How To Start an eCommerce Business From Scratch

eCommerce as a business venture is a trending topic right now and for good reason. The number of internet users worldwide has grown steadily over the past two decades. As of April 2023, it sits at 5.18 billion (64% of the world’s population). What’s more, over half of these internet users (2.64 billion) are online shoppers.

This trend represents an attractive business opportunity for anyone interested in starting an online store to cater to these internet users.

Let’s go through the different types of eCommerce business, why you should consider starting your own online store and how to get started without investing a lot of money.

What is an eCommerce business?

An eCommerce business is one which derives profit from selling products or services to online customers. These could be physical goods like clothing, digital goods like music or services like business consulting or web hosting.

The key factor distinguishing eCommerce from traditional retail commerce is that the transactions occur through digital media like desktop computers, laptops, tablets and smartphones.

Amazon, eBay and Temu are examples of popular eCommerce businesses. You also have the likes of Best Buy, Walmart and Target, which are brick-and-mortar stores that also have eCommerce businesses.

What are the types of eCommerce business models?

Before starting an eCommerce business, it’s crucial that you know what different kinds of eCommerce models are out there. Depending on who’s on the buying or selling side of the business, there are four major models you can use for your eCommerce business:

• Business to Consumer (B2C) model
• Business to Business (B2B) model
• Consumer to Consumer (C2C) model
• Consumer to Business (C2B) model

Business to Consumer (B2C) model

This is a direct-to-consumer model where your business offers products or services through an online store to consumers. These consumers are your average person that wants to purchase products or access services for their everyday needs.

This model operates similarly to how the shop on your street works, selling products to you and your neighbors, except it happens online. Most people think of the B2C model when they hear the word “eCommerce.”

Business to Business (B2B) model

With the B2B model, both the buyer and the seller of products and services are business entities.

Because of the nature of both entities involved in this model, the transaction volumes and pricing are much larger than those seen in the B2C model. Recurring transactions are also common in this model, especially between businesses with a vendor-client relationship.

An example of the B2B model would be a software vendor selling licenses for its products to businesses that use this product for their operations.

Consumer to Consumer (C2C) model

In this model, rather than a business offering goods or services directly to consumers, it provides a platform for consumers to buy and sell products from each other.

These platforms act as an online marketplace where anyone can sell their own products to other customers. Examples of these platforms include eBay and Etsy, which allow anyone to create an online account and start selling products.

As the platform owner, you generate revenue by charging customers a fee for listing their products or taking a cut from each successful transaction.

Consumer to Business (C2B) model

The C2B model has business on the receiving end of the exchange of goods and services for payment. It’s similar to the C2C model, where you provide a platform for this exchange to happen. The difference is that businesses are the customers here.

A great example of the C2B model is a freelancing platform where individuals can offer their skills to companies that need someone to meet a short-term business gap. Upwork and Fiverr are platforms that use this eCommerce model for their business.

Why should you start an eCommerce business?

You now know what an eCommerce business is and the different models you can use to start one. But why should you get involved?

Here are a few reasons why starting an eCommerce business is a great idea.

Constantly growing eCommerce market

eCommerce has grown from being a novel alternative to traditional retail to becoming the norm. By 2020, over 80% of global consumers had shopped online.

Online retail grew from 5.8% of total retail sales in the United States in 2013 to 16.1% in 2022. If this trend continues, it’s projected to reach 21.9% by 2025.

The revenue generated from eCommerce sales is also on an upward trajectory, with over $398 billion generated in the U.S. in 2017 and more than $1.4 trillion predicted to come from eCommerce in 2027.

Access to an international customer base

Most brick-and-mortar stores are restricted to serving customers within their immediate area. Even the ones with branches can only cater to customers in those locations. This limitation is partly because only people in those areas can see or access their physical locations.

When these traditional retail businesses decide to go online, they can offer up their products to a much larger audience that isn’t restricted by geography. With a combination of digital marketing, modern logistics and fulfillment options, they can even reach customers on the other side of the globe.

With online shopping, an Australian customer can order products from a U.S.-based eCommerce business without worrying about how they will receive their order.

Lower barriers to entry

Depending on the eCommerce model and what you choose to sell, your online business can be up and running for a relatively small amount of money.

For example, if you want to sell homemade baked goods online using a B2C model, you can start selling your products for as little as $9.95/month. From a web host like Bluehost, that gives you access to a WooCommerce hosting plan with everything you need to have your business online and reach customers.

In contrast, doing the same thing with a physical store would cost a lot more when you consider paying rent, setting up a store and managing all the utilities involved in a physical location.

Easier to manage

With an online store, the eCommerce application running your store handles most of the daily operations without your intervention. You don’t need someone at the counter to receive customers and answer their questions about products.

Everything a customer needs to make a purchase decision is available on your website or eCommerce app. When a customer makes a purchase, the order fulfillment process is also automated to ensure they promptly receive what they paid for.

