How to Start an Ecommerce Business – Foundr

A magazine for young entrepreneurs
Written by Jesse Sumrak | April 22, 2022

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It’s never been easier to start an ecommerce business. Thanks to increasing internet accessibility, growing online shopping trust, and more user-friendly tools, entrepreneurs can launch a successful ecommerce business in no time.
That’s not an exaggeration, either. While we recommend you put a little more time and thought into your business before launch day, it’s possible to go from conception to take off in less than a week.
Your ecommerce business could be a full-time job, or it might be a lucrative side hustle. You may list all your items on an online marketplace like Amazon or Etsy, or you could host products on your own ecommerce site using Shopify or Squarespace.
There’s no single-best way to form an ecommerce business.
However, starting from scratch with no direction can be intimidating. Jump off on the wrong foot, and you might have to recorrect down the road, and that can waste valuable time and money.
Let’s help you avoid that from the get-go.
Below, we’ll show you how to start an ecommerce business the right way. Our 6-step process will help you do everything from finding your target market to identifying the right products to launching your online store.
But before we show you how to start an ecommerce business, let’s dig into the why.
Table of Contents

1. Choose Your Target Market First

2. Find the Right Product
3. Source Your Product

4. Brand Your Ecommerce Business

5. Launch Your Online Store

6. Market Your Ecommerce Business
Does it feel like everyone from your coworker to your grandma to your childhood pen pal is starting an ecommerce business? There’s a good reason for the surge.
Here are a few (of many) reasons to start an ecommerce business:
Hopefully, those statistics and benefits got you hyped up for starting an ecommerce business. Now, let’s talk about how to make it happen.
Your target market is the specific group of consumers who might be interested in your products.
Some people start with a product idea and then define their target market—however, this strategy has a few potential pitfalls. First, you may find valuable products to sell to an audience that doesn’t interest you. Or worse—you may come up with a brilliant product that nobody wants to buy.
Take Google Glass, for example. Google created the wearable technology without a customer’s need in mind. After 2 years (and hardly any sales), Google accepted defeat and discontinued the product. Google built the product first and tried (and failed) to find a target market.
Lack of market need is the second biggest startup killer. Don’t fall into this trap.
Find the target market, identify the need, and then find the product that solves it.
Start with what you know. If you’re a software as a service (SaaS) expert with a side passion for backcountry skiing, selling furniture might not be your forte. And that’s OK.
Instead, look into niches you’re familiar with and like. You’ll be in the know and better ready to find problems that need solving.
For example, if you’re an avid knitter, you likely already have a network of like-minded friends in the community.
What do they complain about? Do specific stitching patterns frustrate them? Do they wish for better knitting needles?
What frustrates you? Is there a problem you struggle with? Would you (and others) be willing to pay for a solution?
Once you find your niche, niche down again. Want to sell bikes to the cycling community? Will that be road biking or mountain biking? Are you going to sell to men or women? Will they be young or old? Are they new or experienced?
Niching down helps you define your target market further and better identify problems they need to be solved.
After discovering your target market and identifying their problems, it’s time to find the right products. With millions (literally, millions) of products to sell online, narrowing down your options can be the most challenging part of starting an ecommerce business.
Let’s look at a few strategies for finding a profitable product that fits your audience:
Visit Amazon’s best sellers page to learn about the most popular products (based on sales). These lists are updated hourly, and you can choose any department to find category-specific items.
Want to sell to new mothers? Check out the Baby department. Looking for in-demand Xbox accessories? Browse in the Video Games section.
Best-selling items tend to have tons of reviews and 4-star or higher ratings. While you might not find the specific product you want to sell on these lists, you can find plenty of inspiration.
For example, you could visit the Electronics for Kids section in the Toys & Games department to learn what’s resonating with children (or their buying parents) these days. Is it walkie-talkies and cameras or karaoke microphones and monster trucks?
As of now, it’s actually the original Tamagotchi from the 90’s—go figure.
Use keyword research tools like Google Keyword Planner, Google Trends, AnswerThePublic, or Ubersuggest (all free) to learn what consumers are searching for.
Ideally, you want to find keywords with high search volume and low product competition. That’s easier said than done, but it’s worth the investment of your time.
Once you find an in-demand product, search for it on Google and Amazon. If you find tons of other sellers, that means you’re going to be going head-to-head with pricing and branding to win customers. If you don’t find many other sellers, there’s a good chance you’ll have more control over the price.
Don’t try to take on the big brands. They have the budget, market penetration, and manufacturing scale to beat you every time.
If a product is dominated by names like Nike, Amazon, or Coca-Cola, move on to a different item. Soccer shoes? Adidas and Nike own it. Smart speakers? Alexa and Google have it locked down.
