How to Start an eCommerce Business – A Step-by-Step Guide

June 24, 2021/ Posted in Credit Card Processing

Since selling online is applicable to almost any industry or company size, and it has the potential to generate great revenue and enable cross-border trading, the question of how to start an eCommerce business is becoming more and more popular. Since online stores are the future of trading and there is no better moment to establish one than now, we provide you with detailed step-by-step instructions on how to get started and become a leader in your niche.

If you’re ready to launch an e-shop and begin selling online, do it the right way.

What Are the Steps to Starting an eCommerce Business?

Ecommerce has been reporting an incredible and rapid growth that will continue to rise over the upcoming years. Consumers are getting used to new ways of trading, and the fact they aren’t in physical contact with the product is not a decisive point anymore. Moreover, customers expect businesses to build their online stores and provide them with additional possibilities to make a purchase.

According to Statista, retail eCommerce sales will reach $6.388 billion by 2024, which is an increase of 49% compared to 2020. In the US only, 80% of Internet users made at least one purchase online. Taking a look at these statistics, it is clear that the best time for starting a business in an online environment is – now. This is why we decided to present you with an essential roadmap on how to start your own eCommerce business and ensure great results.

Starting an online venture is a complex process, so plan everything in advance.

Choose the Right Business Model

The first thing you should do is choose a business model, or more simply, the way you will operate and find the products to sell.

Drop Shipping is the first possible option. It means you will not have the goods physically with you, and that you will not need a storage place, since all the products are ordered from the supplier directly. Once you place an order, the shipping and all further organization of order delivery to the buyer is an obligation of the supplier you use. Your revenue will be based on commission, but you’ll still have to take care of the clients’ shopping experience, return policies, and all other stuff that could potentially frustrate your buyers.

Another option is to sell a product you manufacture yourself, whether it is physical or digital. This is a more complex alternative: the whole process of production, storage, sales, inventory tracking, marketing, logistics, distribution, and delivery will be in your hands. In other words, this works exactly like any traditional company. The only difference is that everything happens online and there is the additional obligation of delivering goods to your clients instead of showing them in a brick-and-mortar shop window.

Choose the model of selling online and organize it properly.

Create a Plan

A business plan is a kind of roadmap that will show how the plan is progressing and what the next step is in fulfilling your goals. It should consist of several parts that describe the concept of how you will operate and organize. Here are its elements.

Executive Summary

The first part of every plan is an executive summary, which includes:

  • Business description: concept, goals, and vision,
  • Product description: How your product differs from other similar products on the market,
  • Target market: Who your ideal customers are,
  • Marketing strategy: How you’re going to attract your customers in order to sell them the product,
  • Finances: What the current and projected financial state is,
  • The team: Who the people who will accomplish your plan are.

Company Overview

In this section, you should explain who you are and what you plan to do (in this case, focus on answering the questions How do I start an online selling business? and How long does it take to start an eCommerce business?). Here, you will list the legal structure you’ve chosen, industry, business model, value proposition, the team that is responsible for making this project successful, and the time frame.

Market Analysis

Conducting a market analysis is essential before you choose how to set up an eCommerce business. Market research will help you set your target market, determine your position, competition, and identify your ideal customer profile. This analysis will also help you realize the potential market size and the estimated number of people who will be ready to buy your product or service.

Customer Segmentation

One of the most important parts of your plan is making a customer profile and segmentation that will help you sell the product or service and understand what your users want. The details you should consider when making your ideal clients profile include:

  • Location – where they live (city, region, state, country)
  • Age – are they millennials, generation X, or baby boomers.
  • Education level,
  • Job position,
  • The salary amount on year basis,
  • What they do in their free time,
  • The technology they use, in terms of types of devices and brands,
  • What values, beliefs, or opinions they hold.

Marketing Plan

A properly set marketing plan will define the way you’re going to acquire new clients and should be based on the previous part that defined the ideal buyer. This section is one of the most complex parts of the marketing plan, and here are only a few and most important ones you should process:

  • Price of the product or service,
  • Type of merchandise,
  • What promotional channels you will use (e-mail, social media, Google ads, or some more traditional way of promotion),
  • How many products you plan to sell.

