How to Start an Ecommerce Business from Scratch

How to Start an E-commerce Business from Scratch

Ready to start the next Amazon? Or maybe just a side project for supplemental income? We're here to help you get started.

E-commerce continues to take over the world of retail. In the second quarter of 2021 alone, for every five dollars spent on retail, one dollar was spent exclusively with online retailers this past quarter. It’s time to get into the game yourself.

Here’s the push you need to finally start that e-commerce business. We’ll walk you through step by step how to go from nothing to something to something big in the e-commerce world. 

Using a 30-60-90 day framework, this guide shows you how to start an e-commerce business from scratch. The first month involves research and planning. The second step is to make a tangible product. And the third phase includes marketing and running the business. 

If you’re looking for a place to start, look no further. Read on for everything you need to know about creating an e-commerce brand.  

First 30 days: Research and planning

After you’ve decided to start an online business, the research begins. Take time to understand the industry and put thought into each aspect of your product. These five steps will help guide you down the right path.

1. Choose your product

You might have landed here because you already have a great idea. Or maybe you just want to get in on the e-commerce action and don’t have a product in mind. For those of you without a product in mind, start here. 

Think about what products you love. Dive into your passions and creativity. As yourself a few questions to get into the right mindset: 

  • What products can you not live without? 
  • What is a unique talent or interest of yours? 
  • Is there something missing from the current e-commerce landscape? 
  • Or maybe it’s just missing your touch?

It’s a simple philosophy, but: Sell what you know. Look around your home for products or gadgets that you already know and understand. Get confident. Think about something you know better than anyone else. Write down the compliments and praises you often hear about yourself. Inspiration will spark. 

2. Find a niche

Once you’ve selected the actual product, narrow in on exactly what will make it special. “Niche down” as they say. This could entail picking a particular customer-base or target audience with specific tastes. Or maybe it’s more about the product quality. The differentiator may even just be you and your vision.  

The more specific you get, the better—at least at this stage. Don’t worry about getting too weighed down by a super-specific niche. You’re still very early in the game, inevitably things will change. But for now, it’ll make planning and researching much easier to have a niche in mind. If you need ideas, there’s plenty of articles out there around ecommerce business ideas.

In one example, BigCommerce points out the rise of consumers looking for “vegan makeup.” It’s a specific product line that Aurum Rose was able to create an entire e-commerce brand around. 

3. Research competition  

Now that you know what you’re planning to sell and why it will be special, the next step is to research similar companies. A simple Google search should give you a rundown of the most popular online stores in your genre. 

Note which e-commerce platform your competition is using. Look at their marketing tactics. Follow them on social media. Peruse their websites to get ideas or to understand how their operations work. 

You can even look to the behemoths like Amazon and Walmart to see how they present and price items similar to yours. Take in all the research at this phase so you can easily reference it as you continue to build your store.  

4. Pick a name

Time to get creative and pick a name for your company. Take your competitors into account. What names are working for them? Why? 

It might make sense to pick a very obvious name. It could help with SEO (more on that later) and reduce customer confusion. But no one knows what a “Google” is and they’ve done pretty well for themselves. 

Have fun and come up with a list of safe to risky names. Ask your friends or peers to weigh in. Search online for the names to see if the domain name or brand name is taken already or how much the domain could cost.

5. Select your e-commerce platform

Small business owners rely heavily on their tools. Don’t underestimate the importance of selecting the best ecommerce platform for your new store. Set aside at least a week to devote to researching platforms. 

Look at customer reviews, case studies, and talk directly to other store owners. Figure out what you’ll need (and what you won’t) before making a decision. Keep price point in mind. Specifically, look at all their plans—even the bigger ones you don’t need yet. You might need to scale up as you grow, make sure the price point is sustainable. 

60 days: Incorporating and launching

One month of prep down. Now, let’s tackle the next phase of your e-commerce venture. By day sixty, you’ll want to have all these plans in order to launch your business. 

Business registration, business plan, and financials 

With your product in mind, you can register your business with the appropriate authorities. This will enable you to get a tax identification number. You may want to set up an LLC or form some sort of partnership as well if you’re working with a partner or group.   

Registering your company identifies your intent and helps you file taxes appropriately when the time comes. You’ll also be able to use your registration number to sign up for services or get special rates for software. 

A business plan documents your intentions, goals, and deadlines for your online store. It includes a mission statement, stages of development, and means of accomplishing your goals. Financial information, customer data, operation details, and marketing strategies should all be outlined. 

Create a rough sketch of your expenses. Find out and compare prices for different manufacturers. Account for any software, tools, or hiring needs. Don’t forget website, marketing, and creative expenses.  

This list of financials will help you understand how much revenue you can expect to generate. You can use this information to pitch your business to potential investors. 

Logo, website design, and website build 

Creating a logo should be a fun process. Let your creativity fly and find something that speaks to you and your brand. This will be the face of your company. Focus on colors and shapes—everything matters. 

