How to Start an Ecommerce Business – A Beginner’s Guide

Starting an Ecommerce Business can seem quite daunting and there are many different things to think about and that is why I created this beginner’s guide to help you get started the right way.

Before I get started, if you have come here looking for a list of profitable products to sell online, then you are going to be disappointed. This is a post for people who want to build a successful ecommerce business, not just make a quick profit on some trending products!

Step 1: Choose A Niche

Choose Your Niche

You probably have a good idea of what you want to sell but when starting out, but it is always better to think bigger than just the product and think about the niche you want your business to be in. There are many benefits to being a niche focused ecommerce business, including:

  1. It is easier to rank in search engines
  2. Reaching your target audience is much easier
  3. You can plan on how you will grow your business by expanding within your chosen niche

Even the world’s biggest retailer started out within a niche as a book seller and when the business grew, they were able to expand into new areas.

Don’t Chase the Money

This is a big mistake that many people make when they are trying to find the perfect niche. If you are solely focused on finding a niche that will generate you the most profit, then you will probably spend a long time looking and may not even find the perfect, profitable niche.

Yes money is important and you want your business to be profitable and successful but building an ecommerce business purely on financial motive isn’t going to give you the drive to succeed, especially when things get tough.

Building an ecommerce business isn’t easy, it takes a lot of hard work, time and dedication. So you need something to get you out of bed in the morning and give you that determination to give your all for the rest of the day.

Play to Your Strengths

Do you have any hobbies? passions? or areas of expertise?

The reason why I say this, is because it is always better to start a business in an niche you know about or are passionate about. Your passion and knowledge will soon start to show itself in your business, from the way you write your product descriptions and website content to how you answer customer enquiries.

In many cases, it also plays out that you (with your passion and knowledge) are the reason why people want to deal with you and your business. This means that if you do it right, you can build up a loyal customer base and get what every business wants, a word of mouth recommendation!

You are also more likely to continue learning and growing your knowledge so that you and your business are the best that they can be. Many of the small niche business owners that I know, love what they do and it is what gives them that drive to do it day in day out, even when things get a bit tough.

Is There a Market for it? and How Big is it?

The FIRST thing you need to do is to establish whether there is a market out there for your business and also how big that market is.

To find out if there is a market out there, you need to do some research. For this, Google can be your best friend as they have a range of tools that can help you see what people are searching for. Tools such as keyword planner, google suggested searches (the options google show you when you start typing in the search bar) and google related searches (the ones that appear at the bottom of the search page).

Suggested searches and related searches will show you that there are people out there looking for what you are thinking of selling and the keyword planner will give you an idea as to how many people are searching for it. Just be aware that googles numbers aren’t always that accurate!

How Easy is it to Reach your Target Market?

So you have established that there is a market for your niche products/services. Now you need to look at how easy it is to reach that audience.

Once again, Google is your friend as you can type in search queries and check out your competition. How many competitors are there? Are they missing out on opportunities when it comes to digital marketing, social media or SEO?

This may take some time but it is worth the investment. You may see that one or two companies are really strong but everyone else is average at best, if this is the case, then there are opportunities to become at minimum become to second or third best business in the marketplace.

When it comes to reaching your audience, there are so many opportunities out there that the bigger companies are missing. One of the best is to get involved with Facebook groups or forums that are targeted at your chosen niche.

By getting involved, offering great advice and at appropriate times slipping in links to your site and providing members with excellent service, you can soon build up a really good customer base. I have seen this happen many times and have also done it myself.

Step 2: Choose Your Products

Choose Your Products

Once you have decided on which niche you want to go for, you then need to start thinking about your product selection. You may have chosen the perfect niche but if your product selection isn’t right, then you won’t be going anywhere fast!

Throughout my time selling online, I noticed that there were two elements that would determine whether or not a product would be successful.

Some simple yet important advice! When you are doing product research, don’t listen to people or ‘guru’s’ who know exactly what will sell! Simply because if they know all this, then why aren’t they keeping that information to themselves and making millions selling them?

The simple answer is, they probably don’t know or they are just trying to sell you something. This is because there are so many different industries and niches, that no-one can know about them all. You are much better off doing research into your market and figure it out for yourself what will sell.

Does the Product Solve a Problem?

This is something you have probably read lots of times when researching how to find products to sell, but it is very true.

I think of this as someone needs something and I can use myself as a good example here. The lighting in my YouTube videos was pretty rubbish as I was using natural daylight and here in the UK, it isn’t exactly a reliable light source! So I needed to buy some lights to improve the quality of my videos and I searched for a product that would solve this problem.

