How to Start an e-Commerce Business in 2021

How to Start an e-Commerce Business in 2021


eCommerce business, which is basically the transmission of goods, services, and funds over the internet, vary in size and scope. There are the big players like Amazon to platforms like Shopify, Etsy and everything else in between making a killing on a daily basis. Online shopping therefore has seen tremendous growth time and time again over the past few years.

According to a report from the U.S. Census Bureau, in the third quarter of 2019 alone, U.S. eCommerce sales amounted to approximately $154.5 billion, accounting for 11.2% of all retail sales in the nation. Without the need for a brick-and-mortar location, eCommerce business offers greater flexibility, affordability, and opportunity for many entrepreneurs. Will you become an eCommerce entrepreneur?

There is a level of joy and excitement that is beyond words for description, when the sound of an email notification wakes one up from sleep, because of a sale just made online. Not many people have experienced such moments and not everyone will eventually do. Unless you are ready or willing to start an e-commerce business.

Having an e-commerce business is a sure way to experience such moments. The good news however is that more and more people all over the world are beginning to experience such moments, based on the fact that the corona virus pandemic has changed the face of the business world, and the e-commerce business model is now growing more rapidly than ever.

In this practical guide, we will be looking at the step by step process on how to start your own e-commerce business, and how you can scale it up and profit hugely from it. Starting an e-commerce business is gradually becoming the desire of many, but many people have not been able to start, because they don’t have the right product to sell, or they don’t have a better understanding of the market or know how to harness the available resources, or at worst cases, they simply do not know how to go about it.

If any of the above cases relates to you, there is nothing to worry about, the fact that you are reading this post, means that your worry days are over, as the valuable information, we will provide here, will simply hold you by your hands and guide and teach you everything you will need from the stage of idea formation to the stage where you will make your first sale online and subsequent other sales.

The information contained in this guide is as a result of years of research, and we are hoping that you will learn from the information, understand and apply everything in it, with regards to how to start your e-commerce business, which ranges from choosing the right business model/products, to registering your business, how to source for funds, how to market and sell your products, amongst others, and start your own successful eCommerce business.

Running a business it must however, be stated is not an evening stroll that is done casually, but running a business requires, commitment, skills, resources; both mental and financial, determination etc., as they are what helps you to access and harness all you need to help you succeed in business, and in this case, your e-commerce business. We have simplified and compressed everything you need to know on how you can start an E-commerce business in the in-depth practical steps below:

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The world works based on systems and models, and the eCommerce business world is not an exemption. The first step in starting an eCommerce business is to understand the types of business models.

There is no one fit all business model that works for all, when it comes to eCommerce business models, as there are service based businesses, software, digital product sales and physical products.

So before you decide what your eCommerce business will be all about, you have to understand all the available types of business models. For instance, will your eCommerce business model be based on drop shipping or print on demand? This model will work is you are simply selling T-Shirts or selling other physical products. But if you are producing your own products and you have a warehouse, then the retail model will be best for you. There is also the white labelling or manufacturing model or the subscription based model, so you should choose a model that best fits into your product idea.

From the above, you can see that there are different business models, so you should look at each model, look at your products and services and choose a model that is best suited for it, as you will not choose a drop-shipping model, if your products are just eBooks for instance.


Choosing a business model is not same as choosing a niche, they may seem inter-related, but there are remarkable differences. It is therefore very important that you choose a niche, even for the model of e-commerce business that you have chosen. For instance, if drop-shipping is your business model, you have to then narrow down to the type of products you will be drop shipping.

Will your business be dealing on fashion items or gadgets? Or will it be a combination of both? You have to be specific, so as to know the exact niche you will be serving. As someone starting out, it is important that you don’t choose a crowded niche, unless you have the budget to fight the competition in that niche, and also do not choose a niche where there is no competition at all, as that will mean that particular niche is not profitable, hence the lack of interest in it.

While doing the research on your niche, you can for instance chose a product category with over 500 keywords and focus on that niche if that niche is doing well on social media and also if there are affiliate marketers on that niche already.


At this point you have successfully researched the business model and have also chosen a niche, it is now time to start sourcing for your products.

But before you start sourcing for products if you will not be producing them yourself, you will first of all have to study and understand your target audience.  Who are your customers? Will they be able to afford your products? How easily can you deliver products to them?

You can use Facebook for instance to find your target audience, knowing how many people you will be able to target will help you validate your market, if it will be large enough or not.

Once you have identified the image you want to project for your business and the customer base you will be serving, you should then come up with the product idea. Depending on your available resources, you could start with one product and afterwards add more products or services.

