Start an ecommerce business in 2021

Quick summary

Follow these steps to start your ecommerce business. Keep reading for detailed instructions.
  1. Research your business idea to come up with a product that will meet a customer need.
  2. Validate your product idea by talking to potential customers.
  3. Consider how you will sell and ship your product to online customers (11 tips for choosing the right product).
  4. Source your product by procuring inventory or manufacturing your own.
  5. Select your online selling channels, which may include Amazon, your own website, or both.
  6. Build your online storefront and add your products.
  7. Prepare an ecommerce fulfillment strategy to deliver orders to customers.
  8. Attract customers with ecommerce marketing and promotions, and other ways to grow your business.

What is ecommerce business?

Ecommerce business is a selling channel that gives you great potential and visibility in front of millions of customers—if you build your business with the right strategy, sales partners, selling channels, and products. Last year, small- and medium-sized businesses in the U.S. sold more than 3.4 billion products in Amazon stores (in the 12 months ending May 31, 2020), up from 2.7 billion year-over-year. If you’re thinking of starting your own ecommerce store, or you’re looking for tips and ideas to help grow your online business presence, this guide is for you.

Starting an ecommerce business can feel like a big step. While there are a lot of considerations, it doesn't have to be complicated or overwhelming. Some of the most popular brands and businesses started out small, selling just one or two products online and growing from there.
This guide will show you how to start your online store or grow an existing retail business online, plus some of the benefits Amazon offers independent brands and small businesses as a primary or secondary selling channel.

How profitable is ecommerce?

Man looking at graphs and charts on a computer
For aspiring entrepreneurs and growing businesses, ecommerce can be a very profitable model to adapt either as the sole focus of your business, or as an additional selling channel.

Trends show ecommerce business continues to grow year over year. The growth of Amazon’s selling business supports this, with products from third-party sellers now accounting for more than 50% of all units sold in our online stores.

Is it too late to start an ecommerce business?

No, it’s not too late to start an ecommerce business. As consumers become more comfortable with buying products online, the ecommerce engine will likely continue to grow.

Don’t be intimidated by creating or building an online business. Test the waters with Amazon to find out if your idea has potential. The Individual selling plan allows you to sell online and gives you the freedom to pay per item sold. It’s ideal for sellers who are still deciding what to sell.

For existing business owners or entrepreneurs who are ready to dive in, the Professional selling plan gives you access to professional selling tools. This plan comes with a monthly fee, but it gives you access to features like advertising and promotions that can impact your visibility and revenue.

Getting started: how to start an ecommerce business from scratch

cork board with product ideas pinned to it
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. Oftentimes, 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 meal with a friend. Online business owners Saadia Mirza and Bassel Riche came up with a business idea when they were out grabbing dinner. They noticed a problem on the sidewalks of Atlanta. Women on a night out would take off their painful shoes and walk barefoot on the sidewalks to relieve their sore feet. This inspired the brand owners to come up with a new product: Purse Pals, packable ballet flats to help relieve achy feet from painful shoes.
image of an interview with the owners of Your Solemates brand
I think there's nothing more special than putting out something into the world that you're proud of.
Saadia MirzaYour Solemates
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 capitalize 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. Take a look at the Amazon Best Sellers list to spot niche product opportunities.

Your product already exists, now what?

If your idea or product is already on the market, 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 market potential—that’s 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.
woman looking at a computer taking notes

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:
  1. Are easy to package and ship
  2. Have branding potential
  3. Are affordable for customers
  4. Have a long shelf life
Products that may be difficult for a new entrepreneur to sell are:
  1. Food and perishables
  2. Products with a low profit margin
  3. Heavy or bulky items, or products that are expensive to ship
  4. Highly competitive products (check the amount of customer reviews)
  5. Complex items or electronic products
Products to avoid are:
  1. Patented or trademarked products (unless you own the patent/trademark or are certified as a reseller)
  2. 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 unauthorized use of your brand with Amazon Brand Registry. This program is built for entrepreneurs who have an existing trademark or patent. Enrolling unlocks access to tools that enable you to better represent a brand and find and report violations.
illustration of a computer representing an Amazon product page and brand protection technology

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 Handmade.

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 competition.

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!

Consumers looking for products think Amazon first

Many shoppers prefer to start their product search on Amazon. Using Amazon as a sales channel can give you that added piece of visibility.

