How to Start an E-commerce Business from Home

The growth of online shopping over the last two years has made e-commerce a wildly promising business sector for 2022. There has never been a better time to enter the e-commerce market. By 2025, it is expected that global e-commerce sales will reach $7 trillion, as more and more people start their own businesses and invest in online ventures.

It’s not always simple to learn how to start an e-commerce business, just like it’s not always simple to start any business. However, it’s now easier than ever to set up, launch, and maintain websites where business owners, designers, and other creators of all kinds can sell their products online.

We go step-by-step through the entire process of starting an e-commerce business and make everything as straightforward as possible. With the goal of making everything as simple as possible, we walk you through every step of launching an e-commerce store.

What is an E-commerce Business?

The terms “e-business” and “e-commerce” should not be mixed up. The terms are not interchangeable, despite occasionally being used as such. While e-commerce specifically refers to the exchange of goods and services, e-business broadly refers to all aspects of operating an online business.

Any company that purchases and sells products or services online is considered to be engaged in e-commerce. If you’re a talented businessperson or craftsperson, you probably have fantasized about opening your own e-commerce store and creating a company that gives you a sense of freedom and success. In this guide, you’ll learn every step of how to start an e-commerce business. 

The Different Types of E-commerce Business Models

The benefit of setting up an e-commerce business is that there are more options available to you, while the business models in traditional commerce are more constrained. Although there are other niche models, there are four widely recognized business models. 

• B2C: The business-to-consumer (B2C) e-commerce business model involves businesses selling to consumers. If you choose to launch your own online retail store, you’ll probably sell to consumers rather than other businesses. Amazon and Walmart are examples of B2C businesses.

• B2B: When a business sells to other businesses, it is using the business-to-business (B2B) e-commerce business model. Alibaba is an example of a B2B company because its suppliers sell to other companies, and because they are wholesale prices, Alibaba’s prices are incredibly low, which enables businesses to profit from their products.

• C2C: Consumers selling to other consumers are referred to as doing business in the C2C model. Usually, consumers do this through social media platforms like Facebook, eBay, Craigslist, and online classifieds. On those websites, a large portion of the sellers are regular people selling goods they already own, whether they are used or brand new.

• C2B: A consumer selling their own goods or services to a company or organization is referred to as a C2B transaction. This might be a web designer offering their services to an organization. Upwork is an example of this kind of model.

Is an E-commerce Business for You?

Starting an e-commerce business might make sense depending on your objectives. Ecommerce businesses, after all, provide greater flexibility, affordability, and opportunity for many entrepreneurs since they do not require a physical location. 

However, having a better understanding of the advantages and disadvantages of setting up an e-commerce business is crucial. However, it is essential to have a better understanding of the benefits and drawbacks of starting an e-commerce business.

Advantages of E-commerce Business

1. Affordable Business Startup Costs 

A significant advantage of using an e-commerce business model is that launching an online store is much less costly than opening a physical store. Your outlet does not need to be furnished, and you are not required to pay rent or employ many people. 

2. Lower operating expenses

The entire sales process for your business is automated online. As a result, you’ll spend less on payroll, wages, and other business expenses. You can then use the money you have saved to expand your product line and e-commerce website. 

3. The business can be run from anywhere.

 Any geographic limitations you would typically encounter with an office-based business are lessened by e-commerce websites. You can manage your e-commerce company successfully from anywhere in the world. You only need to have access to email, the Internet, and phones in order to manage your e-commerce website from any location.

4. No limitations on opening times

E-commerce websites allow you to reach a wider audience because they are accessible 24/7. This indicates that, as a company, you are maximizing sales and profits.

5. Cost-Effective Sales & Marketing Initiatives

By developing straightforward yet successful sales and marketing strategies, you can increase conversion rates. You could use upselling and cross-selling as examples of effective key strategies to boost your online sales. 

Upselling entails presenting goods that are directly related to those the customer has just decided to buy. Products with extremely low prices mean that customers don’t really have to consider them, and they typically go well with the purchase they just made, making it a simple decision to make. The average basket value will increase as a result of your actions.

Cross-selling enables you to persuade customers to spend more money on additional products. This is typically associated with the main item your customer is buying. The phrases “You may also like,” “Perfect match with,” and “Why don’t you go pro?” may be found on your e-commerce websites. 

Additionally, you can use a variety of effective marketing strategies on your website, like calls to action and limited-time deals, to pique the interest of potential new clients. As a result, your website’s conversion rate from visitor to sale is the higher result of these encouraging customers to take action while on your page. 