So before you invest in any product, it is required that you evaluate it, if the product will be such that will fit into the business model you choose.

Part of the process of validating your idea is to for instance answer questions such as, Can your suppliers meet your pricing? What happens if the supplier falls through, will there be a backup option?


Your e-commerce business should be treated and handled in a professional way, it is then required that you get your business registered, so you can build your brand name.  Each country and state have different operational requirements for company registration. You should therefore contact the company house for your state and get your company registered, either as a sole proprietor, limited liability partnership or as a limited liability company.

It is however advised to consult a lawyer so as to ascertain the best legal structure that will be suitable for your business. You should also register with the custom and revenue board for the purposes of remitting taxes when your business start making sales.

With the registration of your business done, you should then build a brand that will connect with your persona, avoiding some colours that might be considered as a put off to your future prospective customers.

Depending on your country however, you should also apply and obtain Employer Identification Number (EIN), as you will eventually be hiring staff in the future. Aside hiring of staff, you will need your Employer Identification Number (EIN) to open a business bank account and to also file your business taxes, even if you don’t plan on having any employees at the time of starting the business. Your EIN is more like a social security number for your business that helps you file all paperwork.

Once you have done with your registration, you should immediately get a domain name and also create social media accounts for your business, as it will be needed in the marketing of your business. The name of your site and the legal name of your business may not have to be the same, but it will be good if you can keep them as same. Make sure whatever you choose fits your niche.

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Not all types of e-commerce businesses will require permits and licenses, but it is always good to be on the good side of the law. Operating an online store does not exclude you from needing certain business licenses and permits.  It is then expected that you contact your local chamber of commerce or any relevant trade associations, to find out if there are specific permits and licenses needed for your type of e-commerce business, and you should then apply for them and get them approved before commencing operations.

Some types of business licenses and permits that you may need include:

  • Professional and trade licenses for certain industries
  • Sales tax permits
  • Health, safety, and environmental permits
  • Signage permits
  • Building and construction permits

A non-negotiable, after getting the applicable permits and licenses is to get insurance cover for your business. There are lots of uncertainties in doing business, including your e-commerce business, so it is very important that you consult an insurance broker or you can simply do a search online to find out the different types of insurance covers, so as to choose the one that is relevant to your business.

But if you will be hiring staff in the future, which you will obviously do as your business grows, it is then imperative that you have workmen compensation insurance policy to safeguard your employees. No matter the type of e-commerce business you are into, don’t just leave your business to fate or luck, so simply get an insurance cover that is best fitted for your business.


Doing a business online naturally entails a lot of competition because of the low barrier of entry into the internet business world. Having the right and quality products will therefore stand you out. To get the right products, you will therefore have to source for the right vendors that will deliver high quality products and at the right price for your customers.

You can check out Alibaba for manufacturers or wholesalers for the product you intend to sell, and see if they can either have them manufacture the products or supply them to you. If you are using the drop shipping model, you should also check out drop shipping companies with good reputation that can pick up your products from the manufacturers or wholesalers and deliver them to your customers when the orders start coming in.

If you will be using Shopify as your e-commerce platform, you can check out platforms like Oberlo, choose the types of products you want and simply connect it to your Shopify shop, and when orders come in, because of the drop shipping and all in one features in Shopify, the products will be imported from Oberlo to your Shopify and the products will be delivered to the customer, when they make orders.


Many people are always with the notion that doing business online should not follow the seemingly traditional way of doing business. To some extent, that may be true, but not when it comes to writing of your business plan. Your eCommerce business should be treated as a professional business, hence it is expected that you write your business plan, as this will serve as your road map, directing you at every stage of your business journey.

The business planning phase is a very important aspect of your business, as it helps you to think through the whole process of starting and running a successful business, it also helps you to highlight details such as your staffing needs, product sourcing, logistics, marketing budget and financial projections.

Business plan, as it were, are meant to be for your personal use, but you will however need it to pitch your business idea to partners, investors and bankers if there is a need for you to get funding for your e-commerce business.

Your business plan should be able to highlight what your business is all about, your products/services, your target audience, your competition, your team, your marketing plan, your sources of funding and your projected financial inflow for the business. The most important aspect of a business is the financial plan. Your business plan should be able to help you figure out your break-even point, both in unit sales and duration (in months).

There are different business plan free templates online you can access, if you need help writing a business plan, or you can simply hire a professional to write one for you.


It is now time for the most important aspect of your e-commerce business, which is the creating of the actual storefront online. We suggested earlier that you register a domain name at the time you registered your business name. This is now the time to use the domain and create your online store front, as this is where customers will be paying for your goods and services.

