business plan for a ecommerce website

How to Write an Ecommerce Business Plan [Examples & Template]

Published: April 03, 2024

If you have a promising idea for an online e-commerce business , it’s important to create an e-commerce business plan to ensure your vision has enough stock to be profitable.

Having a business plan for your online store will help you define your target market, establish your monthly and quarterly sales goals, and increase the likelihood of long-term e-commerce success.

In this post, we’ll go over an online store business plan and how you can create one for your e-commerce startup. Let’s get started.

What is an e-commerce business plan?

An e-commerce business plan is a document that outlines your business and its goals, analyzes your industry and competitors, and identifies the resources needed to execute your plan. It also lists the e-commerce retailers you’ll use to distribute your products and the marketing strategies you’ll use to drive sales.

Whether a company operates as a startup or has years of operations and growth under its belt, an e-commerce business plan is essential for evaluating a business and determining areas of improvement.

An e-commerce business plan is essential, with increasing numbers of shoppers conducting business online. It's estimated this number has reached over 2 billion . An e-commerce business plan keeps you organized and is useful when seeking investors who need to understand your company.

So, let’s dive into some examples of e-commerce business plans and what goes into writing one using our free template .

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How to Make an Ecommerce Business Plan for Your Startup

Darren DeMatas

June 5, 2024

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In addition to receiving commissions generated through affiliate marketing, we are able to fund our independent research and reviews at no extra cost to our readers. Learn more.

So you’ve decided that you want to quit your day job and start your very own ecommerce empire. That’s great!

But before you become the next Jeff Bezos  (and definitely before you quit your job!), it’s worth spending some time thinking about a business plan. In this article, we’ll dive into the key elements of an ecommerce business plan, which is very different than writing traditional business plans.

Why You Should Create a Business Plan

We know that starting an ecommerce business is exciting, and it can be tempting to jump right in without constructing a business plan. READ: PLEASE DON’T DO THIS.

If you haven’t put your ideas, questions and concerns on paper, then you haven’t given your business model enough thought .

Taking the time to write a business plan might seem like a lot of work, but it can save you a lot of time and money in the long run by better preparing you for potential challenges and opportunities that you’ll face as a first-time entrepreneur. Think of it as a roadmap for your new business venture.

It’s exciting to start your own ecommerce business. However, you want to be well prepared and not jump into anything without having a solid, foolproof ecommerce business plan in place.

After all, you wouldn’t jump out of a plane without a parachute, so why start a business without a safety device in place? That safety device is your business plan.

The business plan is the brainstorming process that ensures your concept and goals are realistic.

This is more than just mental notes. True business plans take your ideas , questions, and concerns and put those in writing.

As you start creating your business plan, you’ll soon understand that it’s more than a single piece of paper with handwritten details on it. It’s a clearly constructed format of how your business will be created, how it will operate, and what you hope the future holds in terms of a successful ecommerce business.

When you write your business plan, be sure to have a target audience in mind. Are you going to look for investors or put a Kickstarter campaign into motion and use this as your descriptive platform? If so, make sure that your business plan contains everything the audience would want to know about your business (and more!). Many traditional funding solutions require a business plan in order to give you capital. However, there are alternative solutions, such as  Payability  that specialize in ecommerce and don’t require credit checks, a business plan, or any complicated paperwork. They can also get you approved in as little as 24 hours.

When your business plan is completed, you should have achieved the following goals:

• Knowledge:  A greater sense of knowledge of the business aspects.
• Resources:  The resources you’re going to need to make your business successful, such as partners, money, employees, etc.
• Road Map: Have clear set goals to take you from the very beginning of your business and onward.
• Viability: In other words, is your business possible? Will you have enough profit margins to keep the doors open long-term?

Now that you know why you should create a business plan, it’s time to move on to how you can create your business plan and get started putting your ecommerce business into motion.

How to Start an Ecommerce Business Plan

At the very beginning of the planning stages, it’s a good idea to develop a framework for your business model. This business model will continue to evolve as you create each section of your ecommerce business plan, so don’t strive for a perfect completed plan on the first try. You will be making tweaks to the plan of certain steps along the way.

There are many ways to sell products online and different business models  to pursue. Research and learn from successful ecommerce business examples in the market. The exact business model you follow will be one that makes the most sense with your resources, skills, and interests.

In order to create the best online business plan with your product in mind, you need to figure out the following things:

What are you selling?

The first step to creating an online business is to learn the absolute basics of what you can sell.

• Physical products: Clothing , shoes, home goods
• Digital products: Software as a Service products, ecourses, ebooks
• Services: Consulting services, home cleaning

Who are you selling to?

• Business-to-Business (B2B): You are selling to organizations, corporations, and non-profits rather than individual customers
• Business to Consumer (B2C): This means you are selling to individual consumers rather than businesses
• Marketplace: You are acting as a middleman by bringing businesses and (B2B or B2C) customers to one website.

How are you sourcing your product?

• Manufacture in-house: You make your product or service in-house
• Third-party manufacturer: You outsource the manufacturing of your product or service to a third-party manufacturer
• Dropship: You partner with a dropship manufacturer. Basically, this means that they make your product, package it and ship it directly to your customer while your company handles the entire customer relationship.
• Wholesale : You buy goods or services from other companies in bulk and re-sell those products on your online store

Additional References

• Entrepreneurship: Business & Marketing Plans
• Small Business and Entrepreneurship
• Entrepreneurship Resources
• Business Plan Resources

Executive Summary

The executive summary will be written according to your goals, and it’s recommended that this is done at the very end of your business plan completion. This will ensure that you include all of the important factors about your business and present your ideas in a concise and complete way.

Some of the features you’ll include in the executive summary include information showing that you’ve done your research, you have concrete sales forecasts, and the main details about your brand.

Business Model

When you’re figuring out your business model, you have to consider four different areas:

• Monetization strategy
• Product/industry
• Target market
• Sales channel

Monetization Strategy

The monetization strategy delves into the methods you are going to use to sell your products.

This strategy will look at different product monetization methods, including white label, private label , affiliate marketing, wholesale, dropshipping, and even selling ads.

Product/Industry

The product industry section is where you summarize your main niche.

For example, “Vegan Skincare Products.”

Target Market

In the target market section, you will write a sentence or so on who your target market, or ideal customer, is in the community.

If you’re selling vegan skincare products, your target customers might be women who embrace the vegan lifestyle and use natural skincare products in their daily beauty regimen.

Sales Channel

The sales channel refers to where you’re going to sell your products.

For example, you might be selling your products on your own website, and this should be entered in this section.

Business Overview

This next section covers your company overview.

This section of your business plan will cover various features of your company, including the following:

• Company type
• Domain name
• Value proposition
• Brand traits

The brand name section lists your business name or brand name.

This is an extremely important aspect of your business plan as it’s what will set the tone for everything that follows.

Pick a brand name that’s simple yet unique and is something that can be used in a wordplay manner, if desired, but not pun-worthy.

Company Type

The company is how your business operates. For example, you might label your business as an LLC , S-corporation, sole proprietor, or some other type of business organization.

The best way to determine how you should categorize your company is to speak to your accountant. There are various tax and legal aspects to forming your business in a certain way.

Speak with the professionals in the company and corporation formation field to determine how to label your company and which company type best benefits your business in a variety of ways.

Domain Name

This section is where you list your domain name.

Choose a domain name that is memorable and embraces the overall traits and features of your business.

And, when choosing a domain name, be sure to think of SEO aspects when doing so. You’ll find out just how much all of these things tie together and ensure a frequently-visited website is the end result.

Keep in mind that with ecommerce, the domain name is just as important as the brand name. Maybe even more so!

Value Proposition

A value proposition is a short, crisp statement that will gauge how clear your idea is. Write this section as if you had one minute to explain your business to a potential investor or customer and then practice it over and over again.

The value proposition can be used on your ecommerce store as your company description.

Here’s a good example: Say you’re looking to start a hiking company called Atlas Hiking Co. which sells premium performance hiking shirts. A possible company description could be the following:

Atlas Hiking Co. is a lifestyle hiking company that produces high-performance hiking shirts for outdoor lovers. Our proprietary SPF40 fabric is one of the lightest fabrics on the market, providing mountain lovers with maximum comfort, both from a breathability and sun-protection standpoint. Our product is made in the U.S.A. and a portion of our profits are donated to preserve national parks around the country.

Pay special attention to all the sensory words !

The mission statement in your business plan is the “why” of it all.

For example, why you started the business, why you are selling the products you are selling, etc., can all be added to this section of your business plan.

You can make this portion as simple or detailed as you like. Just make sure to properly and clearly explain your business mission.

The vision part of the business plan is your “how” in the grand scheme of things. It is the dream you have for your company and the path you’re going to take to realize that dream.

When you write the vision portion of the business plan, think long-term. What are you hoping to achieve, not just in the near future but for the long haul of the life of your business?

Look into the future and plan out where you see your business in 5, 10, even 20 years from now.

This will help you construct the rest of your business plan if you know where you want your business to head, now and in the future.

Brand Traits

The brand traits section is a short section in your company overview.

Basically, in the brand traits section you’re going to want to list three to five words that describe your brand.

Think of your brand personality and describe it using a few separate powerful words.

The personnel section lists all individuals, including yourself, who will be involved in the daily operations of your business. You can create a separate section for a full operations plan or add that later.

Some business owners choose to handle all duties on their own or with a partner, while others will hire individuals to fill the following roles:

• CEO (usually the business owner)
• Management team
• Customer service/logistics
• PR/Social media specialist
• SEO manager
• Advertising manager

Competitive Market Analysis

Here’s a fact you can bank on: there has never been a successful e-commerce entrepreneur that didn’t understand his/her target market cold.

That’s why this section is one of the most important in the entire business plan. It will force you to understand the industry in which you operate, the overall industry analysis and outlook, the existing competition, and your target customer demographic.

Market Segment

The market segment portion of the business plan will help you to put your ideas down on paper, make them more focused, and get your team together.

This area will include your niche selection, target market, and competitive analysis.

Niche Selection

The niche section  provides an overview of your niche, why you selected it, whether there’s a micro niche included, and the type of niche you’ve chosen.

The purpose of this section is to crystalize the ideas that you have and make sure they are understandable and viable.

The target market section covers an overview of your target market plus describes your market segments.

Ask yourself who your  target customer  is (population size, age, geography, education, ethnicity, income level) and consider whether consumers are comfortable with buying your product category online.

When listing the target market information, make sure to mention your target audience size as this is important for ensuring that your audience will be adequately covered.

Competitive Analysis

With the competitive analysis portion of your market analysis, you want to list your market leader and direct and indirect competitors.

After you mention who these entities are, you need to list the characteristics of each one, such as domain name, business model, monthly traffic, and pricing range.

However, before you even get started in writing this section, you need to spend several hours researching your target market.

Here are some of the most efficient ways to research a particular market:

Industry reports

Google is your best friend. Look for any recent industry reports on your market of choice. This will give you a good sense of how much growth the industry is experiencing, why this growth is happening, and what are the largest customer segments. In our example of Atlas Hiking Co., we should research the outdoor apparel market.

Let’s say that through our research of the outdoor apparel industry, we discovered that there was a huge boom in youth hiking apparel. Perhaps parents were increasingly concerned about their kids’ exposure to UV rays while hiking, so they began to spend more money on their kids. We could use this valuable information to guide our business strategy.

There’s only so much you can read online. Go to a nearby store that sells similar products to yours and interview the store representative. The store rep has interacted with hundreds of interested customers, which can lead to thousands of valuable insights! It’s amazing how these insights can translate into a meaningful business opportunity.

Here’s an example:

If I were going into Billy’s Outdoor Store to research the outdoor apparel market, I would probably ask Billy the following:

• What are your best-selling products?
• What are your worst-selling products?
• Find products similar to yours and ask the representative his/her favorite features on products similar to yours.
• How much are customers generally willing to spend on these types of products?
• Do customers make repeat orders of any of these products?
• Do you get a lot of customers that are looking to buy last-minute hiking gear before they go on a hike?

Competition

Create an Excel spreadsheet of all of your competitors. In your spreadsheet, you should have the following columns:

• Competitor Name
• Price point
• Product Description
• Key Features (e.g., fabric, waterproof, slim fit, etc.)

What is the competition missing? Is there a gap in the offering? Where you can add some additional value?

After conducting the competitor analysis, Atlas Hiking Co. might find that the competition’s hiking shirts offer very few features at a low price point, but no one offers a luxury hiking shirt with additional features at a higher price point.

This is just an example of the types of insights one can gain from market research which can drastically alter your business model.

Keyword Research

By using Google’s keyword planner  and trends pages, you can get a good sense of how in demand your product is and whether it’s trending upward or downward. Google is great for a general idea, just don’t bank on it.

Some other keyword tools you can use for keyword research include Ahrefs, JungleScout, and Viral Launch. Check out this list  for more ideas.

