How to Make Money with an Ecommerce Business: The Ultimate Guide

how to make money with an ecommerce business

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Starting an ecommerce business is appealing to would-be entrepreneurs for a number of reasons. For instance, the startup costs are low, you have the flexibility to conduct your business from the comfort of your home, and you can choose between a variety of types of ecommerce businesses. Plus, starting an ecommerce business sounds relatively straightforward. After setting up a store, you just need to source products, market your business, and develop a brand image.

However, unless you have a solid strategy, you’ll never gain the visibility and loyal customers necessary for success.

This ultimate guide looks at the best practices for starting an ecommerce business from scratch. Plus, it has some tips to help you keep growing your business into the long term.

An Introduction to Ecommerce

To start, let’s unpack what an ecommerce business is.

Although most people think of ecommerce as referring to goods rather than services, all types of online transactions that involve the selling of products or services in exchange for money fall under the category of ecommerce. There are four main types of ecommerce:

  • Business to consumer (B2C) — Purchases you make from a business for personal use.
  • Business to business (B2B) — Transactions from one business to another. A common example is software as a service (SaaS).
  • Consumer to consumer (C2C) — Think online marketplaces where anyone is free to sell, such as eBay.
  • Consumer to business (C2B) — This type of ecommerce is more common for services, such as in the case of a freelancer.

Entrepreneurs looking to start an ecommerce business tend to be most interested in selling products through a B2C model.

Where to Source Products for Your Ecommerce Business

Now that you understand what we mean by ecommerce, it’s time to consider what steps you’ll take to create an ecommerce business. The first thing to do is decide where you’ll source your products. You have three main options.


If you want to stock your own products, it may be easier to acquire merchandise through wholesale lots. This means you’ll need to purchase a large quantity, but you’ll receive it at a much lower price per unit.

Of course, you’ll need to have sufficient space to store products if you choose this option. Plus, you should bear in mind that reputable wholesalers will only sell to you if you’re a registered business.

Trade Shows

An alternative is to find suppliers at trade shows. If you’re looking for small quantities of products, attend trade shows where small businesses are looking for someone to help them increase their sales. You can also find wholesale trade shows, instead of researching for suppliers online. Search for upcoming events in your area that are specializing in the kinds of products you’d like to sell.

Dropshipping Directories

A final option is to start a dropshipping business. With this model, you’ll connect with a supplier and list products in your ecommerce store. When you make a sale, the supplier will send the product straight to your customer. As you’ll never own the merchandise, it’s the most affordable option. This makes it a good choice if you have little to invest upfront in your ecommerce business.

e commerce business

Does Your Ecommerce Business Need a Website?

Next you need to decide if you’ll set up an ecommerce store on a marketplace or create your own website. There are advantages to both options, although you’ll find that having a website provides you with more benefits in the long term. If you’re serious about scaling your ecommerce business, creating a website is worthwhile for a few reasons.

1. Use Email Marketing

Having your own website makes it extra easy to market to customers — in particular, through email marketing. With the right lead magnet, you can collect your visitors’ contact information and send them details about new products, offers, and other deals that will push them toward a sale. This helps you gain more repeat business and convert visitors who may otherwise never have become customers.

2. Gather Visitor Data

You’ll also learn more about who is visiting your ecommerce store when you have a website. Web analytics show your visitor demographics, how users are reaching your store, and your visitors’ behavior. You can use all this information to tailor your marketing to target users who are the most likely to convert and to improve the experience to avoid lost opportunities.

3. Develop Your Brand Image

When you create your own website, you have the freedom to make it look and feel exactly how you want. This allows you to stand out much more than you would with the minimal customization available on a marketplace. In fact, when you sell on a marketplace, some customers never even acknowledge that you exist — it will be the marketplace they think of the next time they want to make a purchase, rather than your specific brand.

4. Distance Yourself from Competitors

When you sell on a marketplace, your competitors’ products are just a click away. In contrast, with your own website, users need to go to extra lengths to find what else is available.

Best Ecommerce Platform for a Small Business

Setting up an ecommerce website is extra easy these days: you just need to choose the best ecommerce platform for your small business. Some of the top options include:

  • Shopify — With Shopify, you can choose from a number of attractive, modern themes to create an impressive store (although you will be limited if you decide to stick to the free themes). It’s also easy to adjust any theme to fit your brand image. Shopify is a good choice if you don’t have a website already.
  • WooCommerce — You may be surprised to hear that WooCommerce, not Shopify, is the most popular ecommerce platform. As it’s integrated with WordPress, WooCommerce may be a better option if you do already have a website.
  • Magento — The main reason to choose Magento is its analytics. The platform provides great information about purchase funnels, abandoned carts, and other user behavior.

How to Brand Your Ecommerce Business

We mentioned above that having your own website will give you greater capabilities to brand your ecommerce business. In fact, even if you use a marketplace, branding is essential. You’ll need your customers to remember your brand if they’re to return for repeat sales.

