How To Start an Ecommerce Business in 2025

Many people dream about starting an ecommerce business, but the realities of building an online store can feel daunting.

In this article, you’ll learn the five basic steps to launch an ecommerce store, how much it’s likely to cost, and extra tips for starting your business.

What is an ecommerce business?

An ecommerce business is a company that buys and sells goods or services online. They operate through apps, websites, social media, or online marketplaces. Ecommerce businesses can be small operations run by one person or large global companies, and may use one website or multiple sales channels to reach customers. Examples of businesses that use ecommerce include software companies, clothing brands, and subscription-based services.

Start an ecommerce business in 5 steps

From home-based side hustles to the biggest brands, ecommerce lets entrepreneurs reach customers all over the world for a minimal cost. Follow these five steps to start your ecommerce business:

Find product opportunities and choose what to sell
Research your competition and write a business plan
Choose a business name and set up your online store
Choose a shipping strategy and set marketing goals
Launch your business

1. Find product opportunities and choose what to sell

The first step to building an ecommerce store is knowing what products to sell to consumers. This often is the most challenging part of starting a new online business.

In these posts, discover strategies to find products with lucrative business opportunities and explore the best places to get product ideas:

Evaluating your idea

Once you have an online business idea, how do you know if it will sell? Use these posts to help validate your product ideas and potential markets:

Obtaining your product

After landing on a solid product idea, your next step is figuring out how to obtain your products. These four posts cover the various methods for acquiring products, along with the pros and cons of each:

Sell your retail products online

Shifting your in-person business online can help you generate cash flow. Use these articles to build a resilient retail business:

Looking for inspiration? After losing her job, Hannah Perry turned her dream of starting a cotton candy company into a reality by going viral with her Rainbow Floof Cake.

2. Research your competition and write a business plan

You’ve found your product, evaluated its potential, and sourced a supplier. Before launching your ecommerce business, you’ll need to research your competition, so you know what you’re up against, and how you can differentiate your brand. Here are two posts to help with that:

Writing a business plan

With your competitive research complete, it’s time to write a business plan. This is your roadmap for bringing your ideas to life.

Business plans are great for prioritization, helping you decide what task to focus on next. A business plan also highlights your company’s mission statement to show investors and employees the core values of your brand. Develop your plan using a template:

For example, behind every entertaining MrBeast YouTube video is a solid business plan that supports Jimmy Donaldson’s global ecommerce empire.

3. Choose a business name and set up your online store

Aside from finding products to sell online, another early task in forming an ecommerce business is building your brand. You’ll need to pick a name, design a logo, choose an available domain. This post will help you tackle these important tasks:

Creating a logo

Once you’ve selected a memorable name and registered a domain, it’s time to craft a simple logo. Here are several options for creating a great logo for your business:

Understanding search engine optimization

You’re almost ready to begin building your online store. Before you jump in, however, make sure you understand the basics of search engine optimization—the process of ensuring your website appears in Google search results.

Need a refresher? Read these guides:

Building your store

It’s time to build your online store. Here, find a few essential reads to help you create product pages with captivating descriptions, beautiful photography, and a pleasing color palette:

Don’t forget, if you run into any issues, you can always hire help from a Shopify partner.

Choosing your sales channels

One of the best ways to reach new customers is to find them where they already shop. The right mix of sales channels will depend on your products and target market, but there are several great online options:

The best business names and brands are inspired by real founder stories, like how a backpacking trip led two friends to create a range of eco- and travel-friendly bathroom products:

4. Choose a shipping strategy and set marketing goals

As you get close to the launch of your new business, there are several shipping and fulfillment elements to prepare. Read these comprehensive guides on how to set your shipping strategy:

It’s also a good idea to define your key performance indicators upfront so, once you launch, you know what measures of success to track. Find the right KPIs for your store with these guides:

After a homemade video featuring their modular dining table went viral, Transformer Table has seen explosive growth. Now, they use Shopify to ship orders from their ecommerce store all over the world.

