How To Start an Ecommerce Business From Scratch

Start Ecommerce Business
Step 1

Choose Your Ecommerce Niche

It pains me when people email me their ecommerce site and it’s filled with hundreds of products, dozens of categories, and no real focus.

Unless you have a massive budget, you can’t be the next Best Buy or Amazon. You have to niche down to run a profitable ecommerce store.

Ecommerce Niche Selection

Choosing your niche is the most important step in opening your online business. Start this process by identifying successful companies already working in this space.

Make sure that the area is competitive – an absence of competition usually indicates that there’s no market, either.

Don’t pick an overly crowded niche, however, and skip anything dominated by major brands. If you’re having trouble with this, drill down further on what you want to do – the more specific you are, the less competition you are likely to face.

Niche-ing down also gives you the benefit of having a lot of “shoulder” niches, related to what you do, but not identical. You can work together with business owners in those niches to cross-promote, become (or acquire) an affiliate, and grow your customer base.

Pick a product category with a minimum of 1000 keywords and focus on a niche that does well in social media, where publishers in the area are affiliates on Amazon. If you can nab a few affiliate marketing opportunities, you won’t have to worry about shipping as much product, but you can still make a profit.

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Additional resources:

Step 2

Research Business Models

There isn’t a single business structure that works for everyone. Service-based business, software, digital product sales, and physical products are just the tip of the iceberg.

Before you can decide on what to sell online, you need to understand the different business models available.

How will you source products?

It’s not rocket science, but it does impact your business structure.

My focus is on physical products, but that doesn’t imply a need for you to invest heavily or fill your garage with products. How will you source products and inventory management?

If you want to turn a profit without touching your product or investing heavily at the start, dropshipping is a smart choice.

If you like the idea of having your own warehouse full of goodies, you’re investing more up front and working with a wholesaling or warehousing model. Have a business idea for the perfect product idea or a favorite product you wish you could sell under your brand? Look into white labeling and manufacturing.

And then there are subscriptions, where you carefully curate a set of products or a single product to be delivered at regular intervals to your customers.

The business model that attracts me the most is a single product category that you supplement with affiliate marketing. You can control the marketing and branding on a focused product and focus the rest of your energy on driving sales by monetizing traffic.

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Additional resources:

Step 3

Personas and Product Selection

Now that you’ve identified a niche and business model, you might be tempted to start hunting for products to sell.

Don’t. Before you think about product ideas, think about personas. You can’t expect people to buy your product if you don’t know who you’re selling to.

Personas and Product Selection

Who are you? What does the store represent? Who are your ideal customers? You need to project a consistent brand image (a journey that starts with your brand name). An organic seed company that started selling conventional fertilizer wouldn’t last very long. 

The persona of your store has to match the expectation of your customers and the products you choose to carry.Click To Tweet

Once you’ve identified the image you want to project and the customer you are catering to, it’s time to come up with product ideas. I suggest starting with one – you’ll invest less at the start, and if you want to offer more you can test the waters with affiliate marketing.

In the example of an organic seed company, you could find popular organic products on Amazon and create content to send traffic to those affiliate products. If something catches fire, you can consider making your own brand of that product. If you’re not 100% sure what to sell, you can use affiliate marketing to validate your idea.

Before you invest in the product, though, evaluate it carefully. Even if you choose a dropshipping model, you want to test it carefully and get a feel for the product yourself so you can identify any potential problems and prepare customer service scripts to answer common questions.

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Additional resources:

Step 4

Establish Your Brand & Business

If you want to start a successful business, you need a brand that connects with your persona. Identifying your persona makes building an ecommerce brand easier.  You might avoid girlie colors and images  if you are selling  products to corporate businesswomen interested in living a sustainable life.

Start Online Store Selling Stuff

But before you set up your store and get into the nitty gritty of building a brand – there are some basic steps you’ll need to take.

Step 1: Register Your Business.

Choose a business name and register your company. There are legal protections and tax benefits for incorporating, so don’t skip it.

Step 2: Pick Your Store’s Name

The name of your site and the legal name of your business don’t need to be identical, but keeping them consistent has its benefits. Make sure whatever you choose fits your niche – you don’t want to pick a brand name at the last minute.

Step 3: Get Your Business Licenses

If you’re not familiar with this process, the Small Business Association has plenty of resources to help you get started, including a mentor-protege network and courses on small business basics. Look actively for mentors – their advice can be priceless, even for little things like acquiring business licenses. One of the smartest decisions I ever made was finding someone who could show me the ropes.

Step 4: Get Your Employer Identification Number

You’ll need an Employer Identification Number (EIN) to open a business bank account and file your business taxes next April, even if you don’t plan on having any employees. Your EIN is a bit like your business’ social security number: it’s a unique number that identifies your business and helps you file important paperwork.

Step 5: Apply for Business Licenses and Permits

Operating an online store does not exclude you from needing certain business licenses and permits. Check with your city, county, and state to see what sorts of sales tax licenses or home business licenses you need, and get those approved before you start operating.

Step 6: Find the Right Vendors

You’ll have a lot of competition selling products online, so it’s in your best interest to find the best quality and best prices for the products you sell or materials you use to create your products. Shop around until you find a vendor you want to do business with long-term – this includes your ecommerce software (your “shopping cart”). Think scalable from the start.

