How to create an e-commerce business in 9 steps (2024)

1. Search for products to sell online

To be successful, you need to sell one of the following two types of merchandise:

• A product that is in high demand in a rapidly expanding niche.
• A high quality commoditized product.

Product types

1. Niche products

Niche products are aimed at a very specific consumer base.

Instead of a hundred different product lines, you choose a high-quality item - perhaps with multiple variants - and develop a targeted marketing strategy. Because they are exclusive and desirable, niche products tend to be more expensive and therefore have higher profit margins.

Niche products can be unique or in small series (crafts for example), read these few tips for yourself help choose your niche. 

2. Banalized products

Banalized products - also called commodities - are digital or physical products that are essential or in high demand, that benefit from a large consumer base.

In short, they are products that everyone needs.

Overall, commodities account for the majority of B2C e-commerce sales. They're common and competition is fierce, so online retailers frequently adjust prices to stay ahead of their competitors.

All types of products are commoditized: chargers, pans, sneakers, software, clothing, children's toys, etc. It is interesting to note that commoditization usually starts with a truly innovative product, which becomes popular; other companies begin to imitate the original product and establish rivalries.

Many successful e-commerce start-ups sell a mix of niche products and commoditized products. Their niche products allow them to stand out, while hand-picked core products add volume to their online store.

How to choose your products

Maybe you already have a completely unique idea - maybe you're an inventor or designer with a working product prototype. If that's the case, great. If that's not the case, don't worry: you don't need to invent the next big thing like Apple to launch a successful e-commerce store.

Instead of worrying about disruptive innovation, think about what customers want and what you can offer them.

The following tips can help you come up with a solid idea for a niche product to sell online:

• Every problem has a solution : Innovation often starts at home. Can you create marketable solutions (products or services) to solve The problems that you meet regularly?
• Find your passion : You're about to put a lot of time and effort into your new e-commerce business, so you need to make sure it's based on something that interests you.
• Determining the potential of brand image : Brand image is essential in e-commerce. How are you going to brand your product? Who will your target audience be, and how are you going to create a relationship with them through various e-commerce stores?
• Guilty pleasures are on the way : people spend a lot of money on things they love. If you manage to exploit the passions - or the vices - of consumers with a solid product, you will almost certainly build a customer base.
• Stay on the lookout for opportunities : The most successful entrepreneurs are constantly on the lookout for market shortcomings. Pay attention to societal changes and you'll see consumer trends before they even happen. You might even be able to help them come forward.
• Get on the trend train early : Speaking of trends, if you notice an appealing trend for a product, jump on the bandwagon quickly. The sooner you start an emerging market, the more likely you are to be considered an original part of the industry. “Authentic” brands get a bigger slice of the industry pie.
• Identify niche markets : A niche market makes it easier to target an audience to convert them. It's very profitable and the conversion rates are much better.

Hopefully, you'll have a list of products or services when you're done brainstorming.

If that's the case, try to identify each product's main competitors. If you find yourself in the market that is too competitive, move on to the next idea - and the next - until you find a niche that is easier to access. Then, decide which product you want to choose.

2. Choose your e-commerce business model

You know what you want to sell - now you need to find out where to sell it. It exists four main business models in e-commerce:

• B2C : business to consumer,
• B2B : business to business,
• C2B : consumer to business, and
• C2C : consumer to consumer.

Let's take a close look at each of these business models:

B2B: Business to Business

B2B e-commerce businesses sell products to other businesses.

Sometimes the buyer is also the end user (stationery, office technology, or furniture). However, most B2B transactions revolve around the wholesale of inventory, components, or raw materials.

Generally speaking, B2B e-commerce businesses have longer sales cycles. High-stakes transactions can take months because complex sales often require approval from a group of people.

In exchange for your patience and diplomacy, you get high-value orders and recurring purchases.

B2C: Business to Consumer

Simply put, B2C is traditional retail e-commerce.

Your customers are ordinary people, and you sell products or services at retail prices. Some B2C businesses sell physical products, while others sell computer software or smartphone apps. Still others sell various types of recurring subscriptions.