Waterproof headphones for saltwater swimming? Now, that’s a different story. Caffeinated gum for ultra-endurance athletes? Yours for the taking.
Don’t lock your brand into a confined category. Before you finalize your product decision, think of other complementary products you can sell down the road.
Want to sell bullet-proof cell phone cases? That pairs well with selling screen protectors and power banks. Thinking of selling selfie sticks? Those could cross-sell easily with tripod stands and phone mounts.
Here’s what many good ecommerce products have in common. While there are definitely exceptions to these factors, your product is more likely to succeed if it checks most of these boxes:
Now that you know what you want to sell, it’s time to find the right sourcing strategy. Product sourcing outlines how you plan to get the items you want to sell.
Will you make them with a manufacturer or purchase them from wholesalers? Will you store and ship the products yourself or deliver them through a dropshipping provider?
Let’s walk through a few of your options:
Wholesale product sourcing is probably the most straightforward process. Work with a wholesale company to buy items in bulk at a discount and then sell them for a profit through your ecommerce store. The more you buy, the lower the per-unit cost will be.
Some wholesalers will even allow you to white label the products. This means you can sell the items under your own brand.
In the early days, you could have wholesalers send products straight to your home, where you can package and ship them to your customers. However, as you scale, you’ll have to change your fulfillment strategy to something more sustainable.
If you’re selling through a platform like Amazon, you can take advantage of Fulfillment by Amazon (FBA). FBA stores, packs, and ships all your items. They even handle returns, exchanges, and customer support. The only thing you have to do is keep Amazon supplied with your product.
Hire a manufacturing company to make your custom product. If you’ve identified a brand-new product—or want to make an existing product better or more cost-effective—you can work with a local or overseas manufacturer to bring your product vision to life.
This process is more involved, costly, and risky than wholesale, but it allows you to offer a completely new product to your target market. If you don’t have a unique product, you’ll have to find different ways to differentiate your offering (more on that later).
Dropshipping is similar to services like FBA, but there’s one primary difference: you don’t own the inventory.
With FBA, you purchase inventory and send it to Amazon—they ship it when you make a sale. With dropshipping, your supplier handles warehousing and fulfillment, but you only pay for the product once the customer has paid you.
This might seem like a smarter option, but it has financial implications. While you won’t have to worry about startup costs or the cost to store your products, you’ll face a higher wholesale price on each product—that means lower profit margins on every sale.
Every successful ecommerce business needs a professional brand. Without a brand, your product is just floating in a sea of competition without any way to differentiate itself.
Think about your consumers. Why would they choose to buy from you instead of someone else? Is it price? What happens if a competitor comes in and undercuts you? Why should your customers stick with you?
Consider Coca-Cola. They’ve built a brand and products that consumers absolutely love. It doesn’t matter if Coke costs twice as much as Pepsi—Coke lovers will still buy it.
Here are a few other ways branding can build your ecommerce business:
Here are the elements of your brand you need to consider:
Let’s go deeper into each of these:
Choose the right business name from the start. Sure, you can change it later, as Amazon did with its original name Cadabra or Google did with BackRub (yes, that was the actual name)—but it’s best to nail it from day one.
Would Apple have been this successful if they had started as “Plum” or “Pomegranate”? We’ll never know. However, we do know that a name is a big part of a brand’s identity.
There are no set-in-stone rules for a good brand name, but we’ve found most great names have a few things in common:
A logo speaks a thousand words. Avoid the cheap-and-easy do-it-yourself route and hire a professional. You can find plenty of great logo artists on Fiverr for less than $100—and they’ll even deliver your logo in a variety of styles and file formats.
We have a few tips when it comes to choosing your logo (and your overall brand) colors:
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It’s not what you say; it’s how you say it. Your voice plays a big part in your brand’s identity. It doesn’t matter how elegant your logo is or great your products are if your brand comes off tone-deaf or rude.
Develop a voice and tone that’s unique to your brand and resonates with your audience. Take Wendy’s, for example. Check out their Twitter account to get a feel for their voice.
It’s sarcastic, snarky, clever, and downright savage at times—yet they’re consistent, and followers absolutely love them. Wendy’s created (and won) a social media rivalry with McDonald’s that consumers didn’t even know or care existed.
Decide what you want your voice to be and why—then stick to it. Be consistent with your voice across all your channels. Wendy’s can’t be witty on Twitter and bashful on Facebook. A brand that’s two-faced has no face.
Apple stands for innovation and trust, while IKEA seeks to create budget-friendly furniture that looks good. Tesla stands for sustainable energy, while LinkedIn stands for professional networking.
What does your brand stand for? What is your purpose?
Elizabeth Hague, cofounder of Wildcat Echo, recommends answering one simple question: “What’s the special thing only YOU can do that your customers will miss out on if you never existed?”
