10 Things to Know/Do Before Starting an eCommerce Business
Do you want to start an eCommerce business? Starting an eCommerce business can be exciting and profitable, but success doesn’t happen overnight. Before you launch your online store, there are several important considerations to avoid costly mistakes and build a strong foundation. Whether you're selling physical products, digital downloads, or dropshipping goods, here are 10 key things to know and do before you start an eCommerce business.
1. Choose the Right Product(s) to Sell
Begin by deciding what you want to sell. Consider your skills, interests, and the equipment, storage space, and funds you can access when starting your business. It should be something you can viably make yourself or source from a reliable provider.
Products can be artwork or crafts you make, higher-volume sales of goods sourced from a factory, or digital products distributed through your website or an online marketplace. Savvy business owners start small, test their products, and work to grow over time based on sales and financial data.
2. Validate Your Business Idea
Before spending time and money on branding or building a website, ensure there’s actual demand for what you plan to sell. This is one of the most overlooked but crucial steps when you start an eCommerce business.
How to validate your idea:
- Use Google Trends to see if interest is growing or declining
- Check Amazon Best Sellers or Etsy Trending Items
- Search relevant keywords on platforms like Ubersuggest or Ahrefs
- Ask potential customers directly through surveys or forums
A validated idea will give you confidence and reduce the risk of launching a product no one wants. If you find that the product has a strong potential for sales, you can confidently move forward and start working on creating or sourcing the product.
3. Understand Your Target Audience
When starting an eCommerce business, one of the smartest moves you can make is getting crystal clear on who your ideal customer is. Too many entrepreneurs rush to build a store without understanding who they’re trying to reach. That often leads to wasted time, money, and missed opportunities.
Ask yourself: Who is your target customer? What problems are they trying to solve, and what motivates them to buy? Create detailed buyer personas, called customer avatars, so every decision, from product to marketing, stays focused on that target customer.
4. Pick the Right eCommerce Platform
Choosing the right platform is one of the most significant decisions when starting an eCommerce business. Your platform sets the tone for various needs, from your store's appearance to payment processing costs.
- Shopify: This user-friendly platform is packed with features, but it can be more expensive. It’s best for people who want to start an online store quickly with little technical knowledge.
- WooCommerce: A flexible plugin for WordPress users who want complete control over their store. It’s a top choice for business owners with more tech knowledge who want fine-tuned website control.
- Squarespace: This website-building platform is sleek and simple, ideal for creatives who want a minimalist storefront. You may pay more for hosting, but the block-based builder makes it easy to build a good-looking site.
- Wix: This platform is easy to use and features a freeform drag-and-drop builder, giving you flexibility. It integrates with multiple payment processors.
As you weigh your options, consider how much control you want, how tech-savvy you are, and what kind of support you'll need. The best platform is the one that fits your goals today, can grow with you tomorrow, and doesn’t break your budget.
5. Plan Your Fulfillment and Shipping Strategy
When you start an eCommerce business, figuring out how you’ll get products to your customers is almost as important as what you’re selling. A solid fulfillment plan helps you deliver a great experience and build repeat business. It’s not the flashiest part of running a store, but can make or break your reputation.
There are a few common models to choose from. With self-fulfillment, you handle storage and shipping independently, which can be cost-effective for small operations. Third-party logistics (3PL), also called dropshipping, lets you outsource the heavy lifting to a warehouse.
Whichever model you choose, consider your shipping carriers, delivery speed, and return policy. Be upfront about shipping costs and timelines during checkout. Unexpected fees are one of the fastest ways to harm your reputation. A smooth fulfillment strategy builds trust and keeps your store running professionally.
6. Create a Brand and Secure Your Domain
Your brand isn’t just your logo. It’s the feeling people get when they think about your business. A strong, consistent brand builds trust, sets you apart from the competition, and makes your store easier to remember. It's one of the most valuable assets when you start an eCommerce business.
Start by picking a short, easy-to-spell name and checking for a matching website domain name and social handles. You can create a logo using a simple tool like Canva or Looka. The define your tone, mission, and what makes you different. Even if you’re not ready to launch, grab your domain early so it’s locked in. Then, keep your messaging consistent and aligned with your brand to build your reputation.
7. Build a Marketing Plan Before You Launch
One of the biggest myths in eCommerce is “if you build it, they will come.” The truth is, you need to start marketing your store before it ever goes live. Building buzz early gives you a warm audience ready to buy on day one.
Start with email marketing to grow a customer list and keep future customers in the loop. Use social media to show behind-the-scenes content, optimize your site for search engines, and consider testing paid ads to build momentum. A strong launch plan helps you hit the ground running instead of waiting for traffic to trickle in.
8. Form a Legal Business Entity (LLC Recommended)
Forming a legal business entity is one of the smartest moves a new business owner can make. When you start an eCommerce business, an LLC can protect your personal assets, make your brand appear more professional, and set your operation up for long-term success. Forming a Limited Liability Company (LLC) is worth taking seriously.
How to Start an LLC in 5 Simple Steps
- Choose your business name: Make sure it’s unique in your state and reflects your brand. Check domain availability while you’re at it.
- File Articles of Organization with your state: This is the formal document that legally creates your LLC. It’s typically filed with your Secretary of State.
- Obtain an EIN from the IRS: This is your business’s federal tax ID number. You’ll need it to open a bank account, file taxes, and hire employees (if applicable).
- Get any necessary business licenses or permits: Requirements vary depending on your state, city, and what you’re selling. Check with your local government for guidance.
You can handle this process yourself, but using a service like LLC Attorney can be a smart move if it feels overwhelming or time-consuming. They’ll handle the paperwork and make sure everything’s filed correctly so you can focus on building your store instead of navigating legal red tape.
9. Set Up Business Finances the Right Way
When you start an eCommerce business, one of the best habits you can build early is keeping your business and personal finances separate. It makes tax time less stressful and gives your store a more legitimate and professional feel. It’s also critical to maintain the corporate veil, a term for protecting your personal assets with your business entity.
Start by opening a dedicated business bank account and using bookkeeping software like QuickBooks or Xero to track income and expenses. Choose a payment processor that fits your needs, and don’t forget to research your tax obligations based on where your customers are. A clean financial setup will save you from confusion (and potential IRS issues) later on.
10. Test, Launch, and Optimize
Before you hit “publish,” take the time to make sure your store is smooth, functional, and ready for real customers. Test your checkout flow, check for broken links, and make sure your site works well on both desktop and mobile. A little polish can go a long way in building sales and reducing abandoned carts.
Ask a few friends to try the site and give honest feedback. Set up tools like Google Analytics to monitor user behavior, and consider adding live chat to answer questions in real time. But don’t let perfection get in the way of progress. Launch your site and make tweaks to improve as you go.
Final Thoughts: How to Start an eCommerce Business
Starting an eCommerce business is one of the most flexible and scalable ways to become your own boss. But to increase your odds of success, you should lay the right groundwork from the start. Validate your idea, choose the right products and platform, handle your legal and financial setup, and plan your marketing strategy.
If you're ready to take the leap, start by forming your LLC to protect yourself and legitimize your business. Then, follow the other steps above to build your store smartly.
