Starting an e-commerce business from scratch is an easy, low-risk venture. Nowadays, you can start an e-commerce business from home using only simple software and a product sourcing platform.
So, even if you only have a few hours a week to devote to it, you can still build a successful and lucrative e-commerce business.
In this guide, we’ll show you why now is the best time to start an e-commerce business, what pitfalls to avoid, and exactly how to launch your first online store.
Why now is the perfect time to start an e-commerce business
People launch successful e-commerce businesses every day—and they all started with an idea—just like you. Here’s why you should launch your own store in 2022:
- Massive growth in online shopping - E-commerce is growing at a wild rate, and there’s still so much opportunity to capture. In 2019, worldwide e-commerce sales totaled $3.5 trillion, according to Statista. And in 2020, that number went up to nearly 4.3 trillion. The prediction for 2022 is a whopping 5.4 trillion. That’s a lot of land still up for grabs.
- No coding skills required - It only takes 1-3 days to create an e-commerce website with Shopify, one of the top e-commerce platforms. In fact, Shopify is so popular that in 2020, 457 million people bought something from a store built with the platform. Fortunately, you don’t need to be a web developer to build a Shopify store, and you can do it with no previous coding skills. The platform is also super affordable, so there’s no reason to let tech stop you.
- Get started with a low initial investment - You can start your e-commerce business with a few hundred dollars, including website fees and your first batch of inventory.
3 common pitfalls to be aware of before you begin
So far, we’ve addressed why you should start an e-commerce business and how easy it can be. But, let’s be honest: it doesn’t come without some challenges and pitfalls. We want to set you up for success. So by preparing yourself for these common mistakes, you can easily avoid them and give your business a head start.
1. Thinking competition is a bad thing
See a competitor doing exactly what you want to do? Don’t give up. Seeing competition as a sign that it’s too late to begin is a rookie move. Instead, see competition as a sign of market validation. Clearly, there are customers out there who want that product and brand style. With nearly 8 billion people in the world, you can capture some market share too, despite a steep rise in retail tech startups across the globe. If anything, aim to do it better than the competition.
2. Creating too many SKUs or buying too much inventory
Starting a business means spending a bit of money upfront, and you may be worried that if you don’t succeed, you’re just setting money on fire. So, instead of going all in on day one, launch your store with only 1-3 products and 200 - 300 units. If the idea really doesn’t work, you can liquidate (sell the products at cost), and try again with a new concept.
“If you make a mistake and choose the wrong product, you can liquidate that fairly easily and then move on to the next product.” - Scott Voelker, multiple e-commerce store entrepreneur
3. Investing too much in marketing too quickly
Are you scared of tossing tens of thousands of dollars into marketing without getting ROI? Fear of wasting money on marketing will derail your success. You might be so afraid of this that you end up doing it (sort of like steering a car into a pothole by looking at it). Or, your fear might cause you to stall and never really launch. Instead, trust yourself, and don’t invest in marketing until you’ve gotten your first few dozen sales via word of mouth and organic social media.
How to start your own e-commerce business in 2021
Now that we’ve moved past common fears, we can dive straight in. First, you need to start with a problem that you’re passionate about solving. Follow these steps to bring your idea to a real-life launch.
1. Start with a problem
The best products solve big problems. For example, stainless steel water bottles are popular because they can be reused (unlike plastic) and they don’t break (unlike glass).
Gemandi is booming right now, because Gen Z didn’t have a trusted place to turn for affordable crystal jewelry.
Not sure how to find these sorts of opportunities? Here are several ways to find a problem worth solving:
- Read comments on the social media posts of brands you admire.
- Talk to your friends and family about products they purchased in the past year that they didn’t like.
- Consider important trends, such as conscious consumerism and going vegan, and look for opportunities therein.
- Think about which products in your home frustrate you, seem outdated, are unattractive, or don’t live up to the hype.
Once you’ve found problems you want to solve, it’s time to move on to researching solutions.
2. Research your first product
You have a problem, now how should you solve it? It’s time to discover what products (if any) are currently solving this problem. Research available products, their price points, if they offer free shipping, and more.
Consider all of these factors when researching products:
- The competitive landscape - An easy way to pull up a bunch of competitors at once is to search the product type, such as “eco-friendly razors.” Then find listicles, like this example of 13 different brands from Cosmopolitan. Take a look at what makes the razor special, the branding, and the related products that the companies offer. Try to find room for differentiation. But remember: you can offer a very similar product with different branding and still have success.