6. Simple to Scale

You can easily identify which products are selling well on your e-commerce websites, enabling you to increase the stock levels of these products. Similarly, by utilizing this data, you can concentrate on which products can be diversified to create a wider range of products to sell on the website. This will enable you to expand your company’s sales, clientele, and earnings.

The cost of e-commerce advertising is also less than that of many other types of advertising. You can use social media platforms to advertise your e-commerce business. Furthermore, to improve your website’s page rankings in search engines, you could use a search engine optimization strategy. With the help of SEO, you can attract more visitors to your website and reach a global audience, which will increase your chances of making sales.

7. Measurable Sales Approach 

You might be asking yourself, “How will I measure the results and how will I know if it will be successful?” Using tools like Google Analytics, e-commerce websites can be measured and tracked in an incredibly detailed manner. You can periodically check statistics such as the number of orders processed through your website, the typical number of items in a cart, the rate of cart abandonment, and the percentage of total revenue generated by your website.

8. Less time-consuming

You shouldn’t need to spend a lot of time maintaining your e-commerce website once it has been initially set up. This is because the online system will be used to initiate the entire ordering and payment process for customers. This will give you more time to decide what new products and special offers to sell as well as track the success of your sales. Additionally, you will be able to spot any trends in the types of goods that are doing the best business.

9. Greater Margins

You can sell at larger margins if your company participates in and sells to the trade industry sector through an e-commerce store. This will increase the earnings you make from your products. These websites’ shopping carts and payment methods also ensure that you receive full payment from the buyer immediately. Your cash flow will improve as a result, especially if your clients typically pay you in multiple installments.

10. Receiving Payments with Ease

For your e-commerce website, you can also use a number of trustworthy payment processors, such as Paypal, WorldPay, Sage Payment Solutions, Google Checkout, and Payoneer. By doing this, you can be certain that every payment transaction you make is successfully completed and that your company receives payments on time.

Disadvantages of E-commerce Business

1. Limited product experience for customers

While looking at pictures on a website can give you a good idea of a product, it’s not the same as actually using it, like playing a musical instrument, testing the picture quality of a television, or trying on clothes. Online shoppers may wind up purchasing goods that fall short of their expectations and need to be returned.

2. Insufficient customer service

In a physical store, customers can ask a clerk, cashier, or store manager for assistance if they have a query or problem. Customer service may not be as extensive in an online store. The website’s online service options might be challenging to use or fail to address a particular query, and support might only be available during specific hours.

3. Issues with customer trust

Building a reputable brand can be challenging, particularly without a physical company with a track record and direct customer contact. As part of your online offering, you need to take into account the costs of putting together a strong customer service system.

4. High Competition

The intense competition in the online market makes running an online business challenging. Big businesses frequently develop better marketing strategies, promotions, and even more affordable products, all of which have the potential to steal your customers. If the correct business strategy is not implemented, the business could face substantial losses. If the right business strategy is not put into practice, your company could suffer significant losses.

5. Waiting time

Typically, customers purchase items in stores, pay for them and then take them home.  Customers who shop online must wait for the product to be delivered to them. Even though next-day and even same-day delivery are increasingly common, shipping still takes time.

6. Security Risk

 Creating a reliable e-commerce website involves risk, particularly when users save their credit card details to facilitate future purchases. If your site is compromised, hackers can steal that credit card information. You may lose your reputation as a result of a data breach.

7. No one can make a purchase when your website crashes.

 The worst e-commerce drawback is when your site crashes and no one can purchase anything from your store. Because of this, it’s crucial to make sure the appropriate platform is being used to host your website. 

 As you can see, there are more benefits to starting an online store. Additionally, by remaining persistent and putting the solutions previously mentioned into practice, you can overcome the difficulties. E-commerce is a rapidly expanding industry, and we only anticipate more growth in the coming years.

How to Start an E-commerce Business Step by Step

Knowing your target market is crucial for developing creative product concepts, developing a successful marketing strategy, and developing an e-commerce store that converts. In addition to knowing who they are, you also need to know what your target customers value.

Understanding how your target market uses the internet to make purchases will help you improve the usability of your website and the user experience for your visitors. The likelihood of lost upsells, missed retention opportunities, and cart abandonment increases with each barrier to the purchase process, which lowers customer satisfaction. Online market research can help you identify those stumbling blocks and frequent deal-breakers.

Finding new business opportunities is another benefit of conducting market research. There are many e-commerce business opportunities available that you can take advantage of to succeed in making money online. By conducting online business research and looking at market data, you can find those hidden opportunities that are hiding in plain sight.

