Ultimate eCommerce Guide: How To Set Up an Online Shop (2023)

Join the online shopping revolution and set up your eCommerce business

Creating your own eCommerce business is something that can fill you with a sense of adventure as well as trepidation. With so many different competitors out there, it is hard to stand out from the crowd. You’re going to have to work hard at your offering to differentiate yourself from the competition and make it as an eCommerce business.

That’s why we created the ultimate eCommerce business guide. We want to give you some tips to get you started on the right footing.

How to set up an eCommerce business

Setting up your own online store is easier than ever but it still requires a lot of planning and preparation. Just like setting up a brick and mortar store, you have to consider a wide range of options before you commit.

Some of those things you will need to take care of include:

1.  The eCommerce platform
2.  Payment provider
3.  Drop shipper or shipping tools
4.  Analytics
5.  Accounting
6.  Search Engine Optimization
7.  Social media marketing
8. Email marketing

Did you notice that we didn’t mention stock there? That’s a whole other guide and something that every single online store will handle differently. For everything else, the options included in our ultimate eCommerce business guide will do the trick.

Typically, setting up an eCommerce business would work a little something like this:

1.  Identify a gap in the market or something you could do better than the competition.
2.  Assess the viability of your idea and perform research on the competition and target market.
3.  Identify manufacturers or providers of the stock you’re going to sell and send out initial tenders or enquiries.
4.  Research eCommerce platforms and payment providers and their costs and features.
5.  Build your store, prepare drop shipping or stock and shipping.
6.  Add back-office functions such as inventory control, analytics, and accounting.
7.  Implement measurement functions, SEO, social media marketing, and email marketing.

As you can see, this is a very simplified list of considerations. There is a bit more to setting up an eCommerce business but this is to give you an idea. You will also need a business name, register your business with authorities, brand your business, get an accountant and so on.

You can launch your eCommerce business once you reach Step 5 as long as you implement the other functions quickly after launch. As long as you have a product, platform, payment method and delivery method, your online store is ready to go.

What kind of budget do you need to start an eCommerce business?

One of the most attractive things about eCommerce is the relatively low barrier to entry. Unlike a brick and mortar store, you don’t need thousands to set up an online store. In fact, you won’t need that much at all.

The main expenses of an eCommerce business include:

1.  Business and domain setup fees
2.  Web hosting
3.  eCommerce platform costs
4.  Stock and shipping providers
5.  Payment processing
6.  Back office functions

Business and domain setup fees

Depending on where in the world you live, setting up a business could take minutes or days. Business and domain setup fees should be modest wherever you are. Setting up a business is a case of registering it with your local authorities and setting up a logo and branding.

Domain names can be secured as part of branding or at the same time as your web hosting. Most domain names cost around $10 per year while premium domains cost much more.

Web hosting

The cost of web hosting varies depending on whether you are using an eCommerce plugin like WooCommerce or a standalone platform like Shopify. If you’re using WooCommerce, you will need a fast web host compatible with the plugin. This can cost anywhere from $50 per year up to $150.

eCommerce platform costs

eCommerce platforms will usually bill monthly but you can pay annually if you prefer. Prices vary but using Shopify as an example, a basic eCommerce store costs from $30 per month up to $300 per month. This will include hosting, support and a range of other services as well as the platform itself.

Stock and shipping providers

Stock costs can vary hugely depending on how you’re setting things up. Use dropshipping and you don’t need to hold stock. Buy your own stock and you will need to factor that into your costs. Shipping providers will charge per item so you will likely begin with low costs before they increase alongside volume.

Payment processing

Payment processors will usually charge per transaction so there should be no setup fees. Once your eCommerce business is up and running, these will increase alongside sales.

Back office functions

Back office functions such as accounting, analytics, and marketing can all use cloud services. Some can be had for free while others will charge a monthly fee. Like other elements of eCommerce, this will be a rolling monthly fee that provides access to the platform in question.

Let’s take a look at some of your options when setting up an online store.

How to decide what to sell online

Deciding what to sell is obviously key to the success of your eCommerce business. Some store owners make their own products or come up with a great idea and build a store around that. Others want to set up a store and have to decide what to see on their own. This section concentrates on that latter group.

You have three primary options when selling online:

1.  Manufacture your own products and sell them.
2.  Work with a manufacturer or wholesaler.
3.  Work with a drop shipper.

Manufacture your own products and sell them

This is a common reason for someone to start an online store. You have a skill or a hobby and want to turn that into cash. The product could be digital or real and as long as you have the means to keep up with orders and to ship those orders, you should have little to worry about.

