How to Launch an E-commerce Business

How to Launch an E-commerce Business

E-commerce is a highly competitive, yet equally rewarding, business area. Almost 21.8% of the world’s population buys online. In 2018, e-commerce sales accounted for 11.9% of all retail sales worldwide. Amazon alone generated $72.4B in Q4 2018. It is a vast business and today anyone can find a way into it.

Starting an e-commerce business is challenging and there are things to consider before making any final decisions. After all, you want your online store to be popular among customers and bring in profit.

Identifying a Product and Researching the Market

Come Up With an Idea

The first step of your journey into the e-commerce business launch should be the selection of products you want to sell. This is often the most challenging part for newcomers.

There are several things to consider when selecting products: Do they have high demand in the global market? Can they be easily manufactured or bought in bulk? What are the required warehousing conditions and delivery? You can either choose to resell products manufactured by other companies or create a unique offer for your customers.

Choose an industry you are interested in as you are about to invest a lot of time into planning and launching an online store. If you are not passionate about what you do, how can you expect it to be a success?

Evaluate Product Success

Research the market you want to enter and analyze the popularity of products within the market. Choose products with the potential of bringing you high profit. The factors to consider are as followed:

  • How popular are the products you want to sell?
    You don’t want to center business around products with scanty demand, do you? Google Trends, Amazon Best Sellers and eBay Top Products are the ultimate research tools. If you haven’t chosen a trending product, maybe you should reconsider your decision. A thorough product success evaluation is the first step to turning your online store into a thriving business.
  • Avoid products that sell well only during specific seasons and holidays. Such products are better to be offered only after your business becomes profitable. At the first stages, high seasonality of products will harm turnaround.
  • If you are going to manufacture your own products, consider how you can improve the already existing ones. Offer a superior product compared to your competitors to attract more buyers.
  • If you opt to manufacture your own products, create something that is not big and can be easily shipped. Avoid dealing with bulky packages.
  • How difficult is it to manufacture the product you have in mind? Keep the manufacturing process as simple as possible.

Look Up Competitors

You can’t start a business without knowing your competitors. Familiarizing with the main companies in the industry helps to create unique offers that appeal to customers. Learn as much about them as possible:

  • Determine their target audience.
  • Learn the key features of the offered products.
  • Study the set price for products. If they are placed on various marketplaces, be sure to compare all listings to come up with the best offer for your store.

Make vs. Manufacture vs. Wholesale vs. Dropship

There are a few business models to choose from. You can make your products yourself, manufacture them, purchase in bulk, or dropship.

Making products is an ideal solution for those who try to monetize a hobby. It decreases the prime cost as you create everything yourself or hire a few helpers. However, it is time-consuming and puts limitations on business scalability and product choices.

Manufacturing allows you to source the production to a third-party company. Choosing China, Taiwan, or India will lower production costs; however, you need to pick a contractor carefully. Seed funding is also required to afford to manufacture. It is an excellent option for people with unique and validated business ideas, who are ready to invest in the business upfront.

Wholesale buying is for you if you don’t want to manufacture anything and only want to focus on the business processes of an e-commerce store. Buying and reselling products from well-known and trusted companies enables you to get the business up and running quickly. However, you need to deal with inventory management and storage. Remember, if you choose such an e-commerce business model, you will become a competitor to other dozens, hundreds, or even thousands of companies that sell the very same products.

Drop shipping allows you to offer a large variety of products and eliminates expenses on shipping, storage, packaging, and delivery. You become a drop-shipper, an intermediary between your customers and suppliers. Your online store takes orders and redirects them to a drop shipping partner, who is responsible for product packaging and delivery on behalf of your company. Drop shipping makes money on the difference between consumer and volume price. You can either directly partner with a manufacturer or use a dropship aggregator.

Choosing the Right Sales Channels

Developing Your Own Website

When considering an e-commerce business, many of us think about creating an online store. Today, you don’t need to know programming languages to make it happen. Three options are available:

  • Hire an in-house team of developers. To do so, you need to invest significant funding and be willing to take the financial risk.
  • The vast majority of e-commerce businesses outsource online store development. Development outsourcing entrusts online store development to highly experienced and trusted professionals. They will help you to create an online store from scratch – come up with a logo, create an efficient design, choose the right solutions, set up integrations, and much more.
  • Using e-commerce platforms is the choice for you if your budget is limited. There are hundreds of platforms you can use to get the backbone of your online store up and running in a few hours. Some of them provide free plans with more sophisticated templates at extra charge; others have a monthly payment.

Here are some of the platforms:


Shopify is one of the most popular e-commerce platforms. First-time online store owners choose it for the ease of use, rich features, and great customer support. Depending on the subscription you choose, you will have to pay between $29 to $299 per month. Keep in mind, the less you pay for a plan, the more you spend on payments fees. The platform provides a free 14-day trial, so you can study all the features before making the final decision.


