How to Start an Ecommerce Business in 6 Simple Steps

Are you still not taking advantage of the 80 percent of the U.S. population who shop online? We get it. It can be a challenge for any business — purely digital or brick-and-mortar — to break into the digital shopping arena. But if you don’t, you’re missing out on an amazing opportunity to scale your business.

Today, 50 percent of people prefer to shop online due to convenience. If you want to connect with a broader audience, leveraging the almost infinite reach of the internet makes sense.

But there’s more to the process than simply launching an online business. A well-functioning ecommerce storefront requires a captivating user experience (UX) and premium technology when it comes to hosting and servers.

Fortunately, Nexcess is here to help. In this guide, we’ll explain how to start an ecommerce business in ten easy steps. We’ll also point you in the direction of some tech tools to help you hit the ground running in the digital landscape.

So, let’s dive right in.

Steps to starting an ecommerce business

There are several steps to starting an ecommerce business, but taking your time and following the step-by-step instructions below will ensure you start on the right foot.

Table of contents

1. Create a product or service (if you don’t already have one)
   1. Create a product
   2. Outsource production
   3. Dropship your product
2. Perform market and niche research
   1. Find your target audience
3. Develop an ecommerce business plan
   1. Business plan creation checklist
4. Create your branding
5. Set up your domain name and hosting provider
   1. Select and configure your domain name
   2. Choose and launch your website hosting
6. Create and optimize your website
   1. Determine your buyer’s journey
   2. Make your website mobile-friendly
   3. Map out easy-to-use website navigation
7. Updating product listings and inventory management
   1. Update product listings
   2. Inventory management
8. Focus on search engine optimization (SEO)
9. Set up payment processing and security
10. Advertise and market your ecommerce store
    1. Use a popup to ask for customers’ email
    2. Segment your marketing campaigns
    3. Reinvest your profits into your ads

1. Create a product or service (if you don’t have one already)

If you’re starting from scratch, the first step of how to start an ecommerce business is to come up with the product or service you plan to offer. We’ve outlined the steps of that process below. If you already have a product or service or a brick-and-mortar business expanding into the digital realm, you can move on to step two.

Create a product

If you want to sell physical products, you’ll need to source them from a supplier. You can accomplish this by either manufacturing the products yourself or purchasing them from a wholesaler.

Manufacturing your own products has the benefit of giving you complete control over the product quality and design. However, it’s important to note that this option requires more start-up capital and is more time-consuming.

Purchasing products from a wholesaler is a good option if you don’t have the time or money to manufacture your own products.

If you want to sell digital products, such as eBooks or courses, you’ll need to create or purchase the product files. For example, if you want to sell an eBook, you’ll need to either write it yourself or hire a ghostwriter.

You can also sell services online. For example, you could sell web design services or social media marketing services. If you’re selling services, you’ll need to create a sales page and pricing structure for your business.

Outsource production

Outsourcing production is a good option if you don’t want to manufacture products yourself but still have control over the product quality. You can do this by working with a dropshipper or private label manufacturer.

Purchasing your product wholesale is a good option if you’re selling physical products and want more control over the product quality.

When you purchase products wholesale, you’re buying them at a discounted price from the manufacturer. This enables you to sell the products for a higher price and make a profit.

Dropship your product

Dropshipping is a straightforward way to ship and fulfill your product. Instead of handling these aspects of your business yourself, you can leverage a third-party company to manage inventory and fulfill orders.

As the ecommerce business owner, you would contact a manufacturer or wholesale company, purchase the product from them, and then they would ship it to your customers. This enables you to take a hands-off approach to product fulfillment and is ideal for businesses that are just starting out because it requires less start-up capital. Essentially, as a dropshipper, you act as the middleman rather than manufacturing, fulfilling, and shipping product yourself.

2.  Perform market and niche research

The second step to starting an ecommerce business is conducting market research and establishing your niche. First, you’ll want to see if your product or services make for a profitable ecommerce store. This means looking into things like supply and demand, profit margins, industry trends, and competition. (The same factors apply to niche selection).

