E-commerce businesses are thriving, with sales increasing 2.6% between the second and third quarters of 2024. (To be clear, the term “e-commerce” simply refers to shops that operate online, as opposed to retailers that primarily exist in a brick-and-mortar store.) But whether you’re selling products, subscriptions, or services online, e-commerce businesses come with their own challenges. It’s important to fully understand how to set up, run, and market an online shop before you start investing time and money.
How to Start an E-Commerce Business in Six Steps
Starting a new business is never easy, but e-commerce shops have access to a wide range of tools to help. These six steps will help you get started.
1. Invest Time in Research
Before jumping into any new business, you need to spend significant time researching the market. Sean Collins, co-founder of Holscher Analytics, recommends taking your time choosing a vertical, since this is something that will become your obsession for the next three to 10 years.
“Then look at the existing competition,” he says. “Look at their reviews, talk to customers, talk to their suppliers, and to the merchants themselves. Find out how the business is. Find out how you can stand out. Then research how you can build the product to win.”
2. Choose a Business Model
If you’ve been considering an e-commerce shop for a while, you may already know the type of business you want to start. In case you haven’t yet, that choice should be your next step. There are three major types of e-commerce businesses:
- Business to business (B2B): A B2B e-commerce shop sells directly to businesses. Often, this is a wholesale provider. A beauty product manufacturer may sell only to salons and beauty supply shops, for instance, as opposed to a retailer that is open to purchases from anyone.
- Business to consumer (B2C): B2C simply refers to a business that is geared toward selling to the general customer population, rather than to other businesses. E-commerce shops that sell through providers like Amazon and Walmart are considered B2C.
- Direct to consumer (D2C): Unlike B2C, D2C has manufacturers selling directly to customers without an intermediary. This allows businesses to keep prices lower.
3. Line up Your Team
Collins also points out how crucial it is to have the right people in place to help. You may not be able to hire a full team up front, so he suggests focusing on logistics, business ops (including finances), marketing, customer service, and technology. He also suggests hiring a college intern for valuable help at a fraction of what you’d pay someone with more experience.
“If you go with Shopify, tech is probably the easiest,” Collins says. “Customer service you can share between the logistics person and the marketing person. So make sure that you’ve got someone to cover logistics and marketing. The marketer needs to be able to write copy, design, run ads, build emails, and do some data analysis.”
4. Register Your Business
To make your business official, you’ll need to register it with your local government. This starts with choosing a business name, which can take some time. You’ll want to make sure you can acquire the domain and that no other businesses are using the same name.
In the process of registering, you’ll need to get a business license and set your business up to pay taxes. This includes sales tax and, if you’re hiring employees, payroll taxes. You may also need to look into trademarking your business name and any products you’re selling.
5. Choose Your Platform
If you were selling products in person, you’d need a storefront. The same goes for an e-commerce shop, only in this case, your shop will be virtual. You’ll find several worthy options, so you’ll have to investigate each to figure out which one works best for you. Some popular options include:
- Shopify: The user-friendliness of this option makes it great for beginners.
- WooCommerce: If you plan to build a website using WordPress, this customizable plug-in turns it into an easy-to-manage shop.
- BigCommerce: This solution features a suite of tools geared toward growing a small business, including flexible customization, built-in marketing tools, a platform designed to scale with your business, and integrations with sites like Amazon and Instagram.
- Third-party marketplaces: Sites like Amazon, Etsy, and eBay are great for selling to niche audiences.
Of all the options, Tina Bar, owner of Tina Bar Coaching, prefers Shopify. “Shopify is by far the most cost-effective solution for e-commerce shopping carts,” she says. “Shopify is built to be e-commerce first! They are best in class for conversion, mobile checkout, and one-click buying with Shop. The latest integrations with strategic partners for cross-platform selling, including Meta, TikTok, Google, YouTube, and Pinterest, make it a worthy recommendation.”
All of that said, it’s still worth doing your own research to be sure you’re choosing the best option for your needs.
6. Generate Some Buzz
Word of mouth is one of the biggest drivers of sales. Since you haven’t started your business yet, it will be challenging to get people to talk about you, so Collins has a few suggestions to help you start to generate buzz about your new e-commerce business.
“Use something like Kickstarter to get some initial support,” Collins says. “Run lead-gen ads on Meta. Find a business that already serves your customer base and do a launch promo with them. You want people on your email list and you want to get them hyped up. Build an intro package for them.”
4 Tips for Starting an E-Commerce Store
Once you have your business license, it’s time to position your store for the best success.