B2C e-commerce has a short sales cycle because the stakes are not as high. Most transactions involve a consumer rather than an entire group of people like a board of directors for example.

B2C businesses generally have lower average order values (VMC) than B2B businesses, but they make more sales.

C2B: From consumer to business

C2B is a bit obscure, but it's a real business model.

In a consumer-to-business situation, consumers sell goods and services directly to businesses. You can see this business model at work on freelancing sites, where businesses hire freelancers to carry out various projects.

C2C: From consumer to consumer

C2C businesses connect consumers with other consumers.

They charge subscription fees, registration fees, or transaction fees when people sell products or services to others. Examples include auction companies, like eBay, and online classifieds sites, like LeBonCoin.

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Business models define the structure of your company, while business models define revenues Sales allow you to make money.

Other popular options include:

D2C: Direct to the consumer

Direct-to-consumer brands sell products to consumers without going through an intermediary.

Some of them manufacture their products, while others create a supply chain and outsource the production process. D2C businesses maximize their profit margins by refusing to sell their products in bulk.

Because they communicate and sell directly to consumers, D2C businesses maintain significant control over the customer experience.

As a result, they tend to grow rapidly and build loyal fanbases.

Dropshipping

Dropshipping is an interesting e-commerce business model: you sell selected products on your site as a retailer while your dropshipping supplier handles the shipping and order fulfilment process. While you don't have as much control over your brand image and customer service, it's a good way to test new product ideas while reducing shipping costs and money spent on inventory storage.

Subscription services

Subscription services turn one-time customers into repeat customers by offering special prices on recurring orders: Amazon's “Subscribe and Save” feature is an example, and the monthly delivery service of Birchbox is another.

Many businesses combine subscription services with other business revenue models.

Wholesale

Wholesalers sell significant quantities of goods to other businesses at prices that are lower than retail prices.

Their customers resell these products or use them to create finished products or provide retail services. If you're opting for a wholesale business model, consider segmenting your target customer base into large and small businesses.

White label and private label

In a white label business model, you put your logo on generic products from a distributor.

In a private label business model, you hire a manufacturer to create a product exclusively for you. Both methods save time, but a private label is more expensive than a white label.

In both cases, you devote more energy to marketing and new technologies than to design and production.

Amazon (FBA)

Businesses that choose Fulfilment by Amazon (FBA) are effectively transferring responsibility for warehousing and shipping to Amazon.

Your bulk products are taken to an Amazon fulfillment center, where they are stored and shipped for you. There are fees to pay, but you don't need a warehouse and don't have to post a product. Additionally, Amazon takes responsibility for any issues during the shipping process.

It's a great way to start selling on Amazon without needing a comprehensive website.

3. Validate your product idea and refine your target market

At this point, it's critical to do market research to ensure that you have a solid product idea.

You'll also need to create one or more buyer personas, which will help you develop targeted marketing strategies later on. Market research is not as difficult to carry out as you might think, and the Buyer Personas are pretty fun to create.

Let's get to the heart of the matter.

Market study

Market research seems to be an activity for which you need to hire a specialized company.

Nevertheless, if you wish, but it is not too difficult to gather information on your own. All you need is a strategy and the right tools.

Here are 3 of the most effective ways to learn more about your consumer base:

Conduct consumer surveys

Surveys use good old-fashioned questions to gather information from consumers.

Social media is one of the quickest ways to create an email list: simply create a page for your new business and offer incentives to people who respond to your survey (10% off a later purchase or participate in a sweepstakes).

Paid ads on social media can help you target a specific audience and drive traffic to your page.

Several great marketing tools, including SurveySparrow, Jotform or Typeform, make it easy to generate surveys. All you have to do is register, create your first questionnaire and send it by email to the recipients.

Be sure to track email open rates and use the results of your survey to get an idea of your consumer base.

Ask yourself what type of information you need from customers and develop your questions accordingly.

Here are a few demographic topics to get you started:

• Marital status
• Number of children
• Age
• Genre
• Country of residence
• Household income
• Educational status

Remember to collect psychographic data as well.

Psychographic data make it possible to understand Why the consumers are making decisions. This is information about a person's attitudes, beliefs, and values that helps you understand how they see the world.