Answer that question, and you have your brand’s purpose. Without a purpose, you’re just an ecommerce business with a product out to make a buck—and that purpose won’t drive customer loyalty or repeat purchases.
Finding a product and branding your ecommerce business were the fun steps. Now, it’s time to get into the more technical details.
Your first major decision is to choose whether you’ll sell on your own ecommerce website or whether you’ll rely on online marketplaces.
Let’s look at what those options look like:
A website gives you complete control over the customer experience. You get to decide the URL, layout, and available products. You also get to avoid placing your products next to direct competitors, as you’re forced to do on platforms like Amazon or Etsy.
You have plenty of options when it comes to hosting your ecommerce website. Here are a few of the most popular ecommerce platforms:
These platforms are designed to safely connect buyers and sellers. They have payment processing built-in, as well as user-friendly templates and designs. For the most part, it’s a drag-and-drop website-building process.
The biggest downside to selling on your own ecommerce website is that you have to generate all the traffic. 40% of consumers worldwide use search engines to find products, 38% use Amazon, 35% use other online marketplaces, and 21% use the website of the brand they want.
No customer is going to randomly type in your URL and start shopping on your site—you have to run marketing campaigns to drive traffic (more on that in step 6).
Another option for selling your products is on an online marketplace. Online marketplaces already have millions of shoppers, meaning you don’t have to go and find your audience.
Popular online marketplaces include:
Competition on online marketplaces can be intense. You may be compelled to drop your prices to compete for customers, especially when your products are featured right next to similar, cheaper items.
“If you build it, they will come.” That couldn’t be further from the truth when it comes to digital products. There are plenty of excellent blogs and products on the internet that never get any love, mainly because they fail on the marketing aspect of their business.
But that’s not where you’re going to flounder. While there are hundreds of marketing strategies you could execute, here are the 5 most cost-effective channels:
Master 1-2 of these ecommerce marketing strategies, and you’ll start seeing consistent traffic—and more traffic means more sales.
Want to learn more about marketing your ecommerce business? Read through our guide: 11+ Ecommerce Marketing Strategies to Boost Your Online Sales.
Regardless of what business you’re starting or what you’re selling, there are a few things you should do to set yourself up for success. Follow these best practices to start your business on the right foot:
Find out what you’re up against. Are your competitors big and notorious, or are you up against other blossoming businesses? Does a handful of other companies sell your products? Or is it a hundred or a thousand? What are your competitors’ unique value propositions (UVP)?
Decide how your ecommerce business (and products) are going to be different from the others. Will you have higher quality products or lower prices? Will you provide undeniably amazing customer support, or will you focus on how your brand supports a good cause?
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Don’t just sell products—build a brand. Products come and go, but your brand can last a lifetime (or even more). Get people to recognize and trust your name and logo. Trust is one of the first steps to earning a sale. It doesn’t have to be everybody—you just need your target market to identify you.
Some products and brands do better on online marketplaces, while others perform better on standalone ecommerce websites. And some do well on both. If you’re starting from scratch without an audience, you might want to start with an online marketplace as you build credibility and start seeing traffic from your promotional tactics.
Anyone can whip out a product and throw it up on an online marketplace—but the best (and most successful) ecommerce businesses go above and beyond when it comes to customer support. Remember, you don’t need everyone to love your brand. You just need a select target market. Focus on making your audience’s experience with your product and team better than they’ll find anywhere else.
Analyze your metrics and run A/B tests to drive up your conversion rate. You want more people clicking on your ads, and when people reach your website or product page, you want more people making a purchase. If you optimize your conversions right, you can significantly boost your income without having to spend extravagantly on gaining traffic with ecommerce marketing.
Don’t try to do it all. Take baby steps with your ecommerce business. Launch with one product instead of 5. Start on a single platform rather than trying to be active on all of them. Focus on a handful of marketing channels rather than doing absolutely everything under the endless digital sun.
You now know how to start an ecommerce business. Congratulations! Now, it’s time to make it happen.
Join our free training to learn how you can start a profitable online store in 12 weeks or less. We’ll walk you step-by-step through every phase of the process, helping you find products that’ll sell and tactics for generating sales immediately.
Ready to make your ecommerce business a reality? Sign up and get started.
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About Jesse Sumrak
Jesse Sumrak is a writing zealot focused on creating killer content. He’s spent almost a decade writing about startup, marketing, and entrepreneurship topics, having built and sold his own post-apocalyptic fitness bootstrapped business. A writer by day and a peak bagger by night (and early early morning), you can usually find Jesse preparing for the apocalypse on a precipitous peak somewhere in the Rocky Mountains of Colorado.
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