How to start an ecommerce business

The number of ecommerce businesses has significantly risen over the last several years, and owning one is an exciting prospect for many. On the other hand, getting started can be daunting.

That’s why the team at Yodel has devised an in-depth, step-by-step guide on how to start an ecommerce business, aiding you on your journey to becoming an online entrepreneur. Plus, we’ve gathered exclusive contributions from two successful ecommerce business owners for further insights and expert tips.

Jim De’Ath, Sales and Marketing Director of outdoor equipment specialists Valley & Peak, and Dan Ruscoe, Founder and CEO of sustainable cleaning product retailer KitchTool, have shared their amazing first-hand experience with us, to help you learn all you want to know about online selling.

If you need to post products from your ecommerce business, get a bespoke quote from Yodel for individual or multiple parcels. Our service covers the entire UK Mainland, as well as Northern Ireland, so wherever your online orders come from, Yodel is able to meet your customer needs

What is an ecommerce business?

An ecommerce business is one that sells products over the internet. Ecommerce businesses can sell their goods solely online or across the internet and in physical stores. There are two main models that ecommerce businesses fall under. These are:

· Business to business (B2B), where ecommerce businesses sell products for other businesses

· Business to consumer (B2C), which focuses on selling products to people, rather than companies

Yodel specialises in delivering products within a variety of B2B and B2C sectors. Whichever ecommerce business model you choose, our in-house techniques will ensure your items are received safely and securely. However, for anyone just getting started, whether it be a small business or SME, Yodel’s C2C offering (Yodel Direct) would be the perfect fit. This allows sellers to send individual, multiple, or parcel in bulk – directly to consumers without signing up to contracts.

What costs are involved in an ecommerce business?

Many ecommerce businesses won’t cost as much to launch as bricks-and-mortar endeavours, but there might still be plenty to pay for when you get going.

Jim commented, “One particular piece of advice I'd give for those starting in ecommerce, is that cash flow is very important. Cash really is king, so it might sound simple, but don’t spend it all before you’ve got any back. Make sure you have a nice buffer of working capital; you never know when you might need to fall back on it.”

While everyone has different amounts of capital to invest into their ecommerce business, the types of outgoings are relatively similar. These costs can be associated with:

· Product manufacturing

· Operation

· Website creation

· Shipping

· Marketing

· Offline costs i.e., storage rent and utility bills

Make sure you know how much everything will cost before you start putting money in, and also that you have enough funds, or access to capital, to sustain the process while you’re building a customer base.

If your ecommerce business is based on an online selling platform such as, such as Vinted or eBay, an ad-hoc parcel sending service is ideal. Through various marketplaces, you can integrate a Yodel Direct account to manage all your orders and shipments, saving you time and money.

---

How to start an ecommerce business

1. Choose your product

Before you begin selling products online, you need to decide what you want to sell.

Your products will ideally fill a gap in the market and help provide a solution to customer problems, needs, or wants. Dan said, “We need to walk in the shoes of the customer to understand the steps they are going to take to make their buying decision.

“It's important to remember to stay clear from seasonal products and brands so you can safeguard the longevity of your company revenue.”

Jim added: “You should have the best product knowledge in your niche as standard, and couple this with excellent customer service to set you apart from your competition.”

There is plenty of existing information available to help you build your knowledge, you could have a look at:

• Reading customer reviews on competitor items to solve the common criticisms or faults.

• Looking for existing selling trends online and adding a new or interesting spin.

• Catering to a steadfast audience, for example, a fandom.

• Using keyword research to find out what people are searching for.

Along with researching products, you also need to carry out detailed analysis into how much the items you’re selling will cost to produce; selling goods for less than they cost is an easy way to lose money as a business.

2. Writing a business plan

After you’ve decided on the products you want to sell, and the ecommerce method you’re going to take, you need to start creating a business plan.

A business plan is a roadmap which helps you determine your goals, brand values and mission statement, and assesses your chosen industry, including comparisons to competitors and the best ways to reach potential customers. It will give you an idea of where you’re headed, how you plan to get there and a potential timeline.

3. Come up with a business name and logo

One of the most important parts of starting an ecommerce business is deciding on a name for your brand, choosing a suitable (and available) domain name, and creating an impactful logo.

You need to remember that the name you give your ecommerce business will be what all customers refer to your business as, so it’s imperative that you choose something unique and memorable, as Dan explained:

“Build a brand, not just a product. You want your customers to become advocates of your product and for your products to stick in their mind, therefore sharing their experience with friends and family - which results in free advertisement and repeat customers. Building a brand helps to build the awareness and the foundations of your ecommerce store.”

This goes for your logo too, which should be simple, but effectively define everything your ecommerce business is about. To make sure your logo and brand is unique, you can check whether there’s already a trademark in place here to avoid potential issues.