Logistics and Operation Plan

Since you will run an online store, you’ll want to ship the goods to your clients. This means that a logistics and operation plan is crucial for fulfilling your clients’ expectations. Here is how your logistics and operation plan should contain:

  • The list of suppliers who provide you with raw materials, or where your product is manufactured;
  • The time needed for the production of the products, and how the shipment is organized in the terms of delivery time;
  • Facilities where you and your team will work;
  • The equipment you need to operate. This includes everything from papers to computers and all other tools needed;
  • Inventory – how your storage will be organized and where will be located. How you will track the inventory status;
  • Shipping – how you will deliver the goods to the final customers.

Financial Plan

The only way to ensure your idea is sustainable is to make it work in financial terms. An income statement, balance sheet, and cash-flow statement will help you track the progress and see if there is a need to react. If the final result is not positive, you’ll definitely want to revise what does not function, how you can fix it, or what you could potentially change in order to attain the best possible results. Of course, the whole financial plan has to be based on a timeline, so if any of the sales targets are not achieved, you could easily find the reason why that happened.

Dedicate some time to set goals in financial, sale, and marketing terms

Do it Legally

Setting up an eCommerce business also includes the legal part of entrepreneurship, which regulates your business’s name, legal structure, EIN number, permits, and licenses. Here is how you can regulate your online shop and begin selling your merchandise without any limitations.

Determine the Company’s Name and Legal Structure

Choosing the company’s name is the first step of making your enterprise legal because without it, you won’t be able to register it with any institution. Your company’s name should be unique and catchy. Once you decide how to name it, check with the local secretary of state, as well as the U.S. Patent and Trademark Office, whether the name is available. If they confirm you can use it, then you can move on to the next step and define the legal structure.

Choosing the type of company will have a significant impact on legal and financial implications. The legal structure is defined exactly the same as it is with brick-and-mortar businesses, so you can choose whether you’ll register it as a sole proprietorship, general partnership, LLC, or corporation. Depending on the option you choose, the registration process will differ from state to state, so you’ll want to check all regulations in detail.

Apply for Employer Identification Number (EIN)

Getting an EIN with the IRS is easier than it sounds. You can apply for a business tax ID online with the IRS system that will provide you with the number instantly. The only thing you should be cautious about is that only certain types of legal structures require an EIN and that attaining it can be very helpful to divide your company’s and personal assets and tax obligations. Nevertheless, don’t forget to thoroughly check how a small business pays taxes or if there are any benefits in terms of small business tax deductions.

Procure All the Permits and Licences

No matter what type of legal structure you choose, you will definitely need to register with your local government. Since every state has its own rules on this, you should check what your obligations are. Once you register it with the state you’ll be able to get a general operating license, and depending on your location, you may also have to acquire a local operating license, too.

Although the majority of entrepreneurs start an online venture at home, the majority of states require a home occupation permit which proves your home-based enterprise does not provoke any additional noise or problematic conditions to the neighborhood.

Other types of permits you may need are:

  • Signage permits,
  • Health, safety, and environmental permits,
  • Sales tax permits,
  • Professional and trade licenses.
Ensure your online biz work lawfully

Choose the Right Platform

Starting an eCommerce business implies you’ll have to build a reputable and trustworthy online presence with a website and an eCommerce platform enabling sales to happen. However, this doesn’t mean you will have to code your online store’s website from scratch. Since there are various ready-made solutions, the only thing you actually have to do is choose one and integrate it. Depending on the size of your company, there are different suitable platforms.

Once you revise all the conditions and benefits each platform offers, it is necessary to integrate it to the website, set up your product base, present the products, and your online sales can officially start. But first, let’s go through some of the most used platforms globally and see which of them would be the right choice for you.


WooCommerce is a platform that is free to integrate on a website and that powers more than 28% of all online stores globally. It is suitable for different types of businesses of all sizes. Whether it is a start-up, a small, or a medium-sized company, WooCommerce offers a solution for it.

The greatest benefits of WooCommerce are:

  • Fully customizable,
  • Advanced marketing extensions for tracking sales,
  • Multiple payment solutions like Stripe, Paypal, Amazon Pay, Apple Pay,
  • Search engine optimization tools,
  • Simple drag and drop system for setting up the products.