1. Start Small and Scale
The best thing about an e-commerce business is that you can start making money without breaking the bank. Begin with just a few products or services and gradually add to them as you learn from your initial activity, such as conversion rates.
“Unlike a brick-and-mortar store, you aren’t limited by your geography, and your audience can be global,” says Kim Butler, SEO strategist with Online Optimism. “Plus, you can cut down on rent and staff costs. My advice would be to tap into niche markets, deliver a seamless online experience, and use that data to find and adapt to your customers’ preferences.”
2. Choose the Right Marketing Channels
With so many online shops competing for customers, it can be tough to get noticed. You’ll need to find ways to reach your target audience and to continue to monitor and tweak your campaigns to ensure you’re always bringing in new buyers.
“Choose marketing channels that align with where your customer spends time,” says Bar. “Most marketing fails because it doesn’t speak to the ideal customer in a way that convinces them to buy.”
3. Monitor Results
One of the best things about running an e-commerce business is that you can easily track activity. Using the tools built into your online store, you can keep an eye on traffic, conversion rates, and customer behavior.
“Study your numbers and know what they mean,” says Bar. “There are e-commerce key performance indicators (KPIs) to learn and financials to keep track of. Ignoring these is the number one reason e-commerce businesses either fail to scale or fail to be profitable.”
4. Keep up With Market Trends
The world of online retail is constantly changing, so it’s vital that you not only monitor current trends, but that you’re also prepared to pivot in response. Subscribe to industry blogs and newsletters and attend conferences and events to stay on top of the latest techniques and tools.
“The most successful e-commerce businesses prioritize customer experience, automation, and agility in response to market trends,” says Windy Pierre, founder of eCommerce Manager. “If I were launching today, I’d focus heavily on artificial intelligence (AI)-driven personalization, retention marketing, and social commerce strategies to stay ahead.”
Considerations for Marketers When Starting an E-Commerce business
Marketing any new business can be challenging, especially if you’re new to an industry. Here are a few things to keep in mind if you’re planning to start an e-commerce business.
Branding and Positioning
Your branding communicates what you’re selling better than thousands of words ever could. It’s important to understand your brand and incorporate it into everything, from your logo to the customer service you provide.
Content Marketing Strategy
Your online marketing efforts should be consistent and on-brand. The key is to build trust and authority within your niche through high-quality blog posts, videos, and social media content.
Customer Retention
Reaching new customers is only part of the equation. You should also put serious ongoing effort into keeping the customers you already have. Loyalty and reward programs, VIP discounts, and personalized email campaigns can go a long way toward showing your customers you appreciate them.
ROI Tracking
Whether you’re paying a social media marketer or purchasing Google Ads, that spend needs to be tracked. Pay close attention to the amount you’re investing into marketing and note which efforts get the best results.
Key Takeaways
Like any new business, an e-commerce venture requires that you do careful research and have a plan in place before launching. Yes, choosing the right business model and platform takes time, but it’s an important part of building a successful e-commerce shop. Likewise, attracting new customers is vital, but so is nurturing your existing customers. By monitoring key performance indicators and return on investment, you’ll ensure you’re making the most of your efforts.
Frequently asked questions (FAQs)
Is e-commerce really profitable?
E-commerce can be profitable, but Colby Flood, founder of Brighter Click, points out that margins may be tight. This is especially true for brands that rely on heavy discounting.
“E-commerce is not the same as it was in 2016-2020,” says Flood. “CPMs continue to rise year over year on channels like Facebook ads, and the space is filled with many more brands. Someone should start an e-commerce business for the same reason they should start any other business — because they have confidence that they understand a problem to solve for a target demographic, and they know that they have a viable, profitable solution.”
What are the best tools to market my e-comm store?
You’ll find no shortage of marketing solutions in 2025, but it’s important to have the right tools. Butler believes setting goals is key to finding the right solutions.
“Make sure you have a plan for SEO and content creation,” says Butler. “You can use tools like SEMrush to do competitive research and find/track keywords that make sense for your business. You also want to incorporate an email client, like Constant Contact or Mailchimp, and paid ads on Google and social media. For the site itself, I would suggest WooCommerce (WordPress) and Shopify.”
What are the best strategies for growing e-comm sales?
Once your e-commerce shop is set up, it’s time to start attracting some customers. Bar says that email marketing and ads are the best way to do that. “Once proof of concept has been established, it’s key to build an email list and learn how to run effective ads,” she says. “I recommend Meta and Google ads.”
