How To Start An eCommerce Business In 5 Easy Steps

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start an ecommerce business

Starting a business is always a challenge. And for those without much web experience, starting an online store can be daunting. With so many eCommerce platforms, marketing software programs, and hosting services competing for your attention, it’s difficult to know where to begin.

In the following article, we’ll cover the basic steps of setting up an online store, from finding a niche, to creating a business plan, to formatting your fledgling site.

For more in-depth information, I strongly recommend you download our free eBook, The Beginner’s Guide to Starting an Online Store. In this book, I provide detailed advice for new online sellers and include a host of resources which are beneficial for beginners. It’s free to download–you just have to provide an email address.

But for a good beginning overview of the topic, keep reading! By the end of this article, you’ll have a better idea of how you should go about starting your own online business.

1. Find A Niche

find a niche

As a software reviewer, I spend a lot of time cruising through eCommerce blogs and forums like Reddit and Quora. And across all of these websites, I see online merchants asking the same question over and over:

How can I compete with Amazon?

This question has a wide range of answers, of course, but the most common bit of advice is this: Find a niche and stick to your market.

By creating a niche for your store, you tap into a narrower market and can more specifically promote your products. What’s more, developing a brand and adding value to your products will help your store compete with larger sellers.

So how do you find that niche? Chances are good that you already know what you’d like to sell online. Take a few minutes right now and write down your ideas. Let yourself brainstorm a little. When you have a good-sized list (at least 25 product ideas), take your list and do a bit of web surfing. You’ll want to scope out your competition and see if your product has a viable market.

Search Similar Products To See If There Is Demand

In general, you’ll want to sell products that others are also selling, but you won’t want to enter a market that’s already flooded. Find a good, competitive market for your online business, and then dive deeper.

Use Google, Bing & Yahoo To Scope Out The Competition

Research the other merchants that are selling similar products. Make sure to take notes on what makes your competition successful. Then, determine what they could be doing better. The gap between what they’re doing now and what they could be doing is your niche.

As you search, you should ask yourself these questions:

  •     Is there room for me in this market?
  •     What makes my competition successful?
  •     What value can I add to this market?
  •     What makes my products/store unique?

Once you’ve got a solid idea of what you want to sell, you might also consider testing your idea in a marketplace. There are solid advantages to starting out on a marketplace like Amazon, Etsy, or eBay.

First, there’s a lower barrier to entry. You won’t have to build an entire website and invest thousands into web development before you can begin. In addition, you’ll be able to begin testing the waters more quickly and gather feedback from those who purchase your products. This will help you refine good customer service practices.

What’s more, all of the work you invest in marketplace selling doesn’t have to go to waste. If you chose to move forward and develop your own online store, you can always integrate a marketplace with your store later.

For more information, I recommend you take a look at the guides offered by Amazon and eBay themselves. You should also dig through articles by Practical Ecommerce and Entrepreneur. These publications offer a lot of good advice on using Amazon to support your online store.

2. Set The Stage

set the stage

Once you’ve determined your approach, you’ll need to handle the legalities of owning an online store. Read up on all applicable local, state, and federal tax laws, followed by any international regulations on selling globally.

For more information, read through the Small Business Association’s website. Search for the laws relevant to your business and your region.

Here are a few more technicalities you’ll need to figure out before you open the doors to your online store:

Register A Trade Name, DBA, Or Trademark

Each state has different requirements for businesses. In general, however, most states follow this rule: If you’re planning on naming your business anything other than your full name, you need to register. For more information, take a look at the U.S. Small Business Administration’s website.

Register A Domain Name

Note: A domain name can also be called a web address or URL.

Once you’ve landed on a name for your business (or perhaps when you are in the process of doing so), head on over to a domain service like GoDaddy or Yahoo Small Business to claim your own URL. Ideally, this URL will contain the name of your store. You’ll be able to transfer the URL over to whatever hosting service you choose.

Keep in mind that if you already have your own website, you won’t need to buy an additional domain name. Just tack “/shop” onto the end of your existing domain name.

Fortunately, domain names are fairly cheap. You should be able to purchase one for less than $20/year.

Protip: Domain names don’t have to end in .com. You can also set up a .co, .net, or .biz domain name.

3. Use The Tools Of The Trade

software tools

Every business is unique, and every business has different software requirements. As you plan your online store, you should consider which types of software you’ll need to use.

Keep in mind that some software options include multiple services, so the right shopping cart software could fill a lot of your software needs.

Choose A Shopping Cart/Website Builder

As you consider how you want to build your online store, you’ll need to ask yourself a few questions:

  • Am I planning on adding a store to a pre-existing website, or do I need to build an entire site from scratch?
  • What is my level of technical experience? Do I feel comfortable with APIs and CSS, or would I prefer for someone else to take care of the technicalities?
  • Do I want to be able to customize every aspect of my store, or is ease of use more of a priority?

Here at Merchant Maverick, we specialize in helping you find the right software for your business. Take a look at our Shopping Cart Flowchart to get a rough idea of which software you should consider, and then head over to our reviews for more in-depth information.

Consider Your Payment Processing Options

In order to accept payments online, you’ll need to choose a payment processor. Selecting the right payment processor (and knowing which fees are reasonable) can be a challenging task. In fact, payment processing is so complex that we’ve written an entire eBook on the matter: The Beginner’s Guide to Payment Processing. In this free guide, we explain fees and contract terms in detail.

I strongly recommend you check out the advice in this guide. However, for a broad overview of payment processing, check out my suggestions below.

