How to Start an Ecommerce Business (A Complete Blueprint)

Key Takeaways

if you want to be your own boss and take charge of your future then starting an e-commerce business could be the best decision that you ever made consumers are increasingly buying products online and the tools and knowledge that you need to reach them are more accessible than ever there has never been a better time to start an e-commerce business than right now [Music] for beginners starting an e-commerce business can feel overwhelming so this video will offer you a simple blueprint for starting one that will take you from choosing a product all the way to making your first sale by the end of 2021 worldwide retail e-commerce sales will reach 4.9 trillion dollars and according to nasdaq by the year 2040 as much as 95 of shopping will be facilitated by e-commerce needless to say the future for e-commerce is incredibly bright so if you want a slice of that pie let's get started the first step to starting an ecommerce store is knowing what product you are going to sell direct to consumer for many people this is one of the hardest parts and a lot of would-be business owners stop here after becoming overwhelmed by the sheer amount of choices available now before we get to powerful techniques for finding profitable products we need to lay our foundation by identifying the problem we are trying to solve there's no one way to do this but here are some great ways to unearth product ideas start by writing down a problem statement and brainstorm multiple products that could serve as a solution for example let's say the problem was that many people find it more difficult to stay focused and productive while working from home potential solutions could be a productivity journal a desk organizer blue light blocking glasses or noise cancelling headphones now once we have done this it's time to turn our attention towards the internet to learn more about these markets and populate our list with more potential products here are some great avenues for discovering products trend hunter as the world's largest trend community trend hunter uses data artificial intelligence and real humans to identify consumer insights and new opportunities then we have reddit and as the front page of the internet it showcases forums about pretty much every topic under the sun diving into niche specific subreddits can help you unearth some pretty interesting product ideas social listening this can be as basic as looking at trending hashtags on twitter and topics on facebook or as advanced as using social listening tools like buzzsumo to identify and monitor trends over time you can also gather inspiration by checking out what's popular and trending on other marketplaces browse sites like amazon etsy and ebay checking out their curated list and other categories that showcase current customer demand to make your life super simple we've created a webinar on how to find and source winning products to sell in this 40 minute webinar you'll learn everything you need from research to validation to sourcing your products if you want to learn in a matter of minutes instead of in months make sure to sign up and reserve your spot today now look at your product list by now it should be pretty substantial cross off any products that are too large or heavy as these are going to be pretty expensive to ship and are not a good place to start your ecommerce journey cross off any products that are too fragile or you stand the risk of losing money on refunds if the product breaks while in transit cross off any products that have excessive regulations these will be a hassle cross off any products that are perishable this one is obvious cross off any products that are too easy to buy locally once you've done this you should have a short list of products and now it's time to do some deeper research you see before investing any significant amount of time money or energy into your venture you need to have a good understanding of the market what is the competition like in the space and how much market demand is there don't make the beginners mistake of building a business on a hunch to do this run the products through google trends this will give you a good idea about how search interest is growing over time the goal is to see if your product is trending upwards in interest be sure to check the geographical concentration of the searches this can help you identify where your customer base would be most heavily concentrated and lastly be sure to take note of seasonality does search interest dramatically change at different points in the year this is something you'll definitely want to know next you'll want to conduct keyword research on your product idea using a tool like google's keyword planner this will help you determine how many people each month are searching for keywords related to your product idea and it's going to give you a good concept of how in demand it is next you should run the main keywords for your product idea through buzzsumo to better understand how many people each day are talking about your potential product while these techniques do not give us complete certainty that these communities of interest are markets of buyers they give us confidence that curiosity exists the next thing you'll want to do to narrow down your product idea is run a competitor analysis this is where you see how your business would compare to other players in the space the more you understand about the competitive landscape before you start your business the less potential surprises you'll face later on by evaluating the strengths and weaknesses of your competition you can begin to formulate how you can give your company an advantage to do this simply run a google search and take a look at the top ranking sites you can also use a tool like sem rush to identify competitors at a glance you see competition is good because it confirms there's an existing demand for what you plan to sell when conducting a competitor analysis make sure to take note of these things who their target customers are