How to Start an E-Commerce Business

How to Start an E-Commerce Business

If you want to get started in retail without investing in a brick-and-mortar business, then e-commerce is an excellent choice.

5 Things Every Online Store Needs

When you start your online store, you need to make sure you have:

  1. products, including pictures, descriptions, and prices;
  2. a shopping cart for customers to build their orders;
  3. a payment processing method;
  4. a way to protect your customers’ financial data; and
  5. multiple shipping options.

How you choose to set-up your online store will depend on how much control you want to have over each of these areas.

3 Ways to Get Started

When opening an online store, you have to decide how you’re going to host it: through a third-party platform or an e-commerce provider, or on your own.

Third-Party Platforms

Selling your products through a third-party platform, like Amazon, eBay or Etsy, is an easy and quick way to get started because all you have to do is create a seller account.

Third-party platforms already have a payment gateway in place, so you don’t have to set one up, and you don’t have to pay any web hosting fees. You do, however, have to cover service fees, which are often deducted directly from your sales.

You’ll have to know your shipping costs and options before you make your first sale because you usually ship directly to the customer. Amazon, however, lets you send your products to one of their warehouses, and they’ll fulfill your orders for you.

Third-party platforms leave very little room for you to customize your online store. Make sure you know the design limitations before choosing a platform.

E-Commerce Providers

If you want a little more flexibility in the design of your store, but still want the simplicity of a third-party platform, you can use an e-commerce provider, like Shopify or Magento.

With an e-commerce provider, you have more say in the look and feel of your online store. You’ll have access to templates and themes to build your store so that the design fits your brand. You can usually drop the store into an existing website for an easy experience for your customers.

With an e-commerce provider, you’ll pay a monthly subscription fee, but that will cover hosting, payment processing, and security.

Host Your Own Store

If you want complete control over the design of your online store, you can host it yourself. It will take more time to setup, but you’ll be able to choose the layout, design, and experience without being limited by a template or theme.

Before you set up your store, you’ll have to choose a hosting provider, like Bluehost, WP Engine, or GoDaddy.

Payment Processing

When you host your own online store, you’ll have to incorporate a virtual shopping cart. You can use companies like WooCommerce to easily add a shopping cart to your website.

You will also have to find a merchant provider to process payments once your customers are ready to check out.

The most common way to process payments is through companies like PayPal. Companies like this allow customers to send you funds directly from their checking account or through credit card. PayPal doesn’t have any sign-up fees or monthly subscription fees, but their seller fees can add up quickly. They charge a transaction fee of $0.30 and 2.9% of the total sale amount for each sale you make.

You can also work with individual credit card companies, but keep in mind that each company has different transaction fees.


Third-party providers often have policies in place to ensure customers receive their goods quickly and easily, so before you’ve made your first sale, make sure you know your shipping options and costs.

If you’re going to charge your customers for shipping, you’ll want to make sure you clearly display the prices in your store.

Most customers prefer vendors who offer fast delivery and free shipping. Unfortunately, the faster you want your products delivered, the more it will cost. If you can’t offer free shipping on every order, consider offering it on orders over a certain amount. Look to see what your competitors are offering and try to beat, or at least match, their shipping deals.

When you’re considering your shipping needs, you should also decide how you’ll handle returns. Your e-commerce provider may have built-in return tools to help you refund the purchase price, restock your inventory, and automatically email your customer about the status of their return. But, you’ll have to decide whether you’ll pay for return shipping or leave that cost to the customer.