Work with a manufacturer or wholesaler

The internet is full of manufacturers or wholesalers willing to work with online stores to fulfill products and even ship them. You’re going to need to research carefully to ensure the products are of sufficient quality and the provider is reliable. Read reviews, talk to the provider and ask in forums or elsewhere online for feedback on them before committing.

Work with a drop shipper

Dropshipping is a very common way to run an online store. Find a drop shipper, list their items, integrate your eCommerce platform with their order system and you’re good to go. Use the same methods as above to find a good quality drop shipper that won’t let you down.

Shopify has a very in-depth guide on product selection for online stores that is well worth a read.

Marketing your store

You may have created the best online store in the world and stock the best products but if nobody knows it exists, you’re not going to sell anything. Marketing is a key component of running an eCommerce business and you are likely to spend more time marketing than on any other function.

You will need to learn the fundamentals of SEO, product copywriting, email marketing, social media marketing, conversion tracking and a whole lot more.

You don’t have to become an instant expert on any of these but the more understanding you have, the faster your business will grow. Be prepared to expend significant time and effort on marketing!

Ecommerce platforms 

First things first, you'll need to actually set up a shop to be able to push out your eCommerce products! Here are the platforms which we believe are best for this.

WooCommerce

WooCommerce is one of the most powerful eCommerce plugins available for WordPress. It now powers over 30% of all online stores on the web.

Pros: The plugin has hundreds of free and paid extensions and WooCommerce themes that help you do whatever task you need for your online store. This allows you to sell digital and physical goods, ship products, provide a number of payment options, and design your store to fit your needs.

Cons: It’s a plugin for WordPress. The other platforms are standalone. That means WooCommerce needs to integrate into someone else’s framework.

If you're looking for some eCommerce themes for WooCommerce, check these out. We also compared WooCommerce to Shopify (the next contender on our list) in a detailed guide.

Shopify      

A premium standalone eCommerce business platform designed specifically to help you sell in more ways than ever before. They have many beautifully designed store themes. Unlike WooCommerce, Shopify is its own platform and does not require a WordPress installation to work.

Read more about Shopify here.

Pros: You can improve your social commerce functions on Facebook, Twitter, and Pinterest through the Shopify blog integration. If you already have a website, you can add Shopify buy buttons to a site in minutes. This way if you have a website or blog that is already generating traffic, you can add new ways to convert that traffic into revenue. Furthermore, Shopify has several tools to help you sync in-store and online store purchases. Retail owners can manage their entire inventory in one place.

Cons: Shopify is a proprietary system that requires you to pay monthly. If you stop paying at any time, you lose your store.

Magento      

An open-source eCommerce platform that works on multiple sales channels. Magento is great for visitors who use desktop, mobile, and tablet devices. As part of Adobe Commerce Cloud, Magento has a global presence and is behind some of the world’s leading online stores.

Pros: The platform focuses on delivering personalized shopping experiences for customers, so they get what they want when they want it. It is also flexible and offers unrivalled customisation.

Cons: Unless you know the platform, setting up your Magento store may create the need for expert help. Fortunately, you can rely on Jaagers for your Magento developing needsyou can rely on Jaagers for your Magento developing needs.

Magento Enterprise      

When your eCommerce business has taken off and you are hitting the limits of these other platforms, Magento Enterprise is somewhere you could look next. It’s a full-suite eCommerce ecosystem that includes everything a business needs to trade.

Pros: Magento Enterprise has many great features like customer loyalty incentives, seamless integrations with third-party solutions and scalability.

Cons: Like Magento, setup is ideally left to experienced developers. You might want to use a website designer to help you navigate through the confusing setup. Fortunately, you can reach out to Jaagers to help you with your implementation of Magento Enterprise or see our full guide on how to hire a Magento developerhow to hire a Magento developer.

BigCommerce      

BigCommerce is an eCommerce business platform that helps increase traffic and sales. They have all the tools you need to optimize your site for search, social media, and email marketing.

Pros: They have promotions and coupons to increase sales. You can also use their multi-channel marketing integrations on Facebook, eBay, Etsy, Google Shopping and Nextag.

Cons: This is another proprietary platform. The fees for Bigcommerce start at $30 per month and go up from there as you start to grow. They also charge 2% of your transaction fees on every sale you make.

Online Shopping and eCommerce Payment Providers

Many potential customers leave at the shopping cart. This is common in all online stores and is caused by a number of factors. One way to reduce that is to make the checkout process as simple as possible and contain as few steps as possible. Your choice of payment provider is key to that.