Trade shows

Are there nearby trade shows that you can go to? Again, creating connections with other people in your industry is a surefire shortcut to countless hours of reading on the internet. Trade shows are also a great opportunity to talk to competitors, meet manufacturers, and better understand where things are heading in your industry.

Once you finish researching the relevant industry, you should summarize your findings by answering the following questions:

General Industry

• How big is the overall industry?
• How big is the specific sub-industry in which you intend to operate?
• Where has most of the historic growth in the market come from?
• Why is this the right time to enter this market?
• What are the sub-segments that are poised for future growth (e.g., youth apparel)?
• How crowded is the product category with competition?
• How is your competition distributing its product (online, retail, wholesale, etc.)?
• What’s missing from the competition’s product offering?

Products and Offers

So we know we want to sell hiking shirts, but how do you research specific products?

But for some of us, we’re not quite sure what we should sell. To succeed in online retail, you need a product that is trending upwards in a growing niche.

Different types of products

Some of the different types of products include the following:

• Convenience products: Frequent purchase products, little effort on buying
• Shopping products: Less frequently purchased in between purchases, little more effort and planning, shop around
• Specialty products: Strong brand preference and loyalty, will buy no matter what the price

The various types of niches include the following:

• Hobby niches
• Lifestyle niches
• Problem niches
• Weird/embarrassing niches

Existing products

Come up with detailed specifications for each product or service you intend to sell. If it’s a hiking shirt we’re selling, we would want to have:

• Detailed sketches of the shirt
• Fabric weight, materials, type
• Key features (e.g., pre-shrunk, water-proof, SPF 40)

Future product pipeline

What are other products that you have in the pipeline? Perhaps once you’ve successfully sold hiking shirts, you’re able to leverage your manufacturing relationships to provide hiking socks and shorts. Include that information in this section.

The products and services section will cover the various selling categories of items.

These product offerings will include the following:

• Core product

Each product group will have its own purpose in your sales catalog. For example, tripwire is the product that brings customers to your ecommerce store or online marketplaces  while the core product is your main seller.

Knowing what products you’ll include within each section allows you to have a firm grasp on what your main product will be and how the other types of products will work alongside your main product.

This section will also cover the search volume and Amazon pricing range.

You’ll need to calculate your true costs. You have to make sure you don’t overestimate your margins.

To tabulate your total true costs, you need to write down the costs in the following areas:

• Target price
• Supplier cost of the product
• Total cost per unit
• Net profit per unit
• Profit margin per unit

Once you complete the pricing portion, you’ll have everything on one sheet and readily accessible whenever you need it.

Marketing Plan and Operations

So, now you’ve concluded that you have a great business idea, and it’s in a growing market. That’s fantastic – but how are you going to drive traffic to your ecommerce website and get customers to buy it ? And how much can you afford to spend on your product?

Marketing  is everything. It’s important that your marketing efforts match your business model.

If you have a website and no marketing, your site won’t have any visitors. With no visitors, you will make no sales. Then how do you grow and sell your ecommerce business (if that’s your long-term goal)? Even with the best possible products, nobody will buy them if they aren’t directed to them in some way.

In order to come up with a marketing strategy, you need to first know your customer inside out. You should be able to answer such questions as:

• How old is your customer?
• Where does your customer live?
• What is the population of your customer base?
• What is their education level?
• What is their income level?
• What are your customer’s pain points?

With so many channels to reach your customer, which one is best for you?

Once we know pretty much everything there is to know about our target customer, we can shift focus to our marketing strategy. You want to choose marketing strategies that equal positive conversion rates. What channels should you use to grab the attention of your customer demographic? Some of the key marketing channels include:

Paid Marketing

• Pay-per-click – this online marketing typically involves using Google Shopping campaigns  and managing a product data feed.
• Affiliate sales networks – Allowing other blogs and websites to sell your product for a cut of the revenue. List the different affiliate sale networks that you plan to promote through.
• Facebook ads ⎯ Ads posted on Facebook to draw in buyers through social media means.
• Influencer marketing ⎯ Hiring industry influencers to get the word out about your product through their social media platforms and contacts.

Organic Marketing

• Social media (Facebook, Instagram , Pinterest, etc.): What is your strategy for social media, and where will you dedicate your attention?
• Search Engine Optimization : Create and promote awesome content so people find your product organically through search.
• Content marketing: Figure out how you’ll use content marketing in your business. Consider various article topics that will persuade your target audience to buy your products.
• Blogger networks: could be organic or paid through affiliate sale programs.
• Key bloggers: Develop a list of the key bloggers in your product category. For Atlas Hiking Co., this might be an influencer that blogs about the best hiking trails in America.

Finding the optimal mix of these advertising tools depends 100% on your customer segment as well as your product type. For example, a SaaS product targeting millennials will require an entirely different marketing strategy than an e-commerce physical product targeting baby boomers. Perhaps that should be a post on its own for another day!

How much should you spend to acquire a customer?

In order to understand this, we need first to discuss a concept known as customer lifetime value or LTV. In essence, this is a formula that helps you better understand how much an average customer will spend over time.

Here’s  a good read on how to calculate LTV.

It’s important to remember that for new businesses, you don’t have a lot of data on customer purchase habits so it’s a good idea to be more conservative with your assumptions in calculating LTV.

Let’s say, for Atlas Hiking Co., I determine that the average LTV per customer is $300. This means that over time, the average customer will spend $300. Let’s say, on average, if I receive $300 in revenue, $100 of that will translate to gross profit before I factor in my marketing costs (basically, I’m just subtracting the cost of making the shirts).

Knowing that my gross profit is $100 per shirt is a critical piece of information because it tells me that I can spend up to $100 in marketing to acquire a customer and still be profitable!

Some of the marketing options include social media marketing and content marketing.

Think about your business model and then line up your marketing budget. Your marketing budget may include the following items:

• Sales/branded content
• SEO/blog content
• Facebook/Instagram ads
• Influencer marketing
• Marketing tools
• Niche advertising

Choosing The Right Technology

With so much technology and SaaS products out there, it’s important to understand the various moving parts and diagram how they all integrate with one another.

Some of the different elements include:

• Shopping Cart Platforms  – e.g., Shopify , BigCommerce , WooCommerce , or any open-source platform
• Hosting – Nexcess , BigScoots , Kinsta , WPX
• Payment Processo r – e.g., Stripe, Paypal
• Fulfillment Center – e.g., Amazon, ShipBob
• Apps – e.g., Zipify, BuildWooFunnels, Gelato
• Accounting & Taxes  – e.g., Quicken, Xero
• Marketing Automation – e.g., Klaviyo , Mailchimp
• Marketing Tools – e.g.  Buzzstream, Ahrefs
• Customer Loyalty Programs  – e.g., Antavo, Smile

Come up with a detailed list of the different products and services you need to run your business as well as the monthly and per-transaction cost of each of them. This will be important in understanding the impact of these services on your margins.

Matching your business model to your technology is essential, too. Certain website platforms are better suited for specific sales models.

Email marketing is another type of technology that should be carefully considered and matched up correctly with your business model.

Keep in mind that it takes, on average, 6-7 interactions with a brand before someone makes a purchase, so you need to keep using technology to get them back to your website.

As you explore the technology options and find out ways to draw potential customers in and keep them happy while they’re there, here are some key points to keep in mind:

• What you say about yourself and your products with your website content
• How you respond to questions on live chat and email support
• How to make use of chatbots
• How you connect on social media
• The information you send through email marketing
• What bloggers and influencers say about your brand
• How existing customers review your company
• How you advertise
• How you establish loyalty beyond sales

After you figure out your technology methods, you have to come up with a technology budget.

The business plan must also include the operations side of things. Determine who will be your manufacturer, secondary manufacturer, and shipping and fulfillment  provider.

When looking at supply chain costs and options, ShipBob  is an ecommerce fulfillment provider you can consider.

Financial Plan

When figuring out your financial plan, evaluating and pinpointing your startup costs  is essential.

The focus of the financial plan is how long it will take for you to make your money back. You also need to figure out if you need a business loan .

Traffic and conversion rates will help you determine how long it will be until you start making money back.

You’ll also want to use an income statement to detail financial information.

This section is used for financial projections, such as forecasting sales, expenses, and net income of the business. Ideally, you’ll want to create a monthly Excel balance sheet showing the following:

• Projected revenue:  First, come up with your projected number of units sold and then come up with your projected revenue (Projected Revenue = # of Units Sold * Average Sales Price).
• Fixed expenses:   these are expenses that are fixed no matter how much you sell. Typically, these relate to monthly SaaS subscriptions, employee salaries, or rent.
• Variable expenses  – these expenses change in direct proportion to how much you sell. Common examples include the cost of goods sold and credit card payment processing fees.

This helps business owners better understand what they need to achieve to hit their profit goals. In reality, projections are usually always off the mark, but it’s good to give yourself some measurable goals to strive for.

This section should aim to answer the following questions about your product offering:

• How much product do you need to sell per year to meet your income goals for the business?
• What are the margins on your product? If you sell one hiking shirt for $50, how much do you make after paying your supplier, employees, and marketing costs?
• What is the lifetime value of a customer?
• How much can you spend to acquire customers? If you conservatively project that the average customer will spend $300 over time on your shirts, then you can afford to spend an amount less than $300 to acquire that customer using the paid marketing channels described previously.
• Do you have any big capital expenditures early on that would require you to need to bring in investors?
• Can you improve gross margins by making bigger orders from your suppliers?

There are various acquisition channels that will help your traffic to convert including:

Your revenue plan will contain a 12-month revenue forecast plan to help you map out each month of earnings.

There are different business earning models you can go through to determine how much you can make with your business.

You want to calculate how much traffic costs. This all depends on the methods you use to gain traffic to your site.

As you determine what your profit might be with your ecommerce business  or ecommerce businesses, there are certain math formulas to use:

• The profit equation
• Break-even analysis
• Units needed to achieve the profit target

You should also consider how you will use fintech companies in your ecommerce business.

What are the key elements of an ecommerce business plan?

The main components of an eCommerce business plan include the executive summary, company description, market analysis, organization and management structure, product line or service, marketing and sales strategy, financial projections, and funding request, if applicable.

How do I create a budget for my ecommerce business?

Start by estimating your initial startup costs and ongoing expenses. Consider costs like website development, inventory, marketing, shipping, taxes, and any necessary licenses or permits. It’s also important to factor in a contingency plan for unexpected costs.

How do I find the right product to sell?

Research is fundamental. Look at market trends, customer needs, and competitor products. Use tools like Google Trends or social media platforms to understand what customers are currently interested in. Always consider your passion and knowledge about the product too, as this can drive your business forward.

How can I differentiate my product from competitors?

Differentiation can come from unique product features, superior customer service, better pricing, or a compelling brand story. Understand what your competitors offer and how you can do it differently or better.

Wrapping Up Your Business Plan

Careful planning is crucial to get your e-commerce business from the planning phase to the launch phase and to ensure its successful future.

Going through the exercise of writing a business plan will cement your own understanding of your business and your market. It will also position you to take advantage of lucrative opportunities while mitigating harmful threats to your business down the line.

Your turn! Have you written a business plan for your online store? Do you have anything to add? Tell us about it in the comments below!

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How to Write the Ultimate eCommerce Business Plan

• by Lightspeed

minute read

The numbers don’t lie: since 2014, the number of digital shoppers worldwide has grown from 1.32 billion to 2.14 billion. That’s a 62% increase! Currently a $4.28 trillion market, eCommerce is forecasted to make up a fifth of all retail sales by 2024. If you want a slice of the climbing profits, now is the time to get involved.

An eCommerce business plan can help you steer your online shop in the right direction. Fortunately, you don’t need a business degree to create one. Read on to:

• Learn what a business plan is and why your eCommerce company needs one
• Discover how an eCommerce business plan is different from business plans for other business types
• Learn how to write an eCommerce business plan step by step
• Get access to our free eCommerce business plan template

All your eCommerce questions answered, and more

Learn everything you need to know build, launch and grow an online store with this free guide.

What is a business plan and why does your eCommerce company need one? 

A business plan is a document that outlines the goals of a business and how the business will achieve those goals. While there is no standard format for a business plan, such documents typically cover what the company will do, what problem it will solve, how the business is structured, who the target market is and how the product or service stands out from the competition.

A business plan serves as a roadmap for your company and helps you stay focused. Having one is also useful for attracting investors and business partners, as it shows you’re serious about your business, have done your research, know your industry and have considered the challenges you may face along the way. 

How is an eCommerce business plan different from a business plan for other company types?

While the structure of a business plan for an eCommerce business won’t differ much from a business plan for any other type of company, the business strategy at the core of the plan may differ greatly from that of a traditional retail store.

For example, a traditional retail business plan might describe plans for leasing and designing a storefront. An eCommerce business plan, in contrast, would focus on the company’s digital storefront: its website. One of your business goals for the first year might be identifying the best eCommerce software , rather than finding the perfect space to lease.

