How to start an
ecommerce business from scratch in 5 steps
Dreaming about
turning your million-dollar idea into an
ecommerce store?
You may already be
thinking about what type of products you want to sell, who your audience will
be, and how you’ll
attract shoppers.
It’s a lot to consider, but don’t worry—to figure this
out, let’s look
at five basic areas to help set your ecommerce business up for success:
- Researching and validating your
business idea so
you know what’s likely to sell
- Procuring products or sourcing
them from
reliable suppliers
- Choosing selling channels to
connect products
with shoppers
- Setting up an online store and
listing products
- Marketing and promoting
products to raise sales
Step 1: Research
and validate your business idea
What
problem or
challenge are you seeking to solve? Who is going to be most excited about the
solution you come
up with?
Some ideas—however innovative—can fail if they don’t have
customers to support
them. As you zero in on
product ideas,
here are some prompts to help you make decisions:
- What are the common problems
people face in your
industry?
- Why are they facing these
problems?
- What products can you offer
that will solve
these problems?
- What trends have you noticed in
the world that
you can capitalize on?
- What activities do you enjoy?
What products
would improve those activities?
Answering these
questions can bring you closer to
finding a product
people
want to buy.
Find a way to
improve a product that already exists
Read
customer reviews
of similar products to find out where your competitors fall short. Tally the
complaints and look
for patterns. Next, research how much it might cost to solve the issue.
For example,
glassware comes in many gorgeous designs, but families may avoid purchasing them
out of fear
their children will break them. So you could create a line of shatterproof
glasses that are just
as attractive, but more resilient.
Talk to
potential customers about their frustrations
What
comments or
complaints do you hear from friends or family about products they use? Reach out
to a small
group of people to understand if they face the problem you’re trying to solve,
and find out how
they currently deal with this challenge.
Here’s one approach:
- Offer to buy 5-10 people a cup
of coffee in
exchange for 30 minutes of their time.
- Use your meeting to talk about
the challenge and
see if the pain point is something they would pay money to solve, or if it
doesn’t bother them
much.
- Avoid bringing up the product
you have in mind,
as this may influence the answers you get. Instead, focus on how they feel
about the
challenge, how they currently deal with it, and whether they would pay to
solve the problem.
If so, how much would they be willing to pay?
Asking
these
questions can help you figure out if there might be an audience for the product.
Spot
opportunities with competitor research
Before
you open your
virtual doors, it’s a good idea to check out the competition. A simple approach
to competitor
research can involve browsing results in Amazon search for product categories
that interest you.
Pay attention to the following:
- Product features and benefits
- Price ranges
- Customer reviews
The
more time you
spend validating the product, the better your chances of succeeding in
ecommerce.
Step 2: Source
products
Once
you’ve figured
out what you will sell, and who the products will serve, the next step is to
find the right
source for the products.
Good products will help your new online business
thrive. The key
is not only choosing the right product, but also the right source for products.
Here are a few
options for sourcing ecommerce products.
Resell existing
products
Reselling is a popular choice for Amazon
selling partners, as it can be cost efficient and relatively easy to get
started. Online
directories and listings can help you find suppliers for products. You will need
to contact the
vendor, order products, and ship them to your business or storage location.
Then, ship them out
to customers once the products sell. Finding and building relationships with
suppliers can not
only lead to more affordable procurement, it can also secure a steady supply
chain for your
business in the future.
Create or build
products
Building products
gives you control over quality and design. However, this method may be hard to
scale up. Some
sellers prefer to create small batches of handmade products. This helps keep
operations
manageable. Given the perceived higher quality of handmade products, this option
also allows
sellers to price products at a premium.
If this is the route for you,
explore artisanal
or custom ecommerce selling options like
Amazon
Handmade.
Use dropshipping
or print-on-demand (POD)
Dropshipping is a business model
that might be appealing if you don’t want to keep any inventory in stock.
Instead, when a
customer places an order, you purchase the item from a third-party supplier who
then ships it
directly to the customer. This can allow you to offer a wide variety of products
without
investing in large amounts of inventory.
