May 26, 2022

How to start an Ecommerce business

How to Start an Ecommerce Business

It's no secret that ecommerce is a booming industry. Online shopping skyrocketed during the covid-19 pandemic as the world went into lockdown, and the trend isn't slowing down, even though things are getting back to normal. Plenty of people are now considering opening their own online business, and with the rise of ecommerce platforms like Shopify, it's become more accessible than ever. 

If you're reading this article, you must be looking to start an ecommerce business. Ecommerce sales hit an all-time high of $4.9 trillion worldwide, and the number is expected to go up to $7.4 trillion by 2025. Every day more brick and mortar stores are moving to ecommerce platforms to increase their sales. With people boasting you can set up an online store in 30 minutes, there has been no better time to do it. 

Starting a new business is an exciting time. However, instead of jumping in and opening a virtual store with no research, it's crucial to take a step back and organize yourself first. There are plenty of considerations to make before you open your ecommerce business and begin selling products. You should develop a business plan, conduct market research, and have a clear vision of what your products are going to be. 

This article will discuss all the points to think about when you're planning on setting up an ecommerce store and take you through how to start an ecommerce business step by step. Finally, we'll look at some tips for achieving a successful online business. 

Initial Costs to Setting up an Online Business

There will always be some initial business costs before making any money when setting up your new business. It would help if you justified whether these costs will be worth it initially. Before you start an ecommerce business, you'll need to investigate what aspects of starting an online business will cost you and how much you're likely to pay. This allows you to determine how many products you have to sell before generating a profit. 

Ecommerce Platform

One of the primary initial costs before setting up your store is the expense of the ecommerce platform itself. There are a few different platforms you can use for your online business. Over 3.6 million businesses use Shopify as their ecommerce platform, and it's the biggest one out there. 

Shopify Pricing Tiers

There are three different pricing levels to set up a store on Shopify. There is a Shopify Lite option, but that doesn't include an entire online store. They do offer a 14-day free trial option, so you can try the ecommerce platform before committing to a purchase. 

The basic plan, most suited to new small businesses, costs $29 a month. Using the basic plan gives users access to a complete ecommerce website and blog, the ability to list an unlimited range of products, access to two staff accounts, and up to four inventory locations. 

Users will also get 24/7 support from Shopify and can use a range of features, including sales channels, discount codes, and gift cards. However, there are no reporting or analytics features with the basic plan, so if you want to track the progress of your ecommerce store, this won't be the right plan for you. 

The standard plan costs $79 per month. People who opt for the standard pricing plan access all the Basic Shopify plan features and have additional staff accounts and inventory locations (up to five for both). Standard reporting features are also included, allowing business owners to track profit and sales in their stores. 

Finally, the advanced plan will access all of the above features and have more advanced reporting capabilities. Users also get 15 staff accounts and up to eight inventory locations. The higher the plan, the lower the percentage charged in transaction fees, and users also get access to higher shipping discounts. This plan costs $299 per month. 

When developing your business plan, you should always track your costs and ensure your store generates profit. Naturally, if you want to start an ecommerce business, the lower plan would be the best option, and you can move up through the pricing tiers as your ecommerce business generates more revenue. Initially, the $299 price point seems high, but it will be attainable once your store is running successfully. 

Domain Hosting

If you decide to use Shopify as the ecommerce platform to host your online store, you won't have any additional costs for domain hosting. They include the cost of hosting your domain as part of your monthly fee. But if you opt not to use Shopify, then the cost of hosting your web domain is something you should incorporate into your overall plan. 

Website hosting can be costly, ranging from as little as $2 per month to thousands of dollars per month. The range can vary based on how long you subscribe to the website hosting your domain and the type of domain hosting you choose. 

Shared hosting is the cheapest option because your domain will share the server it uses with other websites. However, that also means you'll be battling against other websites for server usage. So if you have a sudden influx of visitors to your site, then it could go down, or if something happens to their website, it could risk the status of your website too. 

Your website is hosted on a virtual server, and you're still sharing with other websites. But virtual servers can handle higher traffic flow to your site. VPS hosting is more expensive, and plans start at around $50 per month. 