Some of the most successful businesses are built on this principle. A builders merchant is a great example of this as pretty much everything that they sell solves a problem, from building materials to fixtures, fittings and tools. They all solve a problem.

A good way to find products that solve problems is to think about yourself, what problems have you had that you have struggled to find a solution for? You can also extend this to your friends and family and once you have a list of problems, you want to find out if you could design or source a product that would solve them.

You can use this as constant product research as there are always going to be problems that people face and if you can provide a product to solve it, then you have got yourself a business!

Does it Satisfy Someone’s Desire?

The problem is though, that not all product really solve problems and that is why I think there is a second point to this and that is satisfying someone’s desire.

I experienced this first hand as I was a online jewellery retailer for 7 years and while some products solved a problem, the large majority of what I sold really didn’t! That is why desire very much applies to none essential and luxury goods.

Let me give you a couple of examples:

Why would someone buy a Ferrari 458 over a Ford Focus?

Because the Ford Focus is actually a better solution for transporting people and goods around, it is easier to get into and has more storage capacity and that is the problem that most people need a car to solve. But what if someone wants to go fast? wants to own an Italian supercar? They don’t need a Ferrari but they want a Ferrari!

Why would someone buy a Rolex Submariner over a digital Casio watch?

If you need something to wear on your wrist and tell you the time, the Casio is actually the better choice as they keep better time than a Rolex. But what if someone wants a Swiss made watch? wants a beautifully designed mechanical movement? They don’t need these things in a watch but they want them!

I hope you understand what I mean now by satisfying someone’s desire and this same can be applied to anything from designer clothing to jewellery to lingerie.

Many luxury brands create the desire for their products in their marketing, they know people don’t need what they are selling but they make people want it. This is the big difference between the two and you have to run your business accordingly, especially your marketing.

There HAS to be a Demand for it!

There is a difference between there being a market for your niche and there being demand for your products. If your products don’t answer one of the two questions above, then there isn’t going to be any demand for it.

You also need to established how big the demand for the products is as well. If the demand is too small, then it might not be economical or profitable for you to stock that particular product.

To find out how much demand there is for the products, you want to go back and do more keyword research. But instead of researching the niche in general, you want to focus it solely on the products and the numbers you see will soon give you a good indication of the level of demand.

You can also use marketplaces such as Ebay and Amazon as part of your research. To do this, search for your the kind of product you are looking at selling and look at the sales history on Ebay and the amount of reviews/questions asked on Amazon. While not the most accurate bit of research, every little bit helps!

Is it Profitable?

There is no point choosing a product to sell if it is not going to be profitable. This is the final part of your product research, the numbers!

When you are figuring out if it will be profitable to sell, you need to factor all related expenses into your calculations. I commonly see people just looking at the gross profit per product (Sale Price – Cost Price) but this is a recipe for failure.

You need to factor in things such as payment gateway fees and the cost of postage & packaging, only then will you get a good idea if it will be profitable. You then need to figure out if the profit margin you are making per product will cover your businesses overheads such as rent, rates, utilities and insurance etc.

To do this you do need to estimate how many sales you will get and it is always best practise to operate on the cautious side and be realistic.

Step 3: Plan Your Brand

You know the niche you’ll be operating in and the products that you are going to sell, now you need to start thinking about your business and your brand.

The first thing to do is decide on the name of your business and also the logo that you are going to use, this is a pretty important step as this is what you are going to build your business around.

Choosing the right business name is getting more challenging as it is becoming more difficult to find available domain names and social media accounts. Now I know this might be difficult but if you can, try and come up with a list of names and then use tools like namecheckr.com to see if they are available.

If you find that your desired domain name and social media are available, then it is best practice to get them as soon as you can because if you leave it, someone else may come in and get them.

Once you have your business name sorted out, you want to create a logo for your business so that you can start branding your website, social media, marketing materials and packaging. Fortunately, there are now a great selection of tools such as Canva out there that you can use to design a logo for your business.

Unique Selling Point (USP)

The next part of planning your brand is what is your businesses USP?

  • What is going to make your business stand out from the crowd?
  • Why should a customer buy from you rather than the next business?
  • What do you do differently from your competition?

Ecommerce is incredibly competitive these days and while there are still many opportunities out there, you do need to know what makes your business special and different to all of your competition and also how you are going to implement it.

There are many ways you can make your business stand out but there has to be something. Most of the ecommerce businesses that fail, do so because they are generic. Some of the things you could do is:

  • Offer a better customer experience
  • Be more ethical or environmentally friendly
  • Use your business to positively impact the community

These are just a couple of ideas that can set your business apart but one thing I wouldn’t recommend as your USP is being the cheapest as it simply isn’t a sustainable business model. The reason is that if your business grows and you incur more overheads, a leaner startup company can easily come in and undercut you and thus what brought you to the dance has gone!