Similar to dropshipping,
print-on-demand is
where you print products only after a customer places an order. If you offer
custom designs or
unique products that would be difficult or expensive to produce in bulk, POD
might be a good
model for your business.
Work with a
manufacturer
Partnering with a
manufacturer can take time and resources, but the investment might be worth it
if you want to
build your own brand. The right
manufacturer can build prototypes to your specifications.
Locate a few
manufacturers and
ask for samples. Then narrow it down to two or three and order a small batch to
test the
manufacturer's speed, quality, and communication.
It doesn't hurt to
have a backup
supplier in case something goes wrong. For instance, having a supplier in
another country or
region can help you avoid going out of stock if there are delays in the supply
chain.
Step 3: Choosing
an online selling channel
If
you’re new to
ecommerce, you may want to start small and scale up. Selling on your own domain
is one option if
you have the time, resources, and skills to customize a website, create a
seamless online
experience, and compete on the internet to get customers to your
store.
Other options
include starting out on an established ecommerce website, or selling through
social media sites
like Facebook, Instagram, or Pinterest. Whichever route you choose, keep in mind
you can start
with one and add other channels as you scale. You can also drop a channel if it
isn’t serving
your needs.
Sell on an
existing ecommerce website
Selling websites that
already have traffic can help you connect with customers, expanding your
visibility and reach.
Plus, this strategy gives you a chance to learn about what works for other
sellers, get reviews,
and generate revenue before investing in your own website.
Try social
selling
Social
selling is a
way for entrepreneurs to share about products and allow shoppers to buy during a
live show.
Customers can see the products, ask questions, and get personalized product
recommendations in
real-time. Social selling can take place on social media or on live-streaming
destinations like
Amazon
Live, an interactive way to build relationships with customers.
Selling in
Amazon stores
Amazon
is a powerful
channel in terms of reach, with over 300 million customers worldwide. Amazon’s
suite of
tools can help new and existing business owners
reach
those customers with its product-focused infrastructure.
Benefits of
selling on Amazon
for new and existing ecommerce businesses include:
- Speed: Get a
store up and
running quickly thanks to the minimal work involved in setting up the store.
- Scalability and
efficiency:
Selling in Amazon stores frees you up to create and sell great
products—you don't
have to solve every business problem. Use Amazon’s infrastructure, tools,
and customer reach
to grow your business.
- Reach: A
listing in Amazon
stores has the potential to reach customers
in more than 100 countries.
- Ecommerce support:
Use Amazon’s
tools for processing payments, collecting reviews, running promotions, and
even A/B testing of
product pages at scale.
- Built-in SEO:
Amazon product
pages are built to serve search engines the right content and show up
competitively in search
results. When you launch products in Amazon stores with well-written product
pages, you’ll be
primed to rank competitively for the keywords and product searches relevant
to your brand.
- Market awareness:
Customers
come to Amazon to shop for products. That’s why it’s the go-to
for product search.
Step 4: Set up an
online store and list products
Once
you’ve figured
out what to sell and who you’ll sell to, it’s time to get your business up and
running.
Building your
online storefront
The
Amazon
Stores builder allows you to
customize an ecommerce storefront for free. An Amazon store comes along with
built-in technology
to provide a seamless customer experience—from browsing to payment
processing.
If you
have a brand, you can also enroll in
Brand
Registry to use tools like
A+ Content that can
help
create a state-of-the-art shopping experience complete with lifestyle imagery,
video content,
and more.
Creating
competitive product listings
You
can manually list
products with an Individual seller account, or use the Inventory Loader template
with a
Professional seller account to upload a spreadsheet of products. Bulk uploading
will work once
you have products with ASINs on Amazon. The template will grab data from those
ASINs to pre-fill
a product's specifications so you don't have to.
Product descriptions are
what customers
will read to decide if the product will fit their needs. Write a thorough
description and
include everything the potential buyer needs to know to make an informed
decision.
Incomplete or inaccurate descriptions may lead to complaints,
increase returns,
and hurt your reputation, so be thorough, clear and upfront. However,
descriptions don’t have to
be dry. Put yourself in customers’ shoes and come up with fun and engaging
descriptions of how
they can use the products.