To determine market demand, there are many websites you can use. You can research popular search terms on Google Trends, Keylitic, and Glimpse, using data to forecast trends and business opportunities before they become popular. Additionally, you can sign up for Trends, an online community that notifies you about emerging business trends months in advance.

You should be able to answer the following questions after conducting market research and product viability to get a good understanding of your target market and offering.

• How big is your potential market for your product or service?
• Is your product or service a need that people are searching for?
• Is your product or service in high demand?
• How can you make current products better?
• Who would benefit from your product or service, and how many?
• What percentage of consumers have access to already-existing options that are similar?
• What are the average income levels and employment rates of your potential clients?
• How much do potential customers spend on these alternatives?
• Which marketing avenues will you employ?
• Are you able to reach your target customers where they live?
• Who are your competitors?

Contrary to popular belief, the mere existence of competition is a positive sign for new e-commerce businesses. The presence of competition confirms the existence of the market and the profitability of the niche.

The best way to identify your competitors is to use online tools, which will also give you good insights into your competitors’ websites. Ubersuggest, SEMrush, and SiteProfilerif are good examples.

Each of these tools will provide you with a report on the website of your rival, including information on its top keywords, most popular content, social media metrics, best pages, audience demographics, best-selling products, and more.

You can even get a list of the main rivals to the website you’re viewing from SEMrush and SiteProfiler. You can find additional websites and companies in your niche using this method as well.

Identifying those competitors and finding out what you can learn from them should be your next step. The goal of competitor analysis is to identify business strategies that can be implemented that are superior to those being used by other companies. 

It entails investigating the merchandise offered by rivals as well as their promotional strategies. In essence, you’ll try to incorporate some of their successful business practices into your own and profit from the hard work they’ve put into developing theirs.

When conducting research for your online business, benchmarking against competitors in the following areas is a useful method of conducting competitor analysis:

• Product offerings
• categories of goods
• Price variations
• Marketing activities
• Terms and prices for shipping
• The Return and Refund policy
• Methods of payment
• Their Unique Selling Proposition (USP) is used on their website.
• Current promotional initiatives are highlighted on their website.
• Loyalty program
• Differences between desktop and mobile experiences

You’ll need to come up with a plan for getting the physical item you’re selling and shipping orders to your customers. You can consider the following models in this situation:

Make it Yourself

You personally create the item by hand and deliver it to the purchaser. If your product can be created with readily available materials at a reasonable cost, such as handmade soap, candles, crafts, and ceramics, this is a very advantageous start. You would have to make smaller initial material purchases, which would lower your profit margin. However, if you can control the cost and the risk, you can scale up once you have more cash.

Purchase wholesale and resell

This strategy entails acquiring independent or commercial versions of the item you want and reselling them with a markup through your online store. Here, you don’t have a lot of control over pricing because the manufacturer determines the purchase price and the market determines the markup. Because wholesale margins are usually around 50%, if you bought a product for $5 per unit, you would typically sell it for $10.

Private Labelling

A private label solution entails working with a manufacturer to develop a distinctive product that will be sold exclusively by your company. Companies that have a great idea for a novel new product but lack the resources to manufacture it themselves are the best candidates for private labeling.

White Labelling

In this strategy, a generic product that you buy from an online distributor is branded with your company’s name and logo.

Examining products that are already being sold successfully online is a good place to start. If they provide a white label option, you can order a shipment of stock with your brand on it, market it, and then sell it through your own sales channels.

Offer Digital Products

Customers appreciate the convenience of digital downloads and services and depending on what you’re selling, they typically have low overhead costs as well. As a result, selling products online is a wise choice if you’re just starting out. Don’t be afraid to try out various things until you find the one that works best for your company.

Now that you’ve got an idea of how your embryonic e-commerce business will look, it’s time to document it all in a formalized plan of attack. Put your ideas and plans on paper and determine your startup budget, loan needs, and monthly expenses. 

This is known as a business plan, but you can also think of it as the road map for how you’re going to develop your concept into a functioning business. Your mission, vision, value proposition, and objectives should all be stated in your e-commerce business plan. It should detail everything you intend to do and how you intend to accomplish it.

A business plan is essential in assisting you in obtaining financing for your e-commerce venture if that is what is needed to get it off the ground. Make it brief and meaningful, and don’t shortchange the information that investors want to see.

