Did you know that eCommerce stores are one of the most popular options for new business owners to start?

As a small business owner, there are numerous business models and platforms for an eCommerce shop. We’ll discuss how to start an eCommerce business by sharing insights from business owners who create their own products, utilize dropshipping business models, and own print-on-demand businesses.

We provide information from print-on-demand genius Ryan Hogue, who makes $50K per month; Etsy seller Vlad Kuksenko, who started TagPup and makes $3M per year; and TikTok dropshipper Stone Ross, who has found ways to make dropshipping stores up to $75K in less than two months.

Get ready to learn how to start an eCommerce business.

What Is eCommerce?

eCommerce is an online business model that allows people to buy and sell goods or services by accepting electronic payments. IBIS World expects U.S. companies to surpass $1 trillion in revenue from eCommerce this year and expects 7.7% growth through 2027.

eCommerce businesses are typically broken down into two types:

1. Business to Business (B2B): Businesses that provide services to other businesses. They sell software, educational materials, services, and digital products.
2. Business to Consumer (B2C): Businesses that provide products and services to shoppers for personal use. These companies span all industries.

We’ve put together a comprehensive blueprint for starting a small eCommerce business. We’ll share videos, articles, and podcasts based on the most important tasks you’ll face when starting an eCommerce business from scratch.

Case Study: TagPup

Vlad Kuksenko was a graphic designer and product consultant, but he wasn’t making enough to make ends meet, so he started TagPup with just $500. He quickly became the #1 pet store on Etsy and joined the ranks of the top 1% of Etsy shops.

Now, he brings in $60K a month in revenue and has 50% profit margins. He realized his recipe to generate Etsy sales works and started testing it with friends and family who have their own online stores.

He found that he could duplicate the results with other stores and started documenting the process. Today, he runs eCommerce businesses and teaches people how to start an eCommerce business. Find out how in our interview below.

Join the UpFlip Academy to Learn eCommerce

We share the secrets to starting and growing a business to help current and aspiring entrepreneurs get better results. Learn from successful business owners like Vlad. Get started with a 10-day free trial.

How to Start an eCommerce Business

We’ll discuss a list of things needed to start a business in eCommerce. To start a small eCommerce business, you’ll need to:

1. Generate eCommerce business ideas
2. Establish market demand
3. Research products
4. Identify keywords
5. Write an eCommerce business plan
6. Choose a production strategy
7. Choose a name and logo
8. Register your eComm business
9. Get equipment and products
10. Create images and videos
11. Create your website
12. Establish a shipping strategy
13. Start marketing your eCommerce store
14. Build an email list
15. Analyze and improve your eCommerce store

How does eCommerce work? Get ready to find out!

Step 1. Generate eCommerce Business Ideas

The first step to starting an eCommerce business is brainstorming business ideas. Many eCommerce businesses do well by offering online sales of products or services that:

• People are passionate about
• Are disposable
• Pair with complementary products that are easy to produce
• Can be easily personalized

Vlad explained:

Whether you’re selling subscription boxes or digital products or starting an online mattress company, there are eCommerce business examples to get you started.

Find out the best strategies for starting an eCommerce store. We’ll show you how to make up to a million take-home by selling digital products online. Get advice from someone who has already done it!

Step 2. Establish Market Demand

Every eCommerce niche has limited potential for new customers. For instance, if you are selling customized pet collars like Tag Pup does, the target market is limited to pet owners.

You need to know the size of the target audience and segment revenue to decide whether it’s worth entering the market. Search for industry reports from companies like IBIS World or industry organizations to learn about the market demand for your business idea.

Step 3. Research Products

Customers are looking for products that solve a problem or that excite them. That means you need to understand what products are in high demand. You also need to have data on the products, including the number of sales, revenue, and profit margins of products. You need to have an idea of how to add more products as you go, too.

Your product research should go through a funnel with four steps:

1. Category: How much traffic and competition is there? Are there lots of keyword variations?
2. General Product Information: Who is the customer and what do they need?
3. Product Specific: What best-selling product can you offer?
4. Product Details: What are the specific natures of the individual products that you will be selling?

Vlad uses the example of creating a birthday party store: You might start off thinking of all the things that people buy for birthdays, narrow that down to cake toppers, and then come up with a very specific type of cake topper that you can make within your budget.