Use online resources, like these popular freelancing sites, to find great talent at fair prices to help your vision come to life:

  • Upwork: Connecting businesses with freelancers, independent talent, and agencies around the globe.
  • Fiverr: Connects businesses with freelancers offering digital services in 300+ categories.
  • Find & hire top freelancers, web developers & designers inexpensively.

Look for website designers and builders who have worked with e-commerce stores previously. Make sure your website developer is familiar with your e-commerce platform. Send them examples of similar sites to make sure your vision aligns. 

Inventory and product plans

This part of the equation requires an immersive understanding of your product line and operations. You’ll need to figure out exactly how to manufacture your product then get it into the hands of your customers. 

Start with these initial questions to understand where and how your products will be made: 

  • Are you making them yourself at home? 
  • Do you need a warehouse? 
  • Are you planning to drop ship
  • What third-party companies will you work with and what are their requirements? 
  • Does your manufacturer have minimum order restrictions? 

Build models and projections based on various plans. Look at everything with a discriminatory eye to figure out which plan makes the most sense for your new company. 

Take it slow at first. Pick the plan that requires the least amount of effort and money. You can always ramp up.

90 days: Promoting and running

With the biggest hurdle of figuring out production and shipping out of the way, you can move on to maintaining operations and hyping up your brand. These next thirty days of building your e-commerce business involve getting new customers and keeping your current ones happy. This will help your business grow into an e-commerce household name.  

Sales and marketing channels

Sales and marketing are constantly moving targets. As a young business, dip your toes into the waters of a few strategies. Test and experiment with different channels or creatives. Then slowly move forward with whatever is working—and leave behind what’s not. 

These five sales and marketing channels are the most common for e-commerce stores:  

1. SEO

SEO (Search engine optimization) uses organic search to drive potential customers to your website. The goal is to get your website recognized by popular search engines for relevant keywords. When customers search for a product that you sell, you want the search engine to show your company as a result. 

Getting your website to show up as a top Google result is not easy, though. If you’re not familiar with SEO, there’s an entire industry devoted to it now. It’s a sub-sector of marketing that’s very popular with small businesses. If you do it well, you can drive a lot of traffic without spending very much money. 

2. Paid social campaigns 

Paid social media campaigns boost up your social creatives by showing them to more people. You can select which audiences to show a campaign too. This furthers the likelihood that your social media reaches the right customers. 

3. Paid advertising

Paid advertising involves creating specific content meant for drawing in new customers to your business. Paid ad placement ranges from more traditional platforms with ads (like TV or print) to new digital mediums (Facebook or Google).

4. Display ads

Display advertising uses new digital mediums (like websites, apps, or social media) to show pop-up ads for a business. You can create specific assets using text, images, or video to sell your brand on other websites where you might find your typical customer.

5. Partnerships

Partnerships allow you to partner with a relevant influencer or company to promote both your business and their own interests. It’s a mutually beneficial marketing tactic that allows both parties to reach new audiences. 

Set up your customer service platform

Great customer service directly correlates to e-commerce success. In fact, 84% of organizations working to improve customer service report an increase in revenue.

1. Pick an inbox that integrates with your e-commerce store

Your first priority in evaluating customer support tools should be the shared inbox. A shared inbox allows your team to keep up with customer requests and stay organized. 

For e-commerce specifically, make sure your inbox offers an integration with your store’s platform to streamline your workflow. Tracking and collecting all the interactions a customer has with your brand in one place will pay dividends.

An integration with your e-commerce platform allows support reps to see a total customer breakdown: Recent purchases, previous chats or calls, links to social media accounts, etc. Agents can respond quicker, and with more context, to every inquiry.

Other helpful help-desk features include:

  • Personalized folders for agents or teams
  • Priority folders sorted by severity of the request
  • Channel-based folders to separate submission sources
  • Folders for starred conversations you want to pay attention to
  • Time-based folders so nothing, and nobody, falls through the cracks

2. Make self-service (a knowledge base) your e-commerce frontline

A knowledge base empowers prospective customers to make informed purchases by providing detailed answers to common questions. After they make a purchase, self-service reduces support volume and increases customer satisfaction.

Why? Because online shoppers genuinely want to help themselves

To do this, the first step is ensuring you have a knowledge base. Then, keep your help center well organized—with clear sections and tutorials—so customers can easily find what they’re looking for.

Building a solid knowledge base saves both your customers and your customer service team’s time. Make sure that all relevant information (faqs, deliveries, return policy, etc.) is easy to find and eliminate a step in providing answers to your customers’ questions.

3. Measure and optimize key metrics through smart reporting

You should be able to measure a handful of customer-related key-performance indicators (KPIs) within your helpdesk. For e-commerce, you’ll want to track metrics like customer happiness, total conversations per day, and tag insights.

Aim to reduce total conversations with a comprehensive knowledge base and website. See if you can improve customer happiness by personalizing responses or reducing response time. And encourage your team to tag trending topics as they see them, so you can alter the product or create a new knowledge base article.