Amazon tip:

Ways to sell

illustration of Amazon customers from around. the world holding products

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 customize 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 optimization, 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 fulfillment 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 website 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 website 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.
A man looking at a computer screen showing an online store on amazon.com for the fashion brand New Republic

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

man pointing at a computer screen with children's clothes from Amazon seller Hope and Henry
We were able to launch without having a distribution center. We were able to launch without having people dedicated to fulfilling 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 customize 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.
woman pointing at a computer screen with images of children clothes

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 effectively.

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.

Amazon tip:

Product page

Here’s a quick tutorial on how to create a compelling product page.
illustration of an Amazon.com product detail page

Launching and running your online business

man scanning a bar code on a box
Once you’ve set up your online store, it’s time to take care of running your business. You can create a good online experience in a number of ways. Having accurate product descriptions, a fast and easy checkout experience, timely delivery, and an easy returns process is a great start. A good amount of reviews from other shoppers can go far, too.

Ecommerce fulfillment: storing, shipping, and returns

How will you store, ship, and handle returns for your products? When you start building your online business, you’re going to need a process for handling shipping and returns. To keep things simple, it might be best to find a space that is accessible and cost-effective to store and ship your products. Some sellers find the best solution is often to use a place in their home (such as a garage) to store products. As your business grows, you may consider using third-party fulfillment to help you store, package, and ship products.

Did you know you can store and sell your products through Fulfillment by Amazon?

Amazon’s Fulfillment by Amazon service allows sellers to store their products in Amazon’s warehouse and enjoy the benefits of offering Prime members fast, convenient delivery options. As one example, third-party sellers sold more than 700 million items in Amazon’s U.S. store that shipped with Prime Free One-Day Delivery or faster in 2019.

Capture and show reviews

Reviews are a powerful ecommerce tool. Ideally, you should display reviews so that they will be visible to popular search engines, as well as customers who are shopping for products like yours.

Amazon automatically requests customer reviews on behalf of online sellers because reviews can have a positive impact on your future sales. Brand owners on Amazon can also use a tool like Amazon Vine to get feedback on new products through a pool of Amazon Vine reviewers. Vine reviewers are Amazon customers with a reputation for leaving helpful product reviews on Amazon (as judged by other shoppers). Through the Vine program, vendors send a free product to a selection of Vine reviewers in exchange for a review. When you’re starting a new branded product, these reviews can help drive initial sales for a new product. This will help future customers make informed buying decisions.

Track business performance with ecommerce analytics

Analytics lets you see how website visitors are interacting with your store and products. Most online selling channels have ecommerce analytics built into a dashboard, or have an option to install a third-party analytics program.

No matter what solution you choose, you should check your store’s ecommerce analytics periodically to see data on inventory, managing orders, customer service and returns, promotions and advertising, account performance, and beyond.

Once you get familiar with your store’s analytics, you’ll be able to understand how visitors interact with your store. Looking at your store’s analytics reports will also give you great information on how to diagnose and troubleshoot issues in your online shopping experience.

If you’re a registered brand owner selling in Amazon stores, Brand Analytics gives you access to advanced reporting such as:
  • Products winning the most clicks and conversions on strategic search terms
  • Products or brands that customers are reordering
  • Top products most commonly purchased alongside your products
  • Breakdowns of customers by age, income, education, gender, and marital status

Customer reviews drive product decisions

Amazon product reviews are the single most important input to our new product development process. We make sure our new products start from the need that customers express.
Steven YangAnker Technology

Ecommerce marketing and product promotion

Man leading a business meeting about building an online store
Ecommerce marketing is vital to helping you start and grow your business. Running marketing and promotional campaigns will help you reach a broader audience no matter which selling channel you use.
If people can’t find your product, they’re not going to be able to buy your product.
Ryan MulvanyQuiverr
There are so many channels available to promote your products. Choosing one can feel overwhelming. Here is a brief introduction on some of the options available to ecommerce businesses.

Advertising and promoting your online storefront on Amazon

Online store owners are able to run advertising campaigns on Amazon to get in front of the right shoppers. The following options all help to get your product in front of as many people as possible:
  • Sponsored Products ads show up within Amazon product listing pages and can give new products a boost in visibility to Amazon’s 300 million shoppers.
  • Sponsored Brands ads (available to registered brand owners) show your headline, logo, and up to three products at the top of a product search results page.
  • Lightning Deals and Coupons help drive sales and boost your viability, especially when you are trying to boost awareness of your brand.
  • Advertising can help increase your product sales by encouraging reviews and driving sales from interested shoppers.