BigCommerce is another platform providing necessary tools for creating online stores. Zero transaction fee is its main benefit. The monthly plans run between $29.95 and $249.95, and you save up to 10% when paying annually.


WordPress is a well-known content management system. It is a great tool to set the basis of your website. You can choose free templates or use more personalized ones for an additional price. The business plan allows sites to upload plugins, such as WooCommerce or Ecwid, which add a shopping cart functionality to the website.

There are also other e-commerce platforms to consider. Some of them, such as Magento, require coding skills while others have built-in tools for a fast online store launch.

Selling On a Marketplace

Selling products online does not necessarily require you to set up your own store. Online marketplaces provide us with an opportunity to start up an e-commerce business with relatively low costs. There are hundreds of marketplaces out there; some are international and some work on local markets. You have a wide range of choices like Amazon, eBay, Walmart, and Etsy. However, before jumping to one of them, you need to know the pros and cons of selling on a marketplace.

Marketplace Advantages:

  • You don’t have to spend money and time on development and support of your own online store.
  • It reduces marketing costs. With your online store, you need to invest in SEO and marketing to make it popular. Marketplaces provide access to a huge user base.
  • You can sell your products worldwide.
  • Marketplaces are an additional selling channel.

Marketplace Disadvantages:

  • Marketplaces charge fees on every sale. They vary from platform to platform and you should consider it when forming prices.
  • You depend on a third-party service provider that has the power to change the pricing or listing policy at any time.
  • The best choice to consider is combining both of the above-mentioned options.
  • Create your own online store and use marketplaces as additional channels to increase sales and expand brand awareness.

Setting Up Your Business

Decide on Shipping and Customer Service

When your product is prepared and ready for purchase, you need to streamline shipping. The objective here is to decide how to handle the order processing and fulfillment to make your customers happy. You can take orders yourself or entrust it to a third-party.

If your products are small in size, like clothes and accessories, in-house order processing and fulfillment is the right choice for you. You can easily find a warehouse nearby to store items. Choose the location not far from the shipping company office to reduce costs and time for products delivery. Remember, the size of an item profoundly influences the shipping fee. Less fee – more profit.

In case the products you sell are bulky, send them to a third-party logistics company. This way, the products will be stored in a warehouse and the logistics company will pick ordered items up from the warehouse, package them and ship them out to customers on behalf of your company. However, this option is not always for up and aspiring e-commerce businesses. Some logistics companies set a minimum number of orders. If your product turnaround is, for example, less than 1K packages a month, you won’t be able to use such a service.

Another factor to consider is establishing good customer service. It is vital for e-commerce as you need to provide customers with instant assistance and have clear communication. Some problems will inevitably arise after you have your store up and running. Just remember that customers are your primary asset. Be ready to mediate conflicts, solve issues and provide customers with support.

Set Revenue Goals

Setting the right price is vital for any e-commerce business. You can’t take any chances with it. The price should not only include the manufacturing cost or bulk purchasing costs but also cover other expenses. Create a table to add all the necessary information and set specific revenue goals:

  • How much does your product cost per unit? If you manufacture your own offerings, be sure to include manufacturing costs, packaging, and delivery to your office/warehouse. The same goes for reselling products of other manufacturers.
  • What are the shipping expenses?
  • How much do e-commerce software, marketplace listings and marketing cost?

Set revenue goals based on the combined expenses for your online store. Always look for opportunities to cut costs. Every dollar saved means more money to invest in expanding your online presence.

Creating a Comprehensive Marketing Plan

Marketing is the hardest job of an e-commerce business. The main task for any aspiring online store is generating traffic. Not just any traffic, but targeted traffic – customers who are most likely to be interested in your products.

Your primary tools are Facebook and Instagram ad campaigns. The first one has over 2.32B monthly active users, while the number for Instagram is over a billion users. These two channels are efficient in acquiring your first customers and generating revenue right at the start.

Your e-commerce marketing strategy should include the following channels:

  • Content marketing – produce original and customer-centric content that caters to your goals. Your goal is making customers want to interact with you, buy from you and recommend your store.
  • Search engine optimization is vital for an online store to be recommended by a search engine like a perfect match.
  • Email marketing is still alive and efficient. What is a better way to tell your customers about limited propositions and discounts than in a neatly crafted and personalized email?
  • As already mentioned, social media marketing is the powerhouse of your marketing efforts. It helps you engage in communication with customers and boost traffic to your website.
  • Pay-per-click marketing is another tool to consider. Just don’t pour all your money into it. Create targeted ads and don’t forget about landing pages, as you want to attract users who are most likely to buy from you.

When your business does well and you can afford it, consider hiring a marketing team to bring the store to greater success.

After consistently going through the whole process described above, you will be able to launch a new e-commerce business and make it successful. Remember that starting a new online store from scratch will not happen in a matter of days. You need thorough market research, marketing strategy, revenue goals and the right e-commerce solution adjusted to the specific needs of your business.

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.