How to start an eCommerce business: 2023 full guide
This post was last updated on September 6, 2023
You're ready to get the ball rolling in starting an eCommerce business. Your ideas are starting to take shape, you have a true knack for selling and you're excited at the prospect of finally launching your very own online store. But where do you start? How can you learn how to start an eCommerce business off on the right foot?
Starting an eCommerce business requires hard work, discipline and careful planning, but don't let that deter you; the potential profit is substantial in this growing market. The U.S. Census Bureau found that eCommerce sales in the U.S. during the second quarter of 2023 alone totaled over $277 billion. And, by 2026, the eCommerce market is expected to total over $8.1 trillion.
In this guide, we'll cover nine essential steps for laying the foundation of your online store, plus what to expect along the way. Get ready for launch.
Start selling: build your eCommerce website with Wix today.
What is an eCommerce business?
So, what is eCommerce? Ecommerce, short for electronic commerce, involves selling products or services online. Selling online is not just a matter of convenience for small businesses, it's a necessity: a consumer behavior study by Raydiant found that 55% of people prefer to shop online rather than in a brick-and-mortar store.
With an eCommerce business, you can reach a global audience, operate 24/7 and automate your operations, all with minimal overhead costs. With no physical storefront, you don't have to factor in the cost of rent or utilities, and if you operate a dropshipping or print-on-demand business model, this also excludes the cost of inventory management.
There are two main types of eCommerce businesses to consider:
Business-to-consumer (B2C eCommerce): This type of business sells products or services directly to consumers.
Business-to-business (B2B eCommerce): This type of business sells products or services to other businesses.
How to start an eCommerce business
eCommerce has transformed the way we shop. It's made it possible for sellers to reach a global audience, lowered the barrier to entry for small businesses and given consumers more choice and convenience.
Here are the steps you must take to launch your own eCommerce business:
01. Choose a business structure and model
Before you can become the next Jeff Bezos, you'll need to set the foundation for your eCommerce business by selecting the right legal structure and business model. This is a key step in starting a business of any type. Your overarching business structure defines your liabilities, tax status and more.
The most common business structures include sole proprietorship, partnership, limited liability company (LLC) and corporation. If you’re not sure which one is right for you, consult a CPA or business attorney for assistance. You will also likely need to register your business and apply for an employer identification number (EIN) in order to pay taxes, open a business bank account or obtain financing.
Not to be confused with legal structure, you also need to pick a business model based on the type of business you intend to operate. You’ll likely be selecting from one of three popular eCommerce models below:
Direct to consumer (D2C): A D2C eCommerce model refers to brands that cut out the middlemen, including wholesalers, resellers and retailers. It means that you sell your branded products directly to your customers from your online store. D2C eCommerce legends include Casper, Warby Parker and Glossier. It's also sometimes called "customer to customer."
Business to consumer (B2C): Similar to D2C brands, B2C businesses sell products directly to consumers. However, they operate like a traditional retailer and sell other brands within their store.
Business to business (B2B): As the name suggests, a B2B model is when you sell products directly to another business. This business may either be the end user of your product or resell your items to other customers.
At this stage, you’ll also want to consider how your products will be marketed and distributed. Here are a few examples of what we mean:
Private label: With private labeling, you'll source your products from a third-party manufacturer but sell these items under your brand name. You retain control over how the products are produced, how they’re priced and how they’re branded. Private labeling can apply to your entire catalog or to a portion of your products (think Costco’s Kirkland line or Amazon’s AmazonBasics line).
White label: White labeling means that you buy and sell products that are already successfully sold by another company. However, you can add your logo and potentially customize other aspects of the design. Print on demand is a popular form of white labeling that allows for greater personalization.
Dropshipping: In a dropshipping business model, customers purchase products from your store. However, all orders are routed to your suppliers, who are responsible for shipping those items directly to your customers. A dropshipping model is popular for reducing startup costs and simplifying inventory management, since you never have to store or ship items yourself. You can also watch this dropshipping business video to help you.
Wholesale: If you choose to become a wholesaler, you'll be expected to offer products in bulk (at a discounted price) to another business or retailer. While often considered a business-to-business (B2B) strategy, wholesaling can be combined with a business-to-consumer (B2C) strategy. For example, you may sell individual units of your product to the general product while servicing wholesale clients.