The payment provider integrates into your online store and performs the financial transaction on your behalf. They accept the customer’s credit card, PayPal or another method, take the money and send your share to your bank account. It’s a very straightforward process that works hundreds of millions of times per day.

Here are some questions you should ask when selecting a payment provider for your eCommerce business.

•  What payment methods are compatible with your eCommerce platform?
•  How long does it take for me to get paid?
•  What fees does the payment provider charge?
•  How reliable is the payment processor? 
• Is it secure?
•  Does the system work with your eCommerce platform?
•  How many payment options does the provider have?
•  Does your eCommerce platform work in multiple countries?
•  Is it easy for customers to use?

With that in mind, here are some of what we consider to be the best payment processors for online transactions. Our eCommerce business startup guide would not be complete without them!

Stripe      

Stripe is a cross-device payment processor that completes payment in a single click. It includes a full API set up to help you integrate payments across the web.

Pros: You can use Stripe for online stores, marketplaces, mobile apps or subscription services.

Cons: Billing clients directly through Stripe is like pulling teeth. They have several buttons and mobile payment features, but it is virtually impossible to directly bill a client through the site unless you have developer skills or know someone who does.

PayPal      

PayPal is one of the most well-established payment providers around. Formerly owned by eBay, the company now handles transactions for a significant portion of the internet. It integrates well with Bigcommerce, Shopify, Wix, WordPress and Magento.

Pros: PayPal has a one-click checkout that works quickly. There are online payment buttons and solutions for merchants and point of sale solutions. PayPal also provides debit cards for purchasing business goods and services with your revenue.

Cons: Transaction fees can add up quickly. They would have received a perfect 5/5 if not for those high fees.

eCommerce Shipping Tools

Next up on our eCommerce business guide is how to ship your products to your customers. We have covered the platform and the payments, now you need to get the goods to your customers. If you don't get shipping right, you're really going to struggle to get your store off the ground.

AfterShip      

AfterShip is a free Shopify app that auto tracks shipments from 647 couriers across the world. The app provides full tracking, proactive progress updates and other neat tools for frictionless trade.

Pros: You can also display the tracking results in your store. They have options for tracking shipments in the US, Canada, Europe, Asia, Australia & New Zealand, Latin America, the Middle East, and other locations throughout the world.

AfterShip also has a premium option to notify customers when products are in transit, out for delivery, or delivered.

Cons: There could be a bit more functionality on the admin panel.

ShipWorks      

ShipWorks is a premium Magento shipping option that works with all of the major carriers. You can also print shipping labels for companies that need it.

Pros: The platform saves you time from dealing with all of the hassles of shipping.

Cons: Only supports US vendors so not useful overseas.

Ordoro      

Ordoro is a shipping app that works with USPS, UPS FedEx, DHL or Amazon Seller Fulfilled Prime. This app provides the best shipping rates in the industry.

Pros: You can also create printing labels for all the different shipping carriers. Instead of doing this individually, having a system in place to do it bulk can save a lot of time.

Cons: They have many added expenses like USPS integration. You cannot delete orders once they are synced which can be a pain.

Analytics

Analytics are the tools we use to see how well our eCommerce business is performing. Where we can see what stock performs well, what doesn’t perform so well, how our marketing is performing and all that good stuff. It’s a time-consuming process but essential to the success of your online store.

SavvyCube      

SavvyCube is an eCommerce analytics plugin for Magento stores. It enables you to track your buyers, loyal customers and your biggest client refund offenders among other things.

Pros: SavvyCube compares your sales on a granular level to determine how to improve your traffic, sales and repeat buys. You can also assess profitability of the business and of product lines, identify top customers and where are coming from.

Cons:  Could add some additional personal preferences to the analytics.

Google Analytics      

Google Analytics is a full website analytics suite to help you analyze the web traffic to your site. Furthermore, you have A/B testing to increase the efficiency of the products you sell online.

Pros: Evaluate the insights from customers such as time on site, product landing pages and bounce rate to improve your conversion rate, as well as track the traffic to your site. You also have a number of other enterprise-level tools with Google Webmaster, like Structured Data Testing and Google Merchant Center.

Cons: Services divided up by different platforms which can make it difficult to use and to integrate stats. There is a lot to learn and you may even need classes to fully understand how to use it.

Accounting for eCommerce

Ecommerce businesses produce a lot of transactions that will need to be recorded for taxation and budgeting purposes. Accounting software is designed to handle as much as possible to leave you time to run your online store.