Finally, dedicated hosting involves having a dedicated server just for your website. It is suitable for large websites with high-quality content and media that regularly generate a high traffic volume. This form of domain hosting is the most expensive and could cost more than $100 a month. 


Depending on what country you're in when you set up your ecommerce store, you might need to invest in permits and business licenses. The types of licenses an ecommerce store requires are different from a brick-and-mortar business. But just because you're planning to run a virtual business doesn't mean you don't need them. 

In the US, business licenses can vary from state to state. They can also be different depending on your industry and the type of products you're selling. You can visit the U.S. Small Business Administration website for a clear picture of what license you'll require. It would be best if you researched the license rules in your state to find out how to register your business and the associated fees. 

Inventory Management

A crucial part of your ecommerce business is inventory management. During a sale, experiencing an 'out-of-stock' (OOS) product could cost your online business hundreds of dollars. On Shopify, you can use multiple inventory management apps to help keep your own products stocked.

Depending on your ecommerce business model, you may have to buy inventory upfront. This can be an initial expense, but you'll make money back as long as your products generate a profit. 

However, if you have a dropshipping store, your inventory is kept by third-party vendors who only bill you for the items people purchase through your Shopify store. They also take care of shipping the item directly to the customer. 

Marketing and Advertising

Another consideration when breaking into the ecommerce business industry is upfront marketing costs. Ecommerce is quickly becoming a competitive marketplace, with more than 24 million ecommerce businesses set up online. There are various marketing tactics to choose from, and some are more costly than others.

Providing content on your ecommerce website can help with search engine optimization, allowing your online store to appear higher in search engines and driving organic traffic to your website. Other options like using promoted adverts as part of an online advertising campaign can bring new potential customers to your ecommerce business. A general rule of thumb for most small ecommerce businesses is to spend 7-12% of revenue on marketing

Steps to Take Before Setting up an Online Store

Now you know about the initial costs when creating your own ecommerce business, it's time to consider the necessary steps to start an ecommerce business. Firstly, the most important thing to do is research the ecommerce industry as much as possible. Setting up a new online business can be stressful and overwhelming, but the more research you do, the better equipped you'll be. 

Pick a Niche

First things first, when creating an online business, you need to decide your niche. Are you going to sell pet-related products, or perhaps your skills lie in software design? There are many niches out there, so there is something to suit everyone. 

You want to have a specific niche to aim for. Selling every product under the sun is only suitable for big sites like Amazon, which have an established worldwide customer base that will keep coming back to them. When you're just starting out, you don't want to have hundreds of products with no connection to one another all haphazardly listed on your online store. Pick a niche and stick to it. 

It should be a market with a good level of customer demand that isn't over-saturated. If you can identify a gap in the market that you think you can fill, that's even better. But make sure you don't choose something for which there's no demand. 

Research Ecommerce Business Models

Now the niche has been chosen, conduct some research into ecommerce business models. There are several different models to choose from. In this step, you should also consider whether you want to have a dropshipping ecommerce store or invest in your inventory and have a wholesale inventory store. The choice is yours.

Another thing to consider at this step is your pricing model. Are you going to sell products individually or offer a subscription-based service? If you're selling individual products directly to consumers, offering single-priced products would make sense. But if you're a Software as a Service (SaaS) business, you could have users pay a monthly or annual subscription to access your software. 

Create a Business Plan

You've conducted a little bit of background research. You should have a solid business idea and an idea of a niche to target. Now it's time to write down your business plan. The more in-depth the business plan you create is, the more successful your business will be. Creating a successful ecommerce business isn't something you can do on a whim. It requires thought and preparation. When it comes to starting to sell online, you'll be thankful for all the preparation.

You should write down your primary business goals as part of this process. Generally, these will be to sell products and create a profit. Secondary business goals could include gaining more followers on social media or generating higher traffic to your website via content creation. These things won't directly sell more products, but they should mean more potential customers are seeing your content, which could lead to more sales. 