Choose Between A Merchant Account & A Payment Service Provider (PSP)

When it comes to payment processing, you’ll be faced with two options: signing up for a merchant account or integrating a PSP. Take a look at the differences between the two below:

  • Merchant Account: A merchant account is a business account that you set up with your processing bank. This account lets you receive payment from online credit and debit card transactions. The benefit to merchant accounts is that during the set-up process, you’ll be able to negotiate your contract terms for lower rates. In order for everything to work properly with your site, you’ll also need to set up a gateway between your shopping cart and your account to transfer payment data.
  • PSP: A PSP is a service like PayPal or Skrill. These services process your payments in exchange for a cut of the transaction. Many of these services offer free, pre-built gateways for the most popular eCommerce platforms. PSPs tend to be easier to set up and are often better for smaller sellers. The trouble with PSPs, however, is that you can’t negotiate your rates.

As you begin researching your options, I recommend starting with our preferred providers. From there, you can decide which service best fits your business’s size and needs without worrying that you’re being scammed.

Integrate Marketing & Customer Relationship Management

When you choose your shopping cart software, you’ll likely find an app marketplace included on the vendor’s website. In this marketplace, you can sift through dozens (or even hundreds) of integrations for other software solutions.

As you peruse this marketplace, you should consider integrating with and subscribing to a few marketing and customer relation management (CRM) apps.

In particular, you should look into email marketing software. A good email marketing system, like MailChimp or Mad Mimi, lets you design and automatically send out strategic email campaigns. Use these campaigns to retarget past customers and increase conversions.

Don’t Forget About Accounting Software

It’s crucial that you keep good records for your taxes. Look through that app marketplace again for integrations with accounting software programs that can lend a hand.

We like Quickbooks and Xero in particular. We even offer a complete guide to teach you how to set up your Xero account, should you choose that platform.

4. Set Up Your Site

set up your site website design

Retail is all about appearances. You wouldn’t spend more than a few minutes in a disorganized retail store, and your customers won’t either. Organize your site to make products accessible to customers, and improve the overall quality of your site.

As you set up your site, you’ll want to do two things: optimize your site for visitors and optimize your site for search engines.

Perfect Your Site Organization

Good design keeps customers around longer. Make sure your site features attractive, modern design with lots of images. More importantly, you’ll need to ensure your web design is mobile-friendly. These days, 60% of all online traffic comes from mobile devices.

What’s more, you’ll want to provide your customers with navigational tools. Create a toolbar and organize your categories and subcategories within that toolbar.

Finally, make sure to keep all your most important information (sales, contact information, featured products) above the fold. That way, customers can see everything you want them to see before they even scroll.

Play With Search Engine Optimization

Google can be your best friend or your worst enemy. How you set up your store plays a very big role in how well your site performs on Google’s result pages.

There’s a lot to consider when it comes to SEO, and I don’t pretend to know it all. Instead, I’ll refer you to Neil Patel, who is well known for his extensive SEO knowledge.

But first, take a look at a few basic ways you can improve your site’s SEO during your setup process:

  • Use Memorable URLs: Write custom URLs that are real words, not just a jumble of letters and numbers. If you’re selling handmade shoes, for example, a good product URL would be
  • Make Sure Your Site Is Mobile Responsive: I’ve said it once, and I’ll say it again. Your site absolutely needs to be mobile responsive. It simply isn’t an option anymore. Make sure your site works well on all devices.
  • Write Original Product Descriptions & Metadata: Writing your own product descriptions doesn’t just give your customers a better idea of what your products are like, it also boosts your SEO. Search engines love original content, so make sure to extend that practice into your meta-descriptions as well.
  • Consider Maintaining A Blog: A blog can do your business a lot of good. Not only will a blog help build your brand identity, but also it will help you rank higher with search engines. A blog gives you the opportunity to consistently add fresh content to your site, showing search engines that your site is active and providing new keywords for them to grab onto.

Check Your Security

Finally, you’ll need to ensure customers’ payment information will be secure on your site. If you’ve chosen to subscribe to a hosted platform, this should be pretty easy. Most hosted platforms supply their users with a free, shared 128-bit or 256-bit SSL certificate.

Merchants who use an open source platform, however, will have to do a bit more work. These merchants will need to purchase their own SSL certificate (which typically start at $90/year) and follow their platform’s best practices to make sure everything is as secure as possible. What’s more, they’ll need to stay on top of security updates and install patches as they are released.

5. Keep Researching & Improving

research improve ecommerce analytics

It’s likely that at the beginning of your journey into online selling, you will be one person wearing multiple hats. You’ll have to be CEO, Head of Sales, Graphic Designer, Web Developer, and Bookkeeper.

It’s important that during this time (even as you’re busy with a hundred other aspects of your business), you keep researching ways to improve your store. Here are a couple things you can do:

  • Read: There are plenty of excellent websites out there that provide quality information on new developments in eCommerce as well as ways to improve your online store. A couple of our favorites are Practical Ecommerce and My Wife Quit Her Job. Read up on SEO, HTML/CSS coding, digital trends, internet laws, etc.
  • Get Feedback: Tap into your connections and current customer base to get feedback from site users. You can also find user information in your sitewide analytics.

We know you value research (you made it to the end of this article after all). Keep it up and you’ll be well prepared as you enter the eCommerce industry.

Final Thoughts

By now, you should have a better idea about how to begin your online store. But there is so much more that we couldn’t cover here, including marketing, shipping, and growth strategies. While we didn’t have room in this article, you can find all of that advice and more in our free, downloadable eBook: The Beginners Guide To Starting An Online Store.

Hopefully, this brief article has given you a sense of calm as you approach the potentially overwhelming world of online selling. You’re already off to a great start!

Liz Hull

Liz Hull

Liz is software review writer living in Oregon. As of late, she can often be found haunting eCommerce forums and waiting on hold with customer service representatives. When she's free, Liz loves to rock climb, watch Spanish dramas, and read poorly-written young adult novels.
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