Step 4: Pre Planning

I was going to put building your website as step 4, but there is some pre planning you want to do before building your website.

Where to Sell?

When it comes to selling online, there are two main sales channels for you to consider and I will give a brief summary of both below:

Ecommerce Website

This is your own ecommerce website and what is what most people think about when talking about an ecommerce business. There are two main options when it comes to building an ecommerce website:

  1. Hosted Platforms – these include the likes of Shopify and Bigcommerce, who provide a website builder, web hosting and user support for a monthly price.
  2. Self-Hosted Platforms – these include WooCommerce and Opencart, this is where you buy web hosting and then install and manage the ecommerce software yourself but with little support from the platforms.

Which one you go for depends on your own requirements but if you are just getting started, the easiest way is the Hosted Platforms as they remove the technical aspects of managing an ecommerce site for you. Leaving you to focus on your products range, marketing and orders.

Marketplaces

Marketplaces are websites like Amazon and Ebay, that allow users to create an online shop and start selling through their platform. This is often the quickest way to start getting sales but does give you less control over your business as you have to operate within the rules of the marketplace and fees can be high.

Service Partners

You are going to require the use of other companies services when you run an ecommerce business and it can save you a lot of time and effort choosing which ones you want to use before you start building your site. The two primary ones are:

  • Payment Gateways
  • Shipping Services

But things like accounting software and marketing tools can also come into this category. By planning on which services you require for your business, it can make choosing which ecommerce platform to go with much easier as you will know what integrations you require before you get started.

Policies and Customer Service

If you can already have your policies such as:

  • Payment
  • Delivery
  • Returns
  • Terms and Conditions

All sorted and possibly typed out before you start building your website, it will make it much easier for you to get started as you can simply copy and paste them straight on to your website. Doing these before you start your website, also gives you the chance to get them checked over and make sure that they are legal before your site goes live.

The second part is to plan how your customers can contact you, whether by phone or email. Once again, having these in place will make creating the contact us section of your website much quicker to do, you can also check and make sure that they are working properly before your customers start using them.

Step 5: Sales Platforms

Step 5 is pretty much the practical application of the planning that was done in step 4 in that you are setting up the sales channels that you chose.

The process for setting up these sales channels does vary depending on which one/s you have chosen to go with. Fortunately there are detailed guides in the form of blog posts and YouTube videos that can help you set up ecommerce platforms such as Shopify and WooCommerce along with marketplaces like Amazon or Ebay.

Step 6: Start Marketing

Get More Traffic

So you have finished building your online shop!

Now you need to start getting people to visit your new online shop and to do this you need to develop a marketing strategy. Below I will give a short outline of three of the main types of digital marketing that you can use.

When it comes to digital marketing, you may find that there are some elements you can do yourself, whereas it may be more cost effective to employ the services of a digital agency or freelance specialist rather than trying to learn it all yourself.

Search Engine Optimisation (SEO)

The aim of SEO is to get your website ranking well in search engines such as Google or Bing. When you rank well in search engines, you get what is called organic traffic and for online stores, organic traffic is the best kind of traffic as it generally has the best conversion rates.

The main problem with SEO is that it takes a fair bit of work to get your site ranking will and generally takes a long time to see results. However it is a good long term marketing strategy and is definitely something you want to do to your site. But what does SEO consist of? Well there are two main components, onsite and offsite and I will give a quick overview of them both below.

Onsite SEO

Onsite SEO is something you have far more control over as it is all things that you can do on your website. There are three main elements to onsite SEO:

1. Keyword Research

You will hear this a lot when you doing any kind of research into SEO and it is a really important thing to do. The aim of keyword research is to find the right keywords that you want your site to rank for.

When you are just starting out, you want to be aiming for what are known as long tail keywords, which are phrases or questions people type into search engines that are more specific and targeted. Let me give you an example:

  • Diamond Ring is a very broad search term and there could be lots of reasons why they are looking for this, they could be looking at ones for sale, different styles that are available, how much they cost etc. Not only is it a hard search term to rank for but it is also not guaranteed to generate sales
  • 18ct White Gold 1ct Round Diamond Halo Engagement Ring is a far more specific search term and the person is looking for a set of results that perfectly match what they are looking for. There is a good chance that this person is actively looking to buy, so ranking for long tail keywords such as this has a far higher chance of converting into a sale.