Another notable distinction: while a traditional retail business plan might include an organizational chart with many front of house staff members, an eCommerce business plan would emphasize roles in online customer service , fulfillment and marketing.

Now, if you already run a brick and mortar business and are adding an online selling component, you’ll want to cover all of the topics listed above.  

How to make an eCommerce business plan

Now that you understand what a business plan is, why you need one, and what differentiates an eCommerce business plan from a traditional retail business plan, it’s time to get into the good stuff. Read along to learn exactly how to write an eCommerce business plan.

Summary 

This section concisely introduces everything that you’ll be covering in your business plan. Write it last, so that you can source inspiration from the rest of the document.

Company introduction

Explain what your company does and what makes it stand out. Use the company introduction to answer the following questions:

What does your business do?

What problem does it solve, and how?

• What is your business model? (i.e., Who are you selling to and how? Are you a B2B or B2C eCommerce business? Are you direct to consumer, or do you sell products from other manufacturers? Do you rely on a subscription service or traditional sales model?)
• What is your mission statement?
• What are your values?

Going through the exercise of considering these questions and putting your answers into writing will sharpen your focus as a business owner. When opportunities present themselves that don’t align with your values or help you solve your customers’ problems, then you can say no without doubts — or, conversely, you can enthusiastically accept opportunities that align with your vision.

Market research

Get to know your customers and competition. Do some soul searching and conduct market research to uncover:

• Who your ideal customer is. Make this specific. When your brand is distinct enough to “repel” a certain type of customer, it’s also strong enough to make your ideal customer really excited about your products, and to turn them into lifelong customers.
• How big your market is. While there are various ways you can research this figure , rough estimates will go a long way. Let’s say you wanted to start an online care package subscription business for U.S. college students. A quick online search indicates that there are nearly 20 million college students in the U.S. If the average student spends four years in college, that means there are roughly 5 million new students every year who could be receiving care packages. That’s a large market!
• Who your competition is. What other companies are offering similar products and/or to a similar audience?
• What makes your business different from the competition? 
• What advantages and opportunities do you have to be more successful than the competition?

Company structure

Now it’s time for the less sexy stuff. In this section of your eCommerce business plan you should explain:

• What the legal structure of your business is. Is it an LLC, an S-Corporation, a partnership or something else? If you haven’t incorporated your business, do you have plans to do so?
• Who is in charge of the business? List founders and officers and their contributions (in terms of both capital and expertise) to the company.
• Who works for the company? Include an organizational chart that illustrates who currently works for the business, and the roles you plan to hire for.

Products and services

Explain what makes your eCommerce shop shine: its products and services. Describe, in detail:

• What products and services you sell.
• How much you charge for these products and services, and your profit margins on them.
• Where and how you manufacture and source your products.
• How you plan on fulfilling orders. 
• Intellectual property you have ownership of (if any), including trademarks, patents and copyrights.

Marketing strategy

Having great products is fantastic, but that in itself is useless if people don’t know about your products. Include your marketing strategy in your eCommerce business plan to show your team and investors how you’ll get your products in front of customers. 

Your marketing strategy should include:

• A SWOT analysis that explores your business’s strengths, weaknesses, opportunities and threats.
• The marketing channels and tactics you plan to use. Some useful strategies for eCommerce businesses are search engine optimization (SEO), social media commerce , email marketing, partnerships and influencer campaigns.
• Marketing goals and key performance indicators (KPIs) to measure them. How will you measure growth? 

This is the juiciest section of your business plan. It helps you set sales and fundraising goals that will let you explain to investors where you stand financially and why you need their investment. 

If your business is pre-revenue, include:

• Revenue projections
• Funding information
• Expected costs

If your business already exists, include information like:

• Historical and forecasted revenue
• Investments
• A profit and loss statement
• Expenses (supply chain, labor, website hosting, etc.)
• Budget vs. actuals 

The ultimate eCommerce business plan template

Now that you know everything there is to know about how to start an eCommerce business, it’s time to craft your business plan. Follow the template below to set yourself up for success.

Executive summary 

Company name:

Founders/leadership team:

Products/services:

Target market:

Marketing strategies:

Business model:

Mission statement:

Company values:

Ideal customer:

Market size:

Competitive analysis:

What makes your business different from the competition? What are your advantages and opportunities?

Legal structure:

Leadership team:

Organizational chart:

Product/service 1:

Product/service 2:

Product/service 3:

Pricing, positioning and profit margins:

Manufacturing/supply chain:

Intellectual property claims:

SWOT analysis:

• Weaknesses:
• Opportunities:

Marketing channels:

Marketing goals and KPIs:

Revenue (projected or actual):

Profit or loss:

Investments:

Budget vs. actuals: 

eCommerce business plans turn dreams into action

When you record what you want to achieve and how you’re going to achieve it, you’re more likely to turn your vision into a reality. Take the time to think about your business, find out what makes your products different, and be thoughtful about how you’re going to find customers.

When you’re ready to build your eCommerce shop, turn to Lightspeed’s eCommerce platform.  Watch a demo to learn more.

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How To Start an Ecommerce Business in 2024

Want to learn how to start an ecommerce business? This is a complete blueprint for launching a new ecommerce store.

Many people dream about starting an ecommerce business, but the realities of building an online store can be daunting.

In this article, you’ll learn the five basic steps to launch an ecommerce store, how much it's likely to cost, and extra tips for starting your business.

Start an ecommerce business in 5 steps

• Find product opportunities and choose what to sell
• Thoroughly research your competition and write a business plan
• Choose a logo and name and set up your online store
• Choose your shipping strategy and set sales and marketing goals
• Launch your business

1. Find product opportunities and choose what to sell

Finding a product to sell

The first step to building an ecommerce store is knowing what products you want to sell direct to consumer. This often is the most challenging part of starting a new online business. In this section, we’ll highlight strategies you can use to find products with great business opportunities , explore the best places to find product ideas, and look at trending ecommerce products to consider.

• How To Find a Product to Sell Online
• 17 Places to Find Profitable Products
• Trending Products to Sell Right Now
• How to Start an Online Business

💡 Learn more: What is Ecommerce: A Definition and Guide with Examples

Evaluating your idea

Once you have an online business idea , how do you know if it will sell? In this section, we’ll cover a few approaches that active entrepreneurs have used to validate their product ideas and potential markets.

• How to Validate Your Product Ideas
• How To Find And Validate Winning Products

Obtaining your product

After landing on a solid product idea, your next step is figuring out where and how you’re going to obtain your products. The next four posts cover the various methods for acquiring your products, along with the pros and cons of each model.

• From Dropshipping to DTC, Here Are the Most Popular Types of Ecommerce Business Models
• How to Find a Manufacturer or Supplier for Your Product Idea
• How to Source Products for Your Online Store: Top Apps and Tips
• Print on Demand: A Low-Risk Way to Sell Custom Products

Sell your retail products online

Shifting your brick-and-mortar business online can help you generate cash flow and build a more resilient business model. You’ll need to find a good ecommerce solution to build your store on, like Shopify.

• Bricks to Clicks: How to Move Your Brick-and-Mortar Business Online
• Sell Gift Cards for Your Brick-and-Mortar Business with a Simple Online Store
• Local Delivery: Add Local Delivery to Your Store to Increase Sales
• The Ultimate Guide to Curbside Pickup (With Examples of Local Retailers Doing it Right)

2. Thoroughly research your competition and write a business plan

Research your competition

You’ve found your product, evaluated its potential, and sourced a supplier. Before you get into that, you’ll need to thoroughly research your competition so you know what you’re up against and how you can differentiate your business model from theirs.

• How to Conduct a Competitive Analysis for Your Business (Plus a Free Template)
• SWOT Analysis: A Simple Way to Find Your Competitive Edge (Plus a Free Template)

Writing a business plan

With your competitive research complete, it’s time to write your business plan . A business plan is a roadmap that helps bring your ideas and thoughts together. It’s vital in determining what to prioritize, especially if you plan to run your online store as a side hustle . A business plan also highlights your company’s mission statement to show investors and employees the core values of your brand.

• 7 Business Plan Examples to Inspire Your Own
• Business Plan Template: A Practical Framework for Creating Your Business Plan

3. Choose a logo and name and set up your online store

Choose an online business name

Aside from finding actual products to sell online, another challenging decision is determining your business or brand name and choosing an appropriate and available domain name . This blog post will help you tackle these important tasks.

• Need a Catchy Online Store Name? Find Ideas With These Tips and Free Name Generators

Creating a logo

Once you’ve selected a memorable name and registered a corresponding domain, it’s time to craft a simple logo. In these resources, we’ll show you several options for creating a great logo for your new business.

• Shopify’s Free Logo Maker
• The Top 10 Paid and Free Logo Makers Online
• How to Design a Memorable Logo

Understanding search engine optimization (SEO)

You’re almost ready to begin building your online store. However, before you jump into it, you should understand the basics of search engine optimization so you can properly structure your site and pages for Google and other search engines.

• The Beginner’s Guide to Ecommerce SEO
• Want to Rank Your Store? Get On Page One With This SEO Checklist

Building your store

With a better understanding of search engines, it’s time to build out your store using a website builder . There are many crucial elements to consider. Below, we’ve listed our essential reads to help you build high-converting product pages, write captivating product descriptions, shoot beautiful product photography, choose your ecommerce color palette, and much more.

• 50 Exceptional Shopify Stores to Inspire Entrepreneurs
• How to Optimize Your Product Pages For More Sales
• Product Description Examples and Tips to Inform and Persuade Your Customers
• A Picture Is Worth a Thousand Sales: A DIY Guide to Beautiful Product Photography
• Customizing Your Shopify Theme: How To Use Images, Colors, and Fonts
• 10 Must-Know Image Optimization Tips
• How to Create a Coming Soon Page and Start Marketing Before You Launch

Don’t forget, if you run into any problems getting your store set up, you can always hire help from Shopify Partners .

Choosing your sales channels

One of the best ways to reach new customers is to choose sales channels where they already shop. The right mix of sales channels will depend on your products and your target market, but there are a number of great options that can complement and support your self-hosted store.

• Etsy and Shopify: How Three Makers Used Both to Grow Their Businesses
• Scaling Sales on eBay: How One Business Balances Growth, Customer Service, and Life
• How a Jewelry Business Generates 76.8% of Orders Selling on Amazon with Shopify

4. Choose your shipping strategy and set sales and marketing goals

As you get close to the launch of your new business, there are several shipping and fulfillment elements you need to prepare for. In this section, you'll find comprehensive guides on how to set your shipping strategy.

• Ecommerce Shipping and Fulfillment: A Complete Guide
• International Shipping: Everything You Need to Know to Deliver Beyond Your Borders
• Shipping Strategy: Get Packages to Customers Without Cutting Into Your Bottom Line
• How to Reduce Shipping Costs for Small Businesses: 6 Helpful Ways

It’s also a good idea to define your key performance indicators upfront so, once you launch, you know what measures of success to track.

• Top Key Performance Indicators (KPIs) for Ecommerce
• What Are the Basic Ecommerce Metrics I Need To Focus On First?

As a final checklist, this post covers the most essential things you need to do before launch:

• Starting up Starts Here: The Shopify Store Launch Checklist

5. Launch your business

Acquiring your first customer

Now that you’ve launched, the hard work of marketing your products begins. While many new store owners should consider selling their physical products in person, the rest of digital marketing relies on doing one thing well: driving targeted traffic. Next, we’ll share a variety of marketing tactics that will help you in your first months.

• How to Get Your First Sale in 30 Days: A Marketing Checklist for New Entrepreneurs
• Need Traffic? Here’s How to Get Visitors to a New Website (Even If You Don’t Know Where to Begin)
• Customer Acquisition: How to Calculate It and Create a Profitable Strategy For Your Business

Marketing your store

You’re well on your way now and likely have a few sales under your belt. It’s time to get serious and invest in marketing your store . The following posts will help you zero in on your top-performing ecommerce marketing tactics or expand into new ones for driving traffic and converting that traffic to sales.