5. Launch your business

Now that you’re set up, it is time to focus on marketing your products. The key to successful digital marketing relies on doing one thing well: driving targeted traffic. These articles will help you get started:

Marketing your store

You’re well on your way now and likely have a few sales under your belt. It’s time to get serious and invest in marketing your store. The following posts will help you zero in on your top-performing ecommerce marketing tactics or find new ways to drive traffic and turn it into sales.

Email marketing essentials

Driving traffic from social media

Driving traffic and conversions from paid ads

Optimizing for higher conversion rates

Using analytics to uncover insights

How did workout clothing brand Gymshark become a billion-dollar ecommerce business? It began by analyzing its sales data and harnessing the power of community with influencer marketing campaigns:

5 tips for starting an ecommerce store

Forget about year-one profitability
Know your target audience
Sell an in-demand product
Experiment with marketing and advertising
Invest in outreach and link building

1. Forget about year-one profitability

The project of starting an ecommerce business is a marathon, not a sprint. Don’t measure business success by profitability in your first year. Give yourself a runway of 18 to 24 months for your business to get off the ground. Spend your first year testing, reiterating, and reinvesting your sales back into your business using the below budget guidelines.

2. Know your target audience

Outside of developing or sourcing products, you’ll spend a majority of your time getting the attention of customers. The challenge? You want to get your products in front of the right customers—the ones who will actually buy on your site. Understanding these people, a.k.a. your target audience, can help you reach them faster and make more sales.

3. Sell an in-demand product

Create or sell an amazing product with proven market demand. Take a look at the top retailers today—Allbirds, Tushy, Bombas—and you’ll notice they all sell top-tier products.

“Product quality is critical because a good product sells itself,” says Eric Even Haim, CEO of upsell and cross-sell app ReConvert. “When you marry a great product with an audience who’s hungry for it, your marketing becomes 10 times easier.”

Eric explains that new products don’t need to be the “next big thing.” You just need to look for growing trends and markets where customers are underserved.

“Then step in with an excellent product and give them what they want,” says Eric.

Two places to find market demand are:

Google Trends, where you can research topics people search for
Trends.co, which uses data to predict trends and business opportunities before they become popular

When you marry a great product with an audience who’s hungry for it, your marketing becomes 10 times easier.

Eric Even Haim, CEO, ReConvert

4. Experiment with marketing and advertising

It’s important to get the word out about your new business after launch. You’ll want to try different marketing strategies to understand where your audience hangs out and best responds to your content.

Test different online marketing tactics like:

Affiliate marketing
Instagram ads
Website pop-ups
Checkout upsells and cross-sells
Organic search
Content marketing
Loyalty programs

“Success depends on your ability to experiment, test, and analyze your ad and marketing strategies,” says Stephen Light, CEO and co-owner of mattress company Nolah. “Experimentation is the best way to avoid falling into any assumptions about your audience that could end up hurting you rather than helping.”

Stephen suggests being open to getting things totally wrong, especially when you’re just starting out. Use the data you collect to create more effective campaigns that drive traffic and profit.

“Plus, optimizing your ad campaigns and gathering data regarding how your customer base responds to them can help you shape your website’s features,” says Stephen.

Experimentation is the best way to avoid falling into any assumptions about your audience that could end up hurting you rather than helping.

Stephen Light, CEO, Nolah

5. Invest in outreach and link building

Another tip for new ecommerce stores is to have an outreach and link-building plan in place. These tactics can help boost your SEO rankings in Google.

“The sooner you have an approach to link building and driving authority into your site in place, the sooner search engines will recognize your website as an authority in its niche,” says UK-based SEO consultant James Taylor.

“Search engines see a link from an authority source as a vote of confidence toward your website, so the more links you have from trusted websites, the more search engines are going to trust you as an authority.”

James recommends new ecommerce store owners and marketers invest in digital public relations and link-building campaigns early on. This sets the stage for long-term SEO success, so you can rank higher in Google, earn more organic traffic, and make more sales.

“The sooner you have an approach to link building and driving authority into your site in place, the sooner search engines will recognize your website as an authority in its niche.”

How much does it cost to start an ecommerce business?