Accounting tools can accomplish a range of different tasks including:

• Inventory management - Ensure you have enough inventory and can fulfil orders fast enough to meet client demand.
• Merchant integration - The accounting software needs to integrate with the payment, shipping and product management software.
• CRM -  Accounting and CRM working in tandem allows you complete tracking ability of your clients and every aspect of your store.
• Estimates - If you have any estimates for your business, you can run them through your accounting software.
• Budgeting - Verify that your income and expenses match on a profit and loss statement. Otherwise, you will have no way to know whether your business is on track financially.
• Automated invoicing - Reduce your paperwork and time spent doing payment collections. This can be a tedious process, and automation provides your business with continual income.
• Payroll - Keep on top of all employees' and contractors’ pay. Additionally, you need accounting software to stay on top of tax regulations and local laws.
• Tax preparation - Ecommerce has a lot of tax preparation from sales and income tax to going through a large list of transactions. Make sure every transaction is listed properly.

Here are two accounting tools that can help you accomplish your goals.

QuickBooks      

QuickBooks allows you to manage all of your income and expenses through a straightforward dashboard. It’s a global platform that caters to small businesses up to enterprise organisations. It could be ideal for eCommerce businesses too.

Pros: They have several apps that help you connect QuickBooks to platforms like eCommerce, CRM, payment processors, billing & invoicing, and shipping.

Cons: Sometimes bulky to go through transactions and mistakes and duplicates can often be found.

FreshBooks

FreshBooks is similar to QuickBooks in that it’s a cloud platform that can take care of a multitude of accounting tasks to help manage your eCommerce business.

Pros: It is very easy to use and integrates with most eCommerce platforms. It is constantly updated and includes a simple pricing structure.

Cons: Inventory tracking isn’t the best and it can only cope with single-entry accounting.

SEO for online shopping

An online business will only be successful if it can attract customers. For that to happen, those customers have to know you exist and know where to find you. SEO is part of the solution to that. Appearing high on the search engine results page can be the difference between success or failure of your eCommerce business.

To help with SEO, you could use one or more of the following tools:

SEOPressPress      

SEOPress is a WordPress plugin that helps optimize your online store for search engine traffic. Yoast has a full set of tools from keyword ranking tools to XML sitemaps to page analysis for companies looking to seriously increase their search traffic.

Pros: SEOPress is growing in popularity as one of the top SEO plugins for WordPress. It is used by tens of thousands of websites around the world to improve their search traffic. Check out our full review here.

Cons: It is fairly new to the WordPress SEO plugin and has not yet caught up with the big boys in terms of popularity. 

Google Keyword Planner      

The Google AdWords tool is the basis for most third party programs’ keyword research data. It’s an involved tool that you will need to spend a lot of time with to fully get to grips with but delivers the capability necessary for online stores.

Pros: The Keyword Planner provides keyword ideas, as well as estimates on the number of visits per month for every keyword. You can also use this for paid Google AdWords campaigns.

Cons: Google has a tendency of shutting down useful keyword functions for marketers which makes a user a bit wary when using the Keyword Planner. It also has quite a learning curve.

Ahrefs      

Ahrefs helps you track trending and similar websites to determine their search engine strategy. The pro version even helps you break down your competitors’ website traffic statistics. Competitor analysis is a useful SEO strategy and this tool helps with that.

Pros: Ahrefs works with several different platforms and browsers to provide the best strategy for people to use to find the data you need from your competition.

Cons: There is only a 7-day free trial The plans have relatively high price tags that take them out of reach for most small businesses.

eCommerce and Social Media

Social media is a vital part of marketing for any business including online stores. There are no other tools that can reach so many people in such a short time. Any eCommerce business of any shape or size needs to embrace social media in order to succeed.

Buffer      

Buffer is a social media management tool that helps you manage multiple networks. Schedule posts for your articles across social media with ease, monitor posts and comments and a whole lot more.

Pros: You can schedule posts for Facebook, Twitter, Google+, LinkedIn, and Pinterest. The pro version allows 200 scheduled posts in your queue at once compared to 10 posts for free users.

<Cons: It would be nice if they had more bulk schduling features for non-content posts.

Hootsuite      

Hootsuite is another social media tool that helps you schedule bulk social media updates. Additionally, you can manage up to 100 social profiles community management through Hootsuite.

Pros: You can use Hootsuite also to listen and track various social media conversations to see what is trending in your industry. Hootsuite also provides users with in-depth analytics to help you track how well your social media campaigns are going.

