Startup cost
$15k–$50k
TRUiC Business Ideas
How to Start an Ecommerce Store
Decision Snapshot
Ecommerce
Idea Score
49
Profit margin
6%
Break-even
4 mo–12 mo
Time to launch
12 wk–36 wk
Demand trend
Stable
5-yr failure rate
—
Capital intensity
High
Time commitment
Flexible
Part 1 - How to start an Ecommerce Store business - Background
An ecommerce store is a store on the internet where products are bought and sold. Examples of ecommerce stores are eBay, Shopify and Amazon.com. These businesses connect product-seekers with the items they need to improve lives, businesses, and organizations of all varieties.
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Our guide is in 3 parts:
- Part 1 - How to start an Ecommerce business - Background
- Part 2 - Our planner tool to see if this idea is the right fit for you
- Part 3 - Action plan to get started
What are the costs involved in opening an ecommerce store?
This business requires the creation of a website, the use of servers, inventory, relationships with shipping companies, employees and marketing. Building a polished ecommerce store website that is secure enough to permit the safe transmission of bank account and credit card information will cost several thousand dollars. Plan on spending thousands more on marketing to increase the public’s awareness of the ecommerce store. Computers, servers, and inventory will likely cost tens of thousands of dollars. Employing web experts to launch the store will require paying salaries in the range of $30,000 to $50,000 or more.
What are the ongoing expenses for an ecommerce store?
The business requires computers, a high-speed web connection, printers, servers, office supplies, employees, insurance, a space to operate, a space for inventory and marketing. Plan on spending $30,000 to $60,000 per year for website designers, user experience designers, marketing gurus and other professionals. Office administrators who handle clerical duties and customer service will likely make $10 to $15 per hour. The cost of your office and warehouse for inventory will hinge on the economics of your particular location. Budget in at least several thousand dollars to pay for the monthly rent and utilities of these spaces. Budget another $500 to $1,000 each month at a bare minimum for marketing. Plan on spending the same amount for servers, computer-related equipment and office sundries.
Who is the target market?
The target market is those who are looking for specific products that can be purchased and delivered in an affordable manner. Just about everyone is willing to order products online from ecommerce stores. As long as your prices are at or below those of competitors and your delivery times are reasonable, people will consider shopping at your ecommerce store.
How does an ecommerce store make money?
This business makes money by selling goods or services on a website. Customers pay with credit cards, bank accounts, Paypal, Bitcoin or another means. The product is then delivered to the paying customer.
How much can you charge customers?
Customers can be charged anywhere from a couple dollars to thousands of dollars for goods and services purchased on your ecommerce store. The exact cost hinges on the product in question, the supply/demand and competitors’ prices.
How much profit can an ecommerce store make?
The potential for profit ranges from a few thousand dollars per year to billions. Build your ecommerce store into a powerhouse like Amazon.com and your business will rake in billions of dollars per year. However, entrepreneurs should not lose sight of the fact that Amazon.com lost money for years before turning a profit. Be patient, perfect your ecommerce store and your business will eventually make good money.
How can you make your business more profitable?
Sell advertising space on your ecommerce store website. If you have a contract with shipping companies for product deliveries up to a certain monthly/weekly volume but do not reach this limit, consider charging other companies for deliveries with the remaining volume. Consider establishing a members’ rewards club in which repeat customers receive price discounts or faster shipping. This style of offer encourages increased spending on your ecommerce store and further enhances customer loyalty.
Day-to-Day and Growth
What happens during a typical day at an ecommerce store?
Ecommerce store activities are centered on transactions. Everything from listing products for sale to altering prices, coordinating deliveries, ordering inventory, writing product descriptions and performing website maintenance is necessary. Employees often meet with one another to develop business strategies, select product offerings and improve the logistics of deliveries. There is also plenty of interaction with the product delivery companies who transport the products to customers.
What are some skills and experiences that will help you build a successful ecommerce store?
A knowledge of web design, marketing, internet security, and computer programming will certainly help an entrepreneur who launches an ecommerce store. The business owner should have a thorough understanding of supply and demand as well as other economic principles. Yet what matters most is expertise with the web. The ecommerce store website must look polished, have an intuitive user experience design and function without flaw.
What is the growth potential for an ecommerce store?