- Seasonality - You probably want continuous revenue, not big spikes and dips. So make sure that the products you’re researching aren’t highly seasonable (or at least be aware of if they are). For seasonal ideas, you could tap into a niche that buys the item year-round . But for the most part, a seasonal idea won’t be a good fit for most first-time entrepreneurs.
- Potential for recurring business - See if the product could be purchased again, like eco-friendly razor blades, or that you can sell related accessories, like belts. Joi does both. The company sells nut milk powders and bases that can be purchased monthly, as well as pitchers to store the drinks.
- Potential sales price - To start an e-commerce business the easy way, don’t offer something that is very cheap or very expensive. Plan on offering products that are around $20 to $60 each. You can go to the $200 threshold, but keep in mind that you’ll need more premium branding, which is more challenging for a first-time e-commerce entrepreneur.
- Estimated cost of shipping - Next, consider the cost of shipping. Extremely heavy, large, or oddly shaped items are expensive to ship. Most e-commerce stores experience a boost in sales when they offer free shipping under $50. It’ll be hard to offer free shipping to customers if it’s expensive for you. Avoid heavy, large items so you can use free shipping to your advantage—not your detriment. If you’re not sure what something would cost to ship, you could buy something similar and send it to a friend.
Use all of the above to vet your ideas until you’ve got a product that you feel confident in. You’ll never know how successful it will be until you try. But, you should at least have a product with a healthy level of competition, minimal seasonality, a potential for repeat or related purchases, a moderate sales price, and low shipping costs.
3. Get clear on the mission of your brand
It’s time to get clear on your brand before you actually source the product. That’s because your brand should guide every decision you make. Your brand is how customers view your company and differentiate your products from others. It’s the personality, spirit, look, and feel of your company. What do you want to be known for? What do you want to help customers achieve?
To develop your own brand strategy, get clear on:
- Your mission
- Your tagline
- Your brand personality and voice
- Your brand values
“What I do, and I love, is to always look ahead and look at what consumers don't know they want, as yet. To look around corners. And that's what we've done all along.” - Anthony von Mandl, founder of White Claw
Do you want to stand out from competitors who sell similar products, but you’re not sure how? Check out brands that sell to your target audience (but not the same product category), and take inspiration from their brand. Don’t copy their style, but use it as a jumping point.
4. Create your logo and choose your fonts and colors
Next, create your logo and decide on your brand’s fonts and colors. This will ensure that the products you’ll be sourcing align with that vision.
Play around with Google Fonts and type your brand name and product names in to see what fits your vision best.
And for color inspiration, try checking out Design Seeds, which posts a new color scheme every day and sorts previous posts by collection and color family.
You can use a site like Tailor Brands or Canva to easily create a logo yourself. Here are some examples of jewelry brand logos made with Tailor Brands:
5. Source your products
The best way to start an e-commerce business is to source products from suppliers. You don’t have to make anything from scratch or open up a factory.
These are the most common product-sourcing strategies for starting an e-commerce business:
- Dropshipping - With dropshipping, you don’t purchase or store inventory. Instead, you purchase it from a supplier only after a customer purchases, and the supplier ships it to them for you. You’re in charge of maintaining your store and marketing. Automizely Dropshipping makes it easy to find products and get them delivered to your customers in days.
- Wholesaling - Wholesaling is when you purchase products and sell them in your marketplace. For example, if a salon owner purchases products from multiple brands to sell in their salon. You can do the same thing with your e-commerce store, and if you want, you could carry wholesale products from other brands in addition to your own. ASOS carries hundreds of brands and sells its own clothing line.
- Private labeling - With private labeling, you are hiding the fact that you purchased products from someone else. Maybe you purchase shampoo in 5-gallon jugs and put that in your own smaller containers to sell. Or maybe you ask a supplier who already creates bamboo plates to add your logo to the bottom of the plates so you can sell it as your own.
- Supplier platforms - Turn to supplier platforms like Alibaba and Maker’s Row to ask suppliers to help you create custom products. You can also find opportunities for wholesaling and private labeling on these platforms. Some suppliers will allow you to purchase one product as a sample, while others will require a minimum order quantity (MOQ). You can easily find MOQ information on product and supplier listings.
Which method is right for starting an e-commerce business? If you want to sell online without creating your own products from scratch, you can drop ship, wholesale, or private label. If you want to build a big brand with the potential to be carried in Target or Home Depot or Sephora some day, dropshipping or wholesaling won’t be the right choice for you because you won’t have something unique to offer these stores. Instead, you’ll need to work with suppliers, design your own product, and get samples.
