You’re here because you want to learn how to start an ecommerce business. And you’re not alone. It’s estimated that there are 24 million ecommerce websites operating on the Internet and more are created every day.

The good news is that there are more than 5 billion people on the Internet searching for products to buy on a daily basis. There’s plenty of room for growth in the ecommerce industry.

We created this ultimate guide on how to start an ecommerce business to save you time and remove the guesswork. We’ll teach you everything you need to know from starting out to growing and scaling your ecommerce business.

Remember, opportunity waits for no one. Let’s turn your dream into reality NOW.

6 Steps To Starting A Successful Ecommerce Business

The saying “it’s not how you start, it’s how you finish” doesn’t apply to business.

If you don’t map out a strategy that will help you navigate past the challenges that come along the way, your ecommerce ship might sink and never arrive at its intended destination point – entrepreneurial success.

In this section, we’ll take you through the 6 steps you need to take to start – and manage – a successful ecommerce business.

1. Conducting Market Research

Every business idea sounds like the greatest invention since the can opener. Until you realize reality is far different from expectation. To find out if your business idea is viable, your first step must be to conduct market research.

Identifying Target Audience

If you’re selling steaks online, you don’t want to target vegans. You want to target consumers who love to eat meat, specifically steak.

  • How much do they spend on steak?
  • How often do they eat steak?
  • What cuts of steak are popular?
  • Do they prefer steak from Australia, New Zealand, Brazil, Argentina, or the US?
  • Do they prefer dry or wet-aged steak?

These are just a few of the questions that your market research needs to find the answers to.

By learning more about your target audience, you’ll have a better idea of how to reach potential buyers and what types of products you should sell on your ecommerce store.

Understanding Competitors

The person who invented and sold toilet seat covers might have thought he had the market cornered.

He didn’t know he was also competing with other players in the toiletries and disinfectant industries – sellers of toilet paper, alcohol, sanitizers, and hand wipes.

Your competitors aren’t just the ones selling products that are similar to yours. They could be businesses that have products that can be perceived as alternative solutions by the market.

To understand your competitors:

  • Do they have optimized, well-designed, and fully-functioning websites?
  • Find out their strengths and top-selling products.
  • Uncover their weaknesses, poor selling products, and flaws.
  • Create a profile of their buyer.
  • Learn what their market/audience likes about them.
  • Learn what their market/audience dislikes about them.
  • Identify the big players; how are they performing in the market?
  • Identify the small players; how are they performing in the market?

Going back to our previous example, you might be competing for market share with an entrepreneur who’s selling Bison steak online.

Conduct a study on your competitor and on Bison meat. Find out what makes it a better alternative. Is it cheaper or more expensive? Is it healthier? Is it easier/harder to cook Bison meat? Is it more tender than traditional steak meat?

Analysis Of Market Trends

After eating US premium rump and chuck steaks at a friend’s house, you think there’s an untapped niche for these less popular cuts of steak in the market. You can validate your theory by doing an analysis of market trends.

  • Find out if the market has been trending upwards and if growth is sustainable.
  • What are the most popularly-bought products in the market?
  • What are the other growth niches in the market that aren’t saturated?
  • What is the average net profit margin in the industry?
  • What are the possible threats to growth?
  • What are the external and internal risk factors? For example, if you import, your costs will be affected by unfavorable fluctuations in the exchange rate. Internal risks include changes in consumer behavior, inflation, weak, and political and social factors.

When performing market research, use only credible source materials. Don’t limit yourself to online research. Reach out and talk to entrepreneurs who have been in the same industry for decades. Utilize social media which can be a reliable source of information.

2. Choosing A Business Model

Ecommerce isn’t just limited to selling dry goods to consumers. You can sell to other businesses. Consumers can also sell to other consumers. Do you have a product or service that might be useful to the government? You can sell that online too!

There are 6 types of ecommerce business models to choose from:

Business-to-Business (B2B)

You sell a product that can be used by another business to create its products.

Examples:

  • Meat products to refineries
  • Textiles to clothing manufacturers
  • Chemicals to pharmaceuticals

Business-to-Consumer (B2C)

You sell products that consumers use.