4.Sourcing your products

Selling products of the highest quality is vital because this will increase the positive reputation of your ecommerce business and cultivate a happy customer base.

Jim said, “Make sure you stock products that sell. Do your research when buying and spend your precious money wisely.”

Here are just a few methods of sourcing products:

Re-purposing existing products

This concept has grown drastically over the last few years and can be an effective route to go down when sourcing products. With an emphasis on sustainability, vintage clothes and upcycled furniture retailers are examples of ecommerce businesses that have really taken off. Yodel, for example, partner with Vinted, eBay & etsy.

Creating your own products

If you have a talent that allows you to create a unique product and/or you can improve the options already out there, you might want to sell handmade. What needs to be considered though, is if you decide to make products yourself, production might take longer.

This slows down the number of products you can sell, but it does make yours one-of-a-kind, which has its own selling points. You can check now that your new creation can be sent via Yodel Direct.

Working alongside a manufacturer

Finding an effective manufacturer can take time and utilising their services will dip into your capital. However, because manufacturers can have access to specialist machinery, they can create prototypes of your products, as well as meet large order numbers quickly.

Selecting a manufacturer can be tricky though. Dan advised, “Don't rush the process. Instead, negotiate your favourable terms and put in place a contract which covers all expectations and the legal elements of your business agreement. Luckily for me, I was able to get the money back for my mistake of not putting a contract in place and trusting a friendly nature and process.

“You have to safeguard your business and your revenue. Spend that little bit of extra time getting samples, testing the product, getting pre-sale reviews, and negotiating the good and the possible bad, because it can happen.”

5. Building your ecommerce store

After intensive planning and organising, you’re ready to start putting all the elements together and creating your ecommerce store. As Dan pointed out, “You have to learn to TEST, TEST, TEST and the only way you do that is by doing.”

To reap the best results from your ecommerce business, it’s vital that you understand and cater to search engines’ goal of providing their users with the best possible search results

Emphasising organic search optimisatio

Organic search optimisation (often known as SEO) is essential for creating as smooth a journey as possible for customers, and ensuring your products are seen when they are searching for the type of product you’re selling. To touch on just a few considerations, you must have:

· Comprehensive product titles and page structures

· Accurate and attractive product descriptions

· High-quality imagery to highlight your products

· A variety of secure payment options

Jim explained: “Your site has to look good and work perfectly. Spend time on making your site better than the competition. Also, don’t leave SEO to the end. Make a start as soon as you can. It’ll save money in the long term and establish your store much quicker.”

With the building of your ecommerce store, any online reviews should be captured, and your site should be able to showcase them. Reviews not only show potential customers the value of your products, but they also show search engines how your products are perceived.

By building this information into your site, you’ll be able to prove how your ecommerce store can enrich people’s lives.

How to effectively market your ecommerce business

Once your ecommerce business is up and running, you’ve got to make sure you’re marketing your business effectively. There are plenty of strategies that can help you to do this, including:

· Exclusive deals and coupon codes to attract customers to your store

· Sponsored ads. This will cut into your finances initially, but can help you stay in the top results for searches

· Social media marketing, which allows you to present your brand and products on social media, to increase your audience reach

However, these strategies should be carefully considered in relation to your business type and strategy. Regarding social media marketing, Jim said, “Don’t waste time on influencers if they can’t help you. It’s a two-way street; be sure of who you are working with and what they will bring to your business.”

In a similar vein, Dan explained, “Marketing is the lifeblood of any starting business, especially that in ecommerce. Marketing is like the fuel in your car, and it's important to utilise it to stand out from competitors.

“Marketing can be overwhelming along with social media, thinking you need to do everything when in actual fact you don't. Think about where your customers hang out most and focus on that first. Spend your time, effort, and budget (if you have one) on that platform, and when you have mastered it, move to the next.”

The ecommerce business world in a nutshell

Starting an ecommerce business is incredibly demanding, and requiring lots of planning, personal sacrifice, and motivation. Jim noted, “Be ready to adapt. It’s never as simple as the business plan you wrote, and hurdles will be placed in your way at every turn. Remember to also be different. Find what sets you apart and run with it.”

Dan told us about the joys of achieving success in ecommerce: “An ethos of helping others and sharing my knowledge led to me being awarded Inspiration of the Year and Family Supporter of the Year 2022 at the Big Business Events Awards evening.

Remember, we've all been there. The challenges, frustrations and sometimes, tears, are part of the journey, but trust me, when someone is using your product or brand, it feels great!”

Choosing a reliable delivery partner is paramount when starting your own business. Yodel will work with you to deliver your product in a timely and professional manner, through our wide range of postage services. It’s equally important to partner with a carrier that delivers excellent service.

Want to do some more reading on online businesses? Discover our guide to making money online, complete with advice from the experts who have been there and done it.