A Beginner’s Guide to Building a Profitable Ecommerce Business

A Beginner’s Guide to Building a Profitable Ecommerce Business – here are some tips for beginning entrepreneurs to build a profitable eCommerce Business.

Steve Tan

Guest Writer

Founder of eCommerce Elites Mastermind

6 min read

Opinions expressed by Entrepreneur contributors are their own.

My number one piece of advice to all beginning ecommerce entrepreneurs is to prioritize profitability first. It’s great to have revenue, but if your expenses are continually putting your business into the red zone, it’s time to rethink your business model. Twenty-nine percent of small businesses go out of business because they run out of cash, and despite the significance of this statistic, less than half of small businesses are profitable and nearly 30 percent are actually losing money.

Related: Google, Facebook and Amazon Are the Only Winners in Ecommerce

I’ve run an ecommerce business for over 12 years, and in hindsight, I see that my prioritization of profitability has sustained my business through inevitable low points. There’s a mythical line of thinking that businesses can’t always be profitable from the start, but they can be — even if they’re bootstrapped. I’ve learned plenty about how to lay the groundwork for a profitable ecommerce business in my experience, and here are my top tips for beginning entrepreneurs.

1. Orient your product in what your target customer most wants

First, you have to guarantee that you have a product or service that your customer wants, or else you won’t have any profits coming in at all. A story I like to tell along these lines is about a failed business endeavor that my brother and I tried. We noticed that black face masks were gaining tremendous popularity, so we launched a line of gold face masks, marketing them as more luxurious than the black ones. They were a flop because we didn’t actually understand what our target customer wanted.

Related: 12 Steps to Building a Successful Ecommerce Site in 12 Months

Marketing thought leader Peter Drucker once said that “the aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.” No entrepreneur can know with complete certainty that a product or service will sell itself until they conduct market research. Talk with your target customers, whether via social media or by organizing a Facebook group. Qualitative market research can be more helpful than quantitative, because the very definition means seeking to understand what the customer thinks. And, as we know, a customer’s buying behaviors are motivated by these thoughts and feelings.

2. Invest time in learning marketing

There isn’t an entrepreneur who just knows how to be profitable right off the bat. Even if they’ve stumbled onto a new technology or product that does fly off the shelves with minimal efforts, establishing profitability over the long term and beginning the process of scaling requires that you learn from people who have done it before. I believe that a major reason I succeeded was because I prioritized learning marketing to the fullest extent. I rank marketing first out of all skill sets you can learn, because marketing really does make or break your business. To learn, I took as many online courses as I could find, where I learned about building profitable businesses, how to succeed in the ecommerce industry and how to market. Courses are a popular alternative to hiring a business coach, because you can learn from many different perspectives. Courses are also usually less expensive than investing in a coach.

Related: Ecommerce Analytics: 4 Metrics That Are Often Overlooked

Regardless, it’s important to be willing to invest in yourself upfront. Seventy-seven percent of small business owners first relied on their personal savings when they got started. When I was just starting out, I found ways to make ends meet as I invested in marketing courses. These are more worthwhile than other investments if they’re credible courses that have helped others, because investing in your own knowledge helps you run your business more efficiently.

3. Partner with someone and hold each other accountable

In the trenches of building a business, it can be challenging to stay the course and continue to work hard after working overtime  — especially if there are few wins along the way. I personally have felt grateful to work on my company with my brother. We hold each other accountable and always have each other’s backs in business, which is exactly what you should seek in a co-founder.

Related: This Successful Ecommerce Entrepreneur Explains How to Tell The Difference Between Urgent and Important

Research also shows that companies with at least two founders are less likely to scale too quickly. I’ve learned that having someone in the trenches with me helps me slow down, discuss strategy in depth, have a sounding board for new ideas and have someone who I don’t want to let down. It helps me show up every day, which has an undeniable impact on a business’s bottom line.

4. Stay lean

Prioritize profit by keeping expenditures low and abide by the lean startup model. It can initially be exciting to bring in money, so you might think your company can now afford expensive business meals or to pay you and your business partner a salary from the start. However, one of the most expensive startup costs is payroll. Until it’s absolutely necessary, consider putting as much money as you can back into the business.