Starting an ecommerce business costs as little as $100, which is spent on a domain and purchasing a theme for your store. Ecommerce companies cost less than in-person stores because they don’t require the same amount of licenses and permits, and you don’t need to pay rent for a retail space.

If you operate with a dropshipping business model, for example, it’ll likely cost less to start because you don’t need to pay for raw materials, inventory, or manual labor. You only pay for products after a customer purchases them. If you’re creating your own products by hand or working with manufacturers, you’ll need to pay for equipment, materials, and labor upfront.

According to a survey of 150 entrepreneurs and 300 small business owners in the US, many ecommerce entrepreneurs learn how to start a business on a shoestring budget.

Research suggests new ecommerce store owners can expect business costs to reach thousands of dollars in the first year. Expense categories include:

Product: raw materials, inventory, supplier, manufacturing, patents, etc.
Operating: incorporation/legal fees, additional software, business insurance, accounting, etc.
Online store: website/platform subscription, hosting/domain, contract developer/designer, etc.
Shipping: packaging, labels, etc.
Offline: stall/table fees, rent, gas, etc.
Team/staff: salaries, benefits, perks, etc.
Marketing: logo, branding, ads, printed materials, business cards, etc.

Seven pie charts on a dark green background showing how businesses allocate first-year spending.

In the first year, business owners spent:

11% on operating costs
10.3% on marketing costs
9% on online costs
31.6% on product costs
8.7% on shipping costs
18.8% on team costs
10.5% on offline costs

This doesn’t mean you will definitely spend a large amount of money to open your ecommerce store. The amount spent in the first year varies significantly, depending on industry and ecommerce business model, whether the business had employees, or if it was a full-time gig.

You also don’t need significant cash flow before you can begin thinking about how to start an ecommerce business. While many entrepreneurs (66%) use their personal savings to fund their business, survey respondents also used financial support from friends and family (23%) and personal loans (21%).

Start your ecommerce store

Building your own successful ecommerce business is as exciting as it is challenging. You’ll learn about choosing a product, evaluating its viability, figuring out how to get it produced, building an ecommerce website, and marketing and selling to new audiences. At times, you may feel like you’re solving a head scratcher of a puzzle, but it’s rewarding all the same.

Hopefully, this ecommerce business guide provides you with a roadmap on your journey. As always, the best advice anyone can give is to get started and enjoy yourself along the way.

Illustration by Cornelia Li

From first-time sellers to global retailers, Shopify works for everyone. See plans and pricing.

Ecommerce business FAQ

What is ecommerce business?

Ecommerce is the buying and selling of goods or services online. Ecommerce business is conducted through an ecommerce store or online marketplace, social media, or a mobile app. Ecommerce enables businesses to offer convenient shopping to a global audience.

How do I start an ecommerce business?

Research what products you’d like to sell or can source to sell, select a business name, register your business with the government, and obtain permits and licenses. Then choose an ecommerce software and create your website, load your products onto the site, launch, and start marketing your business.

What are the 4 types of ecommerce businesses?

Business to consumer (B2C): When you sell a good or service to an individual consumer (e.g., you buy a jacket from an online retailer).
Business to business (B2B): When you sell a good or service to another business (e.g., a business sells wholesale products for another business to use).
Consumer to consumer (C2C): When you sell a good or service to another consumer (e.g., you sell vintage clothes on Facebook Marketplace to another consumer).
Consumer to business (C2B): When you sell products or services to a business (e.g., an influencer or affiliate offers exposure to their audience in exchange for a fee).

Is ecommerce a profitable online business?

Yes, the ecommerce industry is profitable. Successfully starting an ecommerce company is a marathon, not a sprint. It can take 18 to 24 months for your business to get off the ground. It’s critical that you don’t measure the success of your business by your first-year profitability.

Is it hard to start your own ecommerce business?

No, starting an ecommerce company is easy, with platforms like Shopify enabling brands to go online in just a few days. Starting a brand consists of hard work and continual market research to improve your business. Read this guide on how to start an ecommerce business before you set up a store.