Step 7: Logo Creation

Don’t fret over it too much, but do make sure that it is not in use by another company in your niche. Logo design doesn’t have to be terribly original, however (and really shouldn’t).

Step 8: Get Visual

Consider the colors of your brand, the imagery you’ll use, and the typeface or fonts you’ll employ carefully. If you’ve got the budget, you might want to hire a marketing firm to create a design brief for your company. If not, you can create your own. Just keep it consistent and read marketing tips designed to help boost your brand.

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Additional resources:

Step 5

Build Your Ecommerce Website

Once you’ve legally registered your business and started thinking about design, you need to register your domain name and any redirect URLs that might be relevant. You’re going to need the design info you settled on in the last step now, when you finally build your store.

Which Platform will You Use?

Whatever design you chose needs to be compatible with your ecommerce software, too.

There are literally hundreds of ecommerce shopping cart platforms. Choosing the right ecommerce software is not easy. You need to carefully evaluate things like loading speed, features, compatibility with different payment gateways, compatibility with your business structure, your web developer skills, SEO-friendly features, and more. I’m putting together reviews and comparisons to help you pick the right one.

Once you decide on your ecommerce solution, don’t hire a “CRO Expert” or expensive development company. Just use a theme. You might need to pay a small fee of $100 or so to get a good template, depending on the shopping cart you choose and what they offer.

If you don’t want to worry about taking credit card payments, you can sell products online on a marketplace like Amazon.

Love the idea of your own digital real estate? Make sure your ecommerce platform can scale with you and integrate with popular ecommerce marketplaces to increase your exposure.

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Here are some resources to help you get started:

Step 6

Attracting Customers to Your Ecommerce Store

Apologies to any Field of Dreams fans, but if you build it there’s no guarantee they’ll come. You need to market your store.

When you chose your cart, I told you to think about SEO-friendly features. They are NOT all the same.

Ecommerce Marketing

The keyword-stuffing days of the early 2000s are long gone, but SEO is alive and well. You need to keep keywords and search terms in mind on each page of your site, in your URLS, and in your ad campaigns. You also need to think about driving traffic to your site.

The best ecommerce sites invest heavily in online marketing. If you don’t have the funds, you better have the elbow grease. Subscribe to marketing newsletters or listen to digital marketing podcasts to keep a pulse on the digital marketing industry and get your fill of marketing tips.

Will you use sponsored content, social media, pay-per-click ads, or a combination of strategies? How will you monitor what campaigns are driving traffic to your store? If marketing your site seems overwhelming, will you hire help?

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Additional resources for marketing your ecommerce store:

Step 7

Marketing Your Products Online

Your site isn’t the only thing you need to drive traffic to. The product(s) you choose also need to be included in your marketing budget.

Your mission is to sell products, not drive traffic. To sell products, you have to think beyond your site and look for expansion areas.

product marketing

No matter what and how you decide to sell, the first step is to create an email list. Place an opt-in freebie on your website, launch a social media campaign to gain subscribers, or host a giveaway where the entry ‘fee’ is your customer’s email address.

Running a giveaway is my go-to marketing tactic to get traffic and subscribers quickly. Giveaways have the added benefit of increasing your brand presence and product visibility. Building an email list gives you a group of warm leads to work with, making the sales process much easier.

Providing consumers with coupons and content via email helps to keep your brand on their mind, boost sales, and establish credibility. Keep your emails interesting – ask for your customers’ input often, including reviews. Respond quickly to customer service and product quality issues, and work on building relationships. No sales interaction is about the first sale; focus on the next one always.

On your site, look at how and where traffic flows. Are you losing would-be customers in the same place? If you’re driving traffic to your store but nothing is selling, fix the leaks in your sales funnel by carefully optimizing each page and taking a close look at your product listings. Use analytics to help with this task. There are tools that can help you monitor and optimize every step of the sales process. Make use of them.

Look into partner and affiliate marketing to boost your brand presence by offering affiliate marketing options and partnering with retailers in your shoulder niches. If you’re nervous about approaching other retailers, look into options like JVZoo (www.jvzoo.com), ClickBank (www.clickbank.com), and Amazon Associates.

You can also offer bloggers in your niche a free sample of your product in exchange for reviews. If you’re selling products on Amazon, one easy way to gain consumer respect and confidence (and reviews) is to ask for feedback. Include a card with each product that asks for an honest review and provides contact information for your company (email is enough, unless you have a dedicated customer service phone line).

For more information on marketing your product(s), read these articles:

Ready To Start Your Online Business?

Did this post answer your questions about starting an ecommerce store? If so, please give it a share. I’ve spent years helping business owners like you. Running a successful ecommerce website doesn’t have to be a struggle or pricy.

If you’ve got the elbow grease and time, you could launch a profitable online store for a few hundred dollars per month.

Your success is important to me. If you take the time to read through the resources above, you’ll save hundreds of hours of work and you’ll know where you’re more likely to get your money’s worth in ecommerce. If I missed anything you’d like to see covered, let me know in the comments.

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