This is also useful advice if your long-term goal is to raise money. Investors want to see how you bootstrapped and saved cash while you were in the building process. Consider how you can offer trades and build relationships to eliminate costs here and there, and remember that every cent counts.

By keeping costs low and focusing on marketing a product or service that customers have said they truly want and need, you have the basis for a profitable ecommerce business. Aim to keep the gap between revenue and expenses as large as possible while also knowing when to invest in yourself through online courses. Learning how to be profitable is the most important lesson you can learn as an entrepreneur.

Related: 5 Ecommerce Secrets the ‘Experts’ Aren’t Willing to Share With You

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50 Ecommerce Business Ideas

50 Ecommerce Business Ideas

If you’re interested in exploring online business ideas, ecommerce can be the perfect way to go. Selling online looks a bit different for everyone. With so many different platforms, products and business models to choose from, there’s no shortage of ecommerce business ideas out there. More and more people are buying products online, from everyday…

If you’re interested in exploring online business ideas, ecommerce can be the perfect way to go. Selling online looks a bit different for everyone. With so many different platforms, products and business models to choose from, there’s no shortage of ecommerce business ideas out there.

More and more people are buying products online, from everyday items to specialized goods. Get into the action with these 50 ecommerce business ideas.

Ecommerce Business Ideas

Reselling Business Ideas

General Online Reseller

With online marketplaces like Amazon, it is possible to build a successful ecommerce business without a specific niche. You can simply purchase products at discounted price or wholesale rates and then resell them to customers browsing on those platforms.

Clothing Reseller

If you want to choose a niche for re-sold goods, apparel and accessories are always popular with online shoppers.

Home Goods Reseller

Home goods, ranging from decor to kitchen items, can also make for a very successful online shop.

Toy Reseller

Kids’ items are very popular with online shoppers. Purchase toys from wholesalers or discount shops to sell to online buyers.

Book Reseller

Book shops are popular both online and off. You can sell new or used books and even consider a niche like college books or comic books.

Refurbished Tech Seller

Tech items like smartphones and laptops are always in demand. With the proper skills and supplies, you can refurbish old items to sell them at a higher price.

Handmade and Vintage Ecommerce Ideas

Handmade Jewelry Seller

If you’re interested in selling items that you actually make by hand, jewelry is one of the biggest categories to consider.

Paper Goods Seller

There are tons of paper goods you can design and sell, from invitations to planners.

Wedding Accessories Seller

The wedding industry is huge online. You can make a variety of items, from hair accessories to photo props. Or you can source items from other retailers to sell online.

Handmade Toy Seller

These products tend to be popular with parents who want to make sure the toys their kids play with are safe and made locally.

Handmade Pet Products Seller

Similarly, you can make a selection of products meant for pets, like cat toys or dog bandanas.

Handmade Clothing Seller

Instead of sourcing clothing from other retailers, you can actually design and sew your own clothing and accessories to sell.

Vintage Clothing Seller

You could also purchase a selection of vintage clothing from shops or individuals to create a curated shopping experience.

Vintage Home Goods Seller

Similarly, vintage home goods are popular on platforms like Etsy.

Upcycled Furniture Seller

If you’re able to paint, stain and reupholster pieces, you could purchase furniture that’s in a state of disrepair and then fix them up before selling them at a higher rate.

Collectibles Seller

Collectibles like coins, stamps and baseball cards are always in demand. You can open your own online store or use platforms like eBay.

Original Art Seller

Artists, create your own website or use platforms like Etsy or Artfinder to sell your original pieces.

Custom Artwork Seller

You can also offer custom pieces where people commission portraits or specific items they want drawn or painted by reaching out to you online.

Art Print Seller

If you want to add an income stream as an artist or just offer some more affordable items, turn your original pieces into prints so you can sell multiple copies.

Print On Demand Business Ideas

T-Shirt Seller

Print on demand platforms like RedBubble and CafePress give designers a way to add specific images to t-shirts. Then they handle the printing and shipping. So you just need to create and list items.

