name should be something unique and memorable. But don’t make it so difficult to pronounce or spell or make it so long. You should make it easy for your audience to remember or type your name. 

Need more help? Read through our guide on the 8 Aspects of A Memorable Business Name. You can also use our business name generator tool to get ideas for your name. It’s easy to use – simply enter a short description about your business and we’ll give you tons of names to choose from!

Next is your logo. Your logo will be plastered everywhere – from your online store to your packaging, to your business cards and your social media pages. Your logo should be visually appealing, convey the meaning and identity of your brand, and be unique enough to stand out from the crowd. 

For further info, you can read through our guide on How To Create A Business Logo.

Third is your visual identity. This is composed of your color palette, typography, illustrations, or photographs that you’ll use. Do you know the Coca-Cola red or the Tiffany blue? How about the iconic Disney font? Those are examples of a strong visual identity. Once you decide on yours, you need to use them consistently on all your materials so that your audience will associate that look with you.

Last is your brand identity. This is the personality or the vibe of your brand. Nike is driven, passionate, and athletic. H&M is young, trendy, and hip. Goop Beauty is eco-friendly, all-natural, and clean. Do you see the difference? They all have a specific identity that they built based on their overall visual identity plus the way they write on their materials (brand voice). By having a clear brand identity, you’ll be able to entice an audience into buying from you if they find you relatable or aspirational.  

Set up your online store or website

You’re now at the most important part – it’s time to build your online store! 

Think of this as the online version of your physical store. This is where your customers will go to browse, shop, or just know more about your business. 

The easiest way to do this is to use an E-commerce platform. Some popular ones are Shopify and WooCommerce. They offer a website builder that is specifically tailored for e-commerce, plus comes with advanced features such as inventory management, one-click checkouts, and customizable website themes to make your website visually appealing.

These platforms also offer domain name registration, so you don’t have to worry about configuring it yourself. These platforms are recommended for beginners as they have all the features you need, and offer an intuitive interface to make setting up accessible for anyone, even those who don’t have coding or web design experience.

If you plan to sell products as a side hustle or only as a small part of your overall business, you may want to consider standard website builders instead. Some recommended ones are Wix, Weebly, and Squarespace. All of this can help you create a standard website but still give you the flexibility to add e-commerce options if you choose to. 

Keep in mind though that while these are still very beginner-friendly, they don’t offer as many e-commerce features compared to Shopify or WooCommerce. 

If you are more coding savvy, you may also want to consider Magento, as you can do more customization. 

Want to set-up on an app instead? Some popular shopping apps you can use are Amazon, Alibaba, Aliexpress, Carousell, Shopee, Poshmark, or Depop.   

Sell on Social media

If you don’t know where to start selling, social media is a good place to be a beginner. The platform is all free. You just need to set up a social media account, and that account allows you to post everything: contact details, product list, menus, store locations, history, sale events, etc. 

If you’re wondering what social media to use to maximize your chances best, here’s the hottest social media now for e-commerce activities. 

  1. TikTok

TikTok is a short video platform that has where most trending content comes from. It’s free to use. But to make a successful online business there, you need to be a Gen Z yourself or be really fluent in their language. 

Try following hashtags related to your brand. Follow creators and similar business owners. Observe their content, what works, what goes viral, etc. And then try to replicate their content strategy. And lastly, improve your reach not only with organic posts, but also advertising. TikTok ads offer an inexpensive way to broaden your target audience. 

  1. Instagram 

Instagram might be trying to be TikTok wannabee. But it’s an image-first platform. And so the sole reason to enter Instagram is a good picture or profile. Make this your portfolio. Upload the best picture of your product, office, location, shop, owners, employees, associates, activities, and more fun, engaging things to share. 

Once you get a good grasp of Instagram, now is the time to try Instagram advertising. It’s easy and beginner-friendly, and you’ll have your content seen by a targeted group of people. 

