How to start an e-commerce business and succeed in 2024

What is an e-Commerce business?

E-commerce businesses are more popular than ever. Customers prefer the convenience and selection provided by online shopping, and the pandemic has pushed even more people to shop online. According to data from IBM’s U.S. Retail Index, the pandemic has accelerated the shift away from physical stores to digital shopping by roughly five years. E-commerce grew over 27% in 2020 and is expected to grow by about 14% in 2021, according to data from eMarketer.

With that in mind, you will find plenty of opportunities to delve into online sales. Plus, low barriers to entry have made starting an e-commerce business an appealing prospect for aspiring entrepreneurs. But while it’s easy for anyone with a bit of knowledge of e-commerce and a few resources to get started, it’s a fiercely competitive market. The pandemic caused many brick-and-mortar store owners to switch to an e-commerce model, and brand loyalty is eroding. According to research by McKinsey, the majority of customers have been shopping differently since the COVID pandemic began, and most intend to continue that behaviour.

To succeed in e-commerce and pull a profit, you will need to work hard and build a strong foundation. You will need to do market research; understand your target audience; create a financial plan; and take all the necessary steps to ensure your business is compliant with federal, state, and local laws.

Beyond that, here are some essential tips to help you start a successful online business.

1. Choose an e-commerce model

When most people think of e-commerce, they think of an online store that is the digital equivalent of a brick-and-mortar store. However, there are a wide variety of e-commerce business models. Some require you to build your own e-commerce site, while others let you set up shop within an existing marketplace.

You may be responsible for overseeing all aspects of production, advertising, sales, and delivery, or you could potentially earn a profit without being directly involved in product management. The decision on which approach to take will be influenced by the nature of your product or service, your financial resources, your current abilities and strengths, and the amount of time you can dedicate to achieving profitability.

Here are some e-commerce models to consider:

Business to Consumer (B2C)

Businesses sell directly to customers. This model applies to both goods and services and is what people most commonly associate with e-commerce. There are some variations of this model.

Business to Business (B2B)

Using a B2B business model, one company buys goods or services from another company. They typically do not sell products directly to individuals. B2B commerce is one of the fastest-growing e-commerce segments , and opportunities abound. However, this kind of business can cost more to start and take longer to get off the ground. The business buying process is more complex, typically involving more decision-makers and purchasing order processes. This model also requires you to consider how you will fulfill orders.

Consumer to Consumer (C2C)

The C2C business model connects potential customers with other customers to trade goods or services using platforms such as Amazon and eBay. It’s the online version of a go-between, with the platform taking a cut of each transaction.

Consumer to Business (C2B)

A C2B approach is an emerging category in which a brand’s customers create value for the brand. An example is a blogger becoming a paid influencer for certain brands, becoming an affiliate seller of the brand’s products, co-creating a product, service, or experience with the brand and marketing it to the audiences of both, or providing ad inventory for digital advertising companies.

2. Determine your product(s)

After identifying the most suitable business model for your goals, the next step is to select the appropriate product. The perfect option would be a product or service that has a high demand and minimal competition. However, this can be a challenging task as it may seem like every possible product or service is already available for purchase online.

One strategy for success is to establish a specific area of expertise, otherwise known as a niche. Consider your passions and areas of specialised knowledge, as well as creating products that utilise your skills and intellectual property. This could include introducing innovative products to the market, customising existing products for a particular audience, or offering a fresh solution to a significant issue that has yet to be solved.

How do you find these products? To get started, you can simply search for products to sell online. Keyword research can help you determine how many people might be looking for a particular product or service, and what it might cost to advertise for it. Google Trends can alert you to emerging problems and hot products.

Before deciding to sell on a preexisting platform, take some time to investigate the products available, their prices, and the level of competition. It is also beneficial to read reviews to gauge customer satisfaction and identify any unmet needs that you could address. Additionally, search for related products to determine if there are any complementary items that could enhance your offerings or if you could improve upon existing products.

3. Develop your brand

Developing a brand image and a brand voice that attracts your customers is crucial to customer acquisition for your new business in the first place. Customers will be loyal to your brand because of the high-quality products or services you offer, but they are attracted to your brand because it’s the section of your business that represents the most to them.

Choose a business name

Once you have decided on your offering, you’ll want to choose a solid brand name. Aim for something catchy that also speaks to your offering rather than obscures it. It should stand out from the competition. Consider how your business name can be incorporated into the logo and other visual representations of the brand.

Be sure to research domain name availability. There are plenty of tools that can help you determine whether the domain for your potential brand name is available. Popular domain research tools include:

• Name
• GoDaddy
• Google Domains
• Instant Domain Search

Hire a designer

Visual branding is essential for e-commerce websites. It's like the storefront of your online store. To make it appealing, consider hiring a professional. They can create a logo, design your website, and make a visual branding stylebook. This will make sure your branding is consistent across all platforms. Here are some popular services you can use to hire designers:

• Dribbble
• Upwork
• Toptal

4. Set up your website

Building your website is the online equivalent of building your store. There are two parts that go into this: the storefront and the back of the shop where operations are carried out.

