The e-commerce industry has grown tremendously in recent years and is projected to continue to grow. With the rapid growth of this industry, there are plenty of opportunities for entrepreneurs to make money.
If you’re interested in building an e-commerce business of your own, there are a few things to learn before you get started.
In this article, we will discuss the most important things to know before starting an e-commerce business from scratch. We’ll cover everything from brainstorming business plans to optimizing your business as you grow. To get started, we will quickly review why you’d want to start an e-commerce business in the first place.
Why start an e-commerce business?
There are many motives for starting an e-commerce business, and it’s essential to understand your “why” before you dive in. Your motives will help you make some decisions as you get started.
Some people are passionate about a product or a drive to address a specific problem. For others, there’s just a desire to make money. Both of these motives are entirely valid.
If this business is a passion project, you’re more likely to bootstrap it and make things happen no matter what. However, if you’re just in it to make money, you’ll probably act more strategically to ensure you get your desired return on investment.
Understanding your “why” will also help you develop your brand and determine how you shape your customer experience.
10 Tips for starting an e-commerce business from scratch
Now that you’re familiar with why you might want to start an e-commerce business, let’s review some of the top things to know before starting one of your own.
1. Choose a business model
The first step to starting an e-commerce business is choosing a business model. First, decide if you want to do dropshipping or fulfill orders in-house.
If you’re unfamiliar with it, dropshipping is a popular e-commerce business model in which you sell products independently but outsource fulfillment to another vendor.
If you use a more traditional model with in-house fulfillment, you must decide whether to manufacture your products, add your branding to manufactured products, or sell products from other brands.
You’ll also need to decide if you want to sell on your storefront or if you want to sell on a marketplace like Etsy or Amazon.
2. Decide what to sell
As you consider the business model you will use for your e-commerce business, it’s time to decide what to sell. If your motivation for this business venture is a personal passion or interest, you probably already have a product in mind.
Many people start with one product or a small collection of similar products to get started. This allows them to find a foothold within their niche and grow from there.
No matter what you decide to sell, assessing the supply and demand for that product is essential. You can use keyword research tools to see how many people look for your product each month. From there, you can head to Amazon to see what’s currently available and how many reviews they have.
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3. Create a plan
Once you’ve figured out the basics, you must create a business plan. This can be casual notes from a brainstorming session.
Some things to consider include:
- Who you’ll sell to
- Where you’ll source products/materials
- How you’ll fulfill orders (if you decide to do it in-house)
- Goals for your business
At this stage, you should also map out your financial plan. Decide if you’re going to seek financing from potential investors or if you’re going to fund the initial investment on your own. If you want to seek funding from investors, you’ll need to formalize this plan to present it.
4. Get to know your target audience
The next step is defining your target audience. Map out exactly who you want to sell to, including their gender, household, age, level of education, and other relevant demographic info.
Luckily, serving online customers opens doors to buyers both near and far. However, when choosing geographic parameters for your target audience, it’s important to consider shipping costs and any potential fulfillment limitations.
Once you have defined your target market, it’s worth taking it further and getting to know your customer base with surveys or one-on-one conversations. This insight will help you fine-tune your customer journey, improve your products, and enhance your marketing campaigns.
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5. Build a brand
Building a brand is an important part of creating an online business. Every interaction with your business should have a cohesive look and feel. This means your digital assets should match your physical packaging, and any messaging should have a consistent tone.
From a visual standpoint, you should have an easily identifiable aesthetic that includes a logo, secondary icons, branded colors, and branded typefaces. From a messaging standpoint, your brand should have a specific voice and tone that resonates with your target customers.
Creating a cohesive brand creates a sense of familiarity and boosts brand recognition.
6. Get savvy with marketing
If you want people to buy your products, you must get them to your storefront. To do that, you’ll need to get savvy with your marketing. This means thinking outside the box to create attention-grabbing campaigns.
Some ways to market your online business include:
If marketing is new to you, it’s worth investing in the support of a specialist. Getting help from a marketer with experience in the e-commerce industry is particularly valuable.
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7. Hire wisely
As a new e-commerce business owner, you will wear many hats. This is especially true if you’re starting without a partner. Eventually, you will need help. Depending on your vision, you may want to start with a small team right off the bat.
If you have the budget, hiring people to help with marketing and admin tasks from day one is helpful. As you grow, you’ll likely need help with customer support, business development, production, order fulfillment, and accounting. You’ll likely identify more gaps as you get hands-on experience.
Many people want to hire friends and family to get started, but be careful when taking this approach. Hiring people you already know and trust may seem like a foolproof path, but it can backfire quickly. Personal feelings can get in the way of business and vice versa. It’s harder to reprimand or fire somebody with whom you have a very personal relationship.
8. Ask for reviews and testimonials
A little social proof goes a long way for e-commerce brands. Since customer reviews are worth their weight in gold, you should ask for them on every order.
You can add a card to your deliveries with a QR code, which buyers can scan to leave a review. A few days after your delivery confirmation email, you should also ask for reviews in a follow-up email.
If you have some loyal customers who make recurring purchases, it may be worth asking them for a video review. You could even offer them free products or a special discount for their efforts.
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9. Choose the right tools
When starting an e-commerce business, having the right tools to manage your operations is essential. You’ll need a tool focused on online stores to build and manage your e-commerce website. Shopify and WooCommerce are great options.
Solutions like Microsoft Dynamics 365 can streamline processes, such as inventory management and customer engagement. A detailed Dynamics 365 licensing guide helps you understand the available licensing options, making it easier to select a plan that aligns with your business requirements and supports long-term growth.
Furthermore, proper workforce management tools are also crucial. This technology enhances employee productivity, minimizes errors, reduces labor costs, and streamlines onboarding and recruiting efforts. This is all done while it centralizes HR functions like payroll and benefits.
The platform offers advanced workforce management features. These include flexible intraday work scheduling, shift bidding, and real-time operational insights. This allows supervisors to adapt to demand shifts and streamline business communication processes.
10. Leverage data to assess and adjust
One key to starting a successful e-commerce business is using data smartly. Data helps you understand your customers, enhance their shopping experience, and grow your business efficiently. You don’t need to start with the most extensive or complex tools. Instead, begin with solutions that fit your current needs and can scale as you grow.
Choosing tools that simplify data management and decision-making will make your growth journey smoother and more predictable—without overwhelming yourself early on. Start simple, but start smart.
For example, a composable CDP is a handy tool. It lets you collect and organize customer data from multiple sources, clearly showing who your customers are and what they need. This insight can help you personalize marketing campaigns, improve product recommendations, and build customer loyalty—all without overspending on unnecessary tools.
Final thoughts
Getting your ducks in a row before starting an e-commerce business is essential. However, if you follow this guide and prepare accordingly, you’ll be on your way to starting a successful e-commerce business from scratch.
Are you ready to start your e-commerce business?
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