Optimizing your user experience with A/B testing

What will appeal to customers? What titles or descriptions will catch the attention of buyers? A/B testing allows you to try out different value propositions and offers to find the best combination for your products. For registered brand owners, Amazon's new A/B testing capabilities in the Manage Your Experiments tool allow you to run experiments on your product pages in front of millions of customers to find out what content will drive the most sales. This can help you figure out the right combinations of titles, images, descriptions, and bullet points to help convert customers quickly. Optimizing your content with experiments can increase sales by up to 6%.

Seller Support: You don’t have to do it (all) yourself

Did you know Amazon has a Service Provider Network of trusted vendors to help you with the finer points of running your business? You can use vendors to help with creating product pages, accounting, advertising, and more.

Social media marketing

Given the vast majority of consumers that frequent social media websites every day, adding one or two social media channels to your promotions and outreach can help drive brand and product awareness. To make the most of your time and effort, build a social media strategy for how you will promote your business, engage with social media users, court social influencers, and post content. Start with a plan to set yourself up for success.

Ecommerce business: learn the lingo

two people on laptops talking to eachother

What is an ecommerce business?

Ecommerce business is a business model where buyers and sellers exchange goods and services with consumers over the internet. Two common ecommerce business models are Business to Business (B2B) and Business to Consumer (B2C) ecommerce. Learn more about ecommerce retail.

B2B Ecommerce

B2B sellers focus on selling products that other businesses may need. Often, this could include hardware, software, and office supplies. While the potential pool of customers may be smaller than in the case of a business that sells to individual consumers, business buyers can make recurring, high-quantity purchases.

B2C Ecommerce

B2C sellers focus on selling products to individual users (or the end customer). They target the pricing, marketing, and shipping of the product to incentivize product sales. While end customers may not buy in bulk the way a business might, the volume of the target audience typically makes up for the fact that each sale is smaller by comparison.

Is Amazon B2B or B2C? It’s both.

While Amazon is typically thought of as a B2C channel, over 1 million businesses source their products through our stores, including 55 of the top Fortune 100 companies.

Think about it—if you use Amazon for your private needs, why wouldn't you take advantage of the ease of finding products for your business as well? Businesses of all sizes—from sole proprietorships to large enterprises, government organizations, schools, and healthcare organizations—find the products they need on Amazon Business.

Small businesses thrive on Amazon Business, making up 50% of $10 billion in annual B2B sales through Amazon. If you are a B2B vendor, adding Amazon to your selling strategy can help you reach a wide pool of business buyers.

What is A/B testing?

A/B testing enables you to determine what user experience will help convert more customers. A/B testing involves running two variations of a web page at the same time to measure which one performs best. Test multiple factors at a time to get clear results. Eligible brand owners can A/B test the content on their Amazon product detail pages, and will soon be able to test different product titles and feature bullets.

What is search engine optimization?

Search engine optimization (SEO) is the process of enhancing the quantity and quality of traffic to your website through organic (non-paid) search engine results. People use search engines to find what they are looking for online. Many factors go into SEO, but here are the three fundamental aspects your online business should have:
  • Content that search bots can process—mainly, words and images.
  • A website experience that loads quickly on both desktop and mobile so search bots can access and find content that will help search engine users.
  • Authority—your domain is not spammy and does not include spammy content. Your website has a good reputation, with other websites pointing to it, validating its credibility.

Launch your ecommerce business on Amazon

Since 2000, independent sellers and brand owners have used Amazon to help their business grow. Amazon is powered through individuals and small businesses that take advantage of the scale and diversity of the audience our stores attract. Our selling program is built to help sellers give customers the widest shopping selection possible.

The Amazon Flywheel

In 2000, we launched the “Amazon Flywheel,” giving independent sellers and business owners an opportunity to list and sell their products in our stores.
illustration of Jeff Bezos writing on a napkin

How Anker grew from a side business into a global brand with Amazon

Example of an Amazon storefront using Amazon Stores
Did you know Anker Technologies, the worldwide provider of phone chargers and power banks, started as a small ecommerce business on Amazon? Steven Yang and his wife initially ran a dropshipping business that sparked the idea of selling portable charging devices; this became Anker. As sales took off, the couple went full-time with their business. Today, Anker is a global enterprise.

Start selling today

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