Getting started: how to start an ecommerce business from scratch
If you’re interested in creating your online business, then you’ve come to the right place. In this guide, we’ll walk you through the process—from dreaming about your million-dollar idea, to running your own ecommerce store.
Step 1: Research your business idea
Before you start building your online store
, you need to research your business plan to help you make critical choices quickly and efficiently. There are several ways sellers decide what products to sell or build
. Here are some of the most critical decisions to make when trying to start your ecommerce business.
Find a pain point or challenge worth solving
What problem or challenge do you seek to solve? Who feels that pain point the most? Who would be most excited by you solving this challenge?
Finding a problem worth solving is crucial, because some ideas—however innovative—can fail when they don’t have an audience of customers to support them.
For example, are you looking to make high-quality kitchen utensils? Then people who enjoy cooking meals will be some of your best customers. Are you selling thicker and more durable yoga mats? Then yoga practitioners and instructors might be your best advocates and fans.
Think of the challenge your products will meet. Identify the users who will truly appreciate what you’re trying to create, and keep them top-of-mind. This will guide your priorities.
You don’t have to go far to find a good product idea. Often, people sell to a familiar group because it is a lot easier to spot problems and pinpoint needs more quickly. Think about your own interests to identify opportunities for products that people with similar interests or hobbies might need.
Being observant can help you find a great product idea
The best ideas can come from regular, everyday events, like having a drink with a friend. Online business owner Jaz Wearin came up with the business idea to develop a non-alcoholic beer that tasted just as good as the real thing! After 6 years of refinement, Jaz's idea turned into Nort, a crafted beer full of flavour, but without the fuzzies.
We were one of the first Sellers on Amazon Australia and we're seeing really strong growth.
Christian & ChrisFou
Finding a challenge worth solving and an audience that wants the problem solved will make your venture much more likely to bring you success.
Questions to ask yourself when looking for product ideas
The easiest place to start researching your business idea is within your immediate surroundings. Find out the goals, aspirations, or challenges of people around you, then find products to help them. By being observant, you can come up with ideas for your business that you can then research online.
- What pain points or problems do you have that you wish to solve?
- What flaws or complaints do you have with products you currently use?
- What trends have you noticed in the world that you can capitalise on?
- What comments do you hear from friends or family members around products they use?
- What activities do you enjoy doing? What products would help improve those activities?
Use keyword research tools to spot trends and opportunities
When it comes to selling online, your passion will not necessarily translate to success. You need to figure out whether customers want your product. You can use online tools to research trends, look up questions your audience may have, and determine what their current solutions are.
Your product already exists, now what?
If your idea or product is already available, don’t worry: You have a couple of options. Namely, you might be able to offer the same product at a more competitive price point, or provide a better alternative product. Plus, the fact that the product is already out there is validation of potential—that’s usually a good sign!
Read customer reviews of the existing products to find out where your competitors fall short. Tally the complaints and look for patterns. Next, do your research and figure out how much it might cost to solve the issue.
Step 2: Validating your product idea
The more time you put into validating your product, the better your chances of succeeding. Once you've pinpointed your business idea, research how similar products perform and what your potential customers might be looking for.
Talk to potential customers to validate your idea
The easiest and cheapest way to figure out whether your idea is worth pursuing is to talk to people. Once you've identified a problem worth solving, talk to people who feel the pain point or frustration the most.
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.
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 your product, 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 your product.
11 Tips for choosing the right product to sell online
Although you can sell many things on Amazon, a good place for an aspiring ecommerce store owner to start is with products that:
- Are easy to package and ship
- Have branding potential
- Are affordable for customers
- Have a long shelf life
Products that may be difficult for a new entrepreneur to sell are:
- Food and perishables
- Products with a low profit margin
- Heavy or bulky items, or products that are generally expensive to ship
- Highly competitive products (check the amount of customer reviews)
- Complex items or electronic products
- Restricted products. Depending on the selling channels you use, there may be restrictions on the types of products you can sell. It’s a good idea to check the restricted products list before you start buying inventory to make sure you won’t run into any unexpected challenges.
Help protect your brand with Amazon Brand Registry
You can help prevent the unauthorised use of your brand with Amazon Brand Registry
. This program is built for entrepreneurs who have an existing trademark or patent. Enroling unlocks access to tools that enable you to better represent a brand and find and report violations.
Step 3: Sourcing your products
Once you’ve figured out what you will sell, and who your products will serve, the next important step is to find the right source for your products.
Good products will help your new online business thrive. The key is not only choosing the right product, but the right source for your products. Here are a few options for sourcing your 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 your products. You will need to contact the vendor, order your products, and ship them to your business. 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 secure a steady supply chain for your business in the future.
Create or build your own products
Building your own products will give you the most control over quality and design. However, this method may be hard to scale up. Some sellers prefer to create small batches of their own handmade products. This helps keep operations manageable. Given that some perceive handmade products to be higher quality, this option may also allow sellers to price their products at a premium.
