How to start an online business (e-commerce)


Making money with the convenience of a home computer is appealing to many, but it’s not as easy as it sounds. There are many factors involved in starting an online business (e-commerce) and it is important to research the idea thoroughly to increase the chances of success.

While running an online business allows you to be your boss and set your schedules, it will also be very demanding at times and may require extra hours and finances. Careful research and planning coupled with reasonable expectations will help reduce the risks most businesses face.

Compose a business plan for your e-commerce business

A business plan is the backbone of a business and a good business plan will help ensure the success of the business. Keep in mind that circumstances change and business plans are often modified to reflect these changes.

A good business plan will include detailed information on:

  • Products
  • Market analysis
  • Summary of strategy and implementation
  • Management summary
  • Financial projections
  • Risks

There are many free business plan services available online and templates. Depending on the expertise of the business owner, accountants and financial advisers may be required to help with the financial section of the plan.

Evaluate and acquire the products and / or services for your online business

Deciding what products and / or services to offer for an online business is the next step. It is also important to understand any legality issues or limitations of the products or services and to make sure that the online business will be able to provide them.

Once you have decided on the products and / or services you want to offer, you will need to decide:

  • Will you keep the product in stock or ship orders
  • Are you importing / exporting and will there be any additional costs or legal issues in doing so
  • Can the services you provide cause you any liability issues and if so do you have adequate insurance coverage in place
  • What your competition looks like and how will you get people to buy from you instead of them
  • Are there time limits for the products you can store and if so how many will you be keeping in stock at any one time so you don’t end up with an expired / obsolete product?
  • At what price will you offer your products and / or services to maintain a good profit?

Determine the medium you will use to run your ecommerce business

With a business plan in hand and products and / or services to sell, all you have to do is decide on which medium you want to sell them. Many companies use a combination of mediums to get maximum exposure. Each option has its own cost and most businesses will experience heavier expenses when starting up. Work with one medium and slowly add more and evaluate them for return on investment (ROI) to decide if it works or if you should choose another medium.

Some common media for an online business are:

  • Private / dedicated hosting: Attached to your domain and completely to your store, you will have control over the design of the storefront and all traffic received will be yours (e.g.,, BigCommerce, 3DCart)
  • Shared showcases: Larger storefronts established with many sellers you share traffic in (e.g. eBay,, Amazon, Yahoo)
  • Simplified website: Your simple website with “add to cart” buttons can be integrated with third-party applications such as PayPal.
  • Social media sites: Using free social networking sites can promote your products and / or services, although it can be a bit more difficult to integrate shopping carts or payment options into them. (eg Facebook, Twitter, Blogs).

Start your business online

There are many considerations to take into account once you plan to start your own ecommerce business. Making sure you plan and carefully evaluate your decision will help increase the chances of success and reduce the risk of business failure.

A carefully crafted and specific business plan for your online business will help you stay on track and see how the business is doing against plan. Understanding the products and / or services you want to offer online as well as the limitations or even the responsibilities will help you avoid potential setbacks. Deciding on a medium to sell your products and / or services online will require research and evaluation, but spending the extra time now will save you time and setbacks later.


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