Ecommerce continues to grow rapidly year after year. In 2021 alone, global ecommerce sales surpassed $4.9 trillion. With more people than ever shopping online, now is an excellent time to start an ecommerce business. But where do you begin?
Launching an online store from scratch can seem overwhelming, but it doesn’t have to be. This comprehensive guide breaks down exactly how to start an ecommerce business, step-by-step. Follow along to turn your online store idea into reality.
Selecting the Right Ecommerce Business Model
Before diving into the details, you need to determine what type of ecommerce business model aligns with your goals, interests and budget. There are primarily eight models to choose from:
1. Dropshipping
With dropshipping, you sell products stored and shipped by a third-party supplier. You never have to handle inventory or shipping yourself. The supplier handles it all. This is an easy, low-cost model perfect for beginners.
2. Print on Demand
Similar to dropshipping, print on demand means products are only printed after an order is placed. This works well for customized products like t-shirts, mugs and other merch.
3. Handmade Goods
Sell your own handmade creations from an online store. This takes more effort but allows you to fully control quality.
4. Private Label
Source generic products, brand them with your own logo and packaging, then sell at a markup. This requires more upfront investment.
5. Used Goods
Give old items new life by reselling them. Everything from books to electronics can be resold online.
6. Wholesale Goods
Purchase inventory in bulk from manufacturers at wholesale prices, then sell individually at retail prices for higher profit margins. This is more hands-on.
7. Self-Manufactured Goods
If you have a creative product idea, consider manufacturing it yourself. This requires production expertise but means higher profit potential.
Choosing the Right Ecommerce Platform
The ecommerce platform you use to build your online store is a huge decision. With the right platform, you can launch a professional-grade store quickly and easily without needing to code it from scratch.
Here are some top platforms to consider with key features:
- Shopify – Extremely user-friendly with abundant themes, add-ons and ecommerce features. Ideal for any business model.
- WooCommerce – Build a store on WordPress. Open source and customizable but requires more tech skills.
- BigCommerce – Scalable SaaS solution great for growing brands wanting premium storefronts.
- Squarespace – All-in-one platform good for simple stores selling physical or digital goods.
- Etsy – Best for handmade goods, vintage and crafts. Large built-in audience.
- Amazon – Massive reach but very competitive. Better for established brands.
- eBay – Auction-style site good for used goods. Hit or miss for other models.
For most first-time ecommerce store owners, Shopify and WooCommerce are the best options. Consider your tech expertise when choosing.
Registering Your Business
While not strictly required, formally registering your ecommerce business as an LLC or corporation has benefits. It separates your business and personal assets for liability protection. You’ll also need a business name and structure to open business bank accounts.
The process varies by state but typically involves filing paperwork and paying fees with the Secretary of State or State Corporation Commission. You can DIY or use a service like Incfile or ZenBusiness to form your LLC remotely.
Setting Up Business Banking
Keeping your business finances separate is crucial. Open dedicated business checking and savings accounts in your business name. Never co-mingle personal and business funds.
Banks like Chase and Bank of America offer business checking accounts. For online stores, we recommend a free business account with no monthly fees from Novo or Mercury.
A business credit card is also essential for online advertising, purchasing inventory and other expenses. Find one with cashback rewards and 0% intro APR if possible.
Building and Designing Your Ecommerce Website
Your ecommerce website is the digital face of your business. Its design and user experience directly impact conversions and sales.
Even if using a platform like Shopify, invest time customizing your theme. Optimize product pages, checkout flows, navigation menus, branding and more. Don’t just use the default template.
Focus on simplicity, speed and responsiveness. Remove anything distracting buying. Check designs on both desktop and mobile. Mobile now accounts for over half of ecommerce traffic.
If you have graphic design experience, designing a custom theme from scratch can help your store stand out. If not, use a pre-made theme and customize it.
Setting Up Your Ecommerce Payments System
You’ll need a way for customers to pay you online. Accept all major credit cards, PayPal and other digital wallets.
For credit card processing, Shopify Payments or Stripe are ideal. PayPal also works but charges higher fees. Avoid shady processors with hidden charges.
Ensure PCI compliance and implement SSL encryption for security. This protects customer payment data.
Consider offering installment plans like Affirm to increase average order value and conversion rates.
Creating Killer Product Listings
Product pages make or break ecommerce sales. Make sure yours have:
- High-quality product images/videos
- Detailed titles and descriptions
- Specs, size guides and other key info
- SEO-optimized metadata and alt text
- Strong call-to-action buttons
Write compelling copy that educates and excites buyers. Answer common questions and emphasize benefits. Include user-generated content like reviews and Instagram posts.
Setting Your Inventory Management System
Carefully track and manage inventory to prevent stockouts yet minimize excess stock.
Use inventory management software or Shopify’s built-in system. Link this with sales channels to sync inventory counts in real time.
Set reorder points and ideal stock levels for each product. Automate repurchases and transfers when stock gets low.
If dropshipping, regularly communicate with suppliers about inventory they have available to sell.
Understanding Order Fulfillment and Shipping
Always ship orders promptly, provide tracking info, and send shipping confirmation emails. This delights customers.
With Shopify, you can automate fulfillment. Or consider a 3PL like ShipBob to store, pack and ship orders for you.
Offer customers fast, affordable shipping options. Provide free shipping if possible. Local pickup is also an option.
Developing Your Customer Service Strategy
Stellar customer service improves retention and word-of-mouth referrals.
Make it easy for customers to contact you via phone, email, live chat, messaging apps or social media. Be responsive.
Empower team members to resolve issues independently within reason. Avoid long wait times and approvals.
Surprise customers with above-and-beyond service when possible. Small gestures like handwritten notes make a difference.
Promptly issue refunds or replacements for defective products. Turn negatives into positives.
Driving Traffic to Your Online Store
The best online store is worthless without traffic. Market aggressively from day one.
- Leverage social media – Run targeted ads on Facebook, Instagram, TikTok, etc. Post organic content daily.
- Optimize for SEO – Research keywords, create SEO-friendly content, generate backlinks and more.
- Run paid ads – Google Shopping, Amazon, display and search ads can all drive targeted traffic.
- Partner with influencers – Pay relevant bloggers or social media influencers to feature your products.
- Launch promotions – Giveaways, contests and sales incentivize sign-ups and purchases.
Learn which marketing channels work for your niche and double down on those. Track analytics to optimize efforts.
Analyzing Metrics and Data
Dig into data and analytics to gain actionable insights into your ecommerce business.
Key metrics to track daily include total sales, average order value, conversion rate, traffic sources, top products, margins and more.
Tools like Google Analytics and Shopify Analytics make this easy. Review reports frequently and course correct as needed.
Surveying customers also provides valuable feedback to improve the shopping experience.
By following this comprehensive step-by-step guide, you have everything you need to successfully launch a profitable online store from scratch. With hard work and determination, your ecommerce business can thrive for years to come. The possibilities are endless. Get out there and start selling!
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