How to Start a E-Commerce Business
An e-commerce business sells physical or digital products online through a website or marketplace. E-commerce ranges from dropshipping and print-on-demand to manufacturing your own products. The barrier to entry is low, but competition is intense.
How to get started
1. Choose a niche and validate demand by researching what people are searching for and buying
2. Source or create your product - decide between dropshipping, private label, or handmade
3. Set up your online store using Shopify, WooCommerce, or a marketplace like Amazon/Etsy
4. Drive traffic through SEO, social media, or paid ads
5. Focus on repeat customers and email marketing - acquisition costs are high
Key metrics to track
Revenue
Average Order Value (AOV)
Customer Acquisition Cost (CAC)
Return Rate
Conversion Rate
Common mistakes to avoid
- Choosing a product based on what you like instead of what sells
- Spending all budget on inventory before validating demand
- Ignoring shipping costs and return rates in margin calculations
- Competing on price instead of brand or experience
- Not building an email list from day one
Startup costs
Expect to invest $500 to $25,000 to get started.
- Website/platform fees: $30 - $300/month
- Initial inventory: $500 - $15,000
- Branding and photography: $200 - $3,000
- Marketing and ads: $500 - $5,000/month
- Packaging and shipping supplies: $100 - $1,000
Time to revenue: 1-3 months with dropshipping, 3-6 months with own inventory
Funding options
Bootstrapping
Small business loans
Crowdfunding
Personal savings
Frequently asked questions
Related business types
Dropshipping Business
A dropshipping business sells products online without holding inventory. When a customer orders, the...
Subscription Box Business
A subscription box business curates and delivers physical products to subscribers on a recurring bas...
Marketplace Business
A marketplace business connects buyers and sellers, taking a commission or fee on each transaction. ...
Related resources
Validate your e-commerce business idea
Foundra walks you through validating a e-commerce business step by step. Define your customer, test demand, scope your MVP, and plan your launch.
Start your free trial3-day free trial. No credit card required.