And depending on the web host you choose, your eCommerce website may have additional things taken care of automatically, like backups, software updates and other hosting maintenance tasks. This arrangement is perfect for startups that don’t have the capacity to handle all the moving parts of an eCommerce operation.

How to start an eCommerce business without money?

Now that you know the benefits of starting an eCommerce business, let’s take a look at what you need to do to get one up and running on a budget.

Here are the processes you need to complete to turn your dreams of a successful eCommerce business into reality. This step-by-step approach applies regardless of whether you have an existing business you want to take online or start from scratch:

1. Figure out what you want to sell
2. Decide who you want to sell to
3. Choose how you want to sell
4. Build your business operations
5. Set up your online store
6. Start your marketing and promotional activities
7. Launch your eCommerce business

1. Figure out what you want to sell

Deciding what to sell is one of the most critical steps in starting an eCommerce business. The products or services you choose will shape every aspect of your business, from branding to marketing strategies. Here’s how to approach this step strategically: 

Identify your niche 

• Niche selection: Start by identifying a niche that aligns with your interests, expertise, and market demand. A niche could be a specific segment of a broader market or a unique product category catering to a specialized audience.  For example, instead of selling general fitness equipment, you could focus on eco-friendly yoga mats made from sustainable materials. 
• Market research: Conduct thorough market research to evaluate the demand for your niche. Use tools like Google Trends, SEMrush, or social media platforms to see what products are trending and how consumer interest has evolved over time. Understanding your potential customers’ needs and preferences will help you choose a product that is not only in demand but also aligns with your business goals. 

Validate your product ideas 

• Competitor analysis: Before finalizing your product, analyze your competitors. Examine what they’re offering, their pricing strategies, customer reviews, and market positioning. Doing this will help identify gaps in the market that you can fill with your product or service. 
• Product testing: Test your product ideas with a small audience before fully launching them. This could involve pre-orders, crowdfunding campaigns, or selling a small batch on platforms like Etsy or Amazon. This approach allows you to gather feedback, gauge interest, and make necessary adjustments before a full-scale launch. 

Here are a few examples:

• Eco-friendly products: The eco-friendly niche is a growing market. For instance, a company might start by selling reusable grocery bags made from recycled materials. They identified a rising consumer demand for sustainable products and validated their idea by testing on platforms like Kickstarter, where they successfully funded their initial production run. 
• Specialized services: Consider a graphic designer with years of experience. Instead of offering broad design services, they could focus on creating bespoke branding packages for eco-conscious startups. By narrowing their focus, they target a specific audience and differentiate themselves in a crowded market. 

2. Decide who you want to sell to 

Identifying your potential customers is crucial in building a successful eCommerce business. This decision will significantly influence your product offerings, marketing strategies, and overall business model. Here’s how to approach it: 

• Leverage your expertise: Utilize your knowledge in a specific field to guide both product selection and target market identification. By focusing on your strengths, you can create targeted products or services that resonate directly with your audience. 
• Conduct research: Analyze the demographic and psychographic characteristics of your potential customers, such as age, income, location, lifestyle, and interests. Tools like Google Analytics and social media insights offer valuable data to help you understand your audience better. 
• Segment your audience: Break down your audience into specific groups based on their needs and behaviors. Tailoring your offerings to each segment increases customer satisfaction and loyalty, as they feel more understood and valued. 
• Gather insights: Gain a deep understanding of your customers’ pain points and preferences through surveys, social media, or direct engagement. This knowledge allows you to refine your products and marketing messages to better meet their needs and expectations. 
• Align operations: Your target customers will shape your business operations, from product development to customer service. Ensure your processes align with your audience’s expectations to deliver a superior customer experience. 

3. Choose how you want to sell 

This step involves choosing the right eCommerce model for your business. Your choices—such as what you’re selling and who you’re selling to—will significantly shape this decision 

Determine your eCommerce model 

When selecting your eCommerce model, you can choose between B2C (Business to Consumer), where you sell directly to individual consumers, and B2B (Business to Business), where your products or services cater to other businesses. If your offerings suit both markets, a hybrid model combining B2C and B2B can help you reach a wider audience and diversify your revenue streams. 

Choose a revenue model 

• Fixed cost: This straightforward pricing model sets a fixed price for each product or service. Once the customer pays, they gain immediate access to the product or service. This model is common for one-time purchases, such as buying a physical product, a digital download, or a single service like a one-off design project. 
• Subscription-based: A subscription model involves charging customers a recurring fee to access products or services over time. This model is particularly effective for services that provide ongoing value, such as access to design tools, regular delivery of curated products, or continuous access to digital content. Subscriptions help ensure a steady revenue stream and foster long-term customer relationships. 

Examples: A graphic designer might offer a monthly subscription for ongoing design support, where clients pay a monthly fee for a set number of design hours or projects. Alternatively, a product-based business could offer a subscription box service, where customers receive a new design-themed product each month. 