You can include psychographic survey questions about:

• Musical tastes
• Lifestyle choices
• Aspirations and life goals
• Family values
• Retirement goals

Ask specific questions about your business idea, and ask participants if they would make changes to your products or services.

Interviews with your prospects

If you can, set up phone or Zoom interviews with some of your survey participants.

One-on-one interviews can help you answer specific questions in more detail. Don't leave out participants who have a negative opinion, as they could provide valuable information that will improve the value proposition of your business.

Email interviewees a list of four or five questions a few days before speaking to them. They will provide better answers if you give them time to think, rather than embarrass them on the day of the interview.

Be sure to take as many notes as possible during each conversation.

Create discussion groups

Focus groups can be messy, but they often generate great ideas.

If you have good interpersonal skills and want to bring together several consumers from your target group for a brainstorming session, go for it. You can do this in person or through a video chat app, like Zoom or Skype.

Avoid dominance bias: Dominant characters tend to throw discussion groups out of balance, leading to flawed ideas. So include an impartial and diplomatic moderator in the conversation.

Create buyer personas

You gathered information through surveys, interviews, and a focus group.

Now it's time to integrate all this data into one or more “real” people. Buyer personas make marketing easier because they give you “dream customers” that you can focus on.

To start building a buyer persona:

• Give each profile a nickname — “Gary the Banker” or “Lucy the Interior Designer,” for example.
• Attach a photo to make your character more engaging.
• Add a set of demographics to each profile.
• Enrich each persona with psychographic elements.

You can make your buyer persona (s) as simple or complex as you want, but make sure they're relevant and easy to use.

READ MORE: How do you create a buyer persona? The method

4. Your company's brand image

Visual branding is a complex subject that deserves its own 2,000-word article, but we're going to cover it here in summary form. To make your business memorable and create brand awareness, you need to create a logo and complementary brand colors that stay the same across all of your sales channels.

You can design a logo yourself, or hire a freelance designer to get a professional result.

In either case, consider the following when creating your brand image:

• Relevance : Your logo should be relevant; it should instantly tell customers what your brand offers.
• Simplicity : Don't be too smart or complex - customers should be able to remember your logo.
• Versatility : You need a logo that you can use on your site or on a billboard. It must be able to evolve without losing its integrity or meaning.
• Unique character : Your logo should be unique enough for consumers to associate it with your business.

The best logos in the world are unmissable, even when you remove all the peripheral text; even toddlers recognize the golden arches at McDonald's — sometimes half a mile away. High-performance camping equipment retailer Sierra Designs has a simple, memorable logo that works with or without the adjacent logotype.

Once you have a logo that works for you, use its colors to influence the rest of your visual branding, including your site design, packaging materials, marketing emails, and ads.

5. How to source and manufacture products for your e-commerce

It's time to clarify a bit more about the methods of sourcing products that we talked about in the section on business models. There are three main methods of sourcing products: Artisanal production, wholesaling or manufacturing, and dropshipping. Many online retailers combine these methods to achieve a balanced revenue stream.

DIY products or services

People have been making and selling things for thousands of years. Neolithic traders had to travel overland to sell beads, pottery, and sculptures; today, you can sell handmade items around the world via the internet.

Starting a DIY project costs are generally low, but you spend a lot of time on it. On the other hand, you have full control over the production process and UX, and you can change designs on site if the products don't perform optimally.

As your business grows, you may decide to form an alliance with a manufacturing company to create products en masse.

If you choose the DIY route, remember:

• Organize a reliable supply chain for basic materials.
• Determine shipping options in advance; will you use a shipper or ship the items yourself?
• Determine your production schedule.
• Think about where you will store your inventory.

Wholesaler or manufacturer?

If you're ready to manufacture and ship products on a larger scale, consider using a wholesaler or manufacturer as a product source. Let's look at these two options in more detail:

Wholesalers

Wholesalers sell branded products in bulk. They also sell white label products in bulk. You apply your brand and sell generic merchandise to your customers.

If you prefer to focus on marketing and developing your business rather than product development, you can save time and money with a wholesaler.