what market share do they currently own what is their main differentiator or unique value proposition or unique value add for their business and products what are the key features and benefits that they highlight in their sales materials what are the price points for products across different marketplaces how do they approach shipping what are their marketing tactics what is their social media engagement and what social channels are they using have they received any funding or venture capital and take a look at their customer reviews specifically look at the language used around products and any recurring complaints make sure not to skip this step it's impossible to differentiate yourself as a business without knowing who your direct competitors are and what makes you different by now you should be able to narrow down your product idea to one standout product that not only is data to back it up but resonates with you as a founder now as i stated earlier interest doesn't always translate to sales real product validation only happens after money changes hints if you can try to make some initial sales that is definitely the best way to know you are fulfilling a genuine need for example if you were to sell handmade jewelry you can sell in person at a craft show or listed on a marketplace like etsy for some product ideas this will obviously be a lot more difficult especially if your product requires a significant investment to get to market so here are two other options for validating your idea test the market by building a landing page to promote your potential product run a few paid ads to drive traffic and then capture the emails of interested customers another way is to create a crowdfunding campaign and this is a proven way to test demand if your campaign is successful you'll be in an excellent position to transition into a sustainable business by leveraging the audience you built through your efforts crowdfunding to succeed you'll need a firm timeline and a lot of focus to reach your goal i'm going to post a link to a shopify article below that will tell you everything you need to know about crowdfunding once you have validated your product idea your next step will be creating a plan to obtain your products now there are four popular ways to obtain products for your ecommerce business each with its own pros and cons making your own products is a common approach for hobbyists giving you precise control over quality and your brand while keeping startup costs low now whether you're making physical goods like beauty products or creating digital products like an online course this is a great option for the do-it-yourselfer however it does have its drawbacks there will likely be a large time commitment and if you're selling digital products you can have issues with scalability another viable option for acquiring your product and inventory is to find a manufacturer to produce the product for you you'll have the option of choosing a domestic manufacturer or finding a less expensive manufacturer overseas manufacturing your product is a good idea for those people that have a unique idea or a variation of a current product idea that doesn't exist currently now it's for people that have definitely validated their market for their product and found significant demand this is super important as manufacturing will require the greatest financial investment up front domestic directories like thomas net and makers row and international directories like alibaba are great places to find manufacturers buying wholesale is a lower risk business model compared to manufacturing for a few reasons first you're dealing with brains that are already validated also you don't have to purchase nearly as high a quantity compared to manufacturing your own product now purchasing products wholesale is a good option if you want to get up and running quickly or if you want to sell a variety of products and brands one thing that's important to note here is that these products won't be exclusive to you directories like worldwide brands and sales who are great places to find wholesalers drop shipping is by nature the cheapest option to get started therefore drop shipping is for people that would prefer to keep startup costs as low as possible and are less concerned about margins and customizability directories like oberlo and aliexpress are great places to source products to dropship for everything you need to know about starting a dropshipping business check out the detailed video that we've already made on this subject with your competitive analysis and knowledge of how you'll obtain your product it is time to write a business plan a business plan is a roadmap that will help align your efforts and give you focus knowing which actions to prioritize is vital to building a successful business business plans help you clarify your strategy understand what resources you need and understand potential roadblocks a business plan is a document describing a business its products or services how it earns or will earn money its leadership and staffing its financing its operations model and many other details that are essential to its success now a lot of people dream about building a successful brand but the reality is most people just don't know where to start so to make your life super simple we've created a handy template that will take you step by step through everything you need to accomplish to create an amazing brand the difference between those who succeed and those who don't is that they act on knowledge so make sure to download this template and fill it out it'll be your first step towards your entrepreneurial journey a business plan will have these vital components executive summary write this section last as it really is a high level overview of your business plan and is a condensed version of your most important information next we have the company overview this section of your business plan should answer two fundamental questions who are you and what do you plan to do include your mission values company structure objectives