How to start an ecommerce business from scratch
Here’s how to go from dreaming about your million-dollar idea to running your own ecommerce store
Step 1: Research your business idea
Before you start building a store
, research your business plan to help make choices quickly and efficiently. There are several ways sellers decide what products to sell or build. Here are some common decisions to make when trying to start your ecommerce business.
Find a pain point or challenge worth solving
Finding a problem to solve for a specific audience is crucial for successful ventures. Some ideas—however innovative—can fail when they don’t have customers to support them.
What problem or challenge are you seeking to solve? Who feels that pain point the most? Who would be most excited about solving this challenge?
For example, do you seek to make high quality kitchen utensils? Then people who enjoy cooking meals might be loyal 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 product may 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.
Be observant to find great product ideas
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 quickly. Think about your own interests to identify product opportunities for people with similar interests or hobbies.
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 the product. Use online tools like Google Trends
to research trending products, look up questions customers may have, and determine what their current solutions are. Take a look at the Amazon Best Sellers list
to spot niche product opportunities.
The 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.
Step 2: Validating your product idea
The more time you put into validating the product, the better your chances of succeeding. Once you've pinpointed your business idea, research how similar products perform and what potential customers might be looking for.
Talk to potential customers to validate your idea
One of the easiest and most cost-effective ways 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 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.
11 tips for choosing the right product to sell online
Although you can sell almost anything in Amazon stores, 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 expensive to ship
- Highly competitive products (check the amount of customer reviews)
- Complex items or electronic products
- Patented or trademarked products (unless you own the patent/trademark or are certified as a reseller)
- 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
Prevent the unauthorized use of your brand through Amazon Brand Registry
. This program is built for entrepreneurs who have an existing trademark or patent. It includes 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 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
Work with a manufacturer
Working directly with a manufacturer to build products can give you higher potential for growth, but it’s also 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.
Step 4: Choosing an online selling channel
You have many options for selling products online. Set up a website and host a branded ecommerce store on your own domain name, or sell products on an existing ecommerce website like Amazon—or choose to do both!
Setting up your own domain and ecommerce website
Efforts like search engine optimization
, social media marketing, or online advertising can help drive traffic, but will require time and resources. You’ll also need a process for handling orders and fulfillment
once orders start coming in. This can 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 website.
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.
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 more than 300 million active customer accounts.
- Ecommerce support: Use Amazon’s tools for processing payments, collecting reviews, running promotions, and even A/B testing of product pages at scale.
- Community: Learn how to succeed in online selling through Seller University, a free online tutorial, 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 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.
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 want to drive more traffic, selling in Amazon’s store can help you get products in front of even more potential customers, expanding your brand visibility and reach.
You can choose to start selling in Amazon stores and add another ecommerce channel after you grow your business. Amazon is a piece of many online business strategies, but it doesn't have to be the only piece.
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 an ecommerce store stand out in the market. It’s important to create a memorable impression that will attract repeat customers. You don’t want the product to get lost in a sea of competitors without distinct characteristics.
Building your online storefront
A great way to validate your business idea is to start taking orders. The sooner you start, the better! Here are tips to help you build a store
Creating competitive product listings
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.