Plan on starting your store with around 200 - 300 units of at least one product. If your products are closely related, you can launch your store with a couple more products, and the same number of units for each one.
6. Add your inventory and prices to your store
Now, it’s time to set up your site. Shopify is one of the most popular platforms. In the Inventory section of Shopify, add details about your products, such as the product name, description, and the number of inventory. The process is also easy with BigCommerce, another popular platform for starting an e-commerce business.
Use competitive analysis to price your products. Price yourself towards the middle. You’ll have a harder time bootstrapping a successful business if you aggressively undercut prices or attempt to create a luxury brand, if it’s your first time starting an e-commerce store.
7. Build out your landing pages
Now it’s time to build the landing pages that will sell your products to customers. You need one page for every product you sell. Plus, it’s never a bad idea to create a homepage that links to your product pages. If you are starting your e-commerce business with one product, you can create a one-page website.
With Automizely Page Builder, you can create beautiful, modern product landing pages with templates and drag-and-drop designing. No coding required.
8. Create your shipping and return policies
Concerned about packing and shipping? Don’t waste time shipping orders every day when you first start your e-commerce business. Instead, batch this work in two days a week (such as Wednesday and Saturday).
State your shipping and return policies clearly on your website. For your shipping policy, explain how quickly orders will be shipped out. For example, “Standard shipping orders are shipped within 4-7 days.” If you later choose to offer expedited shipping, make sure to charge fairly for the inconvenience, and state how quickly those orders will be shipped. For example, “Expedited shipping costs $19.95 and will be shipped within 1-2 days.”
You need to decide if you want to accept returns. This will depend on the product type. Expensive products, or those that need to be tried on, should generally come with return policies. Want to follow a common return policy? Allow unused returns up to 30 days after the order date.
9. Get sales from friends and family
Now, it’s time to spread the word. Try to get your first few sales from people you know. Ask your friends and family to support your store by making a purchase if they are interested.
Also ask close family and friends to share your store announcements. Create a simple graphic to use on launch day. This will make it easier for everyone to forward your texts and post about your business. You can use Canva to make a graphic. Just search “announcements” or “new store” to find a graphic design template to use.
Oh—and make sure not to annoy people on launch day. Create BCC emails and avoid group texts.
10. Follow a simple marketing plan
What type of marketing should you do? Email marketing and SEO take time, while paid ads are complicated and risky. To begin, try social media only. On social media, you can reach your audience immediately—and for free.
Start with TikTok and Instagram, the most proven social channels for starting an e-commerce business successfully. Post memes, tutorials, tips, and founder stories. And of course, show off your products in both tutorial-style posts and styled product shots.
For example, Jupiter posts branded product shots on their Instagram grid feed, and hides product tutorials and tips for hair care in their Reels and stories.
When you’ve got some sales from social media, it’s time to branch out, so you don’t grow dependent on one thing. All in all, these are the most popular marketing strategies for growing an e-commerce business.
- Social media marketing
- Email marketing
- Influencer marketing
- Social media ads
- Search and display ads
- Search engine optimization (SEO)
As you grow your social media presence, you’ll be able to drive more traffic to your website. You can capture that website traffic and grow your email list by offering coupons in website popups and bars. Then, keep in touch with your email list, and let them know about new product drops and sales.
Choose marketing software that will scale with your business. Automizely Marketing includes 16 features and works directly with Shopify. As you grow and add more marketing strategies, you don’t have to complicate your tech setup with more tools. You’ll have everything you need in one place.
If you’re ever unsure of what marketing tactic to try, turn to competitor research. Search for media coverage, including articles, interviews, and podcasts. Your competitors just might be sharing their exact recipe for revenue in their interviews.
If you can’t find competitor interviews, look for advice online from e-commerce brands that serve a similar target audience. Search for your favorite e-commerce brands’ names in Google News, read their coverage, swipe their strategies, and learn from their mistakes.
Starting an e-commerce business is an exciting adventure. Choose a product that will be successful by making sure it solves a problem, isn’t seasonal, and doesn’t cost too much to ship. Avoid common pitfalls like sourcing too many products at once, or diving straight into paid ads. Instead, source just one or two products and sell them with word of mouth and social media. Once you’ve got some initial sales, you can keep reinvesting.