4. Build your business operations 

After laying the foundation of your eCommerce business, the next step is to establish the operations that will sustain and grow it. Here’s how to approach this process efficiently: 

• Register your business: Ensure your business is legally recognized by registering it with the appropriate authorities. This includes obtaining the necessary permits and licenses specific to your industry and location. Proper registration is crucial to avoiding legal issues down the road and establishing credibility with customers and partners. 
• Staff your business: Identify and fill the essential roles that will keep your business running smoothly. Depending on your business model, these roles might include inventory management, customer support, IT, content creation, and marketing. Whether you hire full-time staff or outsource, having the right people in place is key to operational efficiency and business growth. 
• Source your products: Decide how you will obtain the products you plan to sell. This could involve manufacturing them yourself, purchasing from suppliers or wholesalers, or setting up arrangements for dropshipping. Your sourcing strategy will directly impact your costs, inventory management, and shipping processes, so make your choice carefully to align with your business goals. 
• Define your brand: Your brand is the face of your business and plays a critical role in attracting customers. Create a strong brand identity that includes your business name, logo, typography, and color palette. Consistent and appealing branding helps establish credibility and distinguishes you from competitors, setting the stage for a successful launch. 

5. Set up your online store 

After laying the groundwork for your eCommerce business, it’s time to create your online store—the primary point of interaction between your business and customers. This step is crucial, as your store’s functionality and design will directly impact the customer experience and, ultimately, your sales. 

Start by securing a domain name that reflects your brand identity and is easy for customers to remember. Next, choose a reliable web hosting plan that meets the performance and scalability needs of your store. Many providers, like Bluehost, offer comprehensive packages that include a domain, hosting, and an eCommerce platform, simplifying the setup process. 

Selecting the right eCommerce platform is key to your store’s success. Bluehost’s AI-powered site builder simplifies this further by generating design elements based on your input. It automatically customizes your website layout, using your business’s logo, preferred colors, and content structure. 

You don’t need technical skills to build a professional-looking store. The AI tool simplifies everything, from page design to image placement. On top of that, Bluehost offers specialized eCommerce hosting plans that work seamlessly with platforms like WooCommerce and WordPress. This gives you the flexibility and powerful features needed to grow your business, no matter its size. 

When setting up your store, ensure that your branding—logo, colors, and typography—are consistently incorporated into the design. This not only reinforces your brand identity but also enhances the visual appeal of your store. 

Beyond visual elements, prioritize the functionality of your online store. Set up systems for order fulfillment, shipping management, and integrate necessary tools like marketing automation or enterprise resource planning (ERP) platforms. These integrations streamline operations and improve the customer experience, ensuring that your store runs efficiently from day one. 

6. Start your marketing and promotional activities 

Marketing is a critical component of launching an eCommerce business, as it enables you to reach potential customers and build brand awareness. For new businesses, effective marketing is essential not only to attract your first customers but also to establish a strong presence in a competitive market. 

To create a well-rounded marketing strategy, consider incorporating both traditional and digital approaches. Traditional media, such as television, radio, newspapers, and billboards, can be effective for reaching a broad audience, particularly in local markets. These channels help to create widespread awareness and credibility for your brand. 

However, digital marketing often offers more targeted and cost-effective solutions, making it particularly well-suited for eCommerce. Digital channels like social media ads and online advertising allow you to reach specific demographics and engage directly with your audience. Platforms such as Google Ads and Facebook Ads provide robust targeting options, ensuring that your marketing efforts are directed at those most likely to convert into customers. 

Additionally, email marketing remains a powerful tool for nurturing customer relationships and driving repeat business. Services like Mailchimp can help you manage campaigns and automate outreach, making it easier to maintain consistent communication with your audience. 

Incorporating search engine optimization (SEO) into your content marketing strategy is also crucial. By optimizing your website for search engines, you can improve your online visibility and attract organic traffic. This not only helps new customers discover your store but also positions your business competitively against established brands. 

7. Launch your eCommerce business

Once you’ve laid the groundwork, all that’s left to do is launch your business and start selling.

Your team should be primed to handle the different parts of the operation required to keep things humming along. These include order fulfillment, inventory management, customer engagement and marketing.

If you’re running this business as a sole proprietorship, then you will need to keep an eye on these aspects of the business to ensure nothing falls between the cracks.

If you nail all these elements of your eCommerce operations, you will leave customers with a great shopping experience that can turn them into repeat customers or ambassadors of your brand.

Final thoughts: How to start an eCommerce business on a budget

Now that you know all the steps you should follow to become a digital entrepreneur, there’s nothing to stop you from starting your eCommerce business.

It’s as easy as picking a product, defining how you want to sell it, choosing an eCommerce platform and model and deciding who your target customers will be.

If you already have the operational side of your eCommerce business sorted out, and you’re looking for a platform to host your online store, Bluehost has several options for you to consider.

Our WooCommerce hosting plans come with a free domain name for the first year, a free SSL certificate, daily backups and automated WordPress updates.

Contact our 24/7 support team today to find out how Bluehost can help get your eCommerce business up and running in no time.

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