Manufacturer

If you have a prototype product or if you want to develop your DIY business, you can partner with a manufacturer. Production companies in the United States and abroad create private label products in bulk for their customers.

Some manufacturers help entrepreneurs create new products and manage the development process from start to finish.

If you decide to work with a wholesaler or manufacturer, consider the following:

• Read company references. If the manufacturer is based in the United States or Canada, check their rating with the Better Business Bureau and associated reviews.
• Get an estimate of production costs.
• Find out about minimum order quantities.
• Obtain an estimate of the manufacturing time.
• Review bulk transport options.
• Review contracts carefully.
• Learn about warranties and after-sales service.

Dropshipping

If you don't have a unique product idea and would rather not work with a manufacturer or store bulk goods, dropshipping might be your best product sourcing solution.

When you partner with a dropshipping supplier, you become a retail distributor. You list the wholesaler's merchandise on your site, and the supplier creates the products and ships the orders on your behalf.

Dropshipping has a lower profit margin than white label or private label resale, but it's a quick and easy business model. Some businesses combine dropshipping and DIY. For example, an artist who sells and ships unique paintings from home may also sell designer prints and mugs through a distributor.

6. Create your “business plan” for e-commerce.

Take time to think about the future before taking the plunge. Around 50% of new businesses fail within five years, often because they are not planned.

Writing a business plan or Canva Business Model can help you better understand your unique offering and help you:

• Find the resources you need to run your business.
• Find out what your competitors are doing.
• Identify opportunities in the market.
• Identify your target market.
• Visualize the future of your business.

Business plans generally have at least seven sections. You can use the following template to create your own strategy:

Overview of your business

A summary summarizes your business idea into a few paragraphs. It's at the start of your Business plan and informs readers about the following:

• What your business does.
• Your business goals.
• The products or services you sell.
• Your target market.
• Your sales channels.
• Your monetization strategy.

You will almost certainly write your summary last. This will give you the opportunity to digest all the other parts of your business plan before summarizing them.

Business Overview

This is where you give readers a very comprehensive overview of your business.

This section starts with your business name before moving on to its business structure and domain name.

Next, you'll write a brief mission statement and then outline your vision for the business. Write down some background information about your business idea and unique value proposition, then finish with a list of top competitors.

Market analysis

The market analysis section allows you to show what you know about your target customers. Many business owners start with the results of a SWOT analysis (strengths, weaknesses, opportunities, and threats). Then, they move on to analyzing the competition.

Competitive analytics help you understand your competitors so you can gain traction in the market.

To do this, they identify and list each competitor's products:

• Domain name and amount of traffic on the website.
• Business model and product features.
• Product pricing strategy.
• Mission statement and vision.

This section ends with a paragraph explaining how you plan to make your business an industry leader.

There are three main ways you can do this:

• Customer segmentation: You will offer high-quality products in a trendy niche market.
• Cost leadership: Your products are cheaper than those offered by your rivals.
• Differentiation: You offer a unique product or a much better version of a competitor's product.

Products and services

This is where you get into the details of your product or service. Talk to your readers about the merchandise you sell or the service you provide; if you sell a lot of different products, write in general terms about your inventory and why your business is different from its peers in the industry.

Marketing plan

In this section, you'll tell readers about your marketing strategies. The segment starts with a breakdown of your marketing budget and continues with a list of the marketing channels you plan to use to promote your business. Marketing channels fall into two main categories:

• Organic marketing channels: Search engine optimization (SEO) tactics, content marketing, social media pages, and blogger networks drive organic traffic to your website. Organic marketing channels are inexpensive, create value over time, and help you improve your brand name.
• Paid marketing channels: Paid marketing channels deliver results quickly, making them an attractive choice for businesses looking to take off. Pay per click (PPC) ads, social media ads, influencer marketing, and affiliate marketing all cost money, but they produce solid leads.

Operations and logistics plan

Your operational and logistics plans cover everything you need to physically operate your business. Office space, technology needs, staff, and warehousing needs all fall into this category.

Remember to include details about:

• Your supply chain.
• Your production plan.
• Shipping and fulfillment options.
• Where you will store your inventory.