Lastly, combine and monitor bottom-line metrics—like retention, repeat orders, and onsite reviews and rating—alongside your service-specific reporting.

4. Automate everything you can, without losing the personal touch

Automation is the secret sauce of good customer support. Done right, it allows your team to engage on a more personal level with more of your customers.

How? Most likely, you already automate a host of transaction messages: Order confirmations, receipts, and shipping notifications.

What you might not be automating are all the one-off or recurring conversations your customers send when they hit a snag. Common, low-value tasks—like “Where’s my order?” or “How do I return this?”—should likewise be automated so that your support reps can focus on more challenging cases.

But don’t overlook the obvious: Letting customers know you got their request and that you’re on it. During a recent study of ~1,000 small, medium, and large companies across the globe:

  • 62% did not respond to customer service emails
  • 90% did not acknowledge an email had been received
  • 97% did not follow up with their customers are the first email

The easiest way to avoid those pitfalls is to set up a personalized auto-reply that, instead of reading like bot-inspired gobbledygook…

Reads like one human talking to another, while still being honest that it’s an “automatic reply”…

You can even set up canned replies for common conversations that you can add, edit, and send with just a few clicks:

Keep these replies creative, thoughtful, and in your brand’s voice. Just because it’s automated doesn’t mean it needs to sound like a robot.

5. Meet your e-commerce customers on the channels they prefer

Today’s customers have certain assumptions when it comes to communication. Online shoppers expect to be able to connect with their favorite brands over social media, email, real-time messaging, offline support channels, and phone calls.

But keeping up with a ton of different channels can be a huge challenge and hurt your team’s response time. Rather than forcing an agent to stop what they’re doing and check social media every day (or hour), funnel all your communications through the inbox with integrations.

No missed messages. And no wasted time moving between platforms.

When you proactively listen to your customers’ conversations, whether they happen within your own customer service email channel or through external platforms, you can better serve their needs.

Improve customer retention

In “The Economics of E-Loyalty,” Frederick F. Reichheld and Phil Schefter found that customer acquisition costs are especially high for online retailers, costing 20-40% more than traditional retail stores. 

But there’s good news. 

Repeat customers spend more than twice as much after 24 months. They go on to say that customers become more loyal to an online brand as well, often referring the store to new customers. 

It makes sense that a customer lifecycle chart for e-commerce looks something like this:

Customer retention is an undeniable factor for growth and revenue. From day one, start to build relationships with your customers that encourage loyalty and repeat buying.

Here are fifteen ways to improve customer retention in e-commerce:  

  1.  Provide proactive customer support
  2.  Reduce customer effort
  3.  Educate your customers
  4.  Make it easy to reach you
  5.  Regularly send and evaluate Net Promoter Score (NPS) surveys
  6.  Surprise customers with delightful experiences 
  7.  Reinforce your value
  8.  Deliver excellent customer service
  9.  Review CSAT scores and incorporate feedback
  10.  Go above and beyond with onboarding
  11.  Delineate channels for acquisition vs retention 
  12.  Handle angry customers with care 
  13.  Automate retention messages
  14.  Take advantage of thoughtful upsells
  15.  Offer e-commerce discounts

When you master not just attracting customers, but retaining them, it sets a solid foundation for your entire organization’s growth. 

FAQs for starting an e-commerce business

Still have a few lingering questions? Starting your own e-commerce business is a big deal (and very exciting!), so we left no stone unturned. 

Here’s a list of some more commonly asked questions and answers about starting an e-commerce business from scratch. 

How do I start an e-commerce business with no money?

For those without capital, you can easily look at on-demand or drop shipping options for your e-commerce store. These models allow you to work with a third-party manufacturer who produces your product after customers have already purchased it. 

You’ll save money and time by not having to store your own inventory. It’s a much lower risk and doesn’t involve much initial investment.

Is starting an e-commerce business worth it?

The return on investment (ROI) for e-commerce ventures varies, as with all businesses, but it is a relatively lower risk than starting a more traditional business. With e-commerce platforms that make it easy to sell and manage your products, you can essentially manage your entire business from a computer. 

E-commerce as an industry is certainly poised for more growth. With nearly 20% of all sales being made online (and rising every year), you can feel safe investing in an online store. 

Is e-commerce profitable?

For those who have found success in the e-commerce world, the answer to this question is a resounding yes. In the first half of 2021, e-commerce businesses generated a whopping $408.51 billion

It’s impossible to tell the future, but there’s certainly money to be made in e-commerce. By starting with a small investment and experimenting with product and marketing strategies, e-commerce can definitely be a profitable business. 

What are the steps to getting started with e-commerce?

Here’s a roundup of all the steps we mentioned to get you started with your e-commerce business. 

By following this 30-60-90 day plan, you’ll be on your way to creating a powerhouse e-commerce store in just a few months. Take it one step at a time and bake in some extra time for brainstorming or pivoting.

E-commerce is a constantly evolving and growing business. Tap into your sense of adventure, patience, and creativity to build a strong foundation and create a brand people will love for years to come.

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