If you are looking to create your website from scratch, you can hire website developers to do it for you. However, if you are looking for a quicker option, you can choose from various e-commerce platforms and software available online. Think online marketplaces like eBay, Etsy, Shopify, and Amazon.

When choosing an e-commerce platform, consider how much control it provides you, how user-friendly the interface is, and whether the platform will support your brand image and other business requirements. Pull these pieces of information into an operations plan and then go from there.

Set up Google Analytics and Search Console

Setting up Google Analytics helps you understand how your users interact with your website. This information can be utilised to enhance their experience and create knowledgeable campaigns. By setting up Search Console, you can effectively address security and maintenance concerns such as malware, hacking, site loading errors, and server errors, ultimately providing a smooth experience for your audience.

5. Implement e-commerce software

You don’t need to be tech-savvy to run an e-commerce business successfully. Tech companies have developed several platforms that allow you to handle different business processes without much hassle. QuickBooks integrates with e-Commerce, Inventory and CRM apps to help you streamline your business operations and management. Here are some tools and software you should look for when building your e-commerce business:

Shopping cart software

Shopping cart software makes it easy for customers to place orders online. They can choose how they want to pay. You can set up your own shopping cart function on your website. Or, you can use platforms like Shopify. They offer ready-to-use shopping cart software. This lets you collect payments upfront. Customers can use credit cards, PayPal, or other popular payment gateways.

Shipment tracking software

If you want to keep your customers happy, keep them in the loop with shipment tracking software. By using shipment tracking software, you can keep the information of all your shipments in one place and allow your customers to check their order status at any given moment.

If a dropshipper is handling fulfillment for you, make sure that their services include shipment tracking. A good provider will push back the shipment information to your system so that your customers can easily track their packages.

Analytics software

Analytics tracking software allows you to keep track of the activity on your website as well as other online platforms that you are using. Such software can be a source of great insights about your customers, product popularity, search trends, and market demand.

Certain software applications necessitate skilled data scientists, while others utilise artificial intelligence to streamline the analysis so that even individuals with limited technical expertise can comprehend it. By utilising analytics tracking software, you can harness the potential of large sets of data to inform your decisions regarding customer service, product development, and marketing.

Loyalty management software

Loyalty management software is an excellent tool for customer retention. The software identifies your repeat customers and helps reward them for their loyalty, which is an excellent tactic for customer retention. It also identifies potential repeat customers and can be used to send incentives like gift cards and coupons to keep them coming back.

6. Build marketing and lead generation campaigns

No matter what e-commerce business model you choose, there’s no growth without marketing. Here are some of the ways in which you can generate online sales through marketing:

Paid ads

One of the quickest methods to connect with your customers is through paid advertising, but it can also come at a high cost. For those considering paid marketing, Google and Facebook are the top options as they have a vast audience, user-friendly interfaces, and provide valuable data to enhance your ad strategies.

Organic growth and search engine optimisation (SEO)

SEO involves producing material that is more easily discoverable by online individuals when they utilise search engines like Google. However, it is incorrect to view SEO as complimentary promotion. It requires dedication and energy and may require a significant amount of time to yield results. Nevertheless, it is a crucial investment to make early on and continue to develop as your business expands. If this is not within your expertise, it is advisable to enlist the help of a professional.

Influencer Marketing

Influencer marketing allows you to leverage the popularity of successful individuals on social media to your benefit. You can reach out to bloggers and influential personalities to review your products in exchange for free products or other benefits. You can also pay them to create sponsored content promoting your brand to their followers.

Word-of-mouth and referrals

The most impactful marketing strategy is word-of-mouth and referral marketing. This occurs when satisfied customers voluntarily spread positive information about your product or service. In today's digital age, word-of-mouth and referrals are often generated through ratings and online reviews.

Although this kind of marketing doesn’t require any out-of-pocket investment, you may need to come up with an operationalised way to solicit reviews from happy customers. The key ingredient—and the main investment—is in creating the kind of customer experience that customers want to tell people about. Positive word-of-mouth is the culmination of everything that goes before: choosing the right business model and product, creating a beautiful brand, and ensuring a seamless purchase and delivery experience.

Get started with your e-commerce business today

Technology has made it relatively easy and inexpensive to start an e-commerce business, especially when compared to the capital investment required from potential investors to open a physical storefront. And economic predictions for the growth of e-commerce are rosy. But make no mistake, there is no such thing as easy money in e-commerce. 

E-commerce is highly competitive, and many of its markets are already saturated. However, with careful research, planning, smart use of resources, and tools that can help you manage your new business, you can figure out how to get into e-commerce and succeed!