Tools like eRank, Everbee, and Google Trends are just some of the sites you can use to perform your research. Check out some of the most popular Amazon product research tools.

Step 4. Identify Keywords

You’ll want to look at top-performing results for the product to see what keywords people are using. Keywords are what customers are using in search engines to find the product they are looking for. There are different types of keywords:

1. Item Specific: Baseball Cap
2. Descriptive: Red Baseball Cap
3. Requirement: Red Cincinnati Baseball Cap
4. Context: Red Cincinnati Baseball Cap For Men
5. Synonyms: Red Cincinnati Red Ball Cap

As you go from the most broad keyword through descriptive, requirements, and contextual, you will narrow the people who see the product but increase the relevancy, clickthroughs, and conversions.

Don’t forget to look at search suggestions and tags. You can also use ChatGPT to look for synonyms for Cap or Red—or whatever keywords are relevant to your eCommerce offering.

Step 5. Write An eCommerce Business Plan

According to Harvard Business Review, entrepreneurs who write a business plan are 16% more likely to be successful. That’s not surprising because your eCommerce business plan will guide your decision-making and can help you get financing.

At a minimum, a business plan for an eCommerce business should explain:

1. How you came up with your eCommerce business idea
2. The problem the new online business solves
3. Why your eCommerce business idea is the solution
4. A detailed overview of the eCommerce space and how you’ll fit into it
5. Your organizational structure
6. How the e-business will operate
7. How you will drive traffic to your website and guide people along the customer journey
8. Your progress as an eCommerce entrepreneur
9. Your budget and what you’ll spend it on
10. Your funding needs, how you’ll get them, and what you’ll spend any borrowed money on

To learn more about writing a solid eCommerce business plan, check out our how to write a business plan guide.

Step 6. Choose an eCommerce Business Model

An eCommerce business will typically involve selling products or services. There are five basic eCommerce business models that business owners use:

1. Start a digital product eCommerce store
2. Sell physical products from other companies
3. Sell your own products
4. Print-on-Demand
5. Start an affiliate marketing business

Keep reading to learn more about each of the eCommerce business models to decide which is right for you.

Start a Digital Product eCommerce Store

If you want to start an eCommerce business, you might want to consider selling online courses or other digital products. Companies that use the “build once, sell forever” strategy can be highly profitable.

Check out our interview with Jacques Hopkins, who started an online course to help customers learn to play the piano. He went from a $150 investment to making $40K a month.

Sell Physical Products From Other Businesses

This type of eCommerce business focuses on selling products or services that are purchased from a distributor. You’ll need enough space to hold inventory for products to sell. Stone Ross offered an alternative:

Check out our interview about how he’s made more than $3 million with TikTok dropshipping.

He teaches his strategies for success in the UpFlip Academy.

Sell Your Own Products

If you have the mind of an inventor or are a creator by nature, this is the business model you’ll want to use. Jason Hernandez, creator of Pooch Selfie, has made over $250K.

Some eCommerce business ideas that use this model include:

• Candle businesses
• T-shirt businesses
• Etsy Handmade businesses (like TagPup!)

Check out our blog about how to create a product for more information.

Print-on-Demand

One of the easiest ways of starting an eCommerce business is by using a print-on-demand company like Printful. In this business model, the eCommerce process is really simple and consists of:

1. Creating artwork
2. Choosing the products you want to sell
3. Adding your artwork to the products
4. Setting the markup
5. Integrating Printful with your eCommerce platform(s)

When you sell online, Printful prints the product(s) and ships them to the customer.

This is the easiest option to start an eCommerce business because they handle everything related to the production and shipping of the products.

You can focus on marketing and other tasks that help grow your eCommerce store into a successful small business. If you have tech, marketing, and design skills, this is the best online business to start.

Find out more about print-on-demand to learn about how Ryan Hogue makes over $50K monthly using Amazon Merch print-on-demand services.

Pro Tip: See our picks for the best print-on-demand companies and print-on-demand platforms to help you decide which options are right for you.

Start an Affiliate Marketing Business

This is the eCommerce business to start if you’ve ever wondered, “How do I start an eCommerce business with no money?”