That is just an example to show you the difference between a broad search term and a long tail specific search. It will take time doing keyword research and the holy grail is search terms with good monthly volume, usually between 500 and 5000 searches and low competition. Two good tools for this are Google Keyword Planner and Ubersuggest.

2. Keyword Optimisation

Once you have your keywords that you want to use, you want to optimise your content for those keywords. Now you don’t want to stuff all your content with keywords as not only does make it hard to your visitors to read but you can also be penalised by search engines for doing this.

Instead you want your keywords to appear organically in your content. To do this you need to take time to craft your Product Titles, Descriptions and Alt Image Tags. You want to walk a fine line between being optimised for search engines but also offering you visitors a good user experience.

Outside of your product pages, you can make use of blogs as they are content heavy areas of your site that you can use to get visitors. Lots of online shops make the mistake of using their blog posts as sales pitches, you don’t want to do this, instead use them to answer questions and inform your visitors. Well written and laid out blog posts can be great ways of not only getting more visitors to your site but also turning those visitors into customers by showing your knowledge of your chosen industry.

3. Internal Linking

The next step is to create internal links around your site, this is where you can really take advantage of your blog posts!

As long as you have created blog posts that are relevant to the products you are selling, then you can start linking keywords and images back to products or categories. This has a two benefits for your site, the first is that you are enticing your visitors to click through to your products and the second is that it is easier for websites to crawl and index your site and they can easily follow your links.

Now you don’t want to over do your linking! The main reason is that every page on your site has so much authority, which it passes on to the page it is linked to and the more links you have on a page, the more this authority is diluted between the links. With a new website, try and keep the number of links low so that your website gets the most benefit from them.

There are some other elements to offsite SEO but the most important is backlinks and these are links to your site from other sites.

This is something you have far less control over and the way to increase the number of backlinks organically is to produce really good content that others want to link to and share. Now this can be your product listings or your blog posts, so you want to put effort into them to make them as good as possible to encourage this backlinking.

You can reach out to people in your industry and see if you can come to some type of arrangement so that you either create a guest post or they review your products etc. Always approach this so that both parties get something from the deal, not just you and your website.

What about buying backlinks? This was once a very popular SEO tactic but search engines have become more advanced and they now rank the quality of your backlinks rather than the quantity. Buying backlinks generally gets you a lot of poor quality links for sites with low domain authority and these can have a negative impact on your rankings.

Social Media Marketing

A great way to get your business out there is to use social media, now there are a whole host of options when it comes to platforms you can use such as Facebook, Instagram, Twitter and Pinterest. Lots of marketers say you should be active on every single platform but this can be a waste of time and energy on your part, especially if you are not getting any results.

How do you choose which platform/s to use? Well it takes a little bit of time and research but I have came up with a strategy that you can use to find out which platforms are going to in a relatively short period of time.

This strategy only takes a month but does require consistent work. You want to post the same content to all your chosen social media platforms on a daily basis. Do this for 30 days and then use your websites analytics software to see which platforms generate the most traffic to your website, you will likely see that one or two will perform better than others.

You can then start focusing all your social media marketing attention towards these top two platforms as they are giving you the best ROI (return on investment) in terms of time. It is pointless spending time posting to platforms that aren’t generating you any traffic, it would be better to spend that time growing your audience on the platforms that are working for your business.

I found it good to re-visit this strategy every 6 – 12 months as you can find that your audience has changed or moved to another platform and you want your social media marketing to be adapting with these changes.

Paid Advertising

The quickest way to get visitors to your website is paid advertising, now there are multiple forms of paid advertising such as Google Ads, Facebook Ads, Sponsored Instagram Posts and Promoted Twitter Posts.

But you do need to know what you are doing as you can quickly burn through your marketing budget if you are running bad ad campaigns. To make your campaigns work for your business, you need to know who your target audience is and how to reach them.

As with all marketing, this takes time and research. If you are planning doing paid advertising, using the social media marketing strategy above can be useful in helping you identify where you want to run ads. But you want to learn how to do them properly before spending all your money with no return!

There are plenty of online courses you can take, that will cover the basics of certain types of advertising but sometimes it can be a better options to use a digital marketing agency as that is what they do on a daily basis. Before signing up with an agency though, always do some research into the company to make sure they are legitimate and also have done good work for others.

Conclusion

I think the fundamental message of this post is that you really do need to do your research before starting an ecommerce business. I did when I started selling online and found products that I sold really well. My best performing ones sold thousands of units.

One thing I will say is that you are never going to get this 100% right, especially when it comes to your product selection. You will always have some dud products but that is retail for you.