Subscription service: Starting a subscription box business or offering product subscriptions in your store are two great ways to earn more predictable income. To be successful, you’ll need to establish a tight strategy for fulfillment, marketing and customer service.
02. Choose the right products
The possibilities are endless when it comes to selecting a profitable business idea. But you may already have an idea of whether you want to sell shirts versus candles, beauty products versus tech.
If not, take some time to research trending products or evaluate what you’re most passionate about. Food for thought: these nine categories have the highest growth potential, according to eMarketer. Among them, auto parts and food and beverage are expected to post the greatest growth this year.
Here are some other tips that can help you decide which products to sell:
Start with your audience: Identify, research and listen to your potential customers. Utilize social media, forums, and everyday conversations to glean insights into their preferences.
Discover trending products: Browse top-selling items on online marketplaces like Amazon or by searching Google. Tools like Google Trends and Algopix can also help you identify top-trending products. For example, let’s say you’re starting an eCommerce business selling supplements. Researching trends in the vitamin industry might lead you to create a product that will meet the needs of a breakout search term like “best prenatal vitamins.”
Fill a need in the market: Ensure that your product addresses a pain point that your target market experiences. In general, the more niche your solution, the better.
Follow your personal or professional passion: Look for products that share space with your personal values and beliefs. Do you love knitting and gardening? Then maybe it’s time to start an eCommerce business selling whimsical planter sleeves.
Leverage keyword searches: You favorite SEO or keyword research tool, like Moz, can be incredibly conducive to discovering frequently searched products, validating a concept and/or analyzing competitors in a particular product category.
Factor in your profit: Determine the potential for your business to scale by calculating revenue-generated-per-dollar and/or per-hour-invested. A break-even analysis will further help you determine the breakeven point for each product and how feasible it is to make a profit. Consider also the logistics around selling each product—digital products, for example have no shipping or physical procurement requirements.
Understand your product’s potential lifecycle: Some products are built to last. Others naturally fizzle out over time. Knowing your expected product life cycle—the time from when the product is introduced to when it ages out—can help you create a multi-year plan for your eCommerce business.
03. Determine your unique selling proposition
Determine the right product sourcing method for your products. The four most common ways to source products are dropshipping, buying from a wholesaler, partnering with a manufacturer or taking a DIY approach.
To determine your best product sourcing method, start with these questions:
Which parts of your product are you looking to customize, if at all?
How much capital do you have to invest in new inventory?
Will you need to outsource other parts of your operations, like fulfillment or warehousing?
How do your competitors source their products?
What is your contingency plan if one supplier or sourcing method experiences issues?
How will you scale your business?
05. Determine your unique selling proposition
Identifying your unique selling proposition (USP) is critical for understanding how your business differs from your competition. For example, “plastic negative” water company, Mananalu, differentiates its products by supporting a larger cause. Mananalu water is packaged in refillable and recyclable aluminum bottles, ensuring that it’s an eco-friendly product.
Similarly, you could establish your USP based on factors like:
Aside from helping you stand out from the competition, your USP should guide your product positioning and how you shape your overall branding.
It also opens opportunities to collaborate with companies and influencers who share your values. Take, for example, the planter sleeves boutique we mentioned earlier. That unique product is relevant for plant enthusiasts who identify with the "cottagecore" movement. Cottagecore influencers and related businesses would naturally be powerful allies for promoting that business without being in direct competition.
05. Choose an eCommerce business name and logo
Document all the essential details of your business in a formal eCommerce business plan. This written document should clearly describe how your business will run, operate and develop. The strongest business plans keep your team aligned, plus help you attract the right business partners and investors.
Essential business plan elements include:
Funding options: crowdfunding, private equity, planned investors
Products and services
Market and SWOT analysis
Marketing and operations plan
Management and organization
Don’t know where to begin? Try this business plan template.
07. Choose an eCommerce business name and logo
As part of your larger eCommerce branding strategy, decide on a business name.
Begin by creating a list of options. You can perform keyword research, choose names related to your niche, or try alternate spellings to make your name stand out. Or, you can give our free Business Name Generator a whirl.