This part of your business plan helps investors understand the daily expenses associated with your own e-commerce business.

Financial plan

You will need capital to launch your e-commerce business. If you don't have start-up costs on hand, you'll need investors or a bank loan to start trading. You need to convince your potential lenders and lenders that you know how to manage money and that you will make your business profitable.

Most financial plans include:

• An income statement: A breakdown of all sources of income and all of your expenses over a given period of time.
• A balance sheet: A double list of all your assets and liabilities, culminating in equity.
• A cash flow statement: A statement of income and expenses in real time, showing when money comes in and when it leaves.

With the right business plan in hand, it will be much easier for you to find investors and convince your bank to approve much-needed business loans.

7. Create your e-commerce store

You've validated your product ideas, registered your business, and written a business plan - now it's time to create your website. Most online retailers and wholesalers choose sales platforms as a service (SaaS) because they are simple to use and offer website creation tools and e-commerce platforms.

There are a lot of SaaS providers out there, and some are better than others. Before choosing one, start with a free trial to test its features.

Remember to look for the following characteristics when choosing your e-commerce platform:

• Web hosting
• Choosing a domain name.
• Excellent speed and uptime
• An excellent website creation tool integrated into the product.
• Free and user-friendly themes.
• Responsive website design.
• A vast application store full of reliable plugins.
• Full compliance with the PCI standard.
• SEO tools integrated and fully customizable URLs.
• Promotions, discounts, analytics, and other e-commerce marketing functions.
• Customer support via phone, email, and livechat (or Chatbot).
• An unlimited product catalog.
• Zero transaction fees and low credit card processing fees

BigCommerce

Arguably the best SaaS platform on the market, BigCommerce offers a range of levels from Standard to Enterprise. All BigCommerce plans include high-quality themes, a responsive mobile-ready website, multiple sales channels, unlimited storage, unlimited bandwidth, and professional analytics.

If you subscribe to the Pro plan, you will have access to a number of additional features, including custom SSL, segmentation tools, and the abandoned cart saver. BigCommerce's excellent customer service is another major benefit. Scalable and powerful, BigCommerce is ideal for growing businesses.

If you're a fan of WordPress, they also have a new WordPress plugin called “BigCommerce for WordPress“which is a competitor to WooCommerce.

See the detailed sheet of BigCommerce

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Shopify

Shopify is an e-commerce giant. Overall, they're the best for dropshipping stores because store integrations and setup are quick and easy. A longstanding name in e-commerce, Shopify was launched in 2004 and quickly became a leading SaaS provider. The benefits of the platform include abandoned cart recovery, free SSL for websites, marketing tools, and decent customer service.

Shopify has a few drawbacks. For starters, you're limited to 100 product variants, so if you have a large catalog with multiple product options (size, material, color, etc.), Shopify might not be for you.

SEO is also a slight defect. You can't create your own custom URL structure and are forced to use the Shopify format.

Overall, it's a great e-commerce website tool that's easy to use, ideal for small sellers and wholesale shippers.

See the detailed sheet of Shopify

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Wix

Very popular with small businesses, Wix has a good range of carefully designed templates, SEO tools, an easy-to-use WYSIWYG editor, and plenty of promotion and gift card options. Setting up the site is a breeze and you can create a site in under an hour.

Wix comes with a built-in store creation tool, and you can use its built-in product galleries to organize merchandise or services in an appealing way. Other features, such as a secure checkout, 24/7 customer support, and multiple payment gateways, make Wix a good choice for businesses with a limited product catalog.

See the detailed sheet of Wix‍

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8. Increase traffic to your online store

Launching an e-commerce site is easy. The challenge is to generate traffic to the site. We'll discuss paid and free digital marketing tactics that will allow you to increase your website traffic - and sales.