Email marketing essentials

• Learn Email Marketing: Everything from List Building to Advanced Lifecycle Automation
• Automated Email Campaigns That Win Customers and Keep Them Coming Back
• How to Write Engaging Welcome Emails (+ Examples to Inspire Yours)

Driving traffic from social

• Go Beyond Likes and Follows: How to Create a Social Media Strategy That Sells
• How to Get More Followers on Instagram: Reliable Ways to Grow Your Audience
• Pinterest Marketing 101: How to Successfully Promote Your Business on Pinterest
• How to Start a Successful YouTube Channel
• Find The Best Fit: Your Beginner’s Guide to Influencer Marketing

Driving traffic and conversions from paid ads

• How to Advertise on Facebook: A No-Nonsense Facebook Ads Guide For Beginners
• The Google Ads Playbook: Top Campaign Types And What to Expect From Them

Optimizing for higher conversion rates

• The Complete Guide to A/B Testing (Tips from Google, HubSpot, and Shopify)
• How to Find and Plug the Leaks in Your Conversion Funnels
• Drive More Ecommerce Sales with Live Chat Without Being Trapped at Your Desk
• Growth and CRO Experts on Increasing Revenue Without Increasing Traffic
• Top Ways to Earn Customer Trust When You Have Zero Sales
• The 39-Point Store Trust Checklist: How Trustworthy Is Your Online Store?
• Driving Traffic but No Sales? Here’s How to Diagnose and Improve Your Store

Using analytics to uncover insights

• The Beginner’s Guide to Analyzing Shopify Reports and Analytics
• Google Analytics Segments (and How to Use Them to Increase Revenue)
• Google Analytics Custom Reports by the Experts (and How to Use Them)
• Facebook Custom Audiences 101: A Starter Guide for Ecommerce Businesses

How much does it cost to start an ecommerce business?

Starting an ecommerce business costs as little as $100, which is spent on a subscription and purchasing a theme for your store. Ecommerce companies cost less than brick-and-mortar stores because they don’t require the same amount of licenses and permits, and you don’t need to pay rent for a retail space.

If you operate as a dropshipping business model, for example, it’ll likely cost less to start because you don’t need to pay for raw materials, inventory, or manual labor. You only pay for products after a customer purchases them. If you’re creating your own products by hand or working with manufacturers, you’ll need to pay for equipment, materials, and labor upfront.

Many ecommerce entrepreneurs learn how to start a business on a shoestring budget. To get a better idea of upfront costs, we surveyed 150 entrepreneurs and 300 small business owners in the US to find out.

According to our research , new ecommerce store owners can expect business costs to total up to $40,000 in the first year, which is paid back to the owner through profit margins.

Expense categories include:

• Product: raw materials, inventory, supplier, manufacturing, patents, etc.
• Operating: incorporation/legal fees, additional software, business insurance , accounting, etc.
• Online store: website/platform subscription, hosting/domain, contract developer/designer, etc.
• Shipping: packaging, labels, etc.
• Offline: stall/table fees, rent, gas, etc.
• Team/staff: salaries, benefits, perks, etc.
• Marketing: logo, branding, ads, printed materials, business cards , etc.

In the first year, business owners spent:

• 11% on operating costs
• 10.3% on marketing costs
• 9% on online costs
• 31.6% on product costs
• 8.7% on shipping costs
• 18.8% on team costs
• 10.5% on offline costs

Now, this doesn’t mean you will definitely spend $40,000 opening up your ecommerce store. The amount spent in the first year varied significantly, depending on industry and ecommerce business model , whether the business had employees, or if it was a full-time gig.

You also don’t need to find $40,000 in cash before you can begin thinking about how to start an ecommerce business. While many (66%) entrepreneurs use their personal savings to fund their business (respondents could choose more than one funding source ) , they also used financial support from friends and family (23%) and personal loans (21%).

5 tips for starting an ecommerce store

• Forget about year-one profitability
• Know your target audience
• Sell an in-demand product
• Experiment with marketing and advertising
• Invest in outreach and link building

1. Forget about year-one profitability

The project of starting an ecommerce business is a marathon, not a sprint. Don’t measure business success by profitability in your first year. Give yourself a runway of 18 to 24 months for your business to get off the ground. Spend your first year testing, reiterating, and reinvesting your sales back into your business using the above budget guidelines.

2. Know your target audience

Outside of developing or sourcing products, you’ll spend a majority of your time getting the attention of customers. The challenge? You want to get your products in front of the right customers—the ones who will actually buy on your site. Understanding these people, a.k.a. your target audience, can help you reach them faster and make more sales.

💡 Read more: Finding Your Ideal Customer: How to Define and Reach Your Target Audience

3. Sell an in-demand product

Create or sell an amazing product with proven market demand. Take a look at the top retailers today—Allbirds, Tushy, Bombas—and you’ll notice they all sell top-tier products. “Product quality is critical because a good product sells itself,” says Eric Even Haim, CEO of upsell and cross-sell app ReConvert . “When you marry a great product with an audience who’s hungry for it, your marketing becomes 10 times easier.”

Eric explains that new products don’t need to be the “next big thing.” You just need to look for growing trends and markets where customers are underserved.

“Then step in with an excellent product and give them what they want,” Eric says.

Two places to find market demand are:

• Google Trends , where you can research topics people search for
• Trends.co , which uses data to predict trends and business opportunities before they become popular.

When you marry a great product with an audience who’s hungry for it, your marketing becomes 10 times easier. Eric Even Haim, CEO, ReConvert

4. Experiment with marketing and advertising

It’s important to get the word out about your new business after launch. You’ll want to try different marketing strategies to understand where your audience hangs out and best responds to your content.

Test different online marketing tactics like:

• Affiliate marketing
• Instagram ads
• Website pop-ups
• Checkout upsells and cross-sells
• Organic search
• Content marketing
• Loyalty programs

“Success depends on your ability to experiment, test, and analyze your ad and marketing strategies,” says Stephen Light, CEO and co-owner of mattress company Nolah . “Experimentation is the best way to avoid falling into any assumptions about your audience that could end up hurting you rather than helping.”

Stephen suggests being open to getting things totally wrong, especially when you’re just starting out. Use the data you collect to create more effective campaigns that drive traffic and profit.

“Plus, optimizing your ad campaigns and gathering data regarding how your customer base responds to them can help you shape your website’s features,” says Stephen.

Experimentation is the best way to avoid falling into any assumptions about your audience that could end up hurting you rather than helping. Stephen Light, CEO, Nolah

5. Invest in outreach and link building

Another tip for new ecommerce stores is to have an outreach and link-building plan in place. These tactics can help boost your SEO rankings in Google.

“The sooner you have an approach to link building and driving authority into your site in place, the sooner search engines will recognize your website as an authority in its niche,” says UK-based SEO consultant James Taylor .

“Search engines see a link from an authority source as a vote of confidence towards your website, so the more links you have from trusted websites, the more search engines are going to trust you as an authority.”

James recommends new ecommerce store owners and marketers invest in digital public relations and link-building campaigns early on. This sets the stage for long-term SEO success, so you can rank higher in Google, earn more organic traffic, and make more sales.

“The sooner you have an approach to link building and driving authority into your site in place, the sooner search engines will recognize your website as an authority in its niche.”

Start your ecommerce store

Building your own successful ecommerce business is as exciting as it is challenging. You’ll learn about choosing a product, evaluating its viability, figuring out how to get it produced, building an ecommerce website, and marketing and selling to new audiences. At times, you may feel like you’re solving a head scratcher of a puzzle, but it’s rewarding all the same.

We hope this ecommerce business guide provides you with a roadmap on your journey. As always, the best advice anyone can give is to get started and enjoy yourself along the way.

Illustration by Cornelia Li

Million-dollar ideas start here

Learn how to build an online business from the ground up with Shopify’s new free course, First Day to First Sale. You’ll develop a winning product, build a brand, launch a marketing strategy, and more.

• How to Start a Dropshipping Business- A Complete Playbook for 2024
• AliExpress Dropshipping- How to Dropship From AliExpress
• The Ultimate Guide To Dropshipping (2024)
• The 13 Best Dropshipping Suppliers in 2024
• What is Shopify and How Does it Work?
• 130+ Dropshipping Products To Sell for Profit
• How to Build a Business Website for Beginners
• Amazon Dropshipping Guide- How To Dropship on Amazon (2024)
• How To Get a Business License in 3 Simple Steps
• Trimming It Down- How to Create a Lean Business Plan

Ecommerce business FAQ

What is ecommerce business.

Ecommerce is the buying and selling of goods or services online. Ecommerce business is conducted through an ecommerce store or online marketplace, social media, or a mobile app. Ecommerce enables businesses to offer convenient shopping to a global audience.

How to start an ecommerce business?

Research what products you’d like to sell or can source to sell, select a business name, register your business with the government, obtain permits and licenses. Then choose an ecommerce software and create your website, load your products onto the site, launch, and start marketing your business.

What are the 4 types of ecommerce businesses?

• Business to consumer (B2C): When you sell a good or service to an individual consumer (e.g., you buy a jacket from an online retailer).
• Business to business (B2B): When you sell a good or service to another business (e.g., a business sells wholesale products for another business to use).
• Consumer to consumer (C2C): When you sell a good or service to another consumer (e.g., you sell vintage clothes on Facebook Marketplace to another consumer).
• Consumer to business (C2B): When you sell products or services to a business (e.g., an influencer or affiliate offers exposure to their audience in exchange for a fee).

Is ecommerce a profitable online business?

Yes, the ecommerce industry is profitable. Successfully starting an ecommerce company is a marathon, not a sprint. It can take 18 to 24 months for your business to get off the ground. It’s critical that you don’t measure the success of your business by your first-year profitability.

Is it hard to start your own ecommerce business?

No, starting an ecommerce company is easy, with platforms like Shopify enabling brands to go online in just a few days. Starting a brand consists of hard work and continual market research to improve your business. We encourage you to read our guide on how to start an ecommerce business before you set up a store.

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How To Create The Perfect Ecommerce Business Plan (Examples & Templates)

Expert Evidence

Sean is the Senior Editor for The Ecomm Manager. He's spent years getting to know the ecommerce space, from warehouse management and international shipping to web development and ecommerce marketing. A writer at heart (and in actuality), he brings a deep passion for great writing and storytelling to ecommerce topics big and small.

The ecommerce market is full of innovative ventures that started as an ecommerce business plan. This guide tells you how to convert your vision for an ecommerce company into a strategic plan.

Click and Cart Revolution: Ecommerce is massively expanding, now a $6.31 trillion market, expected to rise above $8 trillion by 2026. Online sales are booming, making now a ripe time for starting an ecommerce venture.

Blueprint for Success: An ecommerce business plan is essential, serving as a detailed roadmap for starting, running, and growing an online store. It includes market analysis, product details, and financial strategies to achieve business goals.

Investor's Compass: A well-crafted ecommerce business plan is crucial for attracting investment, showcasing your business model, revenue generation plans, and overall strategy to build brand value and equity in the competitive market.

DIY Business Plan: Creating an ecommerce business plan involves outlining your vision, analyzing the market, and detailing operational strategies. An essential step includes drafting an executive summary that encapsulates the company's mission, history, and unique selling points.

Ecommerce is rapidly growing around the world. We love to buy our little treats and trinkets on the internet.

The industry has reached a market valuation of $6.31 trillion worldwide and is expected to cross $8 trillion by 2026.

In 2023, ecommerce accounted for 20.8% of all retail sales .

The contribution of ecommerce is expected to grow even further to cover 24% of retail sales in 3 years.

This seems like a good time for anyone thinking about starting an ecommerce business. Despite many companies enjoying pieces of this $6 trillion pie, starting an online store is not a piece of cake (pause for laughter...).

As with any other business, you need research and careful planning before jumping into action. That’s exactly what this guide is about.

I will shed light on some basic business concepts, discuss examples, provide insights with statistics, and give you ready-to-use templates for various stages.

But first, let’s begin with the fundamentals.

What is an Ecommerce Business Plan?

An ecommerce business plan is a document containing the roadmap for initiating, maintaining, and expanding an online selling company.

This document contains several details that are crucial for establishing your ecommerce business.

It serves to guide the formation of a company and draw insights to make business decisions to achieve short-term and long-term goals.

The ecommerce business plan also contains information about the market, competitors, products, pricing strategy, company finances, supply requirements, etc. The more details you can add to an ecommerce business plan, the better you can execute it.

Why Do You Need An Ecommerce Business Plan?

An ecommerce business plan acts as a roadmap for your online business, helping you navigate the market and scale your brand. It's your ecommerce north star, so to speak.

It helps you analyze the market systematically and develop strategies to stand out from the competition. This plan covers various aspects of your business, such as your goals for marketing, operations, and finances, and shows how these parts are connected.

For example, it can help you see how your marketing budget affects your overall cash flow. You’ll get these insights from the market research and financial sections of your business plan.

If you’re looking for funding, a business plan is essential. Investors use it to assess the feasibility of your business. It outlines your business strategy and makes a strong case for why you need investment.

Entrepreneurs can highlight their operational plans and budget to show how they will run a successful ecommerce store.

Most importantly, it demonstrates the value proposition to potential investors, showing how the company will generate revenue, build brand value, and increase equity.

How To Create The Perfect Ecommerce Business Plan

Let’s look at the step-by-step process for creating an ecommerce business plan.

Each of these stages will help you get a deeper understanding of your business. It'll also help you define your vision through organizational structure and processes. Let’s begin with the executive summary.

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Step 1: Draft an executive summary

Although this is the first part of an ecommerce business plan, it's better to tackle the executive summary after completing the entire document.

The executive summary gives an overview of the business plan on a single page.

The executive summary presents a company overview and highlights of the most important parts of the document.