The second most popular platform is Shopify, which is the best choice for start-ups and small businesses since it provides its users with the option to easily extend online store capabilities if there is a need. In other words, you will not need to transfer the whole store to another platform once your shop starts growing.

The greatest advantages of Shopify are:

  • Unlimited number of products,
  • A mobile-friendly version of your store and payment checkouts,
  • Optimized stores for search engines,
  • Full 24/7 support.

Big Commerce

BigCommerce is the best solution for mid-sized companies that aim to operate on global markets. In order to make it easier for its users to achieve this goal, BigCommerce has developed some advanced features like multi-language and integration to ShipperHQ for accurate cost calculations for cross-border shipping.

The greatest advantages you’ll want to set up an online store with BigCommerce are:

  • Easy integration with globally recognized online sales platforms such as Amazon, eBay, Google Shopping, and many more,
  • Advanced inventory management,
  • Multiple payment solutions,
  • 24/7 customer support.
Choosing the right platform is a crucial step.

How Much Does It Cost to Start an eCommerce Business?

One of the most common questions is associated with the costs of starting an online business. Although establishing an online store is quite simple, and many platforms offer a range of free tools, there are some fixed expenses you should consider and include in the calculation.

  • Hosting – the cost varies depending on the plan you choose. There are three types of hosting plans, shared hosting, VPS hosting, and dedicated hosting. The choice of a hosting plan is important because it directly affects the speed of your website and the number of users your site can support. The hosting plan WooCommerce provides for online stores amounts to around $129 per year.
  • Themes – since every online platform provides its users with themes, add another $100 to your cost plan if you want your website to be esthetically pleasing.
  • Store management and integration of other extensions like email service, search engine optimization tools, or shipping and security tools range from $69 to $299 per month, depending on the platform you choose.
  • Transaction fees differ from 2.2% – 2.9% + $0.30¢ per each transaction. This cost, again, depends on the platform and plan you choose, capital turnover, and the payment processing provider. Every additional fee or commission represents a minus for your revenue. For that reason, you should learn how credit card processing works, carefully revise the offers of credit card processing companies, and make the final decision on what is the most beneficial for you in terms of the lowest expenses. No additional fees or commissions for merchant services is something you might search for, so exploring all PoS terminals provided by Circle Merchant is definitely a good idea too.
Choose the best platform for your shop.

Enable Different Payment Methods So Your Customers Can Shop More

One of the greatest problems of online businesses is a great percentage of unfinished purchases and cart abandonments. According to the Baymard Institute report, the average cart abandonment rate is 69.9%, and the reasons why users leave the shopping cart are different. So, let’s see what customers say, and how their answers can help you optimize your online store according to their needs:

  • 49% of online shoppers abandon their cart due to high extra shipping, tax, or fee costs.
  • 18% said they left the site because of a complicated and long checkout process.
  • 17% left the cart because they haven’t been provided with an option to calculate the total cost of additional expenses and total price.
  • 11% of users haven’t finished the purchase due to poor return policies.
  • 7% of shoppers quit the purchase process because they were not provided with enough payment methods.
  • 4% of shoppers quit the purchase since their credit card was declined due to poor credit card processing services.

As we can conclude, 11% of users have not finished their online shopping due to payment issues, which is why every entrepreneur has to pay special attention to it and explore all the possible options to provide its customers with.

Circle Merchant is a credit card processing company that has low POS fees and a system for contactless purchasing for online shopping. This payment solution enables enterprises to offer additional payment options to their users with great average credit card processing fees and conditions that are beneficial both for merchants and shoppers.

Moreover, Circle Merchant provides credit card payment processing solutions for both online and offline stores, so you can easily integrate them and track your transactions and sales. This user-friendly system provides merchants with low merchant service rates and credit card convenience fees, which will help them reduce operational costs and enhance the shopping experience for their customers. Of course, there is a Help & Support Center, where you can find out everything about what a merchant account is, how the process of applying for a merchant account works, how to easily set up a merchant account, and how the mobile notary service can accelerate the notarization of your documents. And of course, the greatest advantage of using Circle Merchant’s services for credit card processing is that, unlike with other credit card processing companies that can keep your assets up to five working days until the authorization procedure is complete, Circle Merchant guarantees that your money will be on your bank account and ready to use within 24 hours.