5 Things To Know Before Setting Up An E-commerce Business

E-commerce has taken off in a big way in the last couple of years, with mobile shopping alone accounting for about $131 billion during the 2017 holiday season. This works out 1 dollar for every 5 discretionary dollars spent in America has gone into buying a product online. If you have a great product for which there is a proven and unmet demand, then you can definitely consider selling online.

Starting an e-commerce business does not require huge investments, since you can open a virtual store and start selling almost immediately. But this cannot happen overnight. You need to make massive commitment in terms of time to ensure that your venture is a success.

Extensive research, evaluation and planning are required to launch an e-commerce business. If you already have a brick-and-mortar business, then taking it online will be an organic progression to tap into new markets. If you are starting out as a first-time entrepreneur then, without doubt, there will be a considerably steep learning curve.

Here are a few things you need to know before you start your e-commerce business.

  1. Decide on Your Product

Passion, expertise, experience and knowledge need to come together and hit the sweet spot to create a product that you will enjoy as well as profit from selling. If you are not sure of what to sell online, you can try to rank for keywords in viable niches. This requires considerable technical knowledge and thorough understanding of SEO.

There will be keywords where competition is fairly low and where you will be able to rank high in Google searches. This is also useful if you are trying to find an additional source of income and are not looking for investment-intensive businesses. Drop-shipping products can be considered because you can rank high in searches without spending on paid advertising and can also sell in larger volumes to earn profit.

You can use Google Trends and Google Keyword Planner to spot keywords that are trending in e-commerce and see whether you will be able to cater to this category of customers.

Other traditional ways of starting your own business includes identifying a customer pain point and going about resolving it. Ali Beheshti explains this quite well in this post as to how addressing his own concerns led to the birth of Zealie, a revenue cycle management platform. was born because the CEO Mark Blanchard did not really see anyone capitalizing on their social network. The internet marketplace helps you leverage your social network to sell products. There is a certain degree of familiarity between buyer and seller and if a friend’s sharing of a listing leads to a sale, then he or she gets a small percentage commission through as well.

Alternatively, you can also capitalize on your passion to start a business. If you are passionate about painting, you can start a YouTube channel documenting your artistic adventures and begin selling your work online.

  1. Do Not Underestimate a Great Business Plan

Before you venture any further, it is necessary to have a good business plan in place. A study conducted on 193 failed startups revealed that unfunded companies cite a poor business model as the number one reason why they failed. A good business model can provide you with a blueprint as to how you can go about making your venture a success.

A sound business plan is extremely important if you plan to raise funding. Even if you are self-funded, having one will ensure that you have a crystal clear idea of what your company does, who your customers are, what your future plans are, how you will manage operations and finance, establish organizational and management structure, and plan for future funding (if needed).

The components of a successful business plan include:

  • Executive summary
  • Company description
  • Market research
  • Management and organizational structure
  • Operational plan
  • Sales and marketing plan
  • Financial projection

You can begin your business plan with a value proposition that outlines what your company does, why you are unique and how you differentiate your products from others in the market.

The market research section should include industry reports which showcase current trends, current sales and future forecasts, growth drivers, customer segmentation and challenges the industry faces. You will be able to glean valuable information regarding your business ecosystem from this analysis.

If you want to sell gardening equipment online, it is imperative that you make a visit to a gardening popular store in your area to understand shopping patterns. You can interview the salesperson to know more about the type of equipment in demand and learn which brands are popular. You will also get an idea about the price points customers are comfortable with. The market analysis will also help you identify competitors.

Google Trends and Google Keyword Planner will help you locate popular keyword searches online. If you conduct a simple Google search for gardening equipment, you will be able to uncover the major companies selling them. Free online tools like SEMRush and SimilarWeb will help you uncover companies similar to the major competitors. These tools will also help you get more information regarding competitors like geography of traffic, referring websites, keywords they rank for, and social referrals.

You can also conduct surveys with your target market to know more about the potential of your product. You will be able to identify opportunity gaps in the industry where the current products are not addressing some specific customer need. You can also understand about the needs and wants of your target market and tailor your marketing and sales pitch accordingly. It is possible to conduct pricing tests, gather early customer testimonials, test images and logos, and acquire early customer feedback using survey tools like SurveyMonkey and Survata. Surveys are the best way to validate a startup idea and decide whether there is good value proposition.

  1. Name Your Online Store

Next you need to decide on an appropriate and unique name for your company. Choose a name which reflects the personality of your company and matches as much as possible with the available domain name. Your company’s name, along with the logo, is part of the overall branding of your e-commerce company. You can check out this post to know more about e-commerce trademarks.

Next, you need to get your business license and Employer Identification Number (EIN). The EIN is essential to open a business bank account and to file your business taxes. Several other state-specific regulations ad requirements will need to be taken care of as well.

  1. Decide on E-commerce Web Hosting and Shopping Cart Builder

Sign up with a web hosting service to publish your website.,, and are a few service providers you can consider. To sell products from your e-commerce website, you need the help of online store builders like Magento, Selz, BigCommerce or Shopify.

These online store builders are amazingly easy to use and power millions of stores worldwide. You do not need coding knowledge to use these highly intuitive tools and can have a functional online store up and running in no time.

First, you need to choose a template that does justice to the personality of your brand and customer persona you are catering to. You can customize the template to get the right look for your store. The builder guides you with the next step, which is uploading products and organizing them into categories.

Next, you must decide on preferred payment processors for your e-commerce site. To make your store customer-friendly, it is important to offer multiple payment options like credit card, debit card, mobile wallets, cash on delivery (COD), online banking, and so on. You can consider tying up with merchant accounts or payment processors like PayPal, Stripe, Tipalti or Several factors will need to be taken into consideration. These include, but are not limited to, payment processing fees and other policies before deciding on payment processors for your e-commerce site.

  1. Consider Selling on Third-Party Sites

Creating and managing an e-commerce site is not easy. It requires round-the-clock attention and supervision. If you want to get a feel for online selling without committing to a full-fledged online store, you can consider selling on sites like Amazon or eBay.

These third-party sites offer each seller a business page within the site from where they can manage their activities. The page setup hardly takes time and within hours you can start selling. The benefits of setting up shop on Amazon or Etsy include not having to deal with setting up payment gateways, accessing an online home to your store that keeps it up and running all the time, and not having to worry about security certificates. Online marketplaces ensure customer data security during financial transactions and keep all information encrypted.

The flipside to this arrangement is the associated costs. Online marketplaces charge fees to list items and also take commission for each sale, at times as high as 10 percent of the total selling price. Based on your unique customer needs, you have to decide whether or not this will be viable for you.


The groundwork that you do before starting a business determines how effectively you can navigate the challenges that come your way. Also, it is important that you do not keep waiting for the perfect time or to build the perfect store to launch your business. You will learn the ropes as you go along. So make up your mind, jump off the cliff and enjoy this very special ride.


Avinash Nair
Avinash Nair
AVINASH is a digital marketer at E2M, India's premium digital marketing agency. He specialize’s in SEO and Content Marketing Services.

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