At this stage, you should also note all the decisions you've already made as part of your plan. That includes the pricing model you plan to use, the business model you intend to follow, and your niche and business idea. 

Choose Your Products

Naturally, a vital step if you're going to sell online is picking the products you want to sell. Deciding on what products to sell can be tricky, as you need to consider current market trends. 

Trending products will generate more sales fast, but trends can change quickly, so you'll need to keep on top of what's currently fashionable. This doesn't just apply to clothes, but all industries. Products come in and out of fashion as technology moves on or trends change. For example, vinyl records were out of style in the 90s as CDs were popular. But after the advent of online streaming, records have become trendy again as they're considered vintage. Shopify has an excellent list of trending products in 2022

You don't have to choose a trending product, but having some on your product pages could help drive customers to your site. Once they access your online store, they'll then have a chance to see all the other products you sell online. 

Once you've chosen your products, research where you're going to source them and how you'll manage inventory. This will make it easier for you when you set up your ecommerce business. 

Investigate Your Target Market

Another crucial step in your ecommerce business should be researching the target market you want to reach. You should consider what potential customers search for when shopping online and note all the relevant keywords you think apply to your ecommerce store.

In order to get a clear vision of your target audience, you could create customer profiles. This will allow you to create content and marketing relevant to your target market. A vital element is to try and picture your customer, what sort of things they like and dislike, and identify what motivates them to shop online.

Another option is to complete customer segmentation. Ecommerce stores do this by dividing up demographic data like age, name, and address, allowing you to market to your target audience more effectively.

Complete Competitor Research

Once you've developed a business plan, conducting competitor research is the next crucial step to setting up your online business. In Google, type in the search terms you think people will use when coming to your online store. 

Start thinking about the search intent a customer may have at this stage that will lead them to your ecommerce business. Will they be looking for more information about a product? Or are they intending to make a purchase immediately? 

Once you've typed a search term in, go through the top couple of pages on the search engine results and visit the websites of your future online businesses' top competitors. You can note down any similarities in their website design. How do they display their products? What additional landing pages do they have? Are their websites easy to navigate? What is the website structure like? 

Repeat this step for all the relevant keywords you think will bring customers to your store. Note down if there are any commonalities, such as competitors showing up in every keyword result or if it's different people each time. 

In business, there's no need to reinvent the wheel. If your competitors rank highly on search engine page results, they are doing something right. Outright copying them is a big no-no, but you can draw inspiration from their websites, products, and design choices. 

Pick A Business Name 

Finally, now you've figured out your niche and conducted competitor and product research, it's time to think about a name for your online business. It should be something simple but memorable that accurately describes the products you sell online and represents your company values. Shopify has a name generator in case you're stuck. 

Here are some key features of a good ecommerce business name: 

  • Originality: You want your name to be unique to your brand
  • Creativity: Something that stands out among the crowd
  • Simplicity: You don't want it to be overly complicated or something that will be hard to remember
  • Different: It can't be the same as another online business

When selecting a business name, consider that you'll need to name your website after it. So when you're picking a domain, think about how the full name looks in a URL. You don't want the words to spell out anything terrible when they are pushed together. There have been instances where advertising campaigns have accidentally created inappropriate hashtags

Once you've picked your business name, you might want to design a logo or hire someone to do it for you to get a stamp that effortlessly shows people what your ecommerce store is. 

It's Time to Start Your ECommerce Business

You've done all your research now, so it's time to work. This is where we show you how to start an ecommerce business by setting up your store. This process can be time-consuming, but it's worth going slow and steady to ensure you don't miss anything. Creating an ecommerce business is the same as having a brick-and-mortar business. You want to be as thorough as possible to attract more customers. 

Create an Online Store on an ECommerce Platform

The first step on the list is to decide where you're going to create your online store. You can do it yourself without the use of an ecommerce platform. However, they already exist to help people run successful online businesses. When you're just starting and setting up your online store, an ecommerce platform can help you with templates, themes, and the design of your website. Plus, you have access to customer support. 

