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How to Start an E-Commerce Business

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E-commerce has evolved a great deal since its beginnings in the early 1990s. It is such an integral part of modern life that it continues to thrive even in times of unprecedented economic instability.

Requiring fewer initial overheads means that starting an e-commerce business is relatively low risk. However, to ensure that your business dreams become reality it is important you have a clear understanding of how to start your own e-commerce store.

A Brief History

The first e-commerce stores can be traced back to 1991, although the format and function of these stores are incomparable to the sophisticated sites operating today. In 1999, e-commerce accounted for 0.6% of total retail sales. The latest reports have found that e-commerce accounts for 16% of total American retail sales in 2020.

Research Your Market

Before you start laying any of the groundwork for your business, it is vital that you take time to research. Market research will inform the way that you market your business, the products you sell, your price points, your target audience, and your future growth models.

Find Your Niche


Once you have done your market research it is time to find your niche. An e-commerce niche is a targeted subset of a larger market and the niche you choose will impact everything from your target audience to your product design.

Create a Business Plan

Once you know your niche and understand your market, it is time to create a business plan. Your business plan should cover both your long-term vision for your store and the practicalities of how you are going to actualize your vision. Areas to cover in your business plan include:

  1. Your Concept

This is where you will discuss your market, your niche, and the particular product or service you will provide.

  • You Strategy

What are your goals and what are the specific actions you need to take to implement them?

  • The Practicalities

You need to be able to answer questions like:

Where are you sourcing your products from?

Where will your company operate?

How do you intend to ship your packages to your customer?

How do you intend to manage your inventory?

If you have manufacturing or warehouse capabilities, how do you reduce risk?

The answers that you provide should take into account both your vision for your business and be economically sustainable. You should also include the tools you need to deal with many of these practicalities.

There’s a lot you can do with computers nowadays, but make sure you know the prices for each tool you use so you can include them in your financial models. You also need to do your research; for example, the CMMS that an SME uses to reduce risk in manufacturing and warehouse settings will be different from those of a large business (click this link to see why).

  • Financing

You will also need to address the financing you require to establish your business and how you intend to obtain these funds.

Create a Site

The final step is to create an e-commerce store so you are able to begin sales. It is useful to choose an established platform to host your store, as these have the advantages of being easy to use and are built for SEO purposes.

Remember that your store is the face of your business, so it needs to embody your brand image and appeal to your target market.