Affiliate marketing is similar to eCommerce but is typically used by tech companies for purposes of growing their sales force at a low cost.

Basically, you recommend the products or services to other people or companies and get a percentage of each sale you generate.

Tech Radar has a great list of affiliate marketing opportunities for beginners. Check it out to try some for yourself.

Connective eCommerce

The best way to sell something is to connect with people. An example of eCommerce business operations that use this strategy is eCom Babes, the company that originated the term connective commerce. This strategy is focused on three principles:

1. Use templates instead of hiring developers.
2. Don’t store inventory or ship it yourself.
3. Drive traffic with FREE marketing strategies.

Keep reading for more info on how to start an online eCommerce business.

Step 7. Choose an eCommerce Name and Logo

You’ll need to select an eCommerce business name. Keep in mind that the name you choose for your eCommerce business will impact the following aspects of your operations:

• Trademarks
• Registration
• Domain name (the home page of your eCommerce website)
• Social media accounts
• Packaging
• eCommerce marketing

Step 8. How to Register Your Online Business

You need to establish the legal structure for your eCommerce business.

For best results, hire legal representation that has experience starting a business, like an attorney, accountant, or tax specialist.

They’ll help you get your business started quickly so you can focus on getting your store up and running.

Licenses, Permits, and Tax Forms

Each location requires different licenses, permits, and tax forms. Go to a SBA local office to identify what your business needs. Keep reading for information on different legal structures.

Sole Proprietorship

A sole proprietorship is the easiest way to begin online selling, but the structure doesn’t protect the owner’s personal assets from legal issues.

That means if something goes wrong, you could lose both your store and your home.

As soon as customer purchases pick up, I’d recommend converting the business to an LLC.

Limited Liability Company

An LLC is the most common business structure used in the United States because the company protects the owner’s personal assets. An LLC requires a document called an operating agreement, which is formed with the Secretary of State.

Pro Tip: If these types of business structures don’t sound like the right fit for your product idea, check out other business types.

EIN

Every business operating in the United States needs an employer identification number. It’s like a social security number for your business.

Apply for it on the IRS’s website. It’s used on tax forms when filing taxes and to link employees’ pay to the proper employer.

State/Local Business Licenses

Research license requirements at the state and local levels to identify what your business needs. Each location is different and will have different requirements. The Small Business Administration is the best resource for finding your local business offices.

Step 9. Get Equipment and Products

Depending on which eCommerce business idea and model you use, your business strategy might require ordering equipment, products, and shipping materials.

Make sure you find great suppliers for any materials and products you have to order. Even if your business website will be a dropshipping or print-on-demand company, you may want to order some products to check printing quality, shipping costs, and delivery time.

Plus, having the products you’re selling in person will allow you to create better photos and videos that will make you stand out from competitors.

In one of our interviews with him, Vlad spent nearly an hour discussing how to manufacture products yourself or work with dropshippers and print-on-demand companies.

He told us:

He suggests checking out WeEngrave for engraving.

Step 10. Create Images and Videos

The images and videos you use on your eCommerce website and social media accounts will play a major part in your digital marketing and sales strategy. They will help you reach your target customers.

The better and more fun your marketing efforts are, the more likely potential customers will give you a chance. Vlad explained:

He also suggests using a turntable to create a video without moving your camera.

You should create thumbnails that make it easier for individual customers to establish that you offer what they need, too. Sometimes that might mean showing multiple variations of the product or including a model.

Encouraging customers to share their photos can help you market your services online and provide an easy way to get marketing materials for free. Make sure to ask permission to use their photos on your website.

Step 11. Set Up An eCommerce Website

Selling products online is a complicated process. You’ll need to create your own eCommerce store using an eCommerce website like:

• Amazon eCommerce: Use Sell on Amazon to get your online eCommerce business on the largest eCommerce website.
• WooCommerce: If you have used WordPress before, you might find WooCommerce the easiest place to create your own website.
• Shopify: Shopify is one of the easiest-to-use online store platforms on the market.
• Squarespace: Squarespace is another operator-owned platform.
• Etsy: Start an Etsy store to reach a target audience looking for personalized, vintage, or handmade products.

Vlad explained:

Step 12. Create A Shipping Strategy

There are a few ways to sell products online and ship them to your customer base.

