An ecommerce business is a fabulous lifestyle business model that you can start and run from anywhere in the world, whether that’s your kitchen table or a beach in Fiji.
From candles, clothes, jewelry, beauty products, toys, pet accessories, games to tech gadgets, printable journals and planners, shoes, water bottles, and more, the choice of what to sell is only limited by your imagination.
This is a completely remote business opportunity that anyone of any age and skill level can master.
I’ve had a fair bit of success with ecommerce over the years, setting up my own stores, selling on marketplaces like Amazon and buying and selling existing ecommerce businesses.
In this article I’ll outline how to start an ecommerce business, that you can start, launch and grow, with just your laptop and a grand vision!
What is an Ecommerce Business?
Ecommerce (electronic commerce) can literally be used to describe any kind of online business transaction. It’s basically the buying and selling products through online services or over the Internet.
So technically every post I write on this blog about starting an online business could be lumped under the ecommerce business banner, but for the sake of this article, I am specifically talking about the sale of physical products.
Even more specifically, the selling of physical products on your own online store as opposed to Amazon, Etsy, eBay, etc.
If you’d like to know how to start an ecommerce business using Amazon FBA, you can read my mammoth posts here – How We Built a 7 Figure Amazon FBA Business in 12 Months
Is an Ecommerce Business For You?
Of course, I can’t answer this for you, but I can talk a little about the pros and cons of starting an ecommerce business.
The awesome benefits of starting and running ecommerce companies or businesses are the same for all online lifestyle business models;
- Passion to Profit: You get to create something from your passions if that’s what turns you on.
- Flexibility: You get to work from anywhere in the world (my entire brand motto)
- Go Global: You get to sell to a global marketplace (although be careful with this one because of shipping costs – I cover that in the shipping module) – but literally from day one you are an ‘international’ brand.
- No Inventory: You can get started without even seeing what you’re selling (although I don’t advise it). But! You don’t have to have any inventory to hand, you don’t have to store anything and you don’t even have to be responsible for shipping et al!
- Low Upfront Investment: You can also get started with relatively low upfront investment. You will need a few quid to get your platform set up, get some designs done for your site etc, but you don’t need to lay out $$$ upfront to buy stock (the downside of Amazon)
If you’ve just called your entire family into the room to read out how exciting this venture is and are shouting ‘someone pop the champers, this time next year we’ll be millionaires’, just hold your horses!
There are some downsides.
- Competition: The ecommerce space is pretty competitive. To stand out you’ll need to create a strong brand and come up with some creative marketing techniques
- Customer Trust: New ecommerce businesses face the challenge of building trust with customers who may be skeptical of unfamiliar online retailers. (Working with influencers is a huge upside here)
- Thin Margins: Competitive pricing often leads to thin profit margins, making it difficult for new ecommerce businesses to achieve profitability (particularly with print on demand)
- Marketing Costs: Attracting customers can require significant spending on online advertising, which can quickly deplete marketing budgets.
- Customer Service Challenges: Providing high-quality customer service, which is vital, requires resources and efficient systems to manage inquiries and complaints.
To start an ecommerce business is hard work. Rome wasn’t built in a day as they say and neither will your online store be. (Well technically that’s not true, you could actually have an online store up and running in a day). But….
Once your ecommerce store is live then the hard work really starts.
There are a lot of ecommerce businesses out there including of course the big hairy monster Amazon, all vying for the attention of your potential audience. So standing out in a crowded marketplace is going to be tough.
The people who have the most successful ecommerce businesses build a strong brand and use all available resources to promote their products.
The Different Ecommerce Business Models
Print on Demand
Print on Demand (POD) is basically what it says on the tin.
It’s a streamlined ecommerce business model where products are only created (and printed) once an order is placed.
Unlike traditional retail models that require bulk production and inventory management, POD allows you to sell customized items, such as t-shirts, mugs, socks, shoes, iPhone cases, and wall art, without the need to stockpile goods.
Here’s how it works: you choose a product from a POD company’s range of blank items, such as apparel or accessories. Then you apply a custom designs directly to these products. Once designed, you list them for sale on your website or a marketplace. When a customer makes a purchase, the order is sent to a POD company, who prints your design on the item and ships it directly to the buyer.
This model has become extremely popular among ecommerce entrepreneurs because it minimizes risk and overhead costs by eliminating the need for large upfront investments in inventory.
However, one of the challenges with POD is the higher cost price of items, requiring a significant markup to turn a profit, which can sometimes make your products less competitive in the market.
Later in this post, we’ll delve into strategies to manage these costs, but it’s worth noting that POD is one of the quickest ways to launch an ecommerce business with minimal initial setup.
Dropshipping
Dropshipping is another straightforward and potentially lucrative route to launching an ecommerce business, with its success heavily influenced by your product sources and the profit margins you can achieve.
In a dropshipping model, you curate products manufactured by others, showcasing them on your website. When a customer makes a purchase, you place the order with the manufacturer, who then ships the product directly to the customer. This method eliminates the need for you to hold any inventory upfront, reducing initial investment and risk.
However, the backbone of dropshipping is the quality of the products you choose to sell. Investing time in sourcing high-quality items is crucial because your business’s reputation depends on it.
Fortunately, platforms like Shopify streamline the dropshipping setup process with apps like Dsers, which integrate seamlessly to facilitate product management and order fulfillment.
Despite its appeal, starting a successful dropshipping business isn’t as straightforward as some sources might suggest. There are complexities and challenges not often discussed by dropshipping advocates and course sellers.