key staff members and what you sell then we have market analysis and this should show how big you estimate the market for your products is it should include an analysis of your business's position in the market and an overview of the competitive landscape you'll need to use research to back this up with hard data products and services this part is fairly straightforward simply provide detailed information on the products you intend to sell including where they are sourced from in this section you'll want to include how your products are different key attributes for differentiation are price design and function customer segmentation one of the worst mistakes beginner entrepreneurs often make is believing they can sell to everyone the reality is is you can't afford to market to everyone not even if you have a great product that's why this is where you include information on your ideal customer it should answer where they live common behavior patterns their beliefs values and opinions how much they earn and where they spend their free time next we have the marketing plan your marketing plan is one of the most important parts of your business plan a marketing plan should outline your current decisions and how your future strategy will unfold with a focus on how your ideas are a fit for your ideal customer here's what it should include how much your products cost and why what problem you are solving and how you are solving it what is different about your brand and product from your competitors how will you get your products in front of your ideal customer what marketing channels will you use and where will you sell your products then we have logistics and operations and this is the part of your business plan where you will discuss processes that will make your big plans a reality in this section you will want to know who will your suppliers be how much inventory will you keep how will you ship and fulfill your orders and what tools will you need to keep up and running the last component is the financial plan now it goes without saying that businesses live and die by their financial feasibility so take some time on this part the most vital components of a financial plan are the income statement the balance sheet and the cash flow statement to help you understand this in more detail and also to get you started we've created a beginner's guide to cash flow management which i'm going to link right here once we have our business plan in place now it's time to start building our brand in e-commerce choosing a great name is vital to building a memorable brand there's no doubt that choosing a name can sometimes feel frustrating as it can seem like all the best names are already being used there's definitely no one way to come up with a great name but a naming tool like shopify's name generator or brainstorm sessions with people that you trust can be great ways to come up with ideas now if you're stuck for a name another great option is by crowdsourcing a name on a platform like namingforce.com it can be a really cost effective solution make sure when choosing a name that you check to see if the domain is available try and choose a name that has a dot com available as a top level domain signals trust to potential customers once you've chosen a name and secured your domain you will need to get a logo designed take this seriously as logos are a point of recognition for customers and can inspire brand loyalty a good logo is simple memorable enduring versatile and business appropriate online logo makers like hatchful are a great place to start if you're looking to save time and money however if those aren't large concerns hiring a professional designer through fiverr or upwork will help you create something that is completely unique to your business if you're looking to create a serious business it's important that you invest time and money into making your business legal the reason for this is that some suppliers won't actually work with you if you're not a legally registered business not only that but you can create a lot of tax headaches for yourself later down the line if you don't set your business up properly from the get-go now since i'm not a lawyer and every business is completely different i'm just going to give you a high level overview of the most important steps in making your business legal first you need to decide on a business structure second legally register your business third setting up a business checking account and credit card and lastly learn and abide by the regulations for collecting sales tax based in your region search engine optimization is a process by which websites and content are created and enhanced in a way that makes finding them on search engines like google easier before you dive into creating a website you'll need to have a basic understanding of seo in order to structure your site properly as it's really going to affect how easily search engines can find your products in your store it's important that you take the time to get this right from the start now seo is a pretty deep topic so to give you a better understanding we have created a separate video which you can see here once you have a basic understanding of seo it's time to get started building your store now if you plan to use shopify the theme store gives you access to premium designed ecommerce website templates at a really affordable price i really recommend this option as it's a lot more cost effective than hiring a designer and will be the quickest way to get your store live when building your store here are some things that you should really keep in mind write brand copy that communicates brand values and speaks to your ideal customer write product descriptions that entice customers with product benefits take high quality beautiful product photography you don't need to have thousands of dollars in camera equipment to make beautiful photos check out our video that shows you how to take really great photos on your cell phone your website design can have a huge impact on your seo as a best practice