As we mentioned before, Shopify is the biggest ecommerce platform on the internet at the moment. They have a variety of different themes available to make your website unique. It's a simple process to create an account, and since you should have already decided on your business name, it'll be easy to set up your domain, which is one of the first steps. 

Set Up Landing Pages

Once you've set up your website, you need to decide how to structure it. Your website is the advertisement that needs to entice customers to browse through your pages. Like how storefronts draw customers inside brick-and-mortar businesses, your website landing pages should lead your customers towards making a purchase and include a call to action (CTA). 

Let's run through the different landing pages you could use for your ecommerce business. 

Top of the Funnel

A top-of-the-funnel landing page introduces your ecommerce business to brand-new customers. You could tell the story behind your brand and talk about your ethos on this page. You should also mention your products and the value they offer. Do your products solve a problem for someone? Mention that here. 

You can direct customers to newsletters or have them sign up for your email marketing so you can offer them future discounts and promotions. Or you can offer a 10% discount to new customers. 

Middle of the Funnel

A middle-of-the-funnel landing page should target customers browsing your site but who haven't fully converted into buying customers yet. They will already know about your company, but you need to be more persuasive to get them to commit to a purchase. 

Middle of the funnel content could include testimonials and positive product reviews. Think about clickbait titles like: "My life completely changed after I got [PRODUCT A]!" You want this to be that final thing that ensures the customer purchases your product. 

Another form of content could be advertising a sale or a promo code that ends soon to add a sense of urgency to the customer's potential purchase. "Buy in the next hour to get 20% off!"

Your CTA on the middle of the funnel page should always urge the customer to make a purchase. For example, if you're using the clickbait title we mentioned above, you would have a direct link for the potential customer to go and buy Product A.

Bottom of the Funnel

Finally, a bottom of the funnel landing page is to avoid having customers abandon their carts. These people have browsed your product pages, clicked on all the items they wanted to buy, and have them sitting in their shopping baskets. But they haven't bought them yet. This page should give them that final push they need to make the purchase. 

You can upsell discount codes and deals to them. You could also mention bundles or 'buy 2 get the 3rd free' deals, with a 'frequently bought together section. Customers who purchased the pet bed also purchased a collar and a carrier. Upsell these items to customers who are already in a buying mood. 

Create Product Pages

Product pages are essential to any ecommerce business. Without them, you won't be able to sell products, which is the primary goal of all online stores. Shopify's themes allow users to choose unique and eye-catching product pages to convert customers into buying items. And it's not just physical products that require a page. Digital products still need to be advertised on your ecommerce store. 

There are some features a product page should contain. Firstly, the page should always be geared towards the product and making customers want to purchase, which means the page should be enticing and inspiring. The branding should also be consistent across all pages. 

Here are some of the critical features for your product page: 

  • Primary product image
  • Product descriptions
  • A product sizing guide, if applicable
  • Gallery of product photos/videos
  • Customer reviews and ratings
  • Overview of product such as title, CTA, potential customization options

You can also include access to customer support or a live chat if it's something you offer. Customers like companies where they can reach out for help at any time. 

Conduct Marketing 

The website is set up. You've got your main landing pages; the products are ready to go. Now you can open your store and start marketing it. First of all, you'll want to create social media accounts under your brand name. This is an excellent opportunity for free and promoted digital marketing. These are some popular marketing tactics used by successful online businesses. 

Pay Per Click Advertising

This is a form of digital marketing in which a company pays an online advertising company every time a user clicks on their advert that directs them to their website. Loyal customers will often click on a paid advert when it's a brand they recognize. It can help direct new and old customers to your website. 

Social Media Marketing

Organic social media marketing involves using posts, stories, and statuses across various social media platforms to generate more followers and drive traffic to your website. Most social media platforms also have paid advert options, in which successful business owners can set up paid adverts that are pushed onto the feeds of customers and can bring more traffic to their website. 

Influencer Marketing

Like social media marketing, influencer marketing involves paying well-known bloggers and influencers with a high following to promote or review your products. At times this can involve giving the influencer a unique discount code so you can track how successful their marketing has been. Influencer marketing is primarily used in fashion, make-up, and health and beauty products. But it's also popular with famous animal accounts selling pet-related products. 