  1. Facebook

Facebook might be the social media for all types of things. But there’s one that Facebook does better than all others. And that is community. 

Community or groups thrive in its millennial market, most of which have families or starting one. By being genuinely helpful with your Facebook posts, you could penetrate these groups and market your products organically. Facebook ads are shown in all places including groups and communities. So try this effective but affordable tool too. 

Start marketing your products

Selling on social media is the easiest way to enter the e-commerce market. Even beginners and inexperienced sellers can make a buck out of regularly posting their products online. 

But the sales don’t come as easily as they used to. Easy setup and free posting make for an easy saturated platform. So before you set things up for success, here are some tips to succeed on the online market. 

  1.  Pictures are everything

No matter what they say: image always sells. Let me rephrase that. Good images always sell. It’s not enough that you have a picture. Or that the picture shows your products and its features. It has to be good, too. 

Remember, it’s a competitive place, and if the image is what people see first, you need a big impression to make them stay. You can get images from stock photo sites.

  1. Second is copywriting

Your words may not be the ultimate selling point but they add up to people’s positive perception of your product. So make every word count. Take note: you don’t need to say everything about your product or service. 

Only the shockingly good ones might want to stop what they’re doing and click that buy option. The reason? People are easily distracted by long forms of information. If they see a long list of word blocks, you welcome them through the exit. 

  1. Variety is important

However, images and words make up most of the sellable online content. It’s not the only format that works. Videos are hot right now. TikTok and YouTube Shorts are garnering billions of views from this format alone. 

So, do you want to know the first skill as a social media seller? Adapt to trends. Learn how to do videos and podcasts, write scripts, edit sounds, interview people, and more. Keep your eyes open as to what content online attracts attention. Because attention is where engagement is. 

  1. Always listen to negative feedback

Criticisms are a gold mine of learning opportunities. So many things can tell you about one negative feedback. 

From how you speak to your customers to how effective your product is. Record this feedback and make it a priority to improve on them as soon as possible. Happy customers mean a happy bottom line. 

Other ways to market outside of social media:

  • Flyers – Create eye-catching flyers with enticing offers or information about your product or service, and distribute them in relevant locations to reach potential customers offline.
  • Affiliate Marketing – Partner with individuals or businesses who promote your products or services in exchange for a commission on sales generated through their referrals, expanding your reach through their networks.
  • Ads – Invest in targeted advertising campaigns across various platforms such as search engines, websites, or local publications to increase visibility and attract potential customers outside of social media.

Best Practices for a Successful E-commerce Business

You can always start immediately and learn later. Or better yet, learn now and apply them later on. Here are some of the best tips when doing e-commerce business. This is to maximize your limited budget while also retaining talent and earning sales. 

Start small first

If you’re starting an online business, you get caught up with its profitability, and sometimes you don’t wonder whether it will sell in the first place. A good way to check up on your hype is to start small. From your content marketing to your inventory. 

When you start small, you only invest small amounts of money. Not too much to lose for a business that is too risky. After all, inventories are expensive, especially if they sit in too long. 

Starting small is not only for the products but also for the target market. Here, you need to be more niche and specific with whom you’re going to sell. The smaller groups of people you target, the easier to sell out your inventory. 

Social proof

Sellers always forget about this. But whenever you make a sale, always remember to contact the buyer and ask them about their experience. Be ready for negative responses. Positive or negative feedback — both are resources to help you make it better. Also, if it is really a good review, you can display it on your social accounts as social proof of your exceptional delivery to expectations. 

Social proof, according to theorist Robert Cialdini, is that people look for social validation or “proof” when they are doing things that are unfamiliar to them. Case in point, buying new items or availing new services, they tend to mimic other people’s behavior as a way of fitting in. 

Over nine out of ten customers (95%) read product reviews before they choose to purchase something. Additionally, 58% of these shoppers say they are willing to pay more for products that have good reviews.