If this is the route for you, explore artisanal or custom ecommerce selling options like Amazon Launchpad
Working with a manufacturer to build your products
Working directly with a manufacturer to build your products can give you higher potential for growth, but it can also be the hardest path for a new seller to take. It will take time and funding to find the right manufacturer, work with them to build prototypes to your specifications, and eventually make your first order. Once you’ve built a new product, you will have the potential to create a distinctive brand that will help you stand out from the rest.
What ecommerce buyers are seeking in products
Amazon Best Sellers
is a list that can aid your product research by showing what customers like in very specific niches. Doing a deep dive into these categories can help you spot opportunities, up-and-coming products, or patterns among top sellers in your category.
Step 4: Choosing your online selling channel
You have many options for selling your products online. Set up a website and host your branded ecommerce store on your own domain name, or sell your products on an existing ecommerce website like Amazon—or choose to do both!
Many shoppers prefer to start their product search on Amazon. Using Amazon as a sales channel can give you that added piece of visibility.
Setting up your own domain and ecommerce website
There are many affordable options to choose from in setting up an online store. Buying a domain and hosting your own branded website is appealing to people who want to customise and manage all aspects of the user experience and backend process for your business.
While most ecommerce website providers are affordable, be prepared to invest time and money to build a good online experience for customers and drive website traffic. Once your website is up and running, you will need to raise awareness, drive traffic, and earn sales. Efforts like search engine optimisation, social media marketing, or online advertising can help drive traffic, but will require time or resources to manage. You will also need a process for handling orders and fulfilment once your orders start coming in. This can all be challenging to take on while trying to run your business.
Selling on an existing ecommerce website
Using an existing selling store that already has traffic can help you start successfully selling online sooner. Plus, this strategy gives you a chance to learn about what works for sellers, get reviews, and generate revenue before investing in your own solution.
Selling on an existing store also eliminates the risk in investing too much time and money on a product before you’ve built a customer base. Existing ecommerce websites will typically have brand or market awareness and initiatives to drive traffic.
Selling on Amazon
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 your store up and running quickly thanks to the minimal work involved in setting up your store.
- Scalability and efficiency: Selling on Amazon 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: When you list on Amazon, your product has the potential to reach more than 300 million customers worldwide, including the 150 million Amazon Prime members who like to shop on Amazon.
- Ecommerce support: Use Amazon’s tools for processing payments, managing customer reviews, running promotions, and more.
- Community: Learn how to succeed in online selling through Seller University free online tutorials, and plug into a community of driven entrepreneurs through Seller Forums, an online discussion board for Amazon sellers. These resources can be a valuable source of information for troubleshooting and support for your business.
- 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 your products on Amazon with well-written product pages, you will be primed to rank competitively for the keywords and product searches relevant to your brand.
- Awareness: Many shoppers prefer to start their product search on Amazon.
Location, location, location
Whether you’re selling online or offline, the key to success is getting customers to your store.
If you’re setting up a brick-and-mortar store
, your business location can mean the difference between thriving and closing up shop in a few years. Similar to how a shopping district might help a retail store build a customer base, a selling website can help your online store thrive by giving you exposure and access to online shoppers.
For eligible brand owners, Amazon Stores
give the opportunity to create a distinct branded experience.
You can choose to start on Amazon and add another ecommerce solution after you grow your business. While many sellers choose Amazon as a sales channel, it doesn't have to be the only piece.
Lean on Amazon for growth: Hope & Henry
We were able to launch without having a distribution center. We were able to launch without having people dedicated to fulfiling inventory. That’s a big deal.
Matt McCauleyCEO/Founder, Hope & Henry
If you’re new to ecommerce, you may want to start small and scale up. Selling on your own domain might allow you to customise your entire website and online experience, but this takes work and you’ll have to compete on the internet to get customers to your store.
If you already have an ecommerce store but need to drive more traffic, Amazon can help you get your products in front of even more potential customers, expanding your brand visibility and reach.
Step 5: Setting up your online store
Once you’ve figured out what to sell and who you’ll sell to, it’s time to get your business up and running.
Choosing a business name
Your business name will represent your brand, so choose something memorable and simple for customers to type and recall.
If you have a clear idea of what you’re going to sell, brainstorm names by looking at other brands in your industry. Or, a name might pop into your mind immediately. While it may work for rock stars, it’s best to avoid numbers and complicated symbols. Keep the brand name simple and easy to pronounce.
Branding will help your ecommerce store stand out among the competition. It’s important to create a memorable impression that will attract repeat customers. You don’t want your product to get lost in a sea of competitors without distinct characteristics.
Building your online store front
The best way to validate your business idea is to start taking orders. The sooner you start, the better! Here are tips to help you build an online store
Creating competitive product listings pages
Product descriptions are what customers will read to decide if your product will fit their needs. It’s important to write a thorough description telling your potential buyer everything they need to know to make an informed decision. Titles, images, bullet points, descriptions, and keywords can all help you construct a page that converts browsers into shoppers.
Incomplete or inaccurate descriptions may lead to complaints, increase returns, and hurt your reputation, so be thorough, clear, and upfront. However, your 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 your products.
Here’s a quick tutorial on how to create a compelling product page.