Unfortunately, an online store has to compete with Amazon Prime membership, which guarantees 2-day shipping for any products stored in Amazon fulfillment centers. That means a successful brand needs to either:

1. Offer online customers similar results or
2. Manage customer expectations

That’s why many people suggest starting your new business on Amazon or using another fulfillment center to handle shipping products. Then you don’t have to compete with the largest online marketplace because you’re part of it.

If you choose to handle shipping independently, I strongly suggest you read this article from a fulfillment center about what goes into shipping.

You’ll need to decide how to:

• Manage shipping label printing
• Package products
• Manage shipping costs

Most business owners will prefer to let someone else manage these tasks so they can focus on growing their businesses.

Step 13. Begin eCommerce Site Marketing

Now it’s time to start using digital marketing for your own business. I should warn you that eCommerce marketing is an extraordinarily competitive field. Given that all competing eCommerce businesses are trying to sell to similar customers online, you’ll have to stand out to your target audience in order to make sales.

Companies use a ton of different marketing strategies. A successful business will often test different strategies to find what works best for them, then focus on that marketing segment. Strategies used in eCommerce marketing include:

• Social media organic marketing
• Paid ads
• Search engine optimization (SEO)
• Affiliate marketing
• Influencer marketing
• Content creation
• Public relations

Social Media Marketing

Everyone says that if you are looking for future customers the place to be is TikTok. It’s experiencing rapid growth, and small business owners can’t really afford to ignore it as part of their marketing strategy.

Whatever route you take, make sure your eCommerce marketing focuses on creating value for customers. Nobody wants to feel like they are being pressured to purchase new product ideas.

Pro Tip: For a great overview of where to reach different demographics, check out this Sprout Social overview.

Paid Ads

Advertising your eCommerce business using paid ads can be highly profitable.

If you’re going to run paid ads for your eCommerce business, hiring an advertising agency can be highly beneficial because they will already know how to create successful eCommerce business ads.

If you run your eCommerce ads yourself, I recommend taking training from the platform you’ll be using.

Search Engine Optimization (SEO)

Search engine optimization is focused on making your eCommerce business easy for both people and search engines to understand. When you do this well, your website ranks higher in search engine results.

Here are some SEO best practices:

• Use keyword research tools like Ahrefs, Google Trends, or Keyword Surfer.
• Drive your content strategy with keywords.
• Specify metadata for pictures and websites. Moz has a great article on this.
• Limit each product page’s size to less than 2 MB.
• Limit load time to less than 3 seconds.

Affiliate Marketing

Affiliate marketing is essentially outsourcing your sales department. You offer other marketers the ability to refer customers in exchange for a commission from each sale.

You’ll need to create messaging and creative-use guides to specify how affiliates can and cannot market your eCommerce business. You may also want to create content of your own and have them share it. OptIn Monster explains how to set up an affiliate marketing program.

Influencer Marketing

Hiring celebrities or people who are well-known within your niche to promote your products is another form of eCommerce marketing that can help an online store sell more products. BigCommerce found that 89% of businesses get comparable or better results from eCommerce influencers than other forms of marketing.

You’ll need to:

• Reach out to potential influencers.
• Offer them free products.
• Pay a fee for sharing your eCommerce products.
• Use analytics to monitor posts.

Learn more about how to find influencers in Alexa Blogs.

Jason of Pooch Selfie stressed that:

Content Creation

Content creation includes blog posts, videos, memes, and written content on your website or social media channels. Content creation helps eCommerce customers get to know you, then trust you.

Pro Tip: Consider reading our blog about starting an advertising business—many of the skills for eCommerce success are the same for advertising.

Step 14. Build An Email List

Data and brand image are the two most valuable parts of many businesses. Your customer list is valuable because it gives you insights into your customers, what they like, where they live, and how much they spend.

In addition, it also has one of the best returns when it comes to digital marketing strategies. You can use email and text messaging to develop loyal customers by extending promotional offers, providing new customer discounts, hosting referral programs, and more.

It all starts by collecting the emails of visitors to your eCommerce store by offering a discount. Once you’ve collected an email, you’ll want to:

1. Save the email in a database.
2. Send the customer automated and personalized emails routinely.
3. Track results using analytics.