The outline for your business plan will look something like this, from beginning to end: 

1. Executive summary
2. Company Overview
3. Market analysis
4. Unique Value Proposition
5. Products and services
6. Marketing Plan
7. Sales and Marketing
8. Calculating the Profitability of Your Products
9. Logistics and operations plan
10. Financial Management
11. Inventory Management
12. Key Performance Indicators 

You can easily find free business plan templates online if you want something more comprehensive to use as a starting point. If you’re writing one to obtain startup capital as opposed to if you’re just doing it for yourself, it will appear differently. Prior to writing your plan, it is crucial to be aware of your objectives. 

Generally, e-commerce businesses do not require as many licenses and permits as physical stores, but before you set up your online store and get into the nitty-gritty of building a brand,  there are some legal steps you’ll need to take.

Register Your Business: Don’t skip incorporation; there are legal protections and tax advantages, so pick a name for your business and register it.

Choose the Name of Your Online Store: While your website’s name and the legal name of your company don’t have to match, doing so has advantages. You don’t want to choose a brand name at the last minute, so make sure whatever you choose fits your niche.

Get Your Business Licenses: Since most e-commerce stores are operated from home, they don’t need as many licenses and permits as traditional brick-and-mortar shops. Nevertheless, you’ll still need to ascertain in detail what the local regulations are. Typically, your state or local government website will have this information available online. Before you start doing business, apply for any tax licenses or home business licenses that you require.

Design is an effective tool that can change how customers engage with your brand. People will interact with your website more readily, and the more effectively you communicate your brand. Presenting a strong identity is necessary if you want to build a consistent, cohesive brand experience.

Your company’s “vibe” can be summed up as a brand. Your company name, website design, and content should all convey a unified visual theme and set of concepts. The exact same holds true for your off-site presence, which includes things like social media, email newsletters, and even packaging. 

As you work on your brand identity, pay attention to your:

• Color scheme
• Logo
• Typography
• Graphics and photos 
• Iconography
• Data visualization
• Page layouts

Your distinctive brand identity distinguishes you from the countless number of rival businesses, reveals your identity to clients, and outlines the benefits of doing business with you. Additionally, it’s essential to nail your brand identity so that it faithfully represents you to your target audience if you want people to think favorably of your company.

An online store can be created using one of two methods. Utilizing e-commerce platforms or creating it from scratch using website builders with e-commerce plugins. 

You only have a small window of opportunity to promote your brand and attract customers using the e-commerce platform. Competing with other brands that sell comparable products is difficult as well. Also, keep in mind that these platforms will charge your company high fees.

However, creating an e-commerce website from scratch gives you complete control over your company and the freedom to personalize and customize your store however you like. 

Your most crucial choice in this regard will be selecting an e-commerce solution that satisfies all of your needs as a business. The wrong decision can have a detrimental effect on your growth and operations. 

Option 1: Using E-commerce Platforms

Without the need for complex technical knowledge, coding expertise, or a myriad of other computer skills, e-commerce platforms are online programs that enable you to create your very own online store. A great business idea and an internet connection are all you need!

E-commerce store builders are widely available. Some are affordable, some are pricey, some are trustworthy, and some are not.

With so many options available, we’ve compiled a list of dependable and suggested e-commerce platforms below. 

• Shopify is ideal if you do not have a lot of technical expertise or money to hire a tech team. If you want features that are simple to integrate, have automatic maintenance and security, and are easy to use. 
• BigCommerce will function for those seeking an easy setup and a speedy go-live solution. BigCommerce-based retailers typically have no plans for growth and just want to start taking orders.
• Wix is incredibly simple to set up, has great sales tools, and has beautiful designs. A wide variety of features, including Instagram sales, emails to recover abandoned carts, printable shipping labels, and much more.

It’s incredibly simple to create an e-commerce store using an e-commerce platform; all you have to do is decide which platform is right for you, and you’re good to go.

Option 2: Building using WordPress with WooCommerce Plugin

Over a third of all websites are created with WordPress, and it’s clear why people adore it as a powerful and adaptable free website builder. Your website is completely under your control, giving you complete control over its appearance, functionality, security, and many selections of e-commerce plugins to choose from.

But why partner WordPress with WooCommerce if there are other e-commerce plugins available? With more than 5 million installs to date, WooCommerce is the most widely used!

With a ton of features and support, it’s simple to use yet incredibly robust and scalable, allowing you to start and expand your business. And because it’s free, it’s a fantastic option for new shop builders who want to keep prices down.

The main drawback is that starting with WordPress and WooCommerce requires more work because this comes with a lot of responsibilities. WordPress is popular among novices, but you’ll benefit more from it if you have some basic technological knowledge.