Affiliate Marketing

Affiliate marketing works when business owners promote their brand through affiliated resources and companies, paying only when a customer clicks the advert. Instead of paying the blogger directly, they are paid every time someone clicks the product from their page. Bloggers might use affiliated products on their websites and advertise them as part of their articles, which drives customers to the site. 

Email Marketing

Conducting email marketing campaigns is something every online business owner should integrate as part of their marketing strategy. Several websites help you run email marketing campaigns and track analytics. You can set up a mailing list for customers to subscribe to, send emails about future events, and offer exclusive discounts and access to sales. 

When conducting email marketing, all the emails should be polished, vibrant, and match the customer's interests. Automated emails to notify customers of their abandoned cart can boost sales, or you could email customers to offer an exclusive voucher for their birthday. The options are endless. 

These are only some of the most popular marketing tactics employed by successful ecommerce businesses. There are others, and you can tailor each strategy to suit your business needs. Now you've got all the fundamental elements you need to start an ecommerce business. 

How to Succeed in Ecommerce

Once you've set up your own ecommerce business, it's time to research what you can do to drive more sales, generate traffic, and convert the maximum number of customers. There are some primary features people look for from reliable brands. 

Provide Excellent Customer Service

How you interact with your customers will significantly impact how successful you are in the ecommerce industry. People are always looking for a company they can connect with, where they will experience excellent customer service. Offering multiple channels for customers to contact your company will go in your favor, as customers prefer companies who provide them with several options for contacting them. 

Giving customers excellent service also gives them a reason to come back. This contributes to a customer's lifetime value, which is a metric you should be using when calculating how much profit one customer can generate for your ecommerce company. 

Use SEO to Your Advantage

Search engine optimization is crucial to the success of your online business. With Google processing over 3.5 million searches daily, it's an easy way to generate vast numbers of traffic to your website. You are competing for limited search engine result pages (SERPs) against all your top competitors, and the higher you rank, the more money you'll earn. Developing an SEO strategy for your content and landing pages will be vital to getting you closer to the top of the rankings. 

One excellent way to use SEO is to consider user search intent - get into your customers' minds and work out what keywords they'll be using when coming across your company on SERPs. Then you'll know what keywords you can use in your content. There are some keyword research tools out there to assist you with this. 

Focus on Customer Conversion

There's nothing more frustrating than seeing high amounts of traffic coming onto your website but a low number of sales. If that's happening, you need to examine your customer conversion rates. To calculate customer conversion, all you need to do is divide your sales by the number of visitors you get to your site. The average is usually around 2.63%

We've already written about improving your store's customer conversion rate in great detail. But the key factors are: 

  • Having an e-commerce website that is also mobile-friendly: More online shoppers are using mobile devices for their virtual purchases than ever before, so customers need to be able to browse your products easily via mobile browsers. 
  • Provide excellent customer service: As mentioned above, a fantastic experience will bring customers back for more. 
  • Show customer reviews and ratings: If customers can see others who bought your products and loved them, they'll be more likely to buy. 
  • Be clear about shipping times: If you say a package will be there in 3-5 working days, it should be in that timescale. Customers don't like to be misled. 
  • Have an eye-catching website with a simple design: Your website should be easy to navigate, even for the most technologically challenged. People won't stick around if you have pages that don't lead anywhere or have broken links. 
  • Offer discounts and buying incentives: Regular sales and offers will help customers buy more. For example, you could offer free shipping over $50. Customers will spend more to get free shipping. 
  • Use social media: Interact with customers on your social media channels, make regularly scheduled posts showing your unique products, or share positive reviews. If your brand has a voice customers can relate to, they'll be more loyal to you and keep buying.  

Automated Inventory Management

Correctly managing your inventory is also a vital aspect of running a successful business. The majority of customers who cannot buy something on your ecommerce store will try and find it elsewhere. So to keep customers buying from your company, you need to avoid out-of-stocks. This can be particularly important during events that drive a high volume of customers to your site, like sales. 