It gives a brief overview of what the new business is about and what it sets out to achieve. You will discuss these points in-depth later in the document.

You can use the below template to draft your executive summary:

You will have better clarity regarding some of these aspects after you complete the entire ecommerce business plan.

For instance, you can provide a more accurate competitive analysis after conducting market research.

Similarly, you will have a clear understanding of financial projections and investment requirements after you source potential suppliers.

You can create a rough draft of the executive summary at the beginning. Then you can circle back to it when you have more clarity.

Tips for an effective executive summary:

• Conciseness: Keep it brief yet comprehensive. Aim for one to two pages.
• Highlight key points: Focus on the most critical aspects of your plan, such as your business model, market opportunity, and financial projections.
• Engaging language: Use clear and engaging language to make a compelling case.

Step 2: Company description

In this section, you provide details about your brand. At this point, the ecommerce business plan begins to take shape.

Start filling out the details in the template below to describe your company using the examples to help give it some shape.

In this section, you'll outline what your company will look like and what it'll do.

You'll detail the types of people needed to run the company, along with the resources you already have and the ones you'll need.

For example, if you've already purchased a domain name and registered your company name as a trademark, you can list these as existing resources.

If you still need to develop an ecommerce website, list that under required resources (and find the right ecommerce platform to make your job easier).

This section also provides an overview of your company’s hierarchy and management team. Describe the different departments in your company and the key team members for each one.

You should also specify which operations will be done in-house and which will be outsourced to external agencies .

This part of your business plan will give you a clear picture of your current status and help you identify what you’re missing. Keep in mind, this section may change as you do more research and discover new requirements.

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Step 3: Describe your products and services

In this section, you'll define details about the products and services your ecommerce brand will offer. You'll describe what you're offering to your customers.

It includes both products and services. You can use the ecommerce business plan template below to define these aspects.

While you might only sell products on your ecommerce platform , you could also be selling services (which many ecommerce platforms allow you to do).

For each product, include a short description and pricing information. Specify whether you're selling physical or digital products, and explain how customers will receive them.

Describe any services you provide, such as digital subscriptions or in-person consultations. Specify how customers will access these services and any relevant pricing information.

Step 4: Conduct market analysis

This is the most important part of an ecommerce business plan. You must analyze several factors concerning the market segment, competing brands, and competitor products.

You must understand how your products, services, and brand perception compares against the competition .

Use the template below to create a detailed overview of the market you will compete against.

This analysis will affect several other aspects of your ecommerce business plan.

At this stage, you must analyze the market and decide what place your company can take in the competitive landscape. You can also use other methods for market research, such as SWOT analysis or Porter’s Five Forces analysis.

Regardless of the method, you need an accurate understanding of what your competitors offer and how you can differentiate your ecommerce brand.

This brings us to marketing.

Components of a strong market analysis:

• Industry overview: Provide updated statistics and trends in the ecommerce industry. For example, global ecommerce revenue is expected to reach $4.1 billion USD in 2024 .
• Target market: Define your ideal customer with specific demographics and psychographics.
• Competitive Analysis: Analyze your direct and indirect competitors. Tools like SEMrush and Ahrefs can provide insights into competitor strategies and performance.

Step 5: Draft your marketing plan

The marketing plan for an ecommerce business primarily depends on three factors.

These are the target audience, customer segmentation, and market forces. You will draw relevant insights from the market analysis to define your marketing plan.

Here's a template to help you define the marketing strategy for your online store.

Your marketing plan should clearly outline how you'll position your brand in the market.

Define the channels you'll use at different stages of the sales funnel. For example, you might use Facebook ads to raise awareness and email marketing to engage existing customers.

Include sections to define your ideal customers using buyer personas. Create different personas for various types of potential customers, associating each persona with a specific product and its use cases.

Finally, list the ecommerce tools you'll need for your marketing efforts, such as automation tools, CRM software , and SEO tools.

Once you know how to attract your audience, the next step in your ecommerce business plan is to define how you'll convert them into customers.

Step 6: Define sales and customer service processes

At this stage, you will define several aspects concerning your customers.

These include purchase journeys and after-sales services. This strategy serves as an extension of the marketing plan.

See the template below to define your sales and customer service strategy.

With this template, you are essentially defining customer experience with your brand. You'll create a strategy for selling the products on different channels.

These include ecommerce websites, marketplaces, affiliate websites, social media, etc. You'll have to define the sales process for each channel.

You must also draft a plan to create memorable customer experiences. This is crucial for developing a community.

It also has a direct impact on sales and revenue. Repeat customers spend 67% more than first-time buyers. Once you have a strategy for acquiring customers, you must build a strategy for delighting and retaining customers.

Step 7: Create a supply chain strategy

The supply chain strategy includes the journey of the product from the supplier to the customer.

It includes procurement, manufacturing logistics, warehousing , distribution, order fulfillment , and reverse logistics . Use the template below to create your supply chain strategy.

In this section of the ecommerce business plan, you will outline how the product will make its way to the customer.

Supply chain management involves everything from sourcing the products from a supplier to shipping the products to the customer.

Alongside the strategy, you also need to define the stages that you will outsource. Creating your supply chain is quite resource intensive.

That's why ecommerce businesses outsource certain aspects to 3PL companies . Some of the commonly outsourced services include distribution and logistics (42%), manufacturing (37%), product finishing (29%), and packaging (23%).

This process accounts for a significant portion of ecommerce expenses. It will also impact several customer-facing aspects of the business. This includes the availability of stock, shipping charges , delivery time, and more.

Hence, you should define a supply chain strategy for speed, efficiency, and cost-effectiveness.

Step 8: Identify legal frameworks

In this section, you will also cover the applicable legal frameworks for running the ecommerce business.

These include business registration, taxation, permits, legal structure, trade laws, etc. Use the template below to define the legal obligations in your ecommerce business plan.

You must understand the laws applicable to running an ecommerce business in your region.

If you plan to ship products internationally, you must also understand international shipping laws, customs clearance requirements, import/export regulations, and trade laws in the target market.

This section ensures that your company always remains on the right side of the law.

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The final section of an ecommerce business plan is concerned with finances and legal compliances.

The preceding sections will give you estimates regarding different aspects of your ecommerce business.

These include operations, marketing, procurement, logistics, and so on.

Based on these estimates, you will define the financial projections for your ecommerce business. This includes both revenue and expenses.

You can use the template below to define the financial aspects of your business.

If you pitch the ecommerce business plan to an investor, you must add other details to this section.

These would include funding requirements, funding stages, value offerings, etc. This section of your business plan also sheds light on a company’s assets and liabilities.

You must also clarify what you offer the investors against the funds. This can be equity stake, debt, dividends, and so on.

This helps potential investors conduct a cost-benefit analysis.

You can go a step further and present key elements of cost-benefit analysis for the ecommerce company. This should highlight the short-term and long-term gains for the new business.

You can use this section to show potential investors how your new business will grow in market value based on milestones. These milestones can be defined based on sales, inventory size, revenue, market acquisition, etc.

With this section, you conclude your ecommerce business plan.

You need to revisit the executive summary and ensure it aligns with the rest of the document. It is best to review the entire document a few times to ensure you present a unified vision for starting and running your ecommerce business.

Start on the Right Foot With The Best Ecommerce Platform

With your fresh business plan in hand, you're ready to get moving on the foundational parts of your ecommerce journey.

To start strong, you want to choose an ecommerce platform that has all the essential features that ensure your business will be a success.

You can also take a peek at what we think are the top ecommerce platforms for a variety of brands, from big to small. Here's our shortlist of the best ones out there:

• 1. Subbly — Best for subscription-based ecommerce models
• 2. Wix eCommerce — Best for non-technical users
• 3. Ecwid by Lightspeed — Best for social media selling
• 4. Adobe Commerce — Best for data-driven companies
• 5. Shopify — Best for a range of integrations
• 6. Sana Commerce Cloud — Best ecommerce platform for B2B sales
• 7. Volusion — Best customer service
• 8. Shift4Shop — Best free template library
• 9. ShopWired — Best for buy-now-pay-later purchasing
• 10. Elastic Path Commerce Cloud — Best for enterprise organizations

Use The Ecommerce Business Plan to Guide Your Actions

The purpose of creating an ecommerce business plan is to represent your vision systematically.

This document will shed light on several aspects of your ecommerce business idea. It will also serve as a guide, philosopher, and friend when you launch your company.

If you are pitching your idea to investors, this document will show them the value that your ecommerce business idea can generate for them.

The next step for you is to turn the ecommerce business plan into a company.

You should subscribe to The Ecomm Manager newsletter for more news, trends, tips, and guides related to ecommerce. These articles can help you optimize and expand your business further.

Ecommerce Business Plan FAQs

There are always more questions for the end of the post. So, here we are, answering some more questions.

Is ecommerce a profitable business?

The profitability of ecommerce businesses depends on several factors. This includes market condition, business structure, product demand, revenue model, etc. You can understand the profitability of your ecommerce business idea by checking brands selling similar products. When first starting out, you can cut costs by leveraging tools like free inventory management software . This can help ease the financial burden of being a new business.

Do I need a business plan for an ecommerce business?

A business plan gives structure to an ecommerce business idea. It is a really helpful document for business owners and entrepreneurs. This document helps you measure the viability of the business model, products, marketing strategy, financial plan, legal structure, operations, and other aspects of the company.

Creating a Stellar Ecommerce Business Plan for Your Online Store

Choose the Right Ecommerce Platform

For years, you’ve purchased items from online businesses or marketplaces like Etsy, eBay and Amazon and thought to yourself, “I could do something like this, too.”

Starting your own ecommerce business may seem intimidating — writing a business plan, even more so.

However, a business plan allows you to validate your business idea, assess your financial position and create a concrete action plan for how you’ll deliver a product from the original source to the end consumer.

In other words, while the business plan might seem like it’s ultimately meant for other people’s benefit — potential investors, business partners or well-meaning family members who keep pestering you to write one — in reality, the business plan benefits you, the business owner, the most.

You’ll shape the vision and mission for your business and map out how you’ll get there. One study by Harvard Business Review found that entrepreneurs who write a formal business plan are 16% more likely to achieve viability than those who don’t.

An ecommerce business plan is a document that outlines your business purpose and goals, analyzes your industry and competitors and identifies the resources needed to execute your plan.

For example, which suppliers will you work with? What types of products will you stock? Who is your ideal buyer? How will you advertise your business? Can you afford to provide free shipping and still make a profit?

Here’s a step-by-step primer on how to write a business plan for your ecommerce store, what elements to include and how to use your own business plan to increase your chance of success.

How to Create An Ecommerce Business Plan

Business plans help entrepreneurs maintain focus on their goals and shape the day-to-day running of a new business. The key elements of an ecommerce business plan template describe blueprints for growth, projected timelines and financial goals — clarifying topics like cash flow, expenses, marketing tools and distribution channels.

Draft an executive summary.

An executive summary provides a concise rundown of the key points in your business plan. In short, it should summarize your chosen industry, business purpose, competitors, business goals and financial position. Executive summaries average 1-3 pages and are ideally under two pages.

What does your business do?

Explain the raison d’être for your startup. What problem will you solve for your customers? Who is the target audience? Where do you want your business to be in one, five, or 10 years?

Here are the main elements of an executive summary:

The problem statement or business opportunity : Describe a pain point or gap in the market that you are uniquely qualified to fill. (“As someone who used to own a convenience store, I heard many of my customers complain about the lack of healthy food options while traveling domestically.”)

Your business idea : State how you plan to approach the problem (“XYZ is a ready-to-eat meal company that lets travelers order and pack healthy meals ahead of trips so they can avoid eating fast food.”)

Company history : Describe what milestones you have achieved. Are you already working with suppliers? What is your current revenue? (“In 2021, XYZ fulfilled over 10,000 orders, generating $150,000 in revenue.”)

Industry and market analysis : Outline the trends in the market that affect your business, market size, and demand for your product. (“In 2022, the global health and wellness food market was valued at $841 billion and is projected to increase to one trillion by 2026.”)

Competition : Explain who your competitors are, outline their strengths and weaknesses, and make it clear how you will differentiate.

Timeline for key milestones : Project when you plan to achieve goals like breaking even, launching an IPO, or other key milestones.

Financial plan (if you are seeking funding from investors or banks).

What goals does your business want to achieve?

Set short- and long-term goals for your business, such as achieving a certain amount of revenue or testing a new product idea. Business goals can be general and high-level or they can focus on specific, measurable actions (SMART goals).

The most realistic goal-setting approach is to set short-term goals as stepping stones to your long-term goals. For example, your short-term goal to decrease website bounce rate by 25% within 12 weeks might help you reach the long-term goal of growing conversions by 50% within one year.

Timeframes for short-term goals can range from a few hours to a year, while long-term goals generally take 1-5 years to achieve.

What products do you sell?

Outline your product offerings and specify where you’ll source each item. Some ecommerce businesses manufacture products in-house. Others work with wholesalers, manufacturers or print-on-demand businesses to resell their products.

