What To Know Before Starting Your Ecommerce Business

What To Know Before Starting Your Ecommerce Business

Starting an ecommerce business can be a rewarding experience, but the road to success can be confusing and difficult. To help you get started we’ve made a list of some simple and important ideas.

Product and Market

Your ecommerce venture all starts with the product you will sell and the market that will buy it. Product and market fit are perhaps the most important aspects of your ecommerce business and must be extremely well defined.


The money your business makes is almost always in direct proportion to the value you bring to the market. This means your product must give more in use value to your customers than the price they pay for it.

One way to achieve this is by having an easily differentiated product. You must be able to explain simply and succinctly how your product is better or different. Another way of explaining this idea of differentiation is with the “Law of Category.” This states that if you cannot be the first in a category, make a new category. An example of this is with the original Apple Mac. Rather than competing only with another computer, they positioned the Mac as the first computer for graphic design. What category will your product be first in? Often being different is more important than being better.

Remember if you choose to sell other brands or a manufacturer’s product, then your website is the product. What service, brand offering or experience do you offer that will make a customer buy from your store rather than a competitor?

If the product you sell is to compete directly with similar products it helps to think about how it could be measurably better in every aspect. It’s unlikely you’ll be able to provide a more cost effective option so massively improving upon the current market offering will help customers choose you.


This leads to the importance of defining the market for your product. The larger the market and the more value you bring to that market, the more potential sales you can make. However with larger markets comes more competition. It’s easier with smaller markets to establish yourself as an authority or expert resulting in customers coming to you for help and advice. One strategy is to start with a very small niche, become the leader in that niche and eventually grow into larger, complementary markets from a position of strength.

There are a number of practical methods you can use to determine the size and needs of your market. These include; Google Trends, Google Keyword Planner, Google Rankings, Amazon sales, competitor research, product review sites, market research papers and government statistics.

All these methods will give you an idea of how much demand there is for the product you are looking to introduce. That being said often the best businesses are built from a need to solve a problem that you are having yourself. Chances are if you can find a product that helps you solve a problem, there will be other people that also have that problem.

Put your mind to work as you go about life to think of products or ideas that can improve or add value to your own life. A good practise is to put aside 30 minutes a day and dedicate that time to idea creation. Idea creation is a skill that is improved with repetition and over time your insights will become better and product ideas will come to you all the time.

Product creation

So you’ve decided on the product your ecommerce site will sell. Now the next obstacle is determining where and how to obtain your product. Your options are to make your own product, manufacture, wholesale or dropship.

Making your own products can be great for control over quality and brand, but it’s limiting in scalability and will cost your more per product in materials and time. If you are able to make your own products and inventory startup costs are an issue, then this is a great way to start your ecommerce business.

Manufacturing is the most common source of obtaining your product and will result in a lower cost per unit and greater profit margin. The downside is you normally have to pay for a large quantity of product, often before you receive the goods. You also have less control over quality particularly when using international manufacturers. Finding reputable manufacturers and going through prototyping and negotiation are very important skills and worth investing time into learning before you start your store.

You can also buy wholesale products. This is where you purchase products direct from other brands or manufacturers at a discounted (wholesale) price and sell them for a profit. This allows you to populate your store quickly and offer a good range of options. The margins however are usually smaller and you are limited by the wholesalers pricing and product regulations.

The other option is to dropship. This works by taking orders through your online store and passing those orders to a dropship partner who will fulfill the order for you. This is the lowest cost and risk option as you don’t hold any stock. The downside is that dropshipping is very competitive and the margins are usually very small. You are also relying on another party for inventory so backorders can become a problem.

It’s important to research all your options and carefully consider all your product costs and order sizes before you find yourself in a position with too much or too little inventory.

Business Plan

The purpose of creating a business plan is primarily to help you make sense of every aspect of the business before you begin. There are many resources that can help you write a business plan but the most important aspect is highlighting the potential economics of your store. How much revenue do you expect to make based on your market research? What are your margins based on supplier conversations? What are your expected costs for your first few years of existence?

Having a plan keeps you moving forward and gives you a structure to work with. Business plans rarely compare to reality once the business is launched but the process of going through one will certainly help you manage your expectations and clarify your thinking. It will also force you to think deeply about every aspect of the business before you are too far down the road.

Product Validation

All businesses are inherently risky but going through validation for your product can help decrease this risk before undergoing a full, costly launch of your business. One option is to approach potential customers and gauge their interest in your idea either with a prototype or presentation.

The most common form of validation however is to sell preorders of your product. You can do this now through popular crowdfunding sites like Kickstarter or Indiegogo. You can also create the product on your store and sell as preorders. This will require going through the website build and advertising your new site.

Once you get a gauge of how customers are responding to your new product you can then look at investing more into the business.


One of the most important things you can do is set yourself clear measurable objectives with timelines and milestones for your new store. These can be taken directly from your business plan. Having these milestones will keep you motivated to push forward while also ensuring you are monitoring your resources and staying on top of your position.


When starting any business there is a list of things to do longer than you could ever hope to achieve. Having focus from the very beginning will ensure you are doing the tasks that contribute the most to your store’s success. Pareto’s principle states that 20% of the invested input is responsible for 80% of the results obtained. Focus on the most critical, effective and often uncomfortable things that will result in the greatest impact on your ecommerce store’s success.


There are a number of ecommerce platforms you can select to develop your ecommerce site. We have an ebook coming soon that will help you decide which platform is right for you.

Apart from your product, when it comes to starting your ecommerce business, the look and feel of your website as well as the customer’s experience as they use your site are the most important aspects of your business. This is also known as UX/UI or User Experience and User Interface. If you are selling other brands or manufacturer’s product then UX/UI is the most important thing. You can spend all the money in the world on marketing but if the customer arrives on your website and the style or functionality of the site is not perfect you will lose that sale. Of all your startup costs investing in a well designed website that will be consistent with your brand, product and market will give you the greatest return.


It’s worth partnering with a courier service very early in your ecommerce business. Freight will be one of the most significant costs when running your business and leveraging long term relationships to secure better shipping rates will help improve your business profitability. It will be worth the time to research your shipping options including your own packaging materials and processes before sending orders to customers.


Once your ecommerce store is underway and your products are ready to sell, the major task in front of you is marketing. This is a massive topic that is forever changing and will require a large part of your attention moving forward.

Before your launch a good marketing plan will be very useful. You can set up your social media accounts and begin to plan content and timelines for delivery. Creating content for marketing will be a major part of your business so beginning early on brand direction and content creation will be advantageous. We have a dedicated marketing tag on our blog that will help you get started.


Building an ecommerce store is not as simple as most people expect. Not only does it require hard work and effort, it also hinges on managing lots of different pieces coming together to create a working business. That being said, following the ideas in this roadmap will make sure you stay on the right track and will give you a framework to create a successful ecommerce business.

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