Manually managing your inventory can be an overwhelming and time-consuming process. But, several inventory management apps are available on Shopify that will help automate this process, so you don't have to. Inventory management apps can send you notifications to remind you to restock when levels are running low and manage your inventory across multiple warehouse locations. This allows you to focus on other aspects of the business that need your attention more - like marketing and advertising. 

Tips & Tricks When Running Successful Ecommerce Businesses

You have all the tools and know-how you need for your own ecommerce business. But some handy hints might help you along your journey. Here are some of the top tips for starting an online business. 

Start Small and Build Up

First of all, it's easy to look at massive sites like Amazon and eBay and feel overwhelmed. But they have been running for years. They have had the opportunity to grow into the ecommerce giants they are now. 

When starting your own small ecommerce business, you should start small and then slowly build. Pick one niche, and focus on it. Once you've mastered it and generated a sizable revenue, you can branch out and add more products. Initially, though, start small while you learn the ins and outs of the ecommerce industry. 

Understand SEO

We've mentioned SEO several times in this article, and it cannot be stressed enough that mastering SEO is crucial to the success of your business. So spend as much time as you can researching it, and then apply those techniques to your business. 

Once you're up and running, you may be able to afford an SEO specialist who can provide recommendations to you based on your niche and how you are currently performing. But initially, you're going to be doing most of the work yourself to keep costs down. So research SEO, look at your competitors and take notes on what they're doing successfully. Apply it to your website and watch your store rise through the rankings. 

Market and Advertise

Marketing and advertising are primarily trial and error. You won't always succeed right away, and that's okay. It'll take time to learn what works and what doesn't. But you should try various marketing methods at once to engage with more customers and keep them coming back for more. You can choose whether this is paid or organic, but both will benefit you.

Manage Cash Flow

Cash flow is crucial for all online business owners to manage. Otherwise, you could find yourself in the sticky spot of being unable to pay for more inventory because you've run out of funds. Or your marketing budget runs dry, and you can't run any more ads. Automating manual processes as you develop and grow will be a critical factor in allowing you to focus on expanding your business further. 

Arth is an automated cash flow management tool that allows you to keep on top of things in your business, so you never run out of money. We've written more about the benefits of managing your cash flow

Maintain a Steady Flow of Products

There's no time to sit back and watch it all happen when your store is up and running. You should continue researching trending products to see if any apply to your niche and make them available in your store as soon as possible. Trending products come in and out of fashion quickly, so it's essential to be there early while the items are still gaining traction. 

Take fidget spinners, for example. They came into popularity in December 2016, and by the end of 2017, they were already going out of fashion. But data shows that as of 2019, more than 200 million of them had been sent to retailers. Keeping up with trends will help you sell more products, and you could potentially attract a new customer base who will keep coming back for the other items you sell. 

Having products that will not be backfilled once they are out of stock helps create a sense of urgency for the customer. We see this in clothing. Every season a new range of clothing comes in to follow the most up-to-date trends from fashion designers, and older clothes either go on sale or go out of stock and don't get filled up again. 

Final Thoughts

Once you've set up your ecommerce business and are selling products online, remember that it can take anywhere up to two years to start to generate a sizable profit. Don't give up after a couple of months because you don't get a great response initially. Learn from your failures, and invest in more marketing and online advertising. 

After reading this article, you should know everything about how to start an ecommerce business, as well as have an understanding of the research that is necessary before opening your own online store. The more thorough your business plan is, the more likely you will succeed in this thriving competitive industry. 

The top things to remember when running an ecommerce brand is always to provide excellent customer service, ensure every webpage of your site is tailored for SEO, and always conduct ongoing marketing and advertising. Don't forget to keep on top of current trends and have a steady flow of products. If you follow these steps, you'll be on your way to having a profitable online store. 

All that's left to say is, good luck!

Apple advances user security with powerful new data protections

iMessage Contact Key Verification, Security Keys for Apple ID, and Advanced Data Protection for iCloud provide users with important new tools to protect their most sensitive data and communications

Boost Your Brand's Growth with Artoh Card.