As we explore further, I’ll provide more details on the print on demand and dropshipping models to highlight both the advantages and the challenges, ensuring you have a clear understanding of what to expect.
Arbitraging
Arbitrage in ecommerce involves buying products at a low price and then selling them at a higher price on a different platform, capturing the profit from the price difference.
Commonly, this might involve purchasing items from car boot sales or garage sales at bargain prices and then reselling them on platforms like eBay or Amazon for a profit.
Known as retail or online arbitrage, this method is considered a relatively low-risk entry point into ecommerce.
Although I haven’t personally engaged in retail arbitrage, Jim Cockrum’s Proven Amazon Course comes highly recommended if you’re interested in pursuing arbitrage.
Private Labeling
This is the most popular way to start an ecommerce business model on Amazon FBA. (And how we’ve supported our lifestyle over the last few years).
Amazon FBA involves selecting a product already performing well on Amazon and sourcing it from a supplier on platforms like Alibaba. You negotiate the purchase of a minimum order quantity, often a few thousand units, and brand the products and packaging with your own logo before shipping to the Amazon warehouses.
You then list the product on Amazon and utilise both Amazons marketplace and your own promotional strategies to generate sales.
This method can be highly profitable but does require an initial capital investment and carries greater risk due to inventory commitments.
We successfully ran a 7-figure private label brand on Amazon before selling it in early 2020.
Designing & Manufacturing Your Own Products.
If you’re a crafter and make all your own homemade products, platforms like Etsy or Amazon Handmade offer a marketplace for selling unique, self-made items.
This route allows you to leverage your creative skills to design and manufacture your own products, offering them directly to consumers who appreciate handcrafted goods.
This method not only personalizes your ecommerce venture but also connects you with customers looking for authentic, bespoke products.
The Different Ecommerce Business Platforms
Choosing the right ecommerce platform is critical for the success of your online business. Each platform offers unique features and varies in terms of cost, usability, and scalability. Below, we explore some of the most popular ecommerce platforms to help you determine which one aligns best with your business objectives.
1. Shopify
- Overview: Shopify is renowned for its ease of use and quick setup, making it ideal for beginners and seasoned merchants alike.
- Best For: Businesses looking for an all-in-one solution with robust support and extensive integration capabilities.
- Key Features: Integrated payment processing, a wide array of themes, and a comprehensive app store to extend functionality.
2. WooCommerce
- Overview: An open-source plugin for WordPress websites, WooCommerce allows you to convert an existing site into a fully functional ecommerce store.
- Best For: Current WordPress users and those who need a highly customizable platform.
- Key Features: Seamless integration with WordPress, extensive customization options through plugins, and control over data.
3. Magento (Adobe Commerce)
- Overview: Known for its powerful features and scalability, Magento is a favorite among medium to large enterprises.
- Best For: Businesses that require advanced ecommerce features and have the technical know-how to manage them.
- Key Features: Advanced security features, customizable design options, and strong inventory management capabilities.
5. Amazon FBA
- Overview: Amazon’s Fulfillment by Amazon (FBA) program allows you to leverage the marketplace’s extensive reach and fulfillment network.
- Best For: Sellers looking to capitalize on Amazon’s massive audience and streamline shipping and handling.
- Key Features: Access to Amazon Prime customers, simplified logistics, and potential for increased visibility.
6. Etsy
- Overview: Ideal for sellers of handmade goods, vintage items, and crafts, Etsy provides a niche marketplace.
- Best For: Small-scale artisans and those creating unique, often personalized products.
- Key Features: Strong community, easy setup, and a focus on unique, small-batch products.
Your choice of platform should depend on your product type, budget, technical expertise, and long-term business goals. Consider starting with a platform that offers simplicity and room to grow. As your business expands, you might find that switching to a platform with more advanced capabilities is beneficial.
For the purposes of this article we will be focusing on Shopify as that is the ecommerce solution that I use and recommend for anyone wanting to start their own fully owned ecommerce business (as opposed to using a 3rd party platform like Amazon or Etsy)
How to Start an Ecommerce Business – 6 Key Steps
Step 1 – Choosing Your Ecommerce Business Niche
Embarking on the journey of starting an ecommerce business begins with defining your niche. It’s essential to identify not just what products you want to sell, but also who your target customers are, and how you plan to reach them.
If you’re certain about your niche and ready to proceed, feel free to skip this section. However, if you’re still at the stage of thinking, “I want my own online store,” but aren’t sure about the specifics, this guidance will be invaluable.
First, consider your personal interests and passions. What products or activities are you passionate about?
Often, selling products that you personally enjoy leads to a more engaging and successful business because your enthusiasm will naturally attract others who share your interests.
Here are some questions to help you pinpoint your interests:
- What activities do you enjoy?
- What topics do you find yourself frequently talking about?
- What are your hobbies?
- How do you typically help others?
- What can you spend hours doing without losing interest?
Reflect on these questions and jot down some ideas. For instance, you might think about:
- Your love for crafting soaps,
- Your passion for makeup and beauty,
- Your affection for pets,
- Your endless conversations about the future of AI and technology,
- Your enjoyment of jigsaw puzzles,
- Your keen interest in books and literature,
- Your dedication to gardening,
- Your love for baking,
- Your hobby of tinkering with car engines or electronics,
- Your enthusiasm for model building,
- Your delight in hosting game nights with friends and family.
With your list of interests, consider whether there’s a viable ecommerce opportunity for each. Here are potential business ideas based on the examples listed:
- Sell handmade soaps or DIY soap-making kits,
- Offer makeup or skincare products,
- Provide pet accessories and supplies,
- Market technological gadgets and innovations,<