How To Start An E-Commerce Business Online

silver shopping cart on pink surface

Most shopping experiences have moved online, triggering enormous opportunities to start a business online. Consequently, many people are looking at how to start an e-commerce business online. On the other hand, in order to stay relevant with the current trend, many retailers are looking forward to moving their business online. Regardless, whether you are looking to jump into the online business for the first time or move your operations online, e-commerce activities are set to soar over the next couple of years. However, to be successful, an e-commerce business needs a proper setup and rigorous guidelines. Yet beforem answering the question of how to start an e-commerce business online, let’s dive into some basic interrogations.

What are the benefits of e-commerce?

The main benefits of an e-commerce are found in its essence which is convenience for customers and low running cost for the owner. For instance, customers can enjoy faster buying, easy price and product comparaison. While sellers get access to practically an unlimited market reach, cheap advertising and marketing.


What are the different drivers of e-commerce?

Traditionally, the main drivers of e-Commerce are:

  • Customer preferences
  • E-commerce perceived values
  • Partner readiness
  • E-commerce cost
  • Technical expertise
  • Customer trust
  • Employee knowledge and experience
  • Top management support
  • Perceived ease of use
  • Product or service availability
  • Organizational culture

What are the category of e-commerce?

Generally, an online business falls under one of the 5 main types. Yet, don’t be suprise to find out online businesses that are built around all those main types. The most common e-commerce categories are:

  • Business-to-business
  • Business-to-consumer
  • Consumer-to-consumer
  • Consumer-to-business
  • Government E-commerce, G2B and G2C.

What is a good profit margin for eCommerce?

Typically a good profit margin for an ecommerce business is at least 20%. If your online business is below that average then you should be concerned. However, it also depends on the age of the site. Early stage e-Commerce businesss tend to be less profitable.

What kind of online store is most profitable?

The most profitable online stores are those are efficiently and effective run. Indeed, online store are extremely complex to run especially those with large scale volume.

To be profitable an e-commerce store need to bring its running cost close to zero. Hence the most profitable are:

  • Virtual goods such as e-books, writings, videos,hosting,etc… That is because, they don’t require a complex logistics and sophiscated supply chain.
  • Have your physical good warehouse and fulfillment by a thirdparty

What are the limitations of ecommerce?

An e-commerce might sound good because of the enormous potential that it has to offer but it also comes with some serious liability risks.

Technology: setting up and managing on a day to day basic an ecommerce business require a certain level of technology investment. Notably, when the site is handling massive amount of data and the business is runing at scale. The deployment of new technology could be very expensive.

Legal issues: any e-commerce buisness is at risk of law suit at any time whether is because of the quality of the product, or cyber risk relateed to data breach, or law that govern e-commerce transactions.


Labour cost: the cost of hiring and keeping the talented workforce necessary to run an ecommerce buiness can be challenging for any online business. Infact, ecommerce business requires highly talented tech savvy employees who are generally in high demand.

Sales tax:sales tax can be a nightmare especially when buyes and sellers are indifferent states with different sales tax laws and regualtions.

Lack of privacy:the lack of quality encryption can put customers data at risk. This in turn, putpressure on vendors and discourage customers to conduct commerical transactions.

How can I build my E-commerce build business?

Follow these simple step by step guide if you want to start your online business even without money. Keep in mind, this is just an overview of the main critical things you have to consider.


Step 1: Build a business plan and a business model

These are the two most critical steps of any serious entrepreneur. Even if a written business plan might not be urgent, a business model is an absolute necessity. Indeed, a proper business model and planning are needed to set up any business. Basically, a business model is a simplified version of your business plan. It is a document that explains how your online business makes and spends money. Hence, without any thorough business planning, the chances of failure are higher in today’s highly competitive market.

How to Write a Good Business Plan Now: A step by step guide
  • Single-vendor marketplace vs multivendor marketplace

They are many type of online business model. Nonetheless, the mot popular are single-vendor site and multi-vendor site.

Difference between single-vendor site and multi-vendor site

  1. Single-vendor e-commerce site

    Typically, a single-vendor site refers to one seller selling a product or a service to multiple customers. Most online businesses are single vendor site. As a result, general adminstration and support activities such as tracking transaction, fufilments and payment are easier to track. Moreover, this model provides a great for tracking a great control over your brand and inventory quality control.

  2. Multi-vendor e-commerce site

    On the other hand a multi-vendor e-commerce is a platform that connects multi-vendor to multiple customers.Normally, you build, manage the platform infrastructure and all processes; in exchange vendors are required to be registered on your site before selling.

Step 2: Product Selection

Finding the right product is certainly the most important decision you will ever make. It can make or break your business dreams. That is because the shipping cost can easily escalate your final customer purchase price. Yet, with relatively light products you can expect reduced shipping cost and the opportunity for your client to purchase more goods. Comparatively heavyweight products required expensive shipping cost. Also, your ability as a business to quickly get your product into the hands of your customers is paramount. Regardless, your decision should be based on the following mix:

  • Shipping strategy
  • Target audience
  • Market demand
  • Inventory management
  • Sales channels

  • Cheap products vs expensive products

The answer to that question, rely on your ability to master your supply chain and the clear understanding of your market needs. Nevertheless, relatively cheap products tend to have high turnout and scale quick rapidly but reduced profit margins. While, expensive ticket products have slow turnout but relatively good profit margin.

Step 3: Pick your e-commerce Channel

A couple of years ago to launch an e-commerce business you had to design, build a website and maintain a website. In addition to integrating a complex set of software to run your online store. Today, that is outdated. That is because, there are many “all in one” tools available, that make it easier to set up any functional eStore instantly in few minutes. Because of the availability of such tools, the process of launching an e-commerce business online is as simple as creating a Facebook account today. In fact, in most cases nowadays it would cost you practically $0 dollars to start selling on platforms such as Amazon, Shopify, or the rapidly growing Facebook marketplace.

Step 4: Shipping partner

The process of getting an order to a customer or transporting your inventory to your warehouse is perhaps the essence of an online business. This also involves the tracking of products in transit, until delivered. This step is often underestimated by many online entrepreneurs. Especially, the cost of shiping an order to a customer including returns. Eventhough last mile delivery is the most expensive cost for any online business. Failing to find the right partner could get you out of business.

You want to choose an affordable and reliable shipping partner, that can easily access the entire market that you are targeting.


Step 5: Execution

As in any business, execution is key to success. The best practice is to start by focusing on your local neighborhood, city, and state first before looking to go national and perhaps global. Another main attention is marketing. You need to build a strong marketing strategy that drives traffic to your website and convert visitors into buyers. Keep in mind people need to see and touch your product. In my opinion, the best strategy is a balance between offline and online to build a brand notoriety while pushing for online sales.

  • Follow this basic execution steps:
  1. Test your online business for at least 6 months to make sure everything works well. For instance, your website is on point and doesn’t crash. Also, you payment getway and your bank account are functionning well. Your shipping and fufilment are working perfectly. Don’t hesite to find a sample customers within your target market and give them incentives such as free shipping and free products. These will help test your website.
  2. Go live.
How to start an e-commerce business online

Can you really make money with ecommerce?

The answer to that question, depends on your ability to offer and ship a product or a service that solve a problem for your target audience at a competitive rate where ever they are. Your cost of running an online business might be lower but pay attention to other cost such as customer acquisition and retention cost and order fulfillment cost.


To be successful with your business, it is very important to spent time educating yourself and learning what it takes to run an e-commerce business. There are many resources available online. Yet, it important to keep in mind that running an online business is extremely challenging. Even though the starting cost is not high, but running an online business requires constant adaption. The above might not answer the question on how to start an e-commerce business online but it shed the light on some on the key points to consider.


Scroll to Top