Curate a tight product line that demonstrates your value proposition. Why should someone buy from your online store rather than another brand? Why would someone choose your products over a substitute if you don't produce goods in-house?

Ecommerce companies sell three types of products: goods, services and digital products. Tell your readers what you intend to sell and why. List each item and its purpose. For each, you want to answer the question “why?” Why are you choosing to offer these specific products and services? How do you plan on fulfilling orders?

If you’re offering a service, explain what you do and where. Are you local? Do you travel to your customers? Will you partner with similar service providers in other areas?

How will customers access the item if you're offering a digital product? Will they download software or education videos from your site? Will they pay a subscription or usage-based fee? What about licensing requirements? Mention intellectual property ownership (if applicable) including trademarks, patents and copyrights.

Who is your audience?

Describe your ideal customer. Define your product or service from their point of view. What problems does your product solve for them? What benefits or features do customers look for when shopping for that product type?

Create customer profiles that summarize your target audience in terms of demographics (age, location, gender, etc) and psychographics (pain points, interests, buying patterns). Consider creating customer segments based on shared characteristics if you cater to a wide audience.

Demographic data should include the following points:

Education level.

Relationship status.

Occupation.

Meanwhile, discover your target customer’s motivations, needs and wants as much as possible. Psychographic data should include the following points:

Where are you going to sell your products?

Outline your sales channels, both future and existing. For example, your main point-of-sale might be your ecommerce site. Be sure to include stats on site traffic and conversions so readers know how your site is performing.

Still, you might also offer your products online on marketplaces like eBay, Amazon and Etsy. Explain how each of these channels is performing and how you’re optimizing them for product discoverability and conversions (eg: following SEO best practices, using high-quality images, highlighting user-generated content).

Identify your company overview.

Tell your brand's story , its purpose, and how the company was founded. In addition to the company description, provide details on how you currently run the business. List your business partners and employees and describe the business's legal structure.

The best brand names are memorable and communicate the essence of your business. Brand names gain icon status because they represent an excellent product or service, so don’t obsess over it.

That said, the right brand name can be your brand’s most valuable asset, driving differentiation and speeding acceptance. In fact, 71% of consumers prefer to buy from brands they recognize.

If you’re struggling to come up with a name, try using an online brand name generator as a jumping-off point. Remember, you’re not locked into a single brand name forever.

Business structure

Describe the legal structure of your business. Is it a sole proprietorship, LLC, an S-Corp or a partnership? Consider speaking to an accountant if you’re not sure. Who is in charge of the business? List founders and officers and their contributions (both capital and expertise) to the company. Who works for the company? Include an org chart that illustrates who currently works for the business and the roles you plan to hire for . List their responsibilities, salaries and terms of employment (freelance, full-time, part-time).[

Your business structure]( https://bristax.com.au/business-articles/business-structures/ ) affects how much you pay in taxes, your ability to raise money, the paperwork you must file and your personal liability in the event of business bankruptcy, so this information is important to lenders. Also mention if you have filed or plan to file for any applicable licenses or permits.

Domain name

Register a unique domain name for your business. A catchy brand name is essential because the domain is less likely to have been claimed by another business. Keep your domain name as short as possible and ensure it includes your brand name for SEO purposes.

Your mission describes the fundamental purpose of your business. It should tell people why the business exists and how it benefits its customers. For example, LinkedIn’s mission statement is “connect the world’s professionals and make them more productive and successful.”

However, be careful not to exaggerate. An overly aspirational mission statement is disingenuous and wishy-washy — no single corporation or small business will single-handedly “change the world.”

A vision statement is a declaration of what you want your business to achieve in the future by fulfilling its purpose. It describes your company’s “why,” while the mission statement describes the “who” and “what” of the business.

Your vision statement should define your values as a business (eg: reducing waste generated by single-use toiletries) and future goals (achieving a zero-waste world by implementing a circular economy).

Background information

Tell the story of how you conceived your business idea. Say you’re a former school teacher who discovered your artistic flair from making handmade pottery in your garage on weekends. Describe how your business has grown and changed since you first started it.

Your team and key people

List the key personnel in your company. Aside from the founders and executive team, who keeps the business running each day? Here are a few examples:

Company owner — that’s probably you.

CEO — that’s probably also you.

Management team.

Customer service manager.

Logistics manager.

PR and social media specialist.

Advertising manager.

SEO manager.

Copywriters.

Conduct market research.

Ecommerce businesses face intense competition and are liable to market disruptions because they rely on third parties (suppliers, shipping companies, wholesalers) to deliver a product or service. Knowing the market in and out will help you build a more resilient business.

A market analysis considers your ideal customer (their purchase habits and behaviors), competitors (their strengths and weaknesses), market conditions (industry trends and long-term outlook), and how your business fits into this landscape.

The point of a target market analysis is to:

Identify the most and least valuable markets.

Develop buyer personas.

Find gaps in the market to fill.

Assess the viability of a product or service.

Improve business strategy .

Market opportunities

The first step to identifying your target market is determining your total addressable market (TAM) — the maximum market size for your product or service. Who are your customers? What are their demographic and psychographic traits? When and how often will they buy your product?

The best way to obtain a high-level overview of your customer base is to consult your social media and web analytics. These dashboards show where your customers live, their age, gender, general interests and more. You can also use U.S. Census Bureau data to pad up this information.

Competitive analysis

Analyze the strengths and weaknesses of your current and potential competitors. First, find out who your direct and indirect competitors are. You can perform a Google search of businesses that sell similar products or scope out rivals in your local area.

Here’s what you need to know about your competitors:

What markets and segments they serve.

What benefits they offer.

Why their customers buy from them.

Details of products and services, including pricing and promotional strategies.

Search for publicly available information about your competitors. Aside from that, do some of your own primary research. Visit their website and complete an order or visit their physical outlet.

Next, analyze the information. Is there a segment of the market your competition has overlooked? Is there a product they don’t supply? Did you have a bad customer experience when you walked into the store?

Detail your competitive advantage in your business plan. Don’t just list things that your competitors do — that’s not analysis. The competitive analysis section aims to persuade the reader that you are knowledgeable about the competition and that your business idea has a significant advantage over the competition.

Products and services

List the products and services you provide and how customers will access them. If you’re selling digital products, will customers have to stream or download the content? Do they pay a subscription fee to access a content platform or do they pay for each individual content piece? If you’re providing a service, will you provide it on physical premises or will you travel to customers’ homes? Will you sell physical products in a physical store or online? What is your website like? List each product, including a short product description and pricing information.

Develop a marketing plan.

You need a go-to-market strategy if you haven’t already launched your business. How will you spread the word about your business? How and where will you advertise and what is your budget? If you run social media ads, for example, what platforms will you use and who is your target audience? Will you do content marketing and SEO? A thorough marketing plan answers all of these important questions.

Marketing channels

Define which channels match your consumer demographic. Do your potential customers spend time on Facebook or do they prefer YouTube? First, figure out where your potential customers are. Next, create attention-grabbing marketing strategies and use them to reach your customer base.

Paid marketing channels

PPC advertising : Advertise on Google’s search engine and pay only once someone clicks on your ad. You can bid for ad placement in the search engine’s sponsored links when someone searches a keyword related to your business offering.

Affiliate marketing : Embed links to another business’s products in your content and receive a commission when someone makes a purchase using your unique affiliate link.

Social media ads : Run paid ads on social media apps and platforms like Facebook, Instagram and YouTube to reach targeted audiences. Ads can use different creatives such as images, videos and GIFs.

Influencer marketing : Work with a popular influencer who will promote your products to their followers. Influencers are paid based on conversions or reach.

Organic marketing channels

Brands must use an organic marketing strategy to build brand awareness and engagement and drive website traffic.

Examples include:

Search engine optimization (SEO) : Optimize your website, web pages and blog posts for maximum discoverability on search engines. This involves doing keyword research for your industry, creating high-quality content that attracts and converts and using keywords in the right places.

Social media posts : Organic social media posts build brand awareness and humanize the brand by providing a behind-the-scenes look at the company and allowing you to share engaging visual content to inspire, educate and entertain.

Blogger networks : Collaborating with trusted bloggers on link exchanges can help you build website backlinks, improving your search engine ranking.

Content marketing : Organic content includes blog posts, white papers, SEO pages, and more. This gives you content to post on social media and improves the discoverability of your website. Websites that publish high-quality content consistently rank higher in search results.

Email marketing : Create email templates for new and potential customers, cart abandonment, promotions and announcements and more.

Logistics and Operations plan

This portion of the business plan covers what you physically need to run your ecommerce company. Basically, it outlines how you’ll manage the flow of goods from the supplier (you or a third party) to the consumer. You cannot start a business without an established supply chain.

Your logistics and operations plan should cover the following:

Suppliers : Where do your raw materials or products come from? Do you work with a manufacturer who produces your product idea or are you reselling products from a supplier, wholesaler or distributor? What is the minimum order value? Do they require payment upfront or after the sale? Do you have a backup supplier in case demand spikes or there is a problem with fulfillment?

Production : Will you create your own products or use a third-party manufacturer or dropshipping company? If you’re creating your own products, where will this be done? What assets and equipment do you need? What are your operating costs?

Shipping and fulfillment : Outline how the product will reach the end consumer. How long will it take you to pack and ship products to customers? Will you use a third-party shipper? Will you ship internationally?

Inventory : How much inventory will you keep on hand and where will you put it? How will you track incoming and outgoing inventory? Do you need warehouse storage space?

Establish a financial plan.

The financial section of your business plan is where you prove the feasibility of your business idea and calculate your startup costs. It includes financial projections and statements that show your business’s current financial position and project where you hope to be in the future. This is one of the essential components of the business plan, particularly if you are seeking investment funding, a bank loan or a business partner.

Income statement

In this document, you’ll forecast the company’s revenues and expenses during a particular period. Total revenue is the sum of both operating and non-operating revenues while total expenses include those incurred by primary and secondary activities.

If you subtract your expenses from your revenue sources, you’ll come up with your bottom line (profit or loss).

Balance sheet

A balance sheet helps you calculate how much equity you have in your business. It summarizes your company’s assets (what you own), your liabilities (what you owe) and equity (money invested into the business plus profits).

A balance sheet enables you to calculate your net worth. All of your assets (machinery, inventory, business premises, etc.) go in a column on the left and your liabilities (accounts and wages payable, business loan repayments, business credit card payments, taxes) go in a column on the right. If you subtract your liabilities from your assets, you get your business’ shareholder equity.

Cash-flow statement

This document shows how much cash is generated and spent over a time period. Cash flow determines whether your business is primarily gaining or losing money. Positive cash flow and profit margins are important because it enables your business to repay bank loans, purchase commodities and keep the lights on.

How to Increase Ecommerce Sales

Explore our collection of free resources designed to help you scale smarter and accelerate your online growth from $1 million to $100 million.

The Final Word

Writing a comprehensive business plan is crucial not only for staying on track in the first year or so after launching your business but also for securing funding, finding a business partner and evaluating the viability of your business idea.

FAQs About Ecommerce Business Plans

Who needs an ecommerce business plan, what are the benefits of creating a business plan, how do i start an ecommerce business with no money, browse additional resources.

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How to Start an E-Commerce Business in 2023: A Step-by-Step Guide

Rosalie Murphy is a small-business writer at NerdWallet. Since 2021, she has covered business insurance, banking, credit cards and e-commerce software, and her reporting has been featured by The Associated Press, MarketWatch, Entrepreneur and many other publications. Rosalie holds a graduate certificate in Quantitative Business Management from Kent State University and is now pursuing an MBA. She is based in Chicago.

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Table of Contents

1. Define your e-commerce business idea

2. set up your business, 3. source or develop your products, 4. set up your e-commerce website, 5. figure out order fulfillment, 6. market your e-commerce business, how much does it cost to start an e-commerce business, tips for starting an e-commerce business .

An e-commerce business sells goods, services and funds over the internet. Starting an e-commerce business is a lot like starting any company: You’ll need to create a business plan, get licenses and permits and set up dedicated finances. You’ll also need to choose an e-commerce website builder , source your products and market to online customers.

Follow these six steps to get your e-commerce business up and running.

The first step in starting any business is to hone your idea. Online business ideas can include selling physical or digital products as well as professional services. Whatever you choose, you’ll want to define your e-commerce business model and write a business plan that outlines your niche.

During this process, you’ll start to ask a lot of questions: How will you get your products or services to your customers? What sort of licenses or permits do you need? How much will it cost to get your business up and running — and how will you foot that bill? Your business plan should answer these questions and provide a road map for the coming months.

More resources to help shape your idea:

What is e-commerce? Understanding how it works  

Our picks for the best business plan software

Can your business idea actually make money?

Once you've solidified your e-commerce business idea, the next step is to set your company up for success.

