An ecommerce business can be your ticket to a steady income and even early retirement. It won’t happen overnight, but mastering the basics gives you the foundation for success.
Whether you’re starting from scratch or adding ecommerce to your existing online business, this is what you need to know.
Growing an Ecommerce Business from Zero
Let’s get something out of the way right now.
Building a successful ecommerce business isn’t going to happen right away. You’re playing the long game. Nobody gets rich (or stays rich) overnight in ecommerce—no matter what the companies selling ecommerce services might tell you.
Starting an ecommerce business from scratch can feel overwhelming. It helps to break things down into bite-size pieces.
Let’s start with the essentials you need to kick-start your ecommerce home—your website.
- A great domain name: This is the name people will type in a search bar (or click on in search results) to get to your ecommerce site. It should reflect your brand and be easy for people to remember. Finding and securing your domain name is one of the first things you should do.
- A web hosting provider: This is where your site will live online. If you’re not yet tech savvy, choose a hosting service that specializes in ecommerce. They usually offer drag-and-drop site builders and hosting services specifically for creating and running an ecommerce site.
- A well-designed website: Your site should be user-friendly and mobile-responsive. It also should reflect your brand’s voice and identity. You can DIY your site using ecommerce platforms like Shopify, Wix, Squarespace or BigCommerce, or hire a designer to do it for you.
- An SSL certificate: Your site needs to have an SSL certificate to encrypt data and protect information during customer transactions. Sometimes your web host will include this as part of your hosting package. If they don’t—or charge extra for it—you need to purchase and install one.
- A payment gateway: You must provide a safe and secure way for customers to pay on your site. Payment processors, like PayPal, Stripe, and Square are some of the ways to do that. Be sure to pick a solution that integrates with the hosting provider you choose.
- A way to fulfill orders: Whether you will send out orders yourself from your kitchen table, use a dropshipper, or ecommerce fulfillment service, you need a way to get items to customers after a sale. If using a third-party, make sure it integrates with your ecommerce platform.
- Products to sell: You want to offer things people want to buy (that requires market research), but how you describe them on your site is equally important. If you aren’t a wordsmith yourself, hire a copywriter or use an AI tool to get started.
These are just the bare bones to get your site up and running. There are dozens more tools and strategies to implement that will help you accelerate growth and avoid the common pitfalls of running an ecommerce business. You can add those later.
Right now, when you’re just starting out, focus on getting your ecommerce site live.
Getting More Traffic to An Ecommerce Business
You can design the most amazing ecommerce storefront, but if nobody visits your site, it’s all for nothing. To make money, you need site visitors. The more site traffic you get, the more money you can make.
Here are some tried-and-true strategies for getting traffic to your ecommerce site.
SEO
You want your site to be optimized for search engines. This puts your site higher in search engine result pages (SERPs). To optimize, you start by doing keyword research. You need to find out what people are looking for online, then refine that to those keywords that are relevant to your products. The next step is incorporating the most relevant keywords into your site content and meta tags.
There are lots of SEO tools out there that can make this research a lot easier. Some are paid, some are free. All of them can help you.
Social Media Marketing
Social channels like Facebook, Instagram, and TikTok are a gold mine for driving traffic to your ecommerce website. But how?
It starts by claiming your business profile on each channel. Then you should include a link to your site in your profile bio.
But don’t stop there.
You need to populate your account with content that captures the attention of the people most likely to be interested in your products. Posts, reels, stories—all are things you should be sharing regularly on social media. Run contests and giveaways. Use sponsored posts and advertising. Tap into influencers and other trends that are shaping the future of ecommerce on social media.
Content Marketing
A great way to get visitors to your site is to regularly publish valuable and engaging content like blog posts, case studies, articles, and videos. It should be optimized for SEO. Search engines value fresh content and tend to ignore sites that aren’t updated often.
Great content marketing serves double duty. It keeps your site fresh for search engines. It also gives you material you can crosspost on social channels and in email marketing.
Email Marketing
Building an email list of customers interested in your products is another great traffic driver for your site. Use newsletters to stay in touch with subscribers and keep your brand front-of-mind. You can also use email to send out periodic messages about time-sensitive specials or promotions.
But how do you get email subscribers?