Are people currently buying your product or service on the open market? If so, who are the current sellers of that product? You may find that competition is high in your industry. If that’s the case, you may need to reconsider the direction of your store or find something that makes you unique.

For your niche, you’ll want to investigate the same aspects. Does what you’re selling make sense for an online store? Is there a need for it in the marketplace? Is there a lot of competition with that product or industry?

The answers to these questions make up proper market research — and proper market research is critical if you want to have a successful ecommerce business. Put in this work before you invest time, money, and energy into a business idea that may struggle.

Find your target audience

Next, you’ll want to determine your target audience. You can’t sell products to everyone, so it’s important to focus your efforts on a specific group of people.

To determine your target customer, consider the following questions:

• Who is most likely to buy your product?
• What are their demographics? (i.e., age, gender, location, etc.)
• Which of their needs does your product address?
• What are their interests?

Answering these questions will help you create buyer personas for your customers. Nonetheless, it’s important to note that not all leads you receive will fit this mold.

3. Develop an ecommerce business plan

Creating a business plan is essential for starting any business. A business plan lays out the formation and purpose of an organization, and it helps entrepreneurs stay organized when reaching their goals. With that said, here are some important things to consider when creating your draft.

Your business plan needs to cover things like how you plan to generate revenue, pricing strategy, your inventory of product offerings, and financial projections. Imagine you’re going to the bank to get a business loan. This document is what the loan officer would review to approve or deny your loan. It needs to be accurate and thorough.

For some, officially documenting their business plan can seem overwhelming. Below’s a business plan creation checklist to help you cover all your bases.

Business plan creation checklist

• Company name and description
• Mission statement
• Company goals and objectives
• Industry analysis
• Competitive analysis
• Strengths, weaknesses, opportunities, and threats (SWOT) analysis
• Sales and marketing plan
• Product/service lineup
• Pricing strategy
• Financial projections

4. Create your branding

Your branding is how customers will identify you out in the real world. It consists of elements that make up your company’s look and feel, like your brand name, logos, tone and voice, color palettes, typography, and brand story.

Executing these elements well relies on connecting with your customers. If you build a solid foundation of market research in step two, putting your branding together becomes easy.

Some things you can do to strengthen these elements of your ecommerce business are:

• Be yourself and share your story. Don’t worry about pleasing everyone. Market to your target audience, and the customers who resonate with your brand will follow.
• Develop your unique style and stick with it. Several ecommerce stores can be successful in selling the same product. Why? Because each builds a brand that’s uniquely them and attracts their own community of customers. You should do the same.
• Cultivate relationships with your customers. Going the extra mile to create your own content, engage in your comments section, participate in industry-related forums, and start to paint yourself as an authority in the space by associating with the industry’s big names.

5. Set up your domain name and hosting provider

With your product, market research, and business plan figured out, it’s time to move on to the more technical, back-end elements of your ecommerce business — your domain name and hosting.

Select and configure your domain name

After determining your target audience, it’s time to start thinking about your domain name. Your domain name is the URL people will use to access your website. For example, Google’s domain name is google.com. Choosing a good domain name is important because it’s how people will remember and find your website.

When choosing a domain name, keep the following in mind:

• Make it easy to spell and pronounce.
• Keep it short.
• Make it relevant to your business.
• Avoid using numbers or hyphens.
• Check if social media handles are available for the same name.

Choose and launch your website hosting

Hosting is where your website’s files are stored. A hosting company will provide the necessary technology to get your site up and running.

There are two types of web hosting: shared and dedicated. Shared hosting means that your website will share a server with other websites. This is the most common and affordable type of web hosting.

Dedicated hosting means that your website will have its own server. This option is more expensive but provides better performance for high-traffic sites.

6. Create and optimize your website

Just because your domain name is set up doesn’t mean your online store is ready for business. There still needs to be a visible marketplace that exists on your domain. To start building your online store, you’ll need to choose a website development platform.