This includes back-office steps like:

Choosing a business structure . There are benefits and drawbacks to each of these entity types, so talking to an attorney may be helpful as you choose the one that’s right for you.

Naming your business. Consult your local secretary of state's website as well as the U.S. Patent and Trademark Office to ensure that you're not choosing a name that belongs to another company. Check to see if your potential business domain name is available as well.

Applying for an employer identification number (EIN) . You can get an EIN from the IRS for free online or by mail, fax or phone. Not all businesses need an EIN, but having one can help you separate your personal and business finances.

Opening a business checking account . NerdWallet recommends all business owners have a dedicated bank account for their business.

Getting licenses and permits your city or state requires. This probably includes a business license, and if you perform services, you may also need an occupational license. Check your state or local government website for requirements for your area.

Answers as you set up your business:

Do you need a business license to sell online?

What’s the difference between an LLC and a sole proprietorship?

Our picks for the best free business checking accounts

Shopify Ecommerce

Next, you'll need to source the products you're going to sell. If you’re selling physical products, you may need to make them yourself or work with a manufacturer.

A key decision at this point: Are you going to order products in bulk and keep inventory in stock? If so, you’ll need to think about storage space and raising capital to order goods upfront. However, you’ll have the power to ship items yourself.

Other businesses choose to rely on dropshipping , in which products are manufactured or sourced at the time the order is placed. In general, dropshipping may keep your overhead costs lower, but it can be more difficult to manage since inventory levels and shipping will be out of your hands.

Other options for sourcing e-commerce products include:

White-labeling, or ordering items in bulk from a manufacturer and then branding them with your company’s identity.

Print-on-demand, or paying a third party to print your company’s designs on merchandise like T-shirts, mugs and posters. Print-on-demand normally functions like dropshipping, in that a customer places their order, then the manufacturer creates the product and ships it directly to the customer.

Retail arbitrage, or buying discounted items from retail sellers and listing them in your own store at a markup. 

If you're selling professional services, you might just have to describe and list what you offer on your business website. Still, you’ll need to figure out how much to charge and decide how many clients you can see each day or week.

More to help you develop products:

16 e-commerce business ideas

How to find products to sell on Amazon

How to make money on Shopify

Your e-commerce website will be your storefront. It’s where your customers will learn about you and your business, browse your products and make purchases.

The easiest way to set up a website is to use an online store builder . These platforms can walk you through the process of launching your website, from buying a domain name to managing your inventory to taking credit card payments.

Popular e-commerce website builders include Shopify , Squarespace , Square Online and BigCommerce .

If you’re a very small business or just experimenting with online sales, a free e-commerce website builder may be a good place to start. But to list unlimited products and access more robust suites of tools — which can help with things like shipping label printing, order management and sales analytics — you’ll typically need to spring for a subscription.

In general, many online store builders should be simple enough for someone without web development experience to navigate. But most offer the option to pay a professional designer or developer if you don’t want to build the website on your own.

The best e-commerce platform for you fits into your budget and is appropriate for your skill level.

Choosing the right website builder:

Our picks for the best e-commerce website builders

Wix vs. Squarespace: Head-to-head comparison

Shopify vs. Square Online: Head-to-head comparison

Order fulfillment is the process of getting customers’ purchases in their hands.

Most e-commerce website builders offer shipping label printing, which is the first step in the fulfillment process. Some also offer the ability to add shipping costs onto customers’ orders at checkout.

If you choose to handle order fulfillment yourself, research shipping rates so you have a sense of how much it’ll cost. Look for an online store builder that can help make the shipping process easier or research shipping software providers like Shippo .

Note, too, that e-commerce may connect you to customers across the world. If there are places you’re not willing to ship to, make that clear on your website.

If you don’t want to manage order fulfillment, you can outsource it to an e-commerce fulfillment center or use a service like Fulfillment by Amazon. Fees for fulfillment services vary depending on the size of your products, how far they’re traveling and how much you’re shipping.

More to help you manage orders and inventory:

Our picks for the best inventory management software

What is just-in-time inventory?

Shipping services that integrate with WooCommerce

Now that you've started your online store , you're ready to start serving customers — as long as they can find your products.

Your small-business marketing strategy might include:

Omnichannel commerce , in which you list your products on third-party marketplaces like Amazon and Instagram. Some e-commerce website builders can help facilitate this.

Influencer marketing, in which you pay popular social media creators to plug your products. 

Social media content or paid social media ads.

Optimizing your business website for search engines.

Sending email campaigns to past and future customers.

Many e-commerce website builders include some marketing features, which can help you do things like create social media ads or send emails to customers when they’ve abandoned their carts.

But if you want to develop more sophisticated campaigns, consider investing in marketing software . These tools can help you create email templates and campaigns, text customers, keep track of how individual customers are responding to your emails and more.

More help with marketing:

20 free marketing ideas for small businesses

Online marketing strategies and tips

Content marketing for small businesses

The cost of starting an e-commerce business can vary widely depending on what you’re planning to sell and in what volume. Your expenses may include:

Your e-commerce website. Subscription plans for online store builders generally start around $25 to $30 per month when billed annually. You may also need to spring for a domain name if your e-commerce website builder doesn’t include one — and make note of annual fees to keep your URL registered. 

Payment processing fees. In general, the company that provides your payment processing will take a cut of around 3% from each online sale. 

Stocking up. If you plan to order inventory in bulk, be prepared for significant upfront costs — even before you’ve started generating revenue. Inventory financing may be able to help you bridge the gap.

Order fulfillment. In general, you’ll pay a third-party service to fulfill each order, with rates varying depending on item size and weight. The more customers buy at once, the less you’ll have to pay per item. Order fulfillment services may also include warehousing, for which you’ll pay a per-item storage cost. 

Warehousing. If you’re buying more inventory than you can keep in your home or garage but not using an order fulfillment service that provides storage, you may need to spring for warehouse space of your own.

General costs of running a business. These could include monthly or annual fees for accounting software , business insurance , any employees or contractors you plan to hire and more. You may also need to set aside money for small-business taxes .

» MORE: NerdWallet's list of the best accounting software for Amazon sellers

As with launching any business, starting an e-commerce business can feel overwhelming. Here are some tips for managing the transition.

1. Start simple

If you’re not certain e-commerce is the right path for you, set up an online store with low overhead first. This may mean starting with the free version of an e-commerce website builder, ordering a small amount of inventory or selling only one or two types of products. 

Starting small can limit how much startup funding you need and make it easier to pivot if your first idea doesn’t land. As your business starts to get traction, you can trade up to a more robust e-commerce platform and expand your product line.

2. Cultivate a loyal customer base

Your e-commerce business needs customers who appreciate your products enough to buy them more than once and, ideally, customers who will promote them to their networks.

Establishing a strong brand presence on social media can help you build a following. But the more information you can gather from your customers, the more you can market directly to them, whether that means creating an email marketing campaign, sending discount codes through text message or letting them know where your booth will be at an event in their region.

3. Invest in multichannel selling

Loyal customers may be willing to visit your website frequently. But to reach new ones, you might have to meet them where they are — which might be on Amazon, Instagram, TikTok or elsewhere. Start with the platforms where your customers are most likely to be, launch those integrations and then see how they perform. You can add platforms later if they fit into your business strategy. 

Keep in mind that selling in person is a channel, too. Craft fairs, local shops and industry or trade events may help you connect with new customers while generating some revenue.

A version of this article originally appeared on JustBusiness, a subsidiary of NerdWallet.

How to Build an Ecommerce Business Plan for Your Startup in 2024 (Template Included)

Use our guide to easily create the perfect e-commerce business plan. Then download the free template to start building your plan today.

The first step in launching a successful  ecommerce  business is writing a successful business plan.

A well-crafted business plan can help you establish a path and course of action, build your brand, and access funding opportunities such as business loans from lenders and investors. But how do you create a business plan? And what should it include? 

In this guide, we’ll cover what goes into a well-crafted ecommerce business plan and share a template to help you get started in no time.

What is a business plan?

A business plan is a document that acts as a blueprint to how you’ll  launch, run, and grow your ecommerce brand . The plan outlines key elements, such as your product strategy, financial resources, company structure, and more. 

You can make your business plan as simple or detailed as you want, but a comprehensive, formal road map ensures your hard-earned investment doesn’t easily disappear.

Plus, having a structured way to lay out your  ecommerce business ideas  and thoughts makes it easier to share your plan with people who can help you succeed.

Writing a formal ecommerce business plan lets you: 

Communicate your goals and vision of the present and future

Have a comprehensive understanding of what it will take to build a successful ecommerce business

Lay out your core value proposition and how you intend to deliver it

Show existing demand for the value you want to offer

Prove your idea is viable in the market

Show potential investors why they should support your business

Offer an easy way to communicate your vision to potential new hires while building their confidence in your business

Give potential partners a way to identify whether your business is a good fit before collaborating with you

Foresee, plan for, and avoid failure and other predictable consequences.

Minimize the risk your company is exposed to, making success more likely

With these points in mind, let’s review the most common elements to include in your plan to create a functional ecommerce business.

Hire ecommerce talent to market your store

What to include in a ecommerce business plan.

Whether you want a lean startup plan featuring the key points of your business or a longer, traditional plan with full details, there are some things you can’t leave out. 

Besides a cover page with your  business logo , name, and contact details, here are 10 fundamental elements to include in your ecommerce business plan. 

Download our Ecommerce business plan to kickstart your start-up or hire a professional freelance business plan writer to help you out.

1. Executive summary

Write an executive summary to describe your concept and give some context to your business. 

This section acts like an elevator pitch and is what people often read first. Give a good overview of the entire plan and how you plan to make the business a success. 

Keep it succinct—no longer than a page or two—to entice potential partners and investors to keep reading.

Generally, it’s easier to write the executive summary after you’ve thoroughly researched all aspects of your business. 

The executive summary should address essential aspects like:

The overall business concept

Your vision or mission statement

The products or services you plan to offer and their pricing

What differentiates your products or services 

Who will manage and work for your business

Your current and/or projected financial standing

How much money you need and what you’ll use it for

The last two points are key for potential investors or lenders. Include the specific amount you need, how you plan to use the money, and how investors will benefit. 

Alex McIntosh, CEO and co-founder of  Thrive Natural Care , a mission-based skin care brand, proudly states his impact-focused mission on his business plan and ecommerce site. 

“There are a lot of great, natural skincare companies out there, but none that have an impact-focused mission,”  McIntosh writes in his business plan’s executive summary. 

“We are a public benefit corporation, so everything we do has to be mission-centric. Our business plan also puts the customer first, so that informed the products we developed and formulas that work with the skin to support health rather than superficial quick fixes. We also needed to come up with a plan for reaching our customers broadly but also tell our rich and unique story.”

Explore Fiverr’s  professional business writing experts  to develop a concise executive summary for your ecommerce business.

2. Business/company description

Introduce your business by explaining who you are and what you plan to do. Potential investors, lenders, or partners want to see how your business is different from other ecommerce companies. 

For example, Saie , an online beauty retailer, shares its business idea and why it exists in a few short sentences. 

Clarifying these details ensures you highlight your company’s intangible facets, including principles, values, and the culture you want to create. 

Give an overview of your industry then describe how your business will succeed. That way, investors or partners can determine whether to work with you and/or invest their money and time.

Some practical things you can cover in this section include: 

The history or background of your business 

Your business structure (sole proprietorship, limited liability company, or general partnership)

A description of the wider industry and where your business fits into it

Your vision and mission statement

The nature of the business and what you offer

Your target customers and how you’ll provide them with value

Your current team and future hires you might need as you grow (plus experience level and salary estimates)

You’ll cover all these in greater detail later in your plan, so don’t go into excessive detail about them here. Use one or two paragraphs to show why you should be the source of your product or service, why people should choose you over your competitors, and why your vision will succeed.

Keep it clear, simple, and realistic so readers should leave with a solid understanding of your vision, what your business does, and the problem you’re solving.

3. Goals and objectives

In this section, you’ll state the goals and objectives you’re trying to achieve and how you intend to achieve those targets.

Define your short-term, medium-term, and long-term goals, ensuring they’re SMART: 

Specific : Have clear, specific outcomes in mind.

Measurable : Know what metrics to use to evaluate the accomplishment of your goals. 

Achievable : Create a goal you can achieve or accomplish successfully.

Realistic : The goals should be relevant to your business.

Time-based : Have a timeframe for when you want to achieve the goal.

SMART goals ensure you take actionable steps toward improvement, measure your outcomes, and ultimately achieve scalable success.

For example, you could have a short-term goal of decreasing bounce rates by 20% within 10 weeks to reach a long-term goal of growing conversions by 40% within 12 months.

4. Market analysis

Next, analyze the market you’re entering. 

Describe its landscape and identify your target market. Find out the strengths and weaknesses of the market and how your business will fill them. 

For example, Erin Banta, co-founder of  Pepper Home , an ecommerce business that provides sustainable custom-made home goods, identified a gap in the custom home goods market and built their business plan around it. 