There are many eCommerce shopping cart platforms out there which you use, and some of them has already done most of the job for you, so you don’t have to create your store from the scratch. For instance, if you are to use Shopify, you simply have to pay for a plan and the basic plan starts at $29 monthly with 14 days trial period, and you will then simply connect your domain name and you will have your store front ready with just some few clicks. You will then have to import your products into Shopify, or if you are getting your products from Oberlo, Shopify will automatically imports the products from Oberlo into your Shopify storefront.

If you decide to build your own storefront, there are popular themes for e-commerce like Magneto, Big-Commerce and Woo-Commerce, which you can use to build your own storefront. But before choosing any platform, consider things like loading speed, compatibility with different payment gateways, SEO friendliness, and also if they can integrate with other popular eCommerce marketplaces, amongst others.

Once you have decided on your eCommerce solution, you can simply then hire someone from platforms like Fiveer for a small fee to help you with all the customisation, if you don’t have the technical skills to do it yourself.

Setting up your online store is much more than adding your products and content, so after adding your products, you will need to set up your email marketing and other automation services like billing and generating of invoices.

Your Email marketing set up will be needed to help you drive conversions. It is your email setup that will help you handle tasks such as setting up coupons, thank you emails, and up-sells so you can turn visitors into shoppers?


There are billions of web-pages on the internet and your newly created storefront could as well become one of those pages online. But with effective marketing, you should be able to differentiate your storefront and make it stand out from other sites.

As an e-commerce business owner, you should take advantage of the resources the internet offers and create a strategic marketing plan for your business. You may not necessarily have to invest heavily in online marketing, but using strategies like sponsored content, social media, pay-per-click ads, or a combination of strategies, you will have customers flowing to your storefront. Your site isn’t the only thing you need to drive traffic to. The product(s) you choose also need to be included in your marketing budget.

Though your mission is to sell products, not drive traffic, but without the traffic you will not sell any product. An easy way to sell effectively with the traffic that will be coming to your site is to create an email list. And with an opt-in freebie on your website, you can launch a social media campaign to gain subscribers, or host a giveaway to build the email list.

Running a giveaway is a marketing tactic that helps you to get traffic and subscribers quickly. Giveaways will help you in increasing your brand presence and product visibility. And with the email list you will build in the process of giveaways, it will give you a warm leads to work with, making the sales process much easier.

There are a variety of other marketing strategies you might decide to utilise. Strategies like Google ads, social media ads, word of mouth, and more. At the most basic level, you will want to optimise your business website for SEO and also take advantage of any online marketing tools that are included within your eCommerce platform.

Providing consumers with coupons and content for instance via email will help you to keep your brand on their mind, boost sales, and establish credibility.

Other key factors that will help you succeed in your marketing and sales is if you are quick in responding to customer service and if you don’t have any product quality issues, and you are also able to work on building relationships. Bearing in mind that no sales interaction is about the first sale; as the focus is always on the next sale.

As part of your marketing efforts, you should consider partner and affiliate marketing to boost your brand presence by offering affiliate marketing options and partnering with retailers in your niche. You can also offer bloggers in your niche a free sample of your product in exchange for reviews.

How Much Does It Cost to Start an eCommerce Business?

Starting an eCommerce business might not be as expensive as starting a brick and mortal shop, but there are still some basic costs in getting started. We are therefore going to list the likely costs in starting your eCommerce business, which however depend on the size and your country of operation.

  • Business licenses and permits:
  • eCommerce software:
  • Domain name and hosting:
  • Payment processing:
  • Inventory and shipping:
  • Marketing and advertising:

Success tips for your eCommerce business

Success in your eCommerce business will be as result of the little details you take care of. The following aspects of your business when handled correctly will account for a huge percentage of your success rate.

  • Customer Service/Self-Help Content
  • Conversion Optimisation
  • Store Optimisation
  • Inventory

Final Thoughts

We are fully convinced that through this practical guide, we have been able to provide key and valuable information, you will need to start an eCommerce business. But the success of your business or otherwise, will be dependent on you following through with all the outlined steps and processes.

We could provide as many guides as possible, but if you are not willing to take the right decisions and follow through with your decisions, you may never be able to experience some joyous moments of an email notification waking you up from sleep, because of a sale you just made on your eCommerce business storefront. Do you want to experience such joy? Take the bold step and get started now.

What are your thoughts with regards to this guide and do you have any business idea you want us to write about? Let us know in the comment section.

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