How to Launch an E-Commerce Business: A Step-By-Step Guide

E-commerce refers to the sale and supply of products by businesses on an online platform, either independently hosted or through an online marketplace like Amazon or Shopify. With an electronic presence, businesses can sell their products globally without opening any physical stores, and thus reduce costs and reach more customers at the same time. Customers also favour online shopping because of competitive prices, availability of brands from around the world and doorstep delivery of products.

The numbers, clearly, indicate that e-commerce is and will be a significant driver for business growth around the world. Thanks to online marketplaces like Amazon, Shopify, eBay, WooCommerce and Etsy, setting up an e-commerce business has become easier than ever. More and more entrepreneurs with an idea, therefore, are turning to e-commerce to transform their ideas into viable businesses. The ease of starting an e-commerce brand, however, also means that there are millions of players on the market. It is thus essential for a new business to think creatively and plan strategically when setting up an e-commerce business so that it can distinguish itself from the rest.

Building up a new business is akin to building up a new house – there needs to be a solid foundation, a solid structure and an appealing exterior in place before it can be put on the market. In this step-by-step guide, we discuss the essentials of building up an e-commerce business from scratch so as to gain maximum exposure to the target audience and generate as much revenue as possible.

Phase 1 – The Foundation

These are the preliminary steps that will set a base for the future of the business. Just as a house needs solid foundations to survive, an e-commerce business also needs to have the basics firmly in place before it can aim for success.

Selecting the right product – the first and foremost step is to lock down on the ideal product for the business. Two main factors should be taken into consideration – the profitability of the product, and the business owner’s personal enthusiasm for the product. A product sold via e-commerce should be in high global demand, have high margins and be easy to source and sell online. Searching on Google Trends, Amazon Best Sellers and eBay Top Products can help identify what the most popular products are across different categories. And the more a business is personally convinced and enthusiastic about the product, the more invested they will be in making it succeed.
Conducting market research – market research is essential to identify and understand the correct target market for the product. There are two main factors to focus on when researching:
- Demographics – characteristics like age, gender, income level, geographic location, marital status etc. which define who the target customer is.
- Psychographics – characteristics like hobbies, tastes and preferences, values etc. which define the needs of the target customer and thus how to market to them.
Understanding the competition – there will most likely be multiple existing businesses selling the chosen product, and it is essential for a new business to understand what the competition is doing and what results they are generating. Elements to study closely include key product features, price points, website features, social media marketing tactics and customer reviews. Accordingly, a new business can distinguish itself from the competition by offering a newer and better experience to customers.

Phase 2 – The Structure

Once the foundation is set, a sturdy structure is required to prop up the business and keep it running on a day-to-day basis. The sturdier the structure, the less time and money will be required for its maintenance, just as good-quality building materials ensure that maintenance costs for a house are low.

Selecting a manufacturer – picking the right manufacturer for the products is crucial, be it a manufacturing agency or a personal friend/relative making handicrafts. The business should ensure that the manufacturer offers quality products, delivers on time and has sufficient inventory to meet large orders. Businesses who do not sell products made from scratch can source products from other sellers with the help of resources like Oberlo.
Setting up shipping channels – a robust order fulfilment and shipping system is essential to ensure that products are delivered safely and on time. There are two main types of shipping models that e-commerce businesses use:
- Dropship business model – this is ideal for e-commerce businesses that sell products sourced from external suppliers. When a customer makes a purchase, the business places an order with the supplier, who packages the product and ships it to the customer. This is a low-risk, low-cost order fulfilment method as the business does not have to stock and ship any inventory of its own. Marketplaces like Oberlo have a wide range of verified suppliers and can help businesses automate the order fulfilment process.
- In-house fulfilment model – if the business manufactures its own products, it is ideal for the business to ship them in-house as well. ShipStation is a popular shipping and fulfilment tool that integrates easily with all major e-commerce platforms like Amazon, Ebay and Shopify.
Chalking out a revenue model – it is of paramount importance to have well-defined, highly specific revenue goals. The business should make a list of all its costs, both fixed (such as domain name hosting) and variable (such as the cost of raw materials, staff salaries, shipping and handling etc.), and price its products so that costs are covered and a sufficient margin is left. As sales volumes increase, the business can also look for ways to reduce costs, such as by negotiating with materials/product suppliers for better deals.
Hiring the right team – while the business owner may have to do most of the work alone when setting up a small business, it is essential to identify and onboard the right team of contributors. For example, freelance writers, photographers and web designers can be hired for setting up the website and creating marketing content, while consultants can be hired to work on finances or improve the business strategy.

Phase 3 – The Exterior

While the business owner sees the entire structure of a business, outsiders see only the exterior. To attract buyers, a house should be painted and decorated as attractively as possible – similarly, an e-commerce business should present an attractive, unique and memorable exterior to its target audience as well as the general public.

Deciding a business name – this is a crucial step, as the name is what customers will use to identify, look for and refer the business. It should be catchy, easy-to-remember and relevant to what the business sells. At the same time, an appropriate website domain name should be chosen – one that incorporates the business name and is ideally not too long. Those having difficulty coming up with the right name can try Shopify’s business name generator, an excellent tool for new businesses. Both the business name and the domain name should be checked for duplicates, then registered and purchased.
Setting up a business website and social media pages – a new business can set up an independent website or create a site under selling platforms like Shopify or Etsy. The website should contain all necessary information such as product descriptions, payment and return policies, FAQs, special offers etc. The content should be crisp and relevant to the page so as to attract customer attention and show up higher on search engine rankings. Using a distinctive colour scheme, font and page design will encourage visitors to explore the website. It is essential to have the website optimised for viewing on both desktop and mobile devices. At the same time, the business should set up official pages on Facebook, Twitter, Instagram, Snapchat and other major platforms.
Identifying marketing channels – the right marketing channels for an e-commerce business will depend on where most of its customers are present. For example, millennials and Gen Z customers are most active on Instagram and Snapchat, while older customers are more active on Facebook. The business should ensure that it has an official account on all these platforms featuring the business name and a link to the website.
Preparing a marketing calendar – it is essential to attract customer interest by being active online well before the launch. The business should set up a marketing calendar with details of when the first promo emails will be sent out when content will be shared on social media and on which platforms when the launch date will be announced and so on. SEO (search engine optimisation) goes hand-in-hand with online promotion – optimising the e-commerce site pages to have the right keywords and relevant content will boost site rankings on organic search. Paid promotion with the help of pay-per-click ads is another way to reach a broader audience base. A social media manager can be hired to take care of content marketing, SEO and online advertisement so that the business gets maximum engagement from customers.

Phase 4 – The Launch

Once the house has been fully constructed, it is put on the market for sale and a marketing plan is implemented to make sure potential buyers know about the new house and are excited to see it. Similarly, an e-commerce business should tailor its marketing efforts so as to create as much excitement as possible among potential customers and encourage them to visit the website as soon as it is launched.

Testing the product before launch – before getting the final business up and running online, it is useful to do a test launch of the product with friends, family or a volunteer group. That way, the business can incorporate feedback and address issues early on before the final launch, so that the product can start out stronger.
Notifying customers in advance – the business should excite potential customers about the upcoming launch by creating a buzz. Teaser emails can be sent to customer mailing lists and teaser posters can be shared on social media platforms.
Launching across platforms – the launch should take place on a specific date and time across all platforms simultaneously. Emails and social media posts can be shared with the website link so that viewers can immediately visit the site.
Providing special offers for the first visitors – to create even more excitement for customers, a business can provide exclusive offers to the first customers. For example, it can offer a flat 50% discount to the first 100 buyers, or free samples to the first 200 buyers. The offer should be promoted widely across social media so that customers and followers are informed about it and can avail of it.

Phase 5 – The Maintenance

Any house needs to be maintained as it undergoes wear and tear. Repairs and improvements at the right time ensure that the house remains attractive, sturdy and safe to live in. Similarly, an e-commerce business needs to regularly update itself, add extra features and address customer complaints if it is to survive and thrive in today’s fast-paced business environment.

Tracking customer behaviour – a business can thrive only by constantly responding to evolving customer needs. It is thus essential to track how customers behave on the e-commerce site – which products they search for, which ones they save for later, add to their cart, purchase etc. Accordingly, the business can stock popular products, add new products and personalise the experience for customers, as Amazon does. It is also essential to track online ad performance and search engine rankings so that advertising budgets can be allocated and keywords can be updated. Google Analytics is helpful in this regard.
Setting up customer care services – resolving customer issues quickly, courteously and effectively is one of the key factors determining a business’ success. A customer helpline and email address should be set up with efficient, well-trained staff to respond to customer queries. If possible, a chatbot can be set up on the e-commerce site to directly respond to questions and complaints.
Improving site experience – the business should frequently check and update the e-commerce website to ensure that pages load quickly, images and videos load in high quality and site viewing is optimised across devices. Given that 44% of customers will talk to their network about unsatisfactory site experiences, it is vital to make sure that the website is easy to use.
Staying active on social media – in today’s social world, being consistently active on social media is crucial to ensure that the business stays top-of-mind for customers. The business should frequently share interesting new content such as product launches, answers to FAQs, helpful tips and promotional deals. It should also engage with customers by answering their questions and thanking them for feedback on the social media platform itself.

Today, thousands of small businesses across the globe have benefitted from e-commerce and built customer bases that they could not have earned through brick-and-mortar alone. Etsy, in particular, has helped thousands of artisans and craftspeople share their creations with lovers of art. Thanks to its easy, intuitive interface, it has helped Olivia Wang launch her handmade floral pieces on Floral Neverland, allowed Lorena Haldeman to revive her yarn and ceramics business through the HaldeCraft shop and helped Ross Warden take his map-making business from a one-man show to a 4800-square-foot facility that sells through Conquest Maps.

Shopify is another platform that has enabled sellers from around the world to share their niche products. From England-based MindJournal and Singapore-based Perk By Kate to Australia-based Mister Hound and Canada-based Florivera Skincare, Shopify has converted thousands of business ideas into success stories. Thanks to the ease of integrating platforms, many businesses are also using more than one platform to expand their outreach. Kathryn and Carl of Aventuron, for instance, use both Shopify and eBay to manage their sales of bikes and outdoor equipment.