make every product page as few clicks from your home page as possible your page design can also have a huge impact on your conversions design your pages with simplicity in mind trying to weave your brand's dna into the page so that at a glance a visitor knows exactly what you're about use social proof social proof adds credibility and definitely boosts conversions reviews photos from instagram and first person testimonials are a great way to build trust and encourage purchasing behavior now let's talk about shipping before you make your first sale it's incredibly important that you map out a defined shipping strategy here are the most basic things that you need to know number one is who pays for shipping are you gonna pass the full cost of shipping onto customers will you offer free shipping or will you offer flat rate shipping there's pros and cons to all of these but you need answers shipping rates and methods are the next thing that you need to keep in mind calculating shipping cost depends on a variety of factors such as package size package weight origin country destination country carrier additional shipping options like tracking and insurance luckily shopify makes this a lot more simple if you're based in the us or canada you can pay for usps ups dhl express and canada post shipping right through shopify and receive pre-negotiated rates next thing is sourcing your packaging you can order free packaging from usps ups or dhl or invest in branded packaging one thing that's really important to consider with e-commerce is that packaging is a part of the customer experience which is central to the overall brand experience people do unboxing videos for a reason then of course we have customs declarations and forms if you're shipping outside of your own country you'll need to include the proper customs documentation check with your country's postal service to find out exactly which forms you need to attach to your package next we have labeling many new e-commerce entrepreneurs start off by writing the ship to and return addresses on the package by hand although this can be a great way to start it tends to be pretty time consuming tedious and not scalable as your business grows shopify shipping happens to solve this problem allowing you to print and pay for multiple shipping labels directly in shopify lastly we have fulfillment warehouses shipping is undoubtedly one of the more challenging aspects of starting an e-commerce business fulfillment warehouses help simplify this process by automating and handling the shipping for you they accomplish this by keeping part of your inventory at their warehouse fulfillment warehouses can help you get cheaper shipping rates and shorter shipping times but it's going to come at the cost of customizability now that you have launched your store the work of marketing your products begins it's time to make some sales now the goal of digital marketing is to drive targeted traffic to your site here are some effective digital marketing strategies first we have paid advertising paid ads allow you to target users based on demographics interests and traits to serve ads to prospective buyers that can turn them into paying customers now while this does require a budget and there is a bit of a learning curve paid ads can be one of the fastest ways to acquire customers when it comes to the world of online advertising facebook ads and google ads are among the largest providers of paid traffic next we have influencer sponsorships if you have a marketing budget one of the quickest ways to get your product or brand in front of a relevant audience is by paying someone with an online following to promote it for you this involves finding influencers that have an active engaged following who would be interested in your product they also need to have the creative ability to produce content that reflects well on your brand then we have building an email list and this involves generating leads by collecting information from potential customers in order to nurture them or retarget them with ads that will eventually convert them into a customer there are plenty of ways to build an email list from driving paid traffic to a page with an email capture to offering a welcome discount on your website for new subscribers email lists can be one of your most valuable assets as a business owner of course we have search engine optimization when looking for a product or service many consumers begin their search on a search engine like google doing keyword research and implementing your findings into a content strategy for website pages and blog posts can really help you climb in google's rankings which can bring you a lot of search traffic filled with potential customers then we have social media marketing social media is such a powerful tool for reaching new customers building brand authority and creating an audience that can help you consistently make sales while each platform is unique they all follow the exact same principles you need to create content that is relevant and valuable you need to collaborate with other social media accounts to broaden your reach and you need to post consistently to get recognized and figure out what works and what doesn't now the subtopics of marketing shipping operations finance and basically everything we discussed here today are huge topics with tons more to learn consider this video a roadmap to e-commerce guiding you towards the most important things you need to learn about further to create a successful online business make sure to subscribe to our channel because we're going to be doing some deep dives on each one of these topics hopefully this video has given you a blueprint to help you start your ecommerce journey let us know in the comments what other videos you'd like to see and we'll make it happen also don't forget to like and subscribe so you don't miss out on more tips to grow your online business remember we're a channel for small business owners with big plans i've been your host tyler and i'll see you next time on learn with shopify you