Branding an ecommerce business involves many of the same tactics as developing a brand image for any other type of startup.

Visual Image

Although there’s much more to branding than just visuals, your visual appearance is crucial. This includes choosing a color palette, typography, and other stylistic features and using them all to create a logo, guide your web design, and produce visual content.

This may be an aspect of starting your ecommerce business that you’re unable to do alone. It’s worthwhile to turn to an expert in graphic design to ensure you create a professional visual image.

Unique Selling Proposition

If you’re selling similar products to other ecommerce businesses, what makes you different from your competitors? This could be your range of offerings, quality, values, affordability, or something else. Choose one to be your unique selling proposition (USP).

Brand Story

Your USP will be one element of your brand story. In addition, your brand story should encompass your vision, mission, reason for starting an ecommerce business, and goals for the future. Use your brand story to inspire all your communication — from web copy to marketing.

Becoming Active on Social Media

All small businesses need to be active on social media — and ecommerce businesses are no exception. Through social media, you will:

  • Reach more potential customers
  • Stay connected with current customers
  • Enhance your branding
  • Make it easier for satisfied customers to spread the word

To be successful on social media, choose the platforms your target audience uses most. Then, create engaging content — avoid just posting product promotions, as this makes for a boring account to follow.

In addition, you’ll need to dedicate time every day to respond to users’ queries and to show your followers that you’re listening to their feedback. You may also like to expand your strategy to include ads or a partnership with an influencer to further increase your reach.

You’ll find that developing and maintaining a social media presence takes up a large amount of your time. It’s worth looking into outsourcing social media management to free up your time for other work.

How to Expand Your Ecommerce Store

The last thing you want is to stagnate after you’ve been in business a while. Let’s look at how to grow your ecommerce business.

1. Affiliate Marketing

One strategy to consider is affiliate marketing. This involves partnering with an affiliate marketer who will promote your products. When you receive a sale — and only then — you pay the affiliate marketer a commission.

2. Start a Loyalty Program

It’s much easier to gain repeat sales than find new customers. Encourage your current customers to keep purchasing from you by creating a loyalty program. This could involve collecting points to gain discounts or a free product after a certain number of purchases.

3. Expand Your Offerings

Once your ecommerce business has become popular for a specific range of products, look for ways to expand. You could offer a greater variety to your current customers or target a wider audience.

4. Invest More in Ads

As you gain capital, you’ll have more to spend on advertising. It may be tempting to advertise merchandise you’re struggling to sell (especially if you have the products in stock yourself), but you’ll see better results if you advertise your most popular products. This will reduce the risk of wasted ad dollars and help you expand your customer base.

Ecommerce Business Examples to Inspire You

The above may sound like a lot of work — but there’s no need to feel demotivated! Check out these ecommerce business examples to see what you could achieve one day.


A great example of an ecommerce business using its USP to stand out is TOMS. For every sale it receives, the company supports someone in need. Customers gain a new pair of shoes — and feel good about their purchase.

Warby Parker

Today a major ecommerce business, Warby Parker began as the brainchild of Neil Blumenthal when he was an MBA student. He decided to launch an ecommerce store focused on eyewear to offer an alternative to the expensive options that were dominating the market.


Combining word-of-mouth marketing and user-generated content, Birchbox let their customers do the work for them. What made this beauty box company extra appealing, though, was the fact it offered samples of products to customers.

Dollar Shave Club

An example of how to build a successful ecommerce business using a subscription model comes from Dollar Shave Club. It began offering high-quality razors and blades, but the business has now expanded into cologne, hair products, accessories, and more.

What Is an Ecommerce Virtual Assistant and Why Do You Need One?

Some of the work involved in running an ecommerce store is quite dull — such as managing inventory, order processing, and creating product descriptions. All this is crucial work — but it takes time away from the more interesting aspects of your business.

By contracting a VA, you can delegate these tasks to someone else. A virtual assistant can manage product research, product description writing, image editing, and much more.

In addition, an experienced ecommerce virtual assistant can support you with some of the more challenging aspects of running your business. For instance, a VA can provide you with assistance around returns and exchanges, understanding user queries, and providing customers with relevant information. This means you’ll provide better customer service and be more likely to maintain a competitive edge.

The Ultimate Checklist

Need a little extra help starting an ecommerce store? While you’re ironing out the details with your virtual assistant, provide us with your email and, within three days, we’ll send you “The Ultimate Checklist for Every New Ecommerce Site.” Work through the list to make sure your ecommerce store is set up for success from the start.

Laura Holton

Laura is a professional writer specializing in content aimed at small businesses and entrepreneurs. She has helped countless startups find the information they needed to take their ventures to the next level.

Laura Holton

Laura is a professional writer specializing in content aimed at small businesses and entrepreneurs. She has helped countless startups find the information they needed to take their ventures to the next level.


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