Cut down your list of possible names to your favorites. Make sure your names are:
Easy to read, say, spell and remember
Available as a domain
Not being used by another business (check your state’s list of registered businesses)
07. Choose an eCommerce platform and create your website
You're now ready to bring your brand to life through your own online site. As a first step, choose the best eCommerce platform for your needs. Consider whether a platform can give you:
A professional-looking, easy-to-customize eCommerce website builder
A customizable domain name
Secure infrastructure with 24/7 security monitoring and public key certification (TLS)
Built-in analytics to help you track key metrics such as website traffic and store relevant metrics as well
Easy to use content management system
Tools for simplifying, optimizing and automating your back-office operations
A pricing model that makes sense financially for your business, both now and in the future
Wix eCommerce is a powerful, secure platform that offers built-in tools for inventory management, pricing management, marketing, and more. Choose from hundreds of designer-made templates and customize your site as you see fit.
Don’t forget to connect a payment gateway to your store to enable transactions. Wix Payments allow you to accept various forms of payment, including credit card, debit card, BNPL solutions, and more.
Do your research and pay close attention to fees and surcharges required by your chosen providers.
Tips for designing your online store
Be clear about what you sell: Make it easy for customers to understand your business and products by providing high-quality images and strategic copy throughout.
Prioritize SEO: Study eCommerce SEO best practices to give you product pages the best chance at ranking on Google and other search engines.
Use simple CTAs: Use clear calls-to-action like “Shop Now” or “Buy Now” to avoid a confusing user experience.
Keep your store well-structured: A handy navigation bar will help customers find your key product pages. If you sell multiple items or categories, consider creating submenus and product collections for easy browsing.
Use high-quality imagery: Focus on taking clean, consistent product photos that showcase your brand in the best light.
Showcase user-generated content (UGC): Think of ways to invite and showcase customer reviews and other social proof that can increase conversions.
08. Manage your eCommerce business finances
Once you learn how to start an eCommerce business, heed these eCommerce money management tips to ensure that your business thrives. There are a number of considerations that you should factor in when planning your business finances:
Factor in recurring costs
Budget for marketing expenses
Plan for seasonality
Use proven inventory management strategies
Set aside enough funds to fulfill returns
Minimize shipping costs
Understand product invoicing
Know how to handle chargebacks and returns
It's important to keep returns to a minimum to reduce costs, protect your brand's reputation, and increase customer satisfaction. Choosing the right return policy and featuring it in an easily accessible place on your site will pay big dividends in the long run.
09. Create a marketing plan
Whether you decide to tap into email, content marketing, or influencer marketing, there are plenty of ways to beef up your eCommerce marketing strategy. As you decide which techniques are worth investing in, pay attention to the following tips:
Test, test and test again: Marketing is both an art and a science that requires constant experimentation. Ask yourself, would a promotion help drive sales? Could a more efficient checkout increase conversions? Will a blog help sell more products? Try some of these 13 proven ways for how to sell products online.
Keep profits top-of-mind: Profitability isn’t always easy to track and reach, especially in year one of owning a business. But you should always be keeping a pulse on your profits. Make sure that you know how to (properly) calculate your profit margin as you invest in marketing tactics, plus purchase inventory to keep up with growth.
Watch your customer reviews: Positive customer reviews help to build trust with customers, improve search engine rankings, and increase site traffic. Consider spotlighting reviews on your homepage and product pages. In fact, Wix users that add third-party review apps to their stores see an average 10% increase in overall sales and AOV within the first 60 days of integration.
Consider a multichannel or omnichannel approach: A multichannel eCommerce approach means that you sell products beyond your online store. Additional sales channels can include social media (tap into the power of social commerce), third-party marketplaces, comparison shopping sites or mobile. Each channel brings the potential for attracting new customers. For optimal results, consider an integrated omnichannel retail approach.
Optimize the customer experience: From refining your product pages to optimizing the checkout experience, make sure that your customer experience is in tip-top shape before funneling more people to your site. You’ll want to ensure that your site is protected against site crashes too, and won’t buckle under the weight of new traffic.
Personalize for the win: These days, your customers expect your store to be tailored to their needs, whether they're casually browsing your products or seeking the best bang for their buck. Take a look at these eCommerce personalization examples for ideas on how to make your site even more attractive to each unique shopper.
How much does it cost to start an eCommerce business?
The cost of starting an eCommerce business depends on many factors, from the type of products you sell to the features of your online store. However, you can expect to spend at least a few hundred dollars to get started.