Marketing channels for organic products

Organic marketing channels take time to develop, but they offer the best return on investment (ROI) in the long term. Here are some of the best tactics:

• Search engine optimization (SEO): Relevant keywords included in page text, product descriptions, and other website content improve search engine rankings.
• Content marketing: This includes creating a blog on your site, optimizing blog posts, articles, in order to generate targeted traffic to your site.
• Social media pages: Active pages on Facebook, Instagram, and Twitter encourage new visits to the website.
• Link building (off-page SEO): It's very difficult to get traffic on Google without a lot of relevant, high-quality links to your website. These link building strategies include guest blogging and forming link partnerships with other sites in your niche.
• Email marketing: Email is a huge marketing channel for e-commerce businesses. You have to choosing an email marketing service that allows you to create popups, send abandoned cart emails, create welcome email series (including discounts), and send targeted, image-rich marketing emails for vacation promotions.

Paid marketing channels

Paid marketing channels produce quick results and make it easy to create a profitable online store. They are therefore a popular choice for start-ups as well as for businesses with big budgets. While they provide quick results in online marketing, their return on investment is generally lower than that of free tactics (with the exception of affiliate marketing, which has a high return on investment).

Here are some of the main paid acquisition channels for e-commerce brands:

• Affiliate marketing: Bloggers and influencers with popular websites join your company's affiliate program and receive affiliate commissions for any sales they help generate through their affiliate links.
• Influencer marketing: Social media influencers on Instagram, Facebook, TikTok, and other platforms promote your products for a fee. (Here are my guides on how to make money on Instagram and TikTok).
• Pay per click (PPC) advertising: You set up PPC ads with Google and pay every time someone clicks on your ads. This can also include Google Shopping ads, which sync with your product catalog and make your products available on the Google Shopping platform.
• Social media ads: Paid social media ads on Facebook can target new prospects and retarget previous website visitors. One of the best Facebook Ads strategies is to use their DPA ads. These ads appear to Facebook users who have visited your product pages and highlight the same products that they saw on your website. You can also sell directly on Facebook with product listings.

The most effective marketing strategies use a combination of different channels to engage consumers and generate conversions.

If I were to start an e-commerce business from scratch today, I would start by starting an SEO strategy solid. This includes conducting keyword research around terms that have a high search volume and that could appeal to your target audience.

For example, if you sell camping gear, you could write a blog post about “The 10 Best Hiking Tents” and link to your product pages in the content.

Then, you need to come up with a solid link building strategy and partner with other blogs in your niche to get backlinks. This will increase your website's domain authority (DA) and make it easier for all of your pages to rank in search engines.

Finally, I would use paid advertising carefully, starting with retargeting ads on Facebook. Then I would only switch to PPC ads on Google if you can generate a strong return on investment.

9. Measuring the success of e-commerce.

E-commerce analytics tools, like Google Analytics, help you understand how visitors reach your site and what they do when they get there. Ultimately, they also provide information about your conversion rates and sales.

You can use the data obtained through analytics to optimize product descriptions and page content so that more of your visitors turn into potential customers.

SaaS-based e-commerce platforms, like BigCommerce, support Google Analytics integrations. If you are a customer of BigCommerce, simply create an account with Google Analytics and then go to the Web Analytics submenu in the Advanced Settings section of your control panel. Check the box next to Google Analytics and paste your tracking ID into the Property ID field to get started.

The integration of BigCommerce Google Analytics supports enhanced e-commerce and site search, allowing you to assess page views and individual search terms.

You can see analytics in Google Analytics (site traffic), Facebook Insights, and your email provider.

Here are a few key performance metrics (KPIs) and metrics that need to be paid attention to:

• Sessions : The number of times people see your web content
• Scope : The total number of people who saw one of your ads.
• Email clicks : How many recipients open your emails and click on the links included.
• Social media engagement : The number of likes, shares, comments, and clicks you get for each post you create.
• Shopping cart and payment abandonment : When shopping online, how many people add products to their shopping cart but then leave your site without starting - or completing - the checkout process.
• Average order value (AOV) : The average total value of an order on your site.

Overall, you should review this information and take action accordingly to increase sales.

Summary

It takes dedication and dedication to create a successful e-commerce store. You also need to have a great product in a booming niche, a great business plan, the right e-commerce platform, and a well-thought-out marketing strategy.

It might seem like a lot of work — and it is — but if you break goals down into manageable tasks, you'll create an e-commerce business you can be proud of.