Gone are the days when starting a business required years of studying the market, gathering a large amount of resources, and doing all of the legwork out in the real world.

With the explosion of ecommerce (estimated worldwide sales of $5.5 trillion in 2022), you can now do all of this from the comfort of your living room.

If you doubt this claim, this guide to starting an e-commerce business will quickly convince you otherwise.

Are you excited to learn more? Keep reading!

All About Ecommerce Businesses

Any business that involves the sale of goods and services online is an ecommerce business. It does not require a brick-and-mortar structure, though many brands supplement their physical stores with an online option to cover a broader market.

Ecommerce businesses come in all shapes and sizes and thrive on Amazon, Shopify, Etsy, and many other online platforms. Setting one up is likely more manageable than you think!

How to Start an Ecommerce Business

1.     Research

It is crucial to educate yourself about your business before you start one. There is a long list of things you will need to research and learn about before starting an ecommerce business.

Here are some topics to get started with:

  • Products and/or services you want to offer
  • Market trends and size
  • Target audience
  • Competition
  • Expected costs
  • Existing demand in your chosen niche
  • Assets
  • Suppliers
  • Pricing
  • Logistics and delivery
  • And more

2.     Come Up With a Name and Business Model

Once you know what products and services you will be offering, the next step is to determine your business model. Coming up with a business model, strategy, and plan centers on setting specific goals.

You must decide how you’ll offer your products or services to your customers. This includes whether your business will sell individual products, packages, offer subscriptions, or employ some other model.

You must also decide your business entity. An LLC and a sole proprietorship are two very different structures if you’re working as a solo entrepreneur, and there are more options if you have a partnership. Each business structure has its benefits and drawbacks. Look up local laws and regulations for different business entities in your state.

Once you finalize these details, you should be able to condense your vision into a practical strategy. And you now have everything you need to come up with a name and logo for your ecommerce business.

Make sure your name is unique and available in the area you wish to operate in—cross-check the availability of domain names and social media accounts as well.

3.     Apply for an EIN

EIN or Employer Identification Number is crucial for separating your business finances from your personal accounts. It is also required when reporting employment taxes.

Not all business entities are required to have one, so check with your state’s authority.

You can apply for your business’ EIN through the Internal Revenue Service (IRS).

4.     Accomplish the Necessary Documentation

Most home-based businesses aren’t required to get as many permits as brick-and-mortar stores. Depending on the state, city, and industry you’re operating in, ecommerce businesses may need permits for the following.

  • Environmental permits
  • Health and safety permits
  • Professional and trade licenses
  • Building and construction permits
  • Signage permits
  • Sales tax permits

5.     Decide on a Platform

Choosing an ecommerce platform can make or break your ecommerce business. These platforms come with different features, and some are best suited for certain niches, products, and services.

Consider the available packages and pricing options. Use these expected costs as a reference when selecting a platform based on price.

Our advice? Do some research on competitors in your industry and see what platforms or features they offer. Note any missing features that your customers may look for, and do your best to fill the gaps.

Once you choose an ecommerce platform, you will have to finalize your list of payment providers to make the purchase cycle as smooth as possible.

6.     Create Your Website

The next step is setting up an online storefront for your business. You will need to sign up for and purchase a hosting plan and hire a developer to design your ecommerce website.

Your website will be the main point of contact between your brand and your customers. It will facilitate the buying and selling of goods and services. Unlike brick-and-mortar stores, your website is all your customers will see and know about your business. Make sure it attracts and doesn’t drive away customers instead!

We suggest keeping things simple in the startup phase and further developing your website as you bring in revenue over time.

7.     Develop or Source Products

Now comes the central element of any business: the product or service on offer.

If you’re manufacturing your own products, then this stage will involve a lot more work. But if you’re sourcing inventory from a third party, all you need to do is find a supplier. In that case, finding a supplier will be easier if you know how to buy liquidation pallets.

Whether you’re offering services or products, you will have to consider many aspects when sourcing them. These may include:

  • Shipping costs
  • Order fulfillment time
  • Return policy
  • Pricing
  • Payment options
  • Customer service
  • Logistics and delivery
  • And more.

If you’re less inclined to find a supplier, you can clear responsibilities off your plate by working with a dropshipping provider. With dropshipping, you are relieved from storing, managing, and order fulfillment duties.

8.     Market Your Business

The last step in setting up an ecommerce business is marketing. In the digital age, you can easily do this from your home too!

Before you launch your ecommerce website, you must develop a robust marketing strategy. For this, you can do the legwork yourself or hire an experienced marketer that can help you navigate the seemingly endless options in the world of online marketing.

Advertising and marketing your online store can be a breeze with the multitude of tools, software, and channels available online. Leverage the vast online audience at your fingertips through intelligent marketing strategies.

In Conclusion

Ecommerce and the technological advancements facilitating it are ushering in a wave of change in the global economy. There’s no better time to tap into this growing behemoth of a business opportunity.

You now have all the knowledge required to get started. So, what are you waiting for?

Get your laptop and start brainstorming ecommerce business ideas right from your living room!