Ecommerce stores are rapidly growing in popularity. People are flocking to the web for purchases rather than shopping in traditional brick-and-mortar outlets. The bottom line is shopping at an ecommerce store is convenient, cheap, and easy. There is no need to pay for gasoline and spend time traveling to and from a traditional brick-and-mortar retail store when one shops online. This is precisely why ecommerce stores will continue to grow across posterity. Start your ecommerce store today and there is the potential for it to evolve into a highly successful business with rapid sales growth.
What are some insider tips for jump starting an ecommerce store?
Find a niche in which there are few competitors but significant consumer demand. Do not attempt to try to sell a broad array of products. Establish relationships with product manufacturers and you will stand an excellent chance of bringing their products to market at the lowest possible price. Above all, invest in your website. Digital security is of the utmost importance. If your checkout process is not secure or if customer information is not stored in a secure manner, people will avoid your ecommerce store. Key in on the user experience design. If the website is easy to operate, intuitive and aesthetically pleasing, customers will be inclined to buy products from your ecommerce store.
How and when to build a team
Though you might be able to launch an ecommerce website on your own, if you have a background in web design and user experience design, you will likely need assistance sooner rather than later. Add a marketing expert, website design expert and customer service staff as soon as possible. These individuals will help you maintain a high-quality ecommerce store and resolve customer issues.
Part 2 - Is an Ecommerce Store business the right fit for you?
Business Evaluation & Strategy Tool
We'll walk you through the four pillars every business needs: Points of Leverage, Marketing Strategy, Financial Model, and Personal Compatibility. At the end you'll see a personalized report and your action plan below will be tailored to your answers.
Step 1 of 4 — Points of Leverage
Every viable business has natural advantages. Below are common leverage points across four categories. Pick the ones that apply to your Ecommerce business. We've pre-suggested a few based on your idea — review and adjust.
Step 2 of 4 — Marketing Strategy
Without a way to connect with customers, even great businesses fail. Pick the channels you plan to use to reach your customers.
Step 3 of 4 — Financial Model
Enter your monthly baseline costs — the minimum overhead to keep the business running. Then we'll calculate how many sales per month you need to break even.
Step 4 of 4 — Personal Compatibility
A business that doesn't fit your life will fail no matter how good the numbers look. Tell us how this business fits you.
Your Ecommerce Evaluation Report
Complete the four pillars and your personalized summary will appear here.
Points of Leverage
Marketing Strategy
Financial Model
Personal Compatibility
Part 3 - Action plan to launch your Ecommerce Store business in 90 days
Nine concrete steps to take you from idea to open business, grouped into 30-day phases. Complete the planner above and we'll highlight what's most important for your situation.
First 30 days — Foundation
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Form your legal entity
An LLC keeps your personal assets separate from business debts and lawsuits — the most common reason small business owners choose this structure. Sole proprietorships and partnerships do not provide this protection.
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Get an EIN and register for taxes
Apply for your free Employer Identification Number through the IRS, then register for any state or local taxes that apply to your business (sales tax, franchise tax).
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Open a business bank account and credit card
A dedicated business account is required to maintain personal asset protection. Mixing personal and business finances ('piercing the corporate veil') can void your LLC's liability shield.
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Set up business accounting
Recording expenses and income from day one makes tax filing easier and lets you see when the business is actually profitable. Use software (QuickBooks, Wave) or a part-time bookkeeper.
Days 30–60 — Compliance & Risk
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Get permits and licenses
State and local requirements vary widely. Brick-and-mortar businesses typically need a Certificate of Occupancy; service businesses may need specific professional licensing; food businesses need health permits.
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Get business insurance
General Liability Insurance is the most common starting point. If you'll have employees, most states require Workers' Compensation. Specific industries need additional coverage (product liability, professional liability, etc.).
Days 60–90 — Launch
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Define your brand
Your brand is how customers perceive and remember you. A clear name, logo, and visual identity make every later marketing decision easier and protect you legally as you grow.
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Create your business website
Every legitimate business needs a website. Social media pages are not a substitute — you don't own the platform. Modern website builders mean you can launch a clean site in a weekend without a developer.
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Set up your business phone system
A dedicated business number keeps your personal life private, makes the business look legitimate, and lets you route calls professionally. Cloud phone services start under $20/month.