The platform integrates with over 80 different applications like Instagram, YouTube, and Reddit, as well as traditional social networks like Facebook, Twitter, LinkedIn and Google.

Cons: Can be an extremely confusing platform to use. The UI is simple in some places and extremely complex in others. For example, adding accounts with a team is much harder than it should be. They still have not figured out how to schedule images onto social networks.

Email tools for eCommerce

Email is still a powerful outreach tool for any business, including online stores. Effectively managing opt-in lists, email lists, marketing mails, GDPR compliance and the other elements of email marketing takes time. These tools help with all that.

Drip 

Drip is the only email marketing platform to provide automated email marketing tools, drip campaigns, landing pages and funnels through the merging of Drip with LeadPages

Pros: Drip Campaigns are without a doubt the most effective ways of creating a great relationship with a visitor and converting them to a loyal customer of your brand. Drip allows you to send different emails based on what actions a user has taken so far through the complex building of user journey workflows

Like AWeber they also have a solid email template creator, so you can create responsive emails that work on any device.

Cons: All-in-one systems like Drip can get a bit pricey as the size of your email list grows.

AWeber      

Email marketing automation software platform to send out marketing emails to different lists. AWeber makes it easy to segment your email marketing strategy. Break down users into different email specific segments based on their response to your emails.

Pros: You can set up an autoresponder sequence that delivers emails to new subscribers on a specific schedule. AWeber also has customizable email templates to increase your conversion and deliverability rate.

Cons: It would be nice to be able to send out individual emails to prospective clients to entice them to buy.

MailChimp      

MailChimp is a leading email marketing platform. Their dynamic email marketing software enables businesses to use MailChimp to scale their email marketing efforts as they grow larger.

Pros: MailChimp is famous for their offer to allow marketers 2,000 free email accounts and 12,000 free emails.

Cons: Affiliate marketing is a legitimate business practice and their policy on affiliates is frustrating. Plus, it can become expensive as you need to send more emails.

InfusionSoft      

InfusionSoft is part email marketing tool, part CRM. This enterprise-level platform is ideally for experienced email marketers and is something to work up to rather than start with.

Pros: You can do everything on Infusionsoft, from managing your client tasks throughout the day to automated follow-up email tailored to specific actions for clients and prospects to lead scoring to online storefront integration.

Cons: Expensive and requires a lot of training to understand the system. The only email marketing system where they encourage you to spend another $1-2K with a consultant to set up an email list.

Frequently Asked Questions

How do I start an eCommerce business?

Starting an eCommerce business has become relatively easy today. There are plenty of platforms to help you get started and most times you don't have have to keep any stock thanks to the concept of fulfillment warehouses. Dropshipping is the easiest and least expensive way of creating an eCommerce business today. 

How much does it cost to start an eCommerce business?

To start a simple eCommerce business such as a dropshipping business, costs from a few hundred to a few thousand dollars. Getting a dropshipping store up and running typically costs a few hundred dollars. As you add more services and platforms to help you out, your costs could increase, but a few thousand dollars is more than enough to get you going.

Is eCommerce a good business?

Yes, eCommerce is a good business and is the way to go. More and more spending and shopping is shifting to eCommerce from brick and mortar stores. The faster you start an eCommerce business, the quicker you can get on this gravy train.

How do I start an eCommerce business with no money?

You can start an eCommerce business with no money if you opt to use a platform such as Shopify and dropshipping. A cheap plan on Shopify costs a few tens of dollars per month and you won't have any additional upfront costs. You'll have to find innovative ways of doing marketing, which is typically the most expensive part of doing drop business.

Final Thoughts

As you can see, eCommerce sites require a lot of time to get off the ground. Many functions of running a business can be time-consuming and require a lot of effort. That is why you need the right tools and resources to ensure your business can do just that. 

By automating as many business functions as possible, you free up your time to grow your business and delight your customers. Two things that should ensure the success of your eCommerce business.

Hopefully, the information included within our ultimate eCommerce business guide has provided food for thought or other options you hadn’t yet considered. If you have any feedback on our guide, let us know in the comments section below. We are always happy to hear what you have to say!

About the Author

Author: David AttardWebsite: https://www.linkedin.com/in/dattard/Email: david@collectiveray.com

David has been working in or around the online / digital industry for the last 18 years. He has vast experience in the software and web design industries using WordPress, Joomla and niches surrounding them. As a digital consultant, his focus is on helping businesses get a competitive advantage using a combination of their website and digital platforms available today.