You’ll need to take your time getting oriented and ensuring sure everything is configured properly. This may either be really gratifying or a bit overwhelming. Consider what you want from your site, why you want to use WordPress, and how you feel about managing all areas of your online business, from security to SEO and beyond, before deciding to go with this option.

So which option should you choose?

It might be challenging to decide which method to utilize to create your online store—Option 1 or Option 2. To assist you in selecting the one that is right for you, here is a brief overview.

E-commerce platforms make development quick and simple since they don’t require technical expertise and the setup procedure is quite straightforward, allowing you to start building your e-commerce store right away by customizing available online store themes and templates. WordPress requires more time to get started since you first need to locate hosting, set up software and plugins, and get familiar with the platform before you can start creating your website.

To free up your time to concentrate on the development and management of your online business, e-commerce platforms handle a lot of the more technical tasks for you, such as security, hosting, and upgrades.

WordPress, on the other hand, requires you to run updates, put security measures in place, and find reliable hosting. WordPress is popular among beginners; all you need to do is spend a little more time using it and have more technical confidence. 

Overall, we recommend Option 1 to anyone who: 

• is not tech-savvy
• wants to launch an online store as soon as possible
• desire options for quick and visual customization
• wants assistance with the building process

Option 2 is what we advise for anyone who: 

• possesses some technical knowledge.
• wish to have complete control over all aspects of their e-commerce store.
• requires a storefront that is specially tailored.
• has enough time to dedicate to creating and maintaining their website.

Once your e-commerce store is live, triple-test all the facets. Check that the website works properly in different browsers, all pages look good on desktop, tablet, and mobile devices, and all buttons are clickable and connected to the appropriate apps. Hire a QA expert to conduct the test on your behalf and present the results if you have the funds to do so.

Customers won’t just start pouring into your website as soon as your online store is up and running. Even Google is just now learning about the backstreet area of the internet where your online store is situated. You will need to actively take action to draw customers because they won’t just happen to find you by accident.

The owners of e-commerce businesses are finding it challenging to draw in the greatest number of high-quality customers who would add value to their businesses in this era of fierce competition. 

However, this does not imply that you must spend a lot of money on your company’s online marketing; even minor adjustments can have a significant impact. The following are some of the most important things you can do to draw customers to your online store:

Create a visually appealing store.

Users can afford to be selective because there are so many alternatives available on the internet today. The items you offer, as well as the general branding and atmosphere of your company, should all be reflected on your e-commerce site. Consider this: if you arrive at a website that is unattractive, confusing, and unprofessional-looking, you’re likely to assume that the items offered for sale are also like this.

Optimize your product listings. 

The simplest approach for customers to locate your items is through your product listings. You must make sure they are optimized for the best outcomes. Optimizing product titles for search and including product and brand names are some of the crucial elements to apply to your product listings.

Use high-quality product images.

You can correctly represent your products to buyers by using high-quality product photographs. To guarantee the image is clear, use a high-quality camera or phone.

Use Email marketing 

Gather email addresses from customers that visit your e-commerce site to create an email list. Then, you may promote your goods and offers to your email list subscribers.

Social media marketing

One of the top methods for marketing your goods and drawing people to your online business is social media. Creating interesting and high-quality material is essential for success on social media. Ask questions, create polls, and share interactive material to engage your audience.

Search Engine Optimization (SEO)

Make sure that every page of your website is optimized for SEO. More people will visit your online store if you rank higher in search results.

Influencer Marketing

A quick way of reaching your target audience is to partner with social media influencers to promote your products. The concept of paying someone else to promote your goods is not new. If not longer, this tradition dates back many years. The same idea is at the heart of influencer marketing, particularly on social media.

Paid ads

Allocate an ad budget for PPC (pay-per-click) ads on social networks and in search results. It’s another quick way to improve brand awareness for a new store.

You can see that it’s not necessary to spend a lot of money to get customers to your internet business. Being creative and knowledgeable about using numerous platforms is crucial.

Wrapping Up

Getting Ready to Launch Your Online Business? Why do you still wait? It’s time to dream big and launch your own e-commerce company.

It need not be difficult to launch an online business. Take things to step by step.

You could start a successful online store for a few hundred dollars if you put in the effort and have the time. And don’t panic if you are unaware of all there is to know about e-commerce. Nobody does, Each of us is developing as we go.

If you have taken the time to read through the resources above, you’ll save hundreds of hours of work and you’ll be able to tell where in e-commerce you’re more likely to get your money’s worth.

I sincerely hope you found the information I provided on starting an e-commerce business to be helpful. Did this post address all of your concerns regarding opening an online store? If so, would you kindly share it?