“We discovered most shoppers traditionally didn’t have access to custom home goods,”  says Banta.  “So, we simplified the custom décor ordering process and offer stylish, affordable options to help shoppers dramatically transform a room with just a few key pieces. Our target audience is anyone who wants to personalize their space in a stylish yet affordable way, with both form and function as a priority. Our customization features and best in class product lead times have proven our initial success.”

Market analysis requires some research to get data about:

Your target audience

Market size and dynamics

Potential opportunities

You can find this data online or in places like industry organizations and related publications, reputable news outlets, or government statistics offices. 

Market analysis gives you:

Confidence to decide what products to roll out that will sell and give value to your target customers. 

Updated information on current industry trends and what the market will look like in the next five years. 

Enough data to know about your market and win investor trust.

If you need extra help with market analysis, you can get a  market research expert  through Fiverr to do it for you.

5. Competitive analysis

Conduct a competitive analysis to get and showcase information about competitors in your niche or industry and outline how you’ll set your business apart from theirs. 

You can list the names of your direct competitors and specify exactly what you’ll do to differentiate your business and win loyal customers. 

NakedWardrobe, a global womenswear brand, differentiates itself in a highly competitive market by offering its target customers affordable, timeless luxury basics.

“In our business plan, we had a shared vision of creating a carefully curated, high-quality clothing brand at an affordable price point,”  says Shideh Kaviani, president of  NakedWardrobe .  “We sought to create affordable luxury basics that are timeless, with the highest quality textiles and fit. Today, we are leading the market in affordable luxury and empowering women to feel confident by providing fashion that feels like second skin.” 

Conducting competitive analysis helps you find data about:

Your direct and indirect competitors

The markets and segments your competitors serve

Benefits the competition offers

Their products and services

What competitors’ customers buy from them

Promotional and pricing strategies

Competitors strengths and weaknesses

How you’ll stay ahead of the pack should other businesses enter the fray

You can also conduct your own primary research by visiting their physical stores or sites and completing an order.

Analyze the information you find to identify any market segments or gaps your competitors have overlooked and the user experience on their sites.

Detail everything you find about your competitors and your competitive advantage in the business plan. That way, you’ll persuade the reader that you’re knowledgeable about the competitive landscape and your idea has a clear advantage in the market.

Here’s an example of what a competitor analysis section would look like:

Source: BDC

6. Organizational structure

This section gives an overview of your company, such as its historical background—owners, when it was founded, and legal structure—and how your business is organized. 

Include your organizational chart to reflect the team hierarchy (if you have one) and highlight:

Key members of the leadership and management team

People’s individual skills, experience, and functions with the company

Professional gaps you intend to fill with new hires

Here’s what this section would look like when completed:

7. Products and services

List the products or services you offer and how your customers will access them. 

For instance, if you sell digital products, state whether customers will download or stream the content. If you’ll charge a subscription fee, say whether customers will pay a subscription fee for each content piece or to access the entire content platform.

If you sell physical products online, share what your site will look like and which  ecommerce platform  you’ll use, and list each product with its description and pricing details.

Share information about your entire product and service range and how they relate to one another to form your whole offering. If possible, show how your offerings will allow you to cross-sell, upsell, and/or retain customers. 

Keep this section as simple as possible, highlighting:

The most compelling characteristics of your product or service.

Your prices compared to the competition.

How your products meet your target customers’ needs.

How your offerings enable you to hit your long-term goals and objectives.

Any patents, trademarks, licensing, awards, or copyright information you have.

Future product or service expansions you plan to make.

Potential challenges or threats to your product or service range.

Save any technical details about your product or service for the appendix section of your business plan. 

Want to learn about marketing strategy and logistics? Keep reading.

Ready to start selling? Find an ecommerce specialist on Fiverr to grow your store.

8. Marketing strategy

In this section, detail how you’ll attract, retain, and grow customers for your business. 

Marketing covers a wide range of activities and approaches, so ensure you have a clear structure with enough information to show how your planned marketing activities will work. 

Some key things to cover in this section include:

Your unique selling proposition (USP)

Product or service positioning (affordable or premium)

Promotional activities to drive brand awareness and traffic to your site 

Distribution channels and order fulfillment processes you’ll use

Together with your customer personas, distill the marketing efforts you plan to undertake into a brief outline of how you’ll reach and attract your ideal customer.

Your ecommerce marketing strategy can include using social media tools, such as Instagram Reels or TikTok videos, print campaigns, loyalty cards, and more—depending on your budget. The plan should resonate with your audience and meet them on the platforms they visit.

“We always knew we would design a service-style business that relied on customer retention, satisfaction, and high touchpoints,”  says Michael Green, co-founder of  Winona , a female-founded anti-aging wellness center.  “We’ve employed a variety of marketing strategies through various platforms to reach target audiences, notably through Facebook and targeted PPC advertising—where our customers browse and shop.”

9. Logistics

This section is critical, particularly if you’ll opt for a  dropshipping  approach to your online business. 

Set out everything you need to operate your business, including your suppliers, facilities, inventory, equipment, and more. This shows you’ve thought through each aspect of your product down to fulfillment and potential issues you might run into that could impact the customer experience. 

Present a clear picture of how you’ll start the business and manage day-to-day operations, plus details such as costs, delivery options, and estimated timelines.

10. Financials

All the theory you’ve covered so far means little without numbers to back it up. 

Include information about your finances—cash flow projections, profit margins, forecasting, and more—to demonstrate your business’s financial viability to potential investors or lenders. 

The basics to include are:

Any capital you might already have

Potential sales

Cash-flow projection

Profit margins

Customer acquisition cost

Estimated monthly income and expenditure

Estimated expenses budget divided into fixed and variable costs

Projected balance sheet (assets and liabilities) 

Remember, most numbers you’ll include in this section will be based on projections of what you need to start, run, and grow your ecommerce business.

“The most important elements to include in a business plan relate to costs,”  says Lou Haverty, owner of  Tank Retailer .  “You want to accurately estimate your product margins and advertising costs. You want to make the estimated costs higher if possible. If you have a plan that works with higher costs, you give yourself more of a cushion in case you have unexpected costs.”

If you need help structuring your financials section, reach out to Fiverr’s  financial consultants  to handle the numbers for you.

Position your ecommerce business for success

With the elements and steps above, you can create a thorough ecommerce business plan for your startup that will impress your team, key stakeholders, potential investors, and customers.

If you lack the time or bandwidth to build yours, Fiverr is here to help. 

Our digital services marketplace hosts a wide range of experts offering different business services, including writing, financial consulting, legal services, and more. What’s more, you can manage freelancers, project files, and payments for free on the platform.

Sign up to Fiverr  to find a  business expert  who will build and firm up your ecommerce business plan.

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E-Commerce Start-Up Business Plan

Start your own e-commerce start-up business plan

NoHassleReturn.com

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.

As E-commerce continues to accelerate, so does the problem of merchants and manufacturers needing to process returns. The average rate of returns for Internet-based companies is 9%. In the coming year the value of returned merchandise was $1.5 billion. Every one of these transactions involves financial processing. Many of them require physical shipping of physical goods, plus processing the goods as received. This is a huge hassle. 

NoHassleReturn.com strives to position itself as a strategic partnership between online merchants, Web hosting companies and portals, shipping companies, and online payment agents such as credit card issuers. Due to demand aggregation, the strategy will produce reduced or totally free shipping of returned merchandise to consumers. This differentiating element will multiply the consumer acceptance factor and will draw more revenues to all participating companies. The proposed program is therefore a win-win solution to all parties involved. Moreover, the software architecture and website format will be wireless-friendly thus designing the service in such a way that consumers will later be able to easily use it via cellular phones and other personal wireless devices

E-commerce continues to accelerate and the amount of money spent on purchases made through the Internet shows no sign of decline. During the past holiday season (November 20 to December 19), retailers saw online revenues quadruple, jumping 300% to about $11 billion and far exceeding expectations, according to a study by Shop.org and Boston Consulting Group. The study of 30 retailers in such categories as apparel, books and music, home and garden, specialty foods and electronics showed a 270% growth in the number of orders. The study indicated that online sales were growing at 145% annually and it projected online retailer revenues of more than $36 billion for last year. An earlier study conducted by Ernst & Young, before the holiday frenzy, already estimated that total revenues for online retail and consumer products for the calendar year just completed were around $25-30 billion. Currently, the average rate of returns for Internet-based companies is 9%. In the coming year the value of returned merchandise was $1.5 billion. This indicates an amazing opportunity.

Competition`

The company foresees three types of competition for the services we offer: Direct

If we prove successful, others will follow. Our most worrisome competition would be combining delivery and/or courier services, like something of this type owned or partnered with UPS or FEDEX. 

The first competitors to the new service are the online retailers themselves. Since NoHassleReturn.com will need to strike partnerships and strategic agreements with retailers in order to offer its services, they are classified as internal competitors. 

With NoHassleReturn.com, at least one selling opportunity will be given to retailers while consumer is on the Web–something a partnership with a carrier cannot provide. Moreover, serving as a demand aggregator NoHassleReturn.com should be able to arrange necessary agreements and provide consumers with greatly reduced, or even free, shipping for all returned merchandise.

Thinking in reverse to the previous paragraph, service providers such as Mail Boxes Etc. and PostNet may try to forge strategic partnerships with numerous online retailers to simplify the return process. 

Our mission is to enhance customer service of online merchants, boost their customer retention and increase their sales. We strive to improve the overall image of the online merchant and therefore stimulate growth of online shopping. We put our efforts to increase customer satisfaction when consumers deal with retailers, to enhance the interaction process when retailers communicate with consumers, and to streamline the problem resolution order in all possible ways.

Expectations

NoHassleReturn.com’s financials are conservative yet quite promising. Once they are up and running and sign up some merchants as customers, NoHassleReturn.com will quickly gain momentum and generate impressive sales. 

Financial Highlights by Year

Financing needed.

We need $50,000 to start. We will get that from the two owners to start $25,000 each.

Problem & Solution

Problem worth solving, our solution.

NoHassleReturn.com is an e-commerce start-up company positioning itself to become the market leader in offering online merchants and consumers a uniform and trouble-free way to return merchandise purchased online. The company offers a business-to-business solution to online merchants of physical, non-perishable products. The company utilizes a consolidation approach in handling all product returns that allows online merchants to instantly save bad sales, restore customer satisfaction and stimulate repeat sales, while offering consumers a convenient, centralized online location to claim returns. By creating a new service category and utilizing the first-mover advantage, NoHassleReturn.com positions itself for rapid growth and gains a strong opportunity to raise entry barriers for possible competition.

Target Market

Market size & segments.

E-commerce continues to accelerate and the amount of money spent on purchases made through the Internet shows no sign of decline. During the holiday season (November 20 to December 19), retailers saw online revenues quadruple, jumping 300% to about $11 billion and far exceeding expectations, according to a study by Shop.org and Boston Consulting Group. The study of 30 retailers in such categories as apparel, books and music, home and garden, specialty foods and electronics showed a 270% growth in the number of orders. The study indicated that online sales were growing at 145% annually and it projected online retailer revenues of more than $36 billion for 1999. An earlier study conducted by Ernst & Young, before the holiday frenzy, already estimated that total revenues for online retail and consumer products for the calendar year 1999 were around $25-30 billion.

While a notable amount of positive publicity about the Internet shopping has recently appeared in the media, the number of problems encountered by online shoppers actually increased more dramatically than the sales figures. According to a poll conducted by WebAssured.com, the number of complaints filed between November 25, 1999 and January 13, 2000 was up 404% over the same period last year. Over 62% of the respondents claimed they had experienced at least one problem with an online transaction. Misrepresentation/misinformation and delivering defective products each accounted for at least 22% of all complaints. In the breakdown of types of problems occurred, delivery of a wrong item accounted for 17.2%. These kind of problems ultimately result in product returns that cause additional costs to the consumers and both costs and lost revenues to the retailers.

When a wrong, defective, or misrepresented item was delivered to a consumer, the return process often proved uneasy. According to recent findings by PC Data Online, 30% of all consumers who returned items found the return process difficult. It is apparent that existing return procedures are inadequate and sometimes irritating. The solution, however, does not lie in forcing all online retailers to establish a "no-questions-asked" return policy and to post it clearly at the top of their websites. The entire sequence a consumer has to follow, starting from looking up the procedures on the Web and then having to make a trip to UPS or the Post Office, has to be streamlined. There is clearly a need, as well as an opportunity, for a new service company to improve the overall return process for online shoppers. As a result, the consumer satisfaction will be enhanced and it will translate into increased repeat sales for online retailers.

Market Segmentation

As stated in the previous section, the estimated online retail revenues were around $25-36 billion. Both sources providing the estimates indicated that only merchants selling physical products (books, CDs, electronics, apparel, etc.) were included in the breakdown by category. No mention was made of services such as online hotel reservations, news subscriