How Do I Start an Ecommerce Business

5 Things to Keep in Mind: How Do I Start an Ecommerce Business in 2022?


    COVID-19 has rapidly transformed our lives in many ways. In the business sector, it has accelerated the shift from physical stores to eCommerce by five years.

    While traditional retail has experienced non-stop adversity, e-commerce has boomed because consumers now prefer to shop through online stores to keep themselves and their families safe.

    Business owners have realized the need to make companies pandemic-proof to save themselves from the pain of closing up stores and dismissing employees.

    Take advantage of the changing times and start your eCommerce business today. We have everything you need to kickstart your online business!

    Major Things to Keep in Mind When Starting a Thriving Ecommerce Business in 2022:

    1. Know Your Niche

    Before sifting through your eCommerce business ideas, the most important step is knowing your e-commerce niche or the industry segment of where your proposed product or service will fall into.

    Although you want to appeal to as many people as possible, face the reality that small businesses like yours have limited resources. You will find better success in dedicating your energy to a narrow eCommerce niche, whether it be highly-insulated water bottles, lightweight sunscreens, or compostable stationery.

    Here are some tips for choosing the best niche for you:

    • Pursue your passion. – Deciding to become your own boss rather than working through a 9-to-5 job is already a big step. Follow it through by choosing a niche where you are happy to spend hours and hours every day regardless of recurring failures.
    • Conduct keyword research. – There are many free keyword research tools available today. Monitor specific keywords in your potential niche and narrow them down as further as you can get.
    • Pay attention to everyday frustrations. – Great inventions have cemented their place in history because they solved a persisting problem. Gain insight on these issues through your own experience, keyword search, or social media.
    • Consider what’s trending. – Although most trending products or services in the market are fads, you can still take advantage of them by jumping on the train early. Check which aspect of the trend that consumers love and its weaknesses, and improve upon those insights.

    Once you’ve found your niche, get started on making a list of potential products to sell within it or think of something unique that others are not doing. You can also follow the tips on finding your eCommerce niche to develop your potential product or service.

    Take a look at how potential competitors are operating. Grab the opportunities they’re overlooking and improve upon their weaknesses.

    You can also explore Pinterest, Etsy, Instagram, and other social selling sites to know what to offer differently.

    2. Identify the best business model for your product

    Now that you’ve identified your product, choosing the best business model to sell it is the next step.

    A business model will define the framework of how your company will operate and create value. Here are the four main types:

    • B2B – Business to Business

    The B2B e-commerce model involves businesses selling products or services to other businesses. Oftentimes, the sellers involved are wholesalers, distributors, and manufacturers, while the business buyer resells to the consumers.

    Transactions in this model have longer sales cycles, but this is compensated by higher-order values and repeat purchases by the business buyer.

    • B2C – Business to Consumer

    The B2C business model is the most traditional and common type there is. Ecommerce companies following this model sell products or services to their end-users.

    As opposed to a B2B model, the sales cycle in the B2C model is much shorter. It doesn’t take a long time for a consumer to decide whether he/she will buy a product, and the seller can instantly fulfill an order with stocks on-hand.

    Compared to those following a B2B model, B2C companies encounter lower average order values but enjoy greater sales volume.

    • C2B – Consumer to Business

    Although very uncommon compared to other business models, C2B businesses have been growing in recent years. This model allows individuals to sell their products or services to companies.

    Upwork and Fiverr are popular C2B businesses that connect freelancers to companies who want to outsource a writer, assistant, software developer, or any professional. Newer C2B platforms like Ifluenz allow brands to choose from social media influencers to promote their brand.

    • C2C – Consumer to Consumer

    Lastly, C2C businesses are online marketplaces that connect consumers in a single space. They give consumers a platform to trade goods and services with each other and charge transaction, subscriber, or listing fees to make money.

    Sellers immensely benefit from an increased customer base while buyers enjoy more options and lower prices. The main challenge for a C2C business is the lack of quality controls and online scammers’ proliferation.

    After choosing how your company will operate, it’s time to decide how your company will generate revenues. Here are the types of business revenue models to choose from:

    • D2C – Direct to Consumer

    D2C is the most traditional revenue model on this list. Companies employing a D2C model sell goods to consumers without any intermediary or middleman. These allow them to have higher profit margins since the sale and distribution of products are within their control.

    D2C businesses can engage with their customers directly. With the rise of data analytics, they can learn from the data gathered from each interaction to enhance customer experience and build stronger brand loyalty.

    • Dropshipping

    Dropshipping is a revenue model quickly gaining popularity among ecommerce companies. Under this setup, you act as the retailer through your website and directly receive the buyer’s payment. Your supplier will take care of the shipping and order fulfillment.

    This model is great for beginners who may not have enough time or resources to manage inventory, packaging, and shipping.

    Many dropshippers close up shop due to unsustainable low-profit margins. Moreover, it’s your business that will bear the brunt when your suppliers fail to meet your buyers’ expectations.

    • Subscription Services

    This kind of model allows sellers to provide products or services to a customer within a specific term, usually monthly or annually. The buyer can continue or opt-out of the subscription service when that term expires.

    Subscription services target consumers who prioritize convenience without skimping on variety. Some consumers have hectic careers that prevent them from having the time and energy for their everyday tasks or hobbies. A subscription service solves that problem by allowing them to explore new products from their favorite industries or save them time to shop in physical stores.

    This model ensures high customer retention and loyalty, predictable revenue, and low inventory risks. The main challenge is subscription fatigue, so it’s vital to deliver quality products and services consistently.

    • Wholesaling

    In wholesaling, a company offers its products in bulk and sells them at discount prices.

    Although a B2B business traditionally employs this, wholesaling is now increasingly used by B2C companies online to target budget-conscious consumers.

    • White Label and Private Label

    White labeling:

    A business involved in white labeling applies its logo and brand to generic products sourced from a distributor. White label businesses have a free hand on product packaging but none in terms of product quality and specifications.

    Expect fierce competition when you choose this model since any company can resell the products sold by your distributor. Be creative in your marketing strategies to stand out.

    On the other hand, in private labeling, a company hires a manufacturer to create a unique product that it can exclusively sell. This is an excellent option for eCommerce owners who want to sell an ingenious product but have limited manufacturing resources.

    Private labeling:

    Private labelers have full control over product specifications and quality aside from packaging. Since they also have exclusive rights to sell the product, they can charge premium prices.

    However, if you’re gunning on private labeling, the greatest challenge is finding the manufacturer that suits your product idea. It can be very costly since you have to prepare a lot of capital, especially if your manufacturer is abroad.

    Since manufacturing is out of your hands, both methods allow you to invest more time in marketing and technology.

    • Fulfillment by Amazon

    Lastly, companies may take advantage of Amazon’s platform and distribution channels through Fulfilment by Amazon (FBA).

    Through FBA, you pay specific fees to store your goods in an Amazon fulfillment center, which warehouses and ships them to your customers. Amazon takes responsibility for any lapses in those areas.

    3. Know Your Target Market

    When starting a business, it’s essential to know your target audience.

    Your product or service won’t appeal to every member of the buying public. Even if it could, it would be next to impossible to satisfy their evolving needs in the long term.

    Knowing your target market will help you create effective marketing strategies. You will have an easier time setting the right price, branding, and tone.

    Related: How to Market my Ecommerce Business

    To identify your consumers, you need to perform market research, which ascertains your new product or service’s feasibility to potential consumers.

    In the digital age, you don’t need a lot of money to test your product idea with your target audience. If you have a tight marketing budget to conduct research, here are some tips:

    • Visit your competitors’ websites to understand your consumers. Pay attention to what they are overlooking and exploit those gaps.
    • Join online communities (e.g., Facebook and Reddit) and gain insight by reading views on current products or services in the market.
    • Subscribe to industry blogs to get ahead of the latest trends.
    • Use Google Alerts to update yourself with new content relevant to your eCommerce business.

    These are established methods to conduct market research that can be as low-cost as you want to:

    • Conduct Consumer Surveys

    When crafting a survey, define the information you need to avoid unnecessary questions.

    Demographic questions are always a must. They give a general idea of who your customer is and where he/she fits in the general population.

    Some examples of demographic information are:

    • Age
    • Gender
    • Marital status
    • Number of children
    • Educational attainment
    • Household income

    To understand how consumers behave, you should ask psychographic questions. While demographic questions answer who the respondent is, psychographic ones answer why they think that way.

    Some examples of these are:

    • What do you think about milk tea?
    • How often have you purchased a car in the past 10 years?
    • What are your thoughts on climate change?

    You can distribute surveys through emails or social media platforms. Take advantage of websites like SurveyMonkey and QuestionPro to create surveys and email them to select persons. You can also make a survey using Google Forms and post them on niche Facebook groups or Reddit pages. Offer small incentives such as future discounts or shipping perks to increase responses.

    • Interview Consumers

    Interviewing consumers can provide a more in-depth perspective than surveys. You can call them or use video conferencing applications like Zoom or Google Meet for convenience.

    Encourage them to answer honestly because negative responses will only help you improve or recalibrate your product or service. Remember to take notes or ask for their consent if you want to record the conversation.

    • Create Focus Groups

    If you want to interview a group of consumers simultaneously to save time, you can opt to have focus groups. You can also do this via video conferencing tools or in person.

    A significant disadvantage of focus groups is groupthink. People are psychologically wired to strive for harmony within a group, so it’s important to adopt strategies to prevent this from happening.

    After you have gathered your research data, you can now create a buyer persona.

    • Create Buyer Personas

    A buyer persona is a fictional person that encapsulates your ideal customer based on your research findings. It will help you evaluate whether your strategies in every aspect of your business more wisely because in every step, you can ask yourself whether it will improve the experience of your buyer persona or not.

    Here are the steps to build your buyer persona:

    • Discuss and analyze the research data gathered to identify common themes.
    • Supplement the research data with existing information gathered through site analytics, contact databases, and feedback from your sales team.
    • Start building a persona profile by giving his/her a name and a photograph.
    • Fill in the pertinent demographic information.
    • Input their behavior as well as their motivations and challenges in life. This is where your psychographic information comes in.

    After building your buyer persona, you can now construct better brand messaging to solve your persona’s concerns.

    This buyer persona will also help improve your product development and sales teams’ approach to better cater to your consumers’ needs.

    4. Create a Comprehensive Business Plan

    Execution before planning is the course of action if you want to lose a lot of money.

    The next step is to create a business plan, which will define your company’s objectives and can even help you understand the product or service you’re offering. Moreover, it will allow you to study the competition, target audience, and gaps in the market.

    Your business plan should have the following sections:

    • Executive Summary

    This will provide the reader a gist of your business idea. It will summarize the succeeding sections in a few paragraphs.

    • Company Overview

    Your Company Overview contains your business name, business structure, and domain name as an eCommerce business.

    You also need to craft your vision and mission statement.

    Lastly, you will introduce your business idea and unique selling proposition that distinguishes your company from the rest of your competitors.

    • Market Analysis

    This segment will give an overview and analysis of your industry.

    Using competitive analysis, you will understand your competitors better: their position in the market, their products and services, current strategies, and so on.

    Your conclusion should provide what you can offer differently to the target consumer base.

    • Products and Services

    Under Products and Services, you will comprehensively explain your product or service. If you plan to sell multiple variants, describe each one and how it is different from the product lines offered by competitors.

    • Marketing Plan

    This section will outline your marketing strategies or what you plan to do with the 4Ps: product, place, price, and promotions to capture your target audience.

    • Operations and Logistics Plan

    Your Operations and Logistics Plan will detail how you will conduct your everyday business. It will include your supply chain, inventory management, shipping, and fulfillment plan, among others.

    • Financial Plan

    This section will tell your reader whether your business idea is profitable or not. It will include an income statement, balance sheet, and cash-flow statement.

    You must convince your investors or bank that giving you money is worth the risk. Create a clear business plan, and it will do the rest.

    • Branding

    To create strong brand awareness and recognition, you need to have effective branding to make your mark with consumers. Consider these points during its development:

    • More isn’t merrier. If you place too many design elements, it can come across as confusing or even tacky.
    • Make it adaptable. Make sure to use fonts or illustrations that can translate across any medium, whether on a Facebook ad or a highway billboard.
    • Be different. Its primary function is to identify your brand. It has to be recognizable enough for consumers to differentiate you from the rest.
    • Keep it clear. You have to communicate your brand through your logo. Make sure that they are aligned.

    5. Where can I get started to build my eCommerce website?

    The final step before you can launch your eCommerce store is building your website.

    Nowadays, you can take advantage of Software as a Service (SaaS) platforms, which offer eCommerce platforms and customizable website templates. Here are some of our picks:

    This website creation tool is very beginner-friendly and offers tons of aesthetically-appealing themes. It’s popular for businesses with a limited catalog.

    Shopify is arguably the most popular SaaS platform because of its flexibility and fast loading time. Its platform will work best for dropshippers.

    BigCommerce is one of the best eCommerce platforms for any business size. It offers great features, multi-channel selling, and strong SEO performance.

    This is an open-source platform that people with professional web development experience would enjoy. But once you get the hang of it, you can utilize Magento’s robust features to fit your personal needs.

    You can get the best value for your money with Square Online since you’ll only pay for payment processing, except if you choose to upgrade your plan. It is excellent for a small business with a small catalog.

    Related: 10 Steps to Build an eCommerce Website from Scratch


    Owning an eCommerce company is an exciting and challenging experience.

    Remember that aside from the technical aspects of starting an online business, it is crucial to have the right mindset. Be prepared for a lot of research, stressful nights, and maybe a string of failures before you reap success!