There are several website development platforms to choose from, such as Shopify, WooCommerce, and Magento. Each platform has its own set of features and tools, so it’s important to do your research so you can make an informed choice that’s right for your business.

When choosing your website platform, you should familiarize yourself with the fees to save money in the long run. Licensing and hosting fees can quickly add up, so you need to be aware of them before making your final decision.

Once you’ve chosen a platform, you’ll need to select a theme for your website. A theme is a pre-designed template that you can use to create your online store. You may also need to download plugins to add additional features and functionality to your website, like adding a contact form or payment processing. Alternatively, a web designer can customize a site to your business needs if pre-made themes and plugins don’t work for you.

Determine your buyer’s journey

You’ll need to determine the journey potential customers might take when researching, considering, and buying your product. The customer journey is the process potential customers go through when interacting with your brand. There are three stages of the customer journey:

• Awareness: Potential customers become aware of your product or service.
• Interest: Potential customers show interest in your product or service.
• Decision: Potential customers decide whether to buy your product or service.

Once you’ve determined which stage of the journey a customer is in, you can start tailoring the website experience to be the most impactful for each stage. An example might be showing prior customers other items they may be interested in when they land on your site. The result is a personalized feel to navigating your website that is sure to convert more customers into closed sales.

Make your website mobile-friendly

Mobile-friendliness is one of the most essential elements of website optimization. Smartphones are likely your customers’ preferred internet access method, so design your website accordingly.

Take the proper steps to ensure your website’s layout and features fit properly on a mobile device screen. Also, make sure any larger elements of your website, like hi-res images and inventory carousels, load quickly enough to keep your visitors from leaving.

You also need to optimize your website for a seamless UX on top of optimizing for mobile. Load speed and mobile optimization are also vital parts of the puzzle for this, but there are other elements you’ll want to focus on, like navigation.

Map out easy-to-use site navigation

Navigation is an important component of web design optimization. Customers should have a smooth and intuitive experience browsing your site. Leave no questions of where they need to go to accomplish certain actions.

The key to designing your ecommerce website for conversions is to ensure a customer’s interaction with your site is seamless and intuitive. This means optimizing things like payment processing and product listings (which we’ll discuss further in the next section) in addition to navigational hierarchy and site layout.

7. Update product listings and inventory management

If you’re selling physical products, you’ll need to add product photos and descriptions. If you’re selling digital products, you’ll need to add links to the product files. Here are some tips for optimizing your product listings for both scenarios and managing inventory in the case of physical products.

Update product listings

Crafting product listings that engage customers requires focusing on meaningful benefits rather than just features. Ecommerce businesses should implement the following tips when crafting their product listings:

• Use vivid language and storytelling to take shoppers from problem to solution.
• Add social proof like reviews to build credibility.
• Showcase high-quality images from multiple angles.
• Optimize listings with relevant keywords for search engine optimization (SEO).
• Highlight important details like limited discounts upfront.
• Format listings for easy scanning.
• Continuously test and refine listings based on data insights.
• Design listings that convey authentic passion for the product.

The goal is to transform basic product details into compelling narratives that inform, excite, and persuade customers. Leveraging this storytelling approach turns listings from dry descriptions into impactful sales tools that speak to what matters most to shoppers.

Inventory management

Businesses can implement efficient management of their inventory, including ecommerce fulfillment and shipping, by maintaining accuracy through best practices like:

• Regular physical and cycle counts
• Enabling real-time tracking through barcodes
• Implementing radio-frequency identification (RFID) and system integration (using RFID tags to assist in package tracking and implementing this system in both your internal and customer-facing workflows)
• Analyzing sales data to optimize stock levels
• Improving turnover of slow items with promotions
• Balancing inventory costs and risks
• Organizing the warehouse with slotting and mapping
• Unifying inventory systems across all sales channels for visibility
• Developing contingency plans for supply disruptions
• Investing in enterprise resource planning (ERP) and warehouse management software (WMS) platforms for centralized tracking
• Training staff on inventory processes and tools

The overarching focus should be gaining clear visibility into true stock levels and implementing seamless processes that allow for optimized, uninterrupted order fulfillment across all channels.

8. Focus on SEO

Make sure your website is optimized for search engines so people can easily find it when searching for products or services you offer.

You can do several things to improve your SEO, such as using keyword-rich title tags and clear meta descriptions, adding alt text to images, and creating fresh content regularly.

Of course, creating fresh content isn’t enough. Optimize the blogs and web copy you write for your visitor’s readability, user experience, and Google keywords to rank well in the search engine results pages (SERPs).

Ecommerce entrepreneurs must also factor in other Google Ranking signals like Experience, Expertise, Authoritativeness, and Trustworthiness (E-E-A-T). Google runs web content through this filter to ensure users get the best answers possible from the websites they browse.

As a business owner, it’s not enough for you to just “know” your industry. You’ll need to prove it to your audience by leveraging quotes from other experts, leaning on personal experience, or sharing any credentials you have that are relevant to the topic at hand.

9. Set up payment processing and security

Selecting a secure payment gateway is crucial for any online business. The right payment processor can help with the following:

• Payment Card Industry Data Security Standard (PCI DSS) compliance for security standards
• High uptime rate with redundancy to ensure reliability
• Competitive transaction fees and costs
• Integration with platforms like websites and shopping carts
• Quality customer support availability

An effective payment processor should encrypt sensitive cardholder data and comply with industry standards to protect business reputation. This type of reliable, secure payment gateway that prioritizes data protection should be seen as an investment in building customer trust and loyalty.

Taking the time to thoroughly evaluate payment gateways on these criteria will ensure your business has the best solution for securely processing transactions and customer data.

10. Advertise and market your ecommerce store

The final step in starting an ecommerce business is fulfilling the marketing strategy in your business plan. However, ecommerce stores require much different advertising strategies than service providers and consultants.

Below are some proven ways to advertise your online store and capture the attention of qualified buyers.

Use a popup to ask for customer emails

One of the best ways to grow your email list is to use a popup on your website. A popup is a small window that appears when a visitor enters your site. It asks the visitor for their email address in exchange for something like a discount code or an eBook.

You can use an email marketing service like Mailchimp or Constant Contact to create and manage your email list. These services provide templates and tools that make creating beautiful emails that will engage your customers easy.

Segment your marketing campaigns

When you’re marketing your ecommerce store, it’s important to segment your campaigns so you’re only sending relevant information to interested customers. Segmenting your campaigns allows you to target specific groups of people with tailored messages.

For example, if you sell women’s clothing, you might segment your email list by gender and only send emails about women’s clothing to female subscribers. This ensures that your subscribers only get the information they’re interested in, making them more likely to purchase.

You can segment your email list by several criteria, such as age, location, or interests. The more specific you are, the better.

Reinvest your profits into your ads

When you’re first starting, it’s important to reinvest your profits into your advertising campaigns. This will help you reach a larger audience and quickly grow your business.

There are several ways to advertise your ecommerce store, such as Google Ads, Facebook Ads, and Instagram Ads.

The most important thing is to start small and gradually increase your budget as your business grows. This will help you avoid overspending and ensure that you’re only spending money on ads that are proven to be effective.

Start your ecommerce business

Figuring out how to start an ecommerce business doesn’t have to be hard work. Nexcess is here to help you navigate the world of digital shopping. Our team of experts can help you make the most out of our inventory of products. From hosting for ecommerce sites to dedicated servers for ecommerce, our team has your back.

Contact Nexcess for all your hosting needs. Our decades of experience make us the perfect partner to bring your business to the level of your dreams. Get started today — you’ll be glad you did.

This blog was originally published in July 2021. It has since been updated for accuracy and comprehensiveness.