Prioritize great product packaging

Now is the era where products are not just items but also experiences. Everywhere you look, you’ll see social media creators unbox their newly bought things. This phenomenon calls for exceptional packaging design ideas from brands. Design your box beautifully, just as how you would design your product. Other than being in line with your brand personality, they also have to be unique, simple but effective, trendy for campaigns but timeless for classic products. 

For designers, you can look into DesignCrowd Packaging Designers for their creative expertise on the subject. While you can provide the briefs, the professional can take it up a notch and present you with a usable and sellable design. 

Here are some tips for designing packaging materials:

  • Multi-Sensory Experience: Consider incorporating elements that engage multiple senses beyond just sight. Experiment with textures, scents, or even sound elements that enhance the overall unboxing experience and leave a lasting impression on consumers.
  • Cultural Sensitivity: In a global marketplace, it’s essential to be mindful of cultural nuances and sensitivities. Research cultural symbols, colors, and taboos to ensure that your packaging design resonates positively with diverse audiences and avoids unintentional offense.
  • Emotional Triggers: Design packaging that taps into emotional triggers to create a deeper connection with consumers. Whether it’s nostalgia, happiness, humor, or a sense of belonging, evoke emotions that resonate with your target audience and leave a lasting impression.
  • Interactive Packaging: Go beyond traditional packaging formats and explore interactive elements that encourage consumer engagement. This could range from QR codes that unlock exclusive content such as a digital flyer, menu, or business cards to augmented reality experiences that bring the packaging to life.
  • Packaging as a Keepsake: Design packaging that doubles as a keepsake or reusable item, extending its lifespan beyond just the initial unboxing. Whether it’s a beautifully designed box that can be repurposed for storage or stunning packaging designs that transform into a functional accessory, it gives consumers a reason to hold onto your packaging long after the product is used.

Invest in networking and collaboration

Social media is social for a reason. It thrives in community, connection, and networking. Not only can this be applied to people but also to sellers, business owners, and professional accounts. 

While you can grow your platform without collaboration, you will have the same results faster if you connect with co-sellers and creators. Take note, not with competitors. There are brands that complement your business well. For instance, T-shirt designers with coffee shop owners. Or jewelry makers and fashion content creators. 

All you need to do is figure out which organization complements your target audience. And then do collaboration campaigns such as product launches, popup stores, sale events, and more. 

The ultimate goal is to have more sales. But that is not the only thing that can help you by collaborating.  You can also diversify your target buyers, improve brand awareness, boost brand loyalty, level up your communication and social skills, become a friendly and welcoming brand, and many more. 

Track and study your analytics 

To grow a successful online business, always get a good check of your performance. If you launch a new campaign, check its effectiveness. If you collaborated with a brand, see your reach numbers; if you had just published a fresh video, look at how many shares you got. 

All of your performances give a tell-tale sign on what to pursue further, what content to share, what products your market likes the most, and also the negative sides, what they hate, what doesn’t get viewed, and what product has several criticisms. 

Good thing social media nowadays offers free and beginner-friendly listening tools. These analytics reports are usually a separate page on a professional or business account. Here, you can determine the ratings of your posts, stories, and videos: how many people viewed, shared, and liked your content, the time your viewers are most active, your most liked posts, your increase or decrease in engagements, cities and countries reached, and many more. 

Conclusion

E-commerce is a tough market to be in. Not everyone succeeds; others only break even, while some really drive the market up. The good news is that e-commerce platforms are getting easier and faster to set up as more tools and software come in. That also makes it more competitive and saturated. But remember, you can only lose if you’re not prepared. 

So we hope that in reading this article, you will have a good understanding of what you’re going to enter. You can devise your email content strategy, refine your font style, and recalibrate your products and target audience by this time.  And most importantly, start slow and low. If you start with a meager budget, you have less to risk. 

In terms of budget, you can always turn to BrandCrowd for your ideal social media creation tools. Story Makers, IG post Makers, and YouTube Shorts maker can be a good place to start. Good luck!

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