How to Build an E-Commerce Business From Scratch


eCommerce BusinesseCommerce Business

By Mark B. Goldfinger

Let’s face it. The future of e-commerce looks indisputably bright. The events of 2020 proved to be something of a catalyst in this regard. Brick-and-mortar stores were already being supplemented or replaced by online shops. And now they face even stronger competition from competing e-commerce stores.

Online shopping is no longer just a matter of convenience but a necessity. Global retail e-commerce numbers reflect this sentiment as well. Online retail sales are expected to touch $6.8 trillion by 2023—a 386% jump from a mere $1.4 trillion in 2014.

If you’ve been toying with the idea of building your own e-commerce business, I believe the time is right for you to take the plunge. Here is a guide to help you build an e-commerce business from scratch.

5 steps to build an e-commerce business

1. Pick your e-commerce niche

Having the dream to build an e-commerce business is one thing; knowing what you want to sell is quite another. When it comes to selling online, the possibilities are virtually endless. For some people, that could make decisions harder. If you’re having trouble deciding on your niche, it helps to break things down.

For instance, all the ‘‘products’’ sold by e-commerce businesses fall into one of these four categories: physical goods, digital goods, services, and subscriptions. You can pick one of these, a mix, or even choose all, depending on your business goals. Regardless of what you pick, it’s important to keep a clear focus.

I also find it helps to identify a need before you pick or create your niche. Find out what’s in demand among your target customer base and choose accordingly. For example, let’s say you want to first operate within your city. Look at local surveys, check social media commentary, and talk to people to understand what is in demand. This will help you narrow down your niche greatly. Once you identify the broad market niche, you can always narrow down your business model and choose one or more specific products/services.

2. Choose the right e-commerce business model

When beginners think of e-commerce models, it’s often the B2C model they first envision. That’s quite understandable because it is the deepest market and also the most relatable model for the average individual. But if you’re really interested in making a mark in the e-commerce space, you’ll need to broaden your horizons.

There are as many as 10 different types of online business models that are in vogue right now, and many more that you could explore as backups. Potential options include B2B models that involve sales from one business to another, C2C e-commerce which allows customers to trade with each other in exchange for commissions, and even C2B models where consumers sell to businesses.

More articles from

You also need to choose the right revenue model for your business. Think drop shipping, subscriptions, wholesaling, and warehousing, among others. It’s important to make these decisions early on because they make business planning far easier for you down the line.

3. Focus on your business plan and your brand identity

We’ve agreed that e-commerce is booming. So, if you’re planning to build an e-commerce business during this sweet spot in time, chances are, so are a lot of other people. The competition is thick, and like everybody else, you’ll no doubt want your business to stand out. But I find that many fledgling businesses, in a bid to be extraordinary, tend to overlook the ordinary, important things—like planning and branding.

To work out your e-commerce business plan, make sure you take care of the following aspects:

  • Product sourcing
  • Inventory management
  • Budgeting and financial management
  • Product lines
  • Sales channels
  • Marketing and operations

And as far as your branding is concerned, you’ll want to cover the three key basics: logo, website, and domain name.

4. Develop your online store

Your online store is an extension of your brand. In fact, when you build an e-commerce business, your online store may be the only part of your brand that your consumers get to interact with regularly. It’s a no-brainer that you need to put in a great deal of thought to set up this experience.

Personally, I’d suggest you keep three key characteristics in mind when you’re designing your online store:

  • Make it easy to use. Your online store should be easy to use—both for you and your consumers. A complex consumer journey could prompt people to drop out halfway, thus not converting into sales. A complex setup also makes it harder for you to update and manage inventory in your store.
  • Make it informative. I always suggest adding text and a video for good measure, particularly if you’re selling physical goods. The more information people have about the product they’re eyeing, the more likely they are to actually check out with it. Ambiguity is not your friend here.
  • Make it cross-platform compatible. You never know on what device a target user may be checking out your online store. That’s why cross-platform compatibility is important. For starters, ensure your site is mobile-friendly and desktop-friendly. Check if the layout looks neat on both platforms and make sure the customer journey—from end to end—translates smoothly across devices.

5. Promote your e-commerce business

At this point, it might seem like the tedious bits are out of the way, right? After all, your business model is ready, your business is registered, and your online store is up and running. How hard can promotion be? Truth is, it can be quite the challenge.

For new entrepreneurs, in particular, figuring out the ropes of business promotion may take a while. Primarily, there are two ways to promote your business and drive in traffic: you can pay to increase traffic, or you can earn it over time.

Paid promotions are easy enough to understand. You’ve probably seen them everywhere—Facebook ads, sponsored tweets, paid promotions on Instagram, and more.

Earning traffic is harder and takes longer. Here are some ways in which you can build organic traffic over time:

These strategies are challenging, but the results they deliver may be more sustainable. I’d say that to truly get your online business promotions going, you will need to strike a balance and adopt a mix of paid and organic strategies.

How do I drive sales to my e-commerce business?

This is definitely among the top five questions every new e-commerce entrepreneur has. So, before wrapping up, here are some ideas that can help you boost your sales:

1. Respond to your customers and target audience

Keep the dialogue on social media open; engage with your customers on Facebook, Instagram, Twitter, and LinkedIn. Respond within reasonable timelines, address any grievances, and keep the conversation going.

2. Don’t write off the power of emails

It may be too soon to discount the power of email marketing. Sure, emails may not be as dynamic as social media or live chat systems, but with time, they could bring in steady conversions.

3. Everybody has the same web pages—make yours unique

Home pages, product pages, error pages—every business has these. But personalization can work wonders and make yours unique. The great thing is, you can personalize so many aspects of your online store.

4. Make use of time-sensitive incentives

Create a sense of urgency among your target audience. If a sale is ending, highlight it on your website; if an offer is about to expire, send them a message. Just remember to always be honest.

5. Give your customers something they cannot resist

You’d be hard pressed to find a customer who doesn’t love a discount, a freebie, or even a surprise offer. Make this work in your favor by offering repeat customers, or new customers, an unexpected discount or a buy-one-get-one offer. Or throw in a freebie for purchases over a certain amount. There are just so many great ways to do this and drive up your sales in the process.

Build an e-commerce business one step at a time

So, sure, if you’re just getting started with your e-commerce business, there are a thousand things to take care of. But don’t let that overwhelm you. Take it one step at a time. Look to successful entrepreneurs in your niche, including your competition, for some inspiration.

And make sure you don’t lose focus of your core idea. That should help you build an e-commerce business you’ve been dreaming of.

RELATED: International E-Commerce: How…


Read More:How to Build an E-Commerce Business From Scratch