Here are some of the costs you will need to consider:
eCommerce platform: Sell online through your eCommerce website. Manage shipping, payments and marketing from one unified dashboard. It's important to use a powerful, performance-first infrastructure that ensures fast page loading to deliver an enhanced online shopping experience for your customers.
Products: The cost of your products will vary depending on what you're selling. You will also need to factor in the cost of shipping and handling.
Marketing: Marketing your online store to potential customers is crucial for bringing in money. Try online advertising, social media and email marketing. The cost of marketing will depend on your budget and the channels you use.
Other costs: There may be other costs associated with starting an eCommerce business, such as the cost of hiring a web designer or a marketing consultant.
No matter how much money you have to spend, it's important to do your research and plan carefully before starting an eCommerce business. This will help you avoid costly mistakes and increase your chances of success.
Why start an eCommerce business in 2023?
eCommerce sales are expected to grow 10.4% in 2023, so there's no time like the present to get started. Here are just a few reasons to start an eCommerce business this year:
The global eCommerce market is growing rapidly: This growth is being driven by a number of factors, including the increasing popularity of online shopping, the growth of mobile commerce and the expansion of eCommerce into new markets.
The barriers to entry for eCommerce businesses are low: In the past, starting an eCommerce business required a significant investment in technology and infrastructure. However, today, there are many affordable eCommerce tools available that make it possible to start one with a relatively small investment.
eCommerce businesses can reach a global audience: With an eCommerce business, you can sell your products to customers all over the world. This can help you grow your business and reach new markets.
eCommerce businesses can be operated remotely: This means that you can start and run your business from anywhere in the world. This can be a great option for entrepreneurs who want to have more flexibility and freedom.
eCommerce businesses can be profitable: There are many successful eCommerce businesses that are generating significant profits. With the right strategy and execution, you can also build a profitable eCommerce business.
Tips for running an eCommerce business
Here are five tips for running a successful eCommerce business, regardless of your budget or experience:
Provide excellent customer service: Customer service is key to success in any business, but it's especially important in eCommerce. Make sure to provide excellent customer service to your customers to keep them coming back.
Track your results: It's important to track your results so that you can see what's working and what isn't. This will help you improve your marketing efforts and make sure your business is profitable.
Stay up-to-date on trends: The eCommerce industry is constantly evolving, so you need to stay up-to-date on the latest trends. This will help you ensure that your business is successful in the long run.
Focus on a niche: It's easier to market and sell products in a specific niche. This will help you focus your marketing efforts and compete with larger businesses.
Start small and grow gradually: Don't try to do too much too soon. Start with a small number of products and a limited marketing budget. As your business grows, you can gradually increase your offerings and marketing efforts.
Bring your eCommerce business to life
Ready to start an eCommerce business today? Start by defining your business model and doing your product research. Then when the time is right, use the Wix eCommerce website builder to build a professional online store and to get hooked up with a powerful set of back-office tools and automations.
How to start an eCommerce business FAQ
How difficult is it to start an eCommerce business?
Starting an eCommerce business can be both challenging and rewarding. The difficulty level depends on various factors, including your prior experience, the type of products you want to sell, your target market, and the complexity of your chosen business model.
Is an eCommerce business profitable?
Yes, an eCommerce business can be profitable. Many eCommerce businesses have achieved significant success and generated substantial profits. However, the level of profitability depends on various factors, including the niche, target market, product offerings, pricing strategy, marketing efforts, and operational efficiency. Successful eCommerce businesses often focus on providing value to their customers, optimizing their processes, and staying competitive in the market to achieve profitability.
How do I start a small eCommerce business?
It's important to choose a niche that you're passionate about and that you have some knowledge of. This will help you focus your marketing efforts and compete with larger businesses. After that, make sure to do your research and understand the eCommerce market, from the competition to your target market.
Make sure to start small and grow gradually. As your business grows, you can gradually increase your offerings and marketing efforts.
Is it free to start eCommerce?
Starting an eCommerce business doesn't have to be expensive. However, there are some costs that you will need to consider, such as domain name registration, web hosting and payment processing fees.
The total cost of starting an eCommerce business will vary depending on the size and complexity of your business. However, you can expect to spend at least a few hundred dollars to get started.
Marketing Writer, Wix eCommerce
Geraldine is a marketing writer for Wix eCommerce. She uses her broad experience in journalism, publishing, public relations and marketing to create compelling content and loves hearing user success stories.