Home Goods Seller

Similarly, you can have your items printed on a variety of home items, ranging from mugs to shower curtains.

B2B Ecommerce Ideas

Office Supplies Seller

If you’re interested B2B online business ideas, you could open a shop that sells office supplies like printers, paper and writing utensils.

Restaurant Supplies Seller

You could also focus on a specific type of business like restaurants, selling uniforms, receipt books or commercial grade cooking gear.

Workwear Seller

You might even focus on selling apparel that’s specifically for businesses or employees, like scrubs for medical workers or construction apparel.

Shipping Supplies Seller

Since so many other businesses are selling products online or sending items to partners, shipping supplies like boxes and envelopes are in high demand.

Dropshipping Business Ideas

Home Goods Dropshipper

If you want to sell home products but don’t want to actually handle items you could open up an online store and then use a dropshipping service to handle the processing.

Tech Dropshipper

Similarly, you can partner with companies that offer tech gadgets and create an online store to reach customers.

Clothing Dropshipper

For those more interested in fashion, dropshipping is yet another method you can use to reach customers without a ton of work on your end.

Food Products Dropshipper

Some dropshipping companies even have the bandwidth to handle food products like baking supplies or coffee accessories.

Toy Dropshipper

For a more family based business, work with a dropshipper that will process and deliver toys to your online customers.

Sporting Goods Dropshipper

There are a ton of sporting goods companies out there that you can partner with in order to sell products using the dropshipping method.

Automotive Supplies Dropshipper

Similarly, you can source and sell automotive supplies like tools or engine parts.

Beauty Products Dropshipper

There are plenty of products within the beauty industry that you can easily sell online, from skin and hair care items to cosmetics.

Subscription Box Ideas

Beauty Subscription Box

Beauty products also make for the perfect items for a monthly subscription box service where you ship a selection of small items on a recurring basis.

Snack Subscription Box

You might even enter this arena with a subscription box that offers various healthy snacks each month.

Book Subscription Box

Books can also work in a subscription model. Find new titles that fit into a specific genre and send them to customers each month.

Cleaning Supplies Subscription Box

You could also focus on craft supplies to give creatives a great way to try out new things.

Other Ecommerce Business Ideas

Digital Print Seller

If you don’t want to ship physical products, you could offer digital items, like art prints that customers can print themselves.

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Digital Document Seller

For more of a B2B business, you can sell digital documents like spreadsheet templates or examples of contracts.

Online Health and Wellness Shop

Health and wellness is a huge niche right now. If you want to open your own online store that offers a variety of items, from workout gear to supplements.

Online Hobby Shop

Another online store idea with tons of variety, you can offer everything from model car kits to trading card games.

Online Gift Shop

Gift shops also offer a ton of different items. You can focus on artisan goods or gifts that fall into a particular category, like those for baby or wedding showers.

Online Bakery

If you love baking but don’t want to open a full service bakery, create the same variety of products and then ship them directly to customers.

Online Candy Shop

Candy also makes for a perfect ecommerce business idea, since it keeps fairly well and is small enough to ship easily.

Online Plant Shop

Plants can be a bit trickier to ship, but it is possible to open an online plant shop, especially if you focus on small items like air plants and succulents.

Online Art Supply Shop

For an online shop that supports creativity, open a business that offers items ranging from paintbrushes to easels.

Online Consignment Shop

The consignment business model is common in brick and mortar stores. But you can apply a similar concept online where you accept products from other individuals and then sell them online, giving them part of your earnings.

Gift Basket Service

Gift baskets are popular for holidays, birthdays and even corporate functions. In your online store, offer a variety of baskets that contain popular gift items like snacks or scented candles.

Mobile Shopping Experience

More and more shoppers are turning to their mobile devices to complete purchases. Take advantage of this by creating a mobile shopping app where people can purchase your items.

Online Marketplace

Online marketplaces like Amazon, eBay and Etsy give tons of opportunities to small retailers and individuals who want to reach buyers without setting up their own online store. You could provide a similar service to other sellers by choosing a niche and creating a unique shopping experience.

Image: Depositphotos.com

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