Create an email sign-up form and include it on your website. Grow your list with conversion funnels. As your email list gets larger, you can segment it and send out targeted content to different subscribers, based on their interests and demographics. Be sure to use compelling subject lines and calls to action (CTAs) to get click-throughs to your site.
Paid Ads
You can use pay-per-click services on platforms like Google Ads to get your ecommerce site in front of the people most likely to be interested. These paid ads will appear in search results and on relevant websites. The key is to design eye-catching ads that speak to your target audience.
You can also run ads on social media channels. Facebook Ads and Instagram Ads are two popular options. There are lots of strategies to get the most from advertising on social media, including optimizing results on Instagram story ads. Don’t be afraid to experiment to see which ads resonate with your customers.
Increasing Ecommerce Conversions to Drive Growth
Getting traffic to your site is only half the battle. You need those visitors to convert to customers in order to make money.
Optimize your website
There are two major areas you should be focusing on when it comes to optimization. If one or both of these are subpar, conversion rates will suffer.
Design and UX
Your site should be designed with the user in mind. Easy-to-find CTAs, simple navigation laid out in a familiar way. Clean design that skips the clutter.
Incorporate trust signals to build trust, enhance your brand reputation, and eliminate any concerns about the security of personal information. Prominently display customer reviews, security badges, and guarantees.
Speed and performance
You want your site to load as fast as possible. Even a delay of a few milliseconds can negatively impact conversion rates.
Some of this, like the person’s own internet connection speed, is out of your control. But there are things you can directly manage.
- Optimize images
- Use a content delivery network (CDN)
- Resolve site errors as soon as you detect them
- Choose a reliable ecommerce platform
Streamline checkout
Customers who get frustrated with your checkout process are going to abandon that cart in a blink of an eye. Obviously this doesn’t help conversion rates.
The ideal checkout process should incorporate all of these things:
- Guest checkout, so customers don’t have to create an account to complete their purchase
- Multiple payment options to meet customer preferences
- Address auto-complete to reduce the keystrokes a customer must make
- A “save customer info” button to streamline account creation
- Progress indicator, if your checkout process requires more than one screen
Test and refine
All these site optimization strategies are not a one-and-done thing. You have to continuously monitor performance and make changes as needed.
Conduct A/B tests, use heatmaps, try out different CTAs. There are endless options for testing site performance. The goal is to use these tools and strategies to see what influences your conversion rates.
P&L: The Secret To Growing Your Ecommerce Business
So you’re making money with your ecommerce site. Congrats!
Now you need to know how to understand and manage your income and expenses.
This starts with solid financial statements. Your financials, especially the Profit & Loss (P&L) are your roadmap to continued growth.
The typical ecommerce P&L includes these elements:
- Total revenue: this includes product sales on the website, across social channels, and any other sales channels, subscription and membership services, and income from third-party sources (e.g. affiliate marketing).
- Cost of goods sold (COGS): this includes your inventory purchase price and shipping/freight costs to get it to you, plus any labor costs if your products require assembly, packaging, or customization.
- Gross profit: Subtract COGS from total revenue to get this number.
- Operating expenses: these are all the expenses for things you need to run your business, like marketing/advertising, technology subscriptions and fees, shipping/fulfillment costs, salaries, rent, office supplies, etc.
- Operating income (or loss): Subtract operating expenses from gross profit
- Other income and expenses: this includes any income or expenses not directly related to your business activity, like interest earned on investments or interest paid on loans.
- Net income (or loss): add or subtract other income and expenses from your operating income (or loss) number. This is how your business performed during the timeframe covered by the P&L (e.g., quarterly, annual).
Straightforward enough, right? Mostly.
Ecommerce businesses face a few special challenges when it comes to building a realistic P&L.
- Cost calculations – ecommerce costs include the usual COGS, but also shipping, storage, returns, and other factors that hit your bottom line. You also have to track expenses related to the platforms where you sell.
- Revenue calculations – you’re selling across different platforms and channels and they each have their own rules about revenue and ways to report it to you. It can get complicated to correctly categorize all this data or make revenue projections.
- International transactions – if you’re selling across borders, you have concerns like currency fluctuations, taxes, and tariffs that add complexity to all financial reporting.