Examples:

  • Household products
  • Fashion accessories
  • Food

Consumer-to-Consumer (C2C)

You sell products to consumers by transacting through third-party websites.

Examples:

  • Facebook Marketplace
  • Amazon
  • eBay

Consumer-to-Business (C2B)

You offer products or services that can be used by businesses.

Examples:

  • Selling stock photography
  • Offering freelance services
  • Offering back office outsourced services

Business-to-Administration (B2A)

Your company has a product or service that can be used by the government and its agencies.

Examples:

  • Create hiring software
  • Design proprietary accounting software
  • Develop software that creates national IDs

Consumer-to-Administration (C2A)

You have a product or service that can be used by the government and agencies to fast-track its processes for the public.

Examples:

  • Business registration
  • Payment of taxes
  • Renewal of licenses and permits

3. Building An Ecommerce Website

An integral part of running an ecommerce business is the website. You can’t and shouldn’t depend on social media platforms to grow your business.

Having your own ecommerce website has several benefits… 10 and counting.

  • Build your business brand
  • Create a one-stop-shop where you take the customer through the entire buying process
  • Open a new stream of revenue
  • Keep your business open 24/7 and 365 days a year
  • Reduce business costs
  • Build credibility
  • Enhance your online presence
  • Give your reputation as a proprietor of quality products and services a boost
  • Expand your market/audience reach
  • Retain your current customers

But not ecommerce websites are created equal. To be effective, your ecommerce website must have the following qualities:

  • Mobile responsive
  • Optimized for search engines
  • Web pages have a fast download time
  • Contain fresh, useful, relevant, and optimized content
  • The home page must have a compelling Unique Value Proposition (UVP)
  • Web pages must have strong Calls-to-Action (CTA)
  • The website must look beautiful; aesthetically appealing with high-resolution images
  • Fully-functioning buttons
  • Easy to understand and quick to fill out contact forms
  • Complete contact details

With all of these qualities, you should only entrust the design of your website to an experienced and reputable Shopify developer in the Philippines.

4. Creating A Market Strategy

With an ecommerce business, you can reach more potential buyers compared to a brick-and-mortar store. Add to this, the fact that your online shop remains open 24/7 and you have a business model that can generate sales for you 365 days a year without taking holidays off.

That said, just because you opened an ecommerce store doesn’t mean “they” – meaning your customers – will come.

You need to create a marketing strategy that will place your products front and center of the consumers who are most likely to become paying customers. Also, don’t forget the ones who are already your customers.

Existing customers are a gold mine. It costs less money to generate sales from existing customers compared to new ones. They made their choice – you. Now, give them more reasons to buy from you again.

Here are 5 tips on how to create an effective ecommerce marketing strategy:

  • It all starts with having a beautiful, well-designed, and optimized ecommerce website. If your site isn’t optimized, Google won’t be able to find it.
  • Create amazing content that’s unique, well-researched, useful, relevant, and optimized for search. Then, post them on your social media pages.
  • Set up a Facebook Store and link your ecommerce website. Facebook is the largest social media platform with more than 2.9 billion users every day.
  • Add image-focused social media platforms such as Instagram and Pinterest to promote your ecommerce site.
  • Run contests on social media that offer amazing discounts and giveaways to customers.

The primary objective of your marketing strategy is to drive more people to your ecommerce website. Once there, the CTAs that are in place must be able to do their job and move the visitors along the sales funnel.

5. Fulfillment And Logistics

One of the key online behaviors that consumers possess and presents challenges to an ecommerce business is fulfillment. Shoppers want to get their orders right away as soon as possible.

When a transaction is completed on your ecommerce site, you must fulfill that order and have it shipped and delivered to the customer within an acceptable time frame.

Customers understand that “delayed gratification” is a tradeoff for the ease and convenience of online shopping. However, there’s a limit to their patience.

  • 53% of consumers revealed in a survey that speed of delivery is an important factor for their continued patronage of an ecommerce business.
  • In the same survey, 25% of shoppers will abandon the purchase if delivery is slow.

Order fulfillment involves different areas of responsibility:

  • Storage – Your products must be stored in a clean and secure environment that is accessible.
  • Inventory – Your stock of products; you must make sure you have stocks of products on-hand that are of good quality and up to standard.
  • Processing – The processing of orders goes through the following stages; retrieving the item, packing the item, and shipping the item.
  • Shipping – You can have the item shipped by courier service, sent via the local post office, or picked up by the customer.
  • Returns Processing – You must have a process in place that attends to customer returns. You can offer refunds or a replacement of the returned product.

As you have read, inventory management is a crucial component of running an ecommerce business.

You don’t want your ecommerce website to read “Out of Stock” for a long time. Initially, a shopper might view that situation in a positive light; that your items are in demand.

But over time, frequent incidents of having insufficient inventory might be perceived by customers as the ecommerce business’ inability to pay suppliers or simply poor management practices.

Without stocks, you have no sales. Meanwhile, your costs continue to run.

6. Growing And Scaling Your Business

How do you know that the time is right to grow and scale up your ecommerce business? To know with confidence that your business is ready to enter an expansion phase, you have to assess its performance objectively and subjectively.

An objective assessment means that you have to review and analyze your business metrics because numbers don’t lie.

Financial Statements

Sit down with your accountant and go through your income statement, cash flow statement, and balance sheet and uncover the answers to these questions:

  • Have you steadily maintained profitable operations for an extended period?
  • Have you recovered your initial investment?
  • Is your current level of profitability sustainable?
  • Are there factors that can affect cash flow if you decide to expand operations?
  • Are you in a position to internally finance an expansion program?
  • What are your top-selling items?
  • If you decide to expand operations, what is the effect on your monthly expenses?

Customer Relationship Management (CRM)

Find out if your business has consistently added to its database of existing customers and the rate by which you are acquiring new buyers.

Website and Social Media Analytics

Find out if your ecommerce platform and social media pages are consistently gaining more activity in terms of the number of followers, engagement levels, and transactions.

It’s very important to evaluate how your current SEO strategy is performing. If your ecommerce website has consistently ranked near or at the top 3 positions of the first page of the SERP – that’s a powerful signal for growth.

Inventory Management

Talk to your suppliers and vendors and find out if they have enough stocks to support your growth/expansion plan. Then, check the capacity of your warehouse or storage facility.

You might have to lease another storage facility or if the numbers show it, the time might be right for you to buy a warehouse for your business to cut down recurring costs.

A subjective assessment means getting feedback from your customers. It’s subjective because your customers can be passionate about your business that they want more of your products.

You can run a subjective assessment simply by reaching out to your loyal customers.

  • Send out a survey via email or social media. You can also tally the number of comments you received on social media that are urging you to expand your business or add to your product mix.
  • Contact a good number of loyal customers and ask them at least 3 questions one of which is “Do you think it’s time for us to expand the business?”
  • Talk to your team. Are they ready for a growth phase? What are their future plans? Do they envision themselves working for you in the next few years?

Expanding a business can be a very exciting time but when you allow emotions to overcome rational thought, you might get misled by growth signals. It’s all about consistency. If your business has consistently been on an uptrend, then you should seriously consider expanding operations.

Keep in mind that entering the growth phase doesn’t happen in 24 hours. You have to plan for it.

For example, if your current facility is operating at full capacity, then you’ll have to set aside time to look for a new place plus manpower to handle more inventory and the increased output.

Start Your Ecommerce Business

If you’ve always wanted to be in retail, an ecommerce business would be the ideal venture for you. The timing can’t be any more perfect than NOW to become an online entrepreneur!

Work and life have continued to use Internet-based channels to address their needs. As the world becomes increasingly influenced by the Internet and digital technology, you’ll have greater opportunities to run a successful ecommerce business.

Once you’ve committed to the ecommerce entrepreneurial lifestyle, invest in an ecommerce website that’s designed and developed by an experienced and credible Shopify developer.

That ecommerce website will be your store on the Internet where you will welcome guests and customers 24/7 and 365 days a year.

Follow our tips and in a few years you might find yourself challenging the giants of the ecommerce industry.