I’ve used SendGrid and Mailchimp, but you’ll find additional ideas in this guide on the best email marketing software. Big Commerce also has a great guide on email marketing strategy.

Step 15. Analyze And Improve Your eCommerce Store

Every eCommerce website builder will have its own analytics, as do many platforms like Etsy and Amazon. You’ll want to get familiar with the data your builder or host provides.

They will normally provide key performance indicators that will help you identify how to better manage your eCommerce website. You’ll want to track things like:

• Impressions: Number of people who see your products on the search engine or website
• Product Views: Number of people who went to the product page
• Favorites: Number of people who marked a product to come back to
• Orders: Number of orders
• Completed Orders: Number of orders where the product has been shipped
• Delivered Orders: Number of orders customers have received
• Revenue: The amount of earnings you’ve made
• Profit: The amount you make after costs
• Traffic Source: Where your traffic comes from

How Much Does It Cost to Start an eCommerce Business?

Starting an eCommerce company doesn’t have to cost a fortune. We’ve talked to many online store business owners, and the costs for an eCommerce startup range from $1,000 to $250,000.

In our interview with Marcus Harvey from Portland Gear, he suggested beginners use the following low-cost plan to start an eCommerce business:

• Open a store on Shopify.
• Select a print-on-demand company. (See our picks for best POD options for inspiration!)
• Budget for social media marketing that costs less than $500 a month.

If you’re short on cash, another option is securing startup capital through crowdsourcing. Jason of Pooch Selfie used Kickstarter to raise approximately $7,000 for an injection molding tool.

He told us:

Keep reading for more ideas on securing funds.

How to Get Funding for an eCommerce Site

Common funding paths include:

• Personal funds, savings, 401K loans
• Loans from family or friends
• Crowdfunding
• Credit cards
• Business loans
• Home equity loans
• Rollover as Business Start-ups (ROBS), which are similar to 401K loans, but with different requirements

I think it’s worth noting that the majority of these options will involve contracts, and you should search “corporate lawyers near me” to ensure you approach these legal requirements with someone knowledgeable on your team.

Pro Tip: Check out our article on business funding for more information on how to fund your eCommerce business idea.

eCommerce Frequently Asked Questions

How do I start an eCommerce business with no money?

Most eCommerce business platforms offer a free trial period to get started. Search for the free trial and start a new eCommerce business idea today. Affiliate marketing and digital products are some of the easiest eCommerce business ideas to get started for free.

How many eCommerce stores are there?

According to IBIS World, there were approximately 341,000 eCommerce sites in the United States in 2022. That number is expected to grow by 10.9% each year.

How many eCommerce businesses fail?

There are statistics that say 80 to 90% of eCommerce businesses fail, but based on an analysis of the startups in IBIS World reports, this figure is too high. It’s more likely that 33% to 60% fail in the first 5 years.

Who are the major players in eCommerce?

The top four eCommerce businesses account for 27% of the market’s revenue and 33% of its profit. These are the businesses that set the standard for online stores:

• Amazon: $156.4 billion in revenue and $10.8 billion in profit
• Walmart: $33.4 billion in revenue and nearly $2 billion in profit
• Apple: $31.3 billion in revenue and $5.3 billion in profit
• eBay: $5.5 billion in revenue and $376.9 million in profit

Where can I get more eCommerce industry information?

If you’re looking for the best information impacting eComm businesses, check out these resources:

• Internet Merchants Association
• Internet Society
• United States Census Bureau

What companies make the best software for eCommerce businesses?

If you’re looking for useful software for your eCommerce business, check out some of the options below:

• Klaviyo: Email and SMS marketing automation platform
• Helium 10: Useful software for Amazon FBA and Walmart sellers
• Jungle Scout: Resources and data for Amazon sellers
• QuickBooks: Financial management software for all types of small businesses
• Shopify: Leading eCommerce platform
• WordPress: Free website building and hosting platform ideal for eCommerce businesses

Start Selling Products in Your Online Store!

We’ve covered the basics, from What does eCommerce mean? to how to start an eCommerce store. We’ve given you all the tools you need to learn while researching how to start a successful eCommerce business. Hopefully, one day we’ll get to feature your product or store in an Upflip blog, video, or podcast!

What would you like to sell online?