Everyone around talks about the benefits of starting an ecommerce business. No wonder, the e-commerce niche is gradually conquering the world market. People have got used to shopping online, and they won’t be eager to return to their pre-Covid consumer habits even under safe conditions.

Ecommerce is one of the few industries that are not afraid of Covid-19. In 2020, eCommerce sales hit 19.6%, compared to 14.3% in 2018. Here are some other figures worth your attention:

advantages of starting a ecommerce business

But getting value out of ecommerce opportunities is not as easy as it seems. The thing is, there are many ecommerce projects today. They are often very similar and unable to win client recognition in the background of world-known and successful online businesses.

How to turn your ecommerce project into a growing online business? Our 9-step guide will help you to differentiate.

9 Steps to Starting an Ecommerce Business

Our guide comprises 9 steps on how to set up an ecommerce business and sell online. At first glance, it may seem that the path is tedious and complicated. Yet, moving from one step to another and having the overall picture in mind will help you concentrate on the progress. Here is what should be done:

starting an online business checklist

Neither of the steps is more or less important — be careful while completing each. Pay particular attention to the legal aspects of your business. If you doubt some of the decisions you make, it will be better to hire a consultant in the beginning not to face problems in the end.

1. Choose a product to sell

The first step is the most responsible. When selecting a product, consider two factors: relevance and competition.

Product relevance

Let’s start with relevance. You can opt for a product idea that is relevant and trendy. Social media is the place where trends are born, and this is where you can look for trendy goods.

For example, a lot of startuppers have caught the trend of bath bombs and won a jackpot. The same can be said about scented candles, which are now an indispensable part of people’s evening rituals. If you spot a growing trend promptly, you will increase the chances of a successful business.


One more point is competition. If you are determined to sell common goods, be ready to invest a lot of money into promotion. Otherwise, it will be extremely hard for you to outstand competition.

How to make a client choose you over Amazon, for example? Sometimes this question remains unanswered simply because your niche market is full of recognized business giants who are hard to outrun.

That’s why you should consider selling unique products. Today, we see that more and more customers support sustainable brands. Contributing to sustainability can help you to differentiate. Also, hand-made and exclusive goods are appreciated by clients. Choosing the right ecommerce product will make it easier for you to complete the rest of the steps.

2. Make sure that your idea is viable

Now you have a particular product in mind. What’s next? The next step is to make sure that your e-commerce idea is viable. Here, we will consider the three aspects: product demand, client interest, and competitor analysis.

Product demand

Firstly, explore the existing demand and product value on the market. Start by analyzing Google Trends. Google Trends is a free tool that enables users to explore how often people search for particular stuff. You can adjust your inquiry by choosing the target location, time period, product category, and search mode.

Client interest

Next, explore client interest in your product. Create a description of your buyer persona. How old is your target audience and where do they live? What are their interests and what are their values? These questions, as well as many others, should be answered in the profile of your buyer persona.

When the description of your target customers is in front of your eyes, get a sense of the client base and reach them directly. Getting client feedback before establishing a business may give you many useful insights on service improvements.

The quickest way to reach a client is to create an anonymous free survey and encourage your target audience to answer a few questions. If you are looking for a more precise way to check client response to your idea, you can find a software engineering company and develop a minimum viable product (MVP).

Competitor analysis

The last part of step 2 is competitor analysis.  Research your target market. Having too many competitors means that it will be hard to differentiate. Not enough competitors may also be a bad sign indicating that the niche is not profitable. The best scenario is when there is healthy competition but the market is not overloaded yet.

When checking out the competitors, explore their business models and social media channels. What is their marketing strategy and how do they drive sales? Their examples may inspire you in your pursuit of creative ideas for your business.

3. Write a business plan and solve formalities

At this step, you will develop a business plan for your e-commerce project. Start with defining the strategic vision. Think about the problems or pains of your target audience. How your solution will help solve them and how do you know it?

Choose the right business model and infrastructure to execute your vision. The latter includes staffing, facilities, technologies, and systems involved in the implementation of your goals. And then, move to the creation of your business name.


So, you are one step away from registering your business. It’s time to come up with a catchy, interesting, and memorable name. On the one hand, it should be unique to keep you ahead of the competition. On the other hand, it has to hint at the direction of your business or at the peculiarities that differentiate you.

Check whether the name you like is not taken by some other company. Also, make sure that the domain with a related name is available. If it is not, consider choosing another name or another domain structure.


With a catchy brand name, you advertise your business by the word of mouth. But it is also important to represent your ecommerce company visually. Create a cool logo. Use free tools for logo creation if your budget is limited. And if you can afford to hire a designer, the latter will create a trendy and laconic logo that will belong only to you.

Business entity

Finally, choose the right business entity type for your e-commerce company. A legal structure determines the legal and financial procedures one is obliged to complete. There are four options: to create LLC, sole proprietorship, general partnership, or corporation.

If you have no experience dealing with these legal structures and know little about their pros and cons, it will be great to consult an attorney. They will advise you on what type suits your business better. If you are opening a small ecommerce business, legal professionals will recommend you to choose a sole proprietorship or general partnership.

how much does it cost to start an ecommerce business

Opting for one of these two structures allows you to operate in one country and be registered in another. For example, if you are based in Germany but aim at the US market, it will be no need for you to spend money on registering your business in the US.

The requirement will be to file a “doing business as” application, or DBA, in the target country. Under DBA, your business will be legally represented in this state under your individual name.

4. Comply with legal requirements

You are almost in the middle of the way.

Business licenses and permits

Permits and licenses indicated by ecommerce businesses on their websites are there not only to make clients feel secure. Having licenses and permits is a legal requirement for a business that wants to operate in a particular state.

If you choose a legal structure different from the sole proprietorship and general partnership, you have to get a general license. It will allow you to operate in the chosen country. In some of the states, a local operating license is also needed.

If you plan to start a brick-and-mortar store as well, the number of required permits and licenses will significantly increase. A sole e-commerce business does not generally require you to get a lot of documentation. Yet, not to miss anything vital, google your questions and look for the answers on official state websites.


You may apply for an employer identification number (EIN) for your company. Not all types of legal entities require you to have EIN. Yet, it will be useful in cases when you need to separate your personal financial operations and business finances. Attorney’s advice will help you define whether you need it or not.

5. Get your product

You are a few steps away from setting up a profitable e-commerce business. At this stage, we move from managing formalities to the practical part of the path. To successfully sell goods online, you should source these goods first.

If you sell your own products, solving this task will not take much of your time. If not, refer to the business plan you created at step 3. Here, we have talked about suppliers of your product.

Finding s reliable distributor may take time. The best way to choose a good supplier is to set the so-called “trial period” for your cooperation. It will allow you to check how things are going before signing long-term contracts or becoming fully dependent on your business partners.

6. Build your eCommerce store

The paperwork is done, the products are ready for selling. But how to start an e commerce website? Your online store will be a place primarily associated with your brand. With high client expectations, you should make sure that your e-commerce software is bug-free and performant.

How to build your ecommerce store and what tools to use? Let’s review the most popular options. Most of them allow users not only to create online stores but also customize them to serve client needs.


This platform comprises many cool templates and will be suitable for businesses that have no time to build an ecommerce business from scratch. By using the ready-made template for an ecommerce store, a company can save money and effort.

There are 2 plans you can choose from, Basic ($35/month) and Advanced ($54/month). Yet, Squarespace is a general website builder meaning that it is not adjusted to the ecommerce requirements. All features and functions needed for an online store should be added manually. It complicates the process of online store creation for those having no tech background.


This option is a good choice for companies that already have their ecommerce websites in action but aim to improve them. If you have a WordPress website, you can download the WooCommerce plugin. The add-on is free and open-source and provides users with a lot of e-commerce functionalities and features.

WooCommerce makes the whole process of online retail easier. Yet, it will require you to have a tech background to use its advantages to the fullest extent. After all, being open-source presumes making regular improvements and updates.


Magento is a highly-customizable online platform for the creation of ecommerce spaces. There are two versions of Magento, one of each is fully open-source and free. Its open-source version allows users to adjust nearly every aspect of an ecommerce website to their customer needs.

Magento has the following benefits:

  • Speed and performance

Magento allows for building highly performant websites. It has the capability at hand to support thousands of orders in one hour. If you plan to create a growing business, Magento can greatly help.

  • Easy content management

To make unique offers, you need to customize the ready-made elements on your platform. Magento allows for flexible content management. Using Magento, you will be able to adjust the e-store interface and functionalities to your business needs.

  • Flexible configuration

Magento uses a component-based module structure. It helps to keep code clean and ensure high website performance. Developers can disable or enable code components depending on their purpose.

  • Powerful SEO

Magento is well recognized by top search engines. If you built your ecommerce store on Magento, you ensure good SEO and pave the way for organic traffic. Magento also allows for customized search engine optimization.

  • Security and analytics

Magento allows for multiple-level security permissions to protect your ecommerce store. Moreover, you get the chance for third-party integrations with the aim of insightful analytics and secure payments.

Magento benefits for ecommerce business

To make use of Magento’s benefits, take some time and watch guides on how to manipulate Magento elements to create an online store. Another option is to look for a dedicated Magento development company that will do everything for you.


Shopify is one of the largest e-commerce software platforms. It allows businesses to create user-friendly and eye-catching online stores for any type of goods. There are a lot of add-ons that help companies customize their ecommerce projects and differentiate.

Shopify offers several subscription plans to serve different business needs. If one has a limited budget, they can start with the 14-day free trial. Then, they will have to pay for the Basic ($29/month), Shopify ($79/month), or Advanced ($299/month) plan. The Basic option does not allow for the creation of a complete store. Other options do, but they are more expensive.

7. Manage SEO

While looking for a product or service, people formulate their requests in a particular way. Knowing about the ways people think about your product will help you rank high in search results. To achieve this goal, a little SEO background will be needed.

Check out Google Trends to reveal what keywords are frequently searched by your target audience. You may also use Google Keyword Planner Tool to look for the product-related keywords and incorporate them in your website content.

8. Find the first client

You’re almost there. Your ecommerce store is up and running, you are ready to generate revenue online. Your task now is to find the first customers and create the order fulfillment algorithm. Your first buyers can be your friends who are ready to contribute to the successful start of your business.

Social media can be another place where you can find the first clients. Create social media pages for your business and generate organic traffic to these pages. Interact with people having product-related interests or drive targeted traffic to reach your audience.

9. Keep going and launch a promotion

Congratulations — we are at the final step. Now the task is to move ahead and continue promoting your store with social media, online advertising, and promotion tools. For the ads to be effective, choose the right channels that suit your business most.

For some companies, making YouTube videos or using email marketing is the best choice. For others, the easiest way to reach their audience is to use Facebook or Instagram. Yet, try to use at least several channels for promotion and apply multi-channel marketing.

In the end, we recommend watching this video about some extra things to know before diving into e-commerce:

Important note: our guide is not the ultimate instruction on how you should act to reach success in ecommerce. The stages and the order may differ depending on the type of business you aim at. Moreover, as your business grows, you will need to make changes and improvements to your business strategy.

To get more precise planning and focus solely on your specific business needs, refer to advisory services for digital. Experienced digital consultants will help you choose the best strategy for a profitable online store.

How Much Does It Cost to Start an Ecommerce Business?

Of course, compared to opening a brick-and-mortar business, setting up an ecommerce business is more efficient. You do not have to pay for rent, equipment, and store maintenance. Yet, there are some expenses you should go through to build an effective ecommerce store.

Licenses and permits

How much money will you need for opening a new business? You will spend some resources on getting licenses and permissions to operate online. Everything depends on your current location and the country you are targeting at. The costs vary from state to state.

While one country may charge $10, another can require you to pay $600 and even more. For example, in Norway, you will pay nearly $3200 for registering a private limited company. In the US, the sum will vary from $50 to $500 depending on the state.

These are the licenses you may need to pay for:

  • Business license, which allows you to run business in your state, city, region.
  • Seller’s or reseller’s permit enables you to sell products and collect sales taxes.
  • EIN (Employee Identification Number), which is needed when you choose LLC as your legal structure and plan to hire employees.
  • DBA (Doing Business As) license, which will give you the chance to operate a business under a particular name.


And here are the insurances you may need as well:

  • General liability insurance — basic business insurance covering various aspects from physical injury to the violation of intellectual rights.
  • Commercial property insurance — covers cases of property damage.
  • Data breach insurance — protects your business from an information breach.
  • Intellectual property insurance — gives you the legal rights for all the information you produce in your business and ensures that no one has the right to copy your content.
  • Business Owner Policy (BOP) — complex insurance covering some aspects of general liability, commercial property, and business income.

Ecommerce software

You can choose between free software types or purchase the chosen plan of the paid options. If you have a tech background and can manage your store on your own, you will save money on the development. If you cannot do it by yourself, you should invest in ecommerce software development.

The best choice to find an affordable and high-quality software development company is to outsource. With a trusted outsourcing partner, you will get a high-quality product at a satisfactory price.

Domain and hosting

If you build your ecommerce business from scratch, you will have to pay for domain and hosting. The average price for such services varies from $1 to $30 per month.

Payment gateways

Fast and secure payment processing is a must-have for an online store. Not to allow your clients to worry about the safety of their credit card and personal data, invest in the integration of reliable payments options into your ecommerce store.

Employee salary

At the start, there will be no need for hiring people for your ecommerce business. Yet, in the course of growth, you will spend some money on employee salaries. Your employees may include social media managers, consultants, store administrators, marketers, and support representatives. A great solution is to hire freelancers for one-time cooperation at the start.

Ads and promotion

If you invest at least 5-10% of the revenue in promotion, you will keep your business safe. Of course, there are plenty of free adverting means and tools. Make use of these but do not forget to strengthen your results by using paid ads as well.

Important note: your precise expenses depend on many factors. These include your initial budget, the way you supply products, your choice of a platform, your flexibility, your choice of a software development partner, etc.

Tips for Starting an Ecommerce Business

And finally, here are some practical tips from our team that will give you a better business vision and help you be more in control of your brand and audience.

– Ensure responsive customer support

88% of online buyers are less likely to return to an e-commerce store if they had a bad experience there. The first visitors of your online store may face technical difficulties while making an order. This is why you should keep in touch with your potential buyers at the early stages of your business development.

Prompt response to their questions and assistance with order processing will help you earn client respect. A great way to help customers is to create a FAQ section on each page. While coming up with the questions for this section, step into the client’s shoes. Live chats and support will build a long-term and trusted relationship between you and your audience.

– Care about user experience

Great user experience yields conversion up to 400%. When thinking about e-store improvements, consider the client journey. Adjust your website design to the interests and preferences of your target audience. Use various methods of user involvement to increase customer retention. Remember: it is easier to retain a client than to find a new one.

Some aspects of your ecommerce website may look exceptional and stylish but will not be used by a client in a way you expect. You should apply analytics tools to explore client behavior on your website. Knowing what attracts user attention the most will let you use it for your business benefit.

– Make unique offers

Create unique offers that will be limited in time. Limited-time offers include various deals, discounts, and promotions that can be used by a customer in a certain period of time. They work on the basis of FOMO notion, or “fear of missing out.” This fear drives a customer to catch a unique opportunity and make an order.

Limited-time offers will encourage your potential clients to make a quicker decision concerning an order. However, do not overuse them in your business. If being abundant, they will lose their value for a client.

– Create visually appealing content

Organize your website content in a way it looks visually appealing. It is a good idea to add written content to make a relevant offer. However, if this information is not structured properly, a customer will get bored and skip it.

Your offer should be informative but should not impose a cognitive load on your customer. Mix verbal, audial, and visual information. Make your e-commerce store entertaining and add high-quality product photos for your website.

– Introduce regular updates

When selling online brings you first money, it won’t mean that it’s time to relax. You have to regularly improve your ecommerce business and make updates. If you get stuck in one place, your clients may go to a competitor who keeps pace with trends and news.

Be ready to invest money in enhancing marketing tactics and make sure that your ecommerce store remains performant and fast-loading. Advertise your business by collaborating with influencers and using promotion tools. By caring about your brand identity, you will grow your business and improve your market image.


Hopefully, our guide will help you make the first steps towards starting an ecommerce business. You need to invest money, time, and effort into letting your ecommerce business grow. Having a plan in front of your eyes will make it easier for you to allocate necessary resources and manage them effectively.

And if you need help with building an e-commerce software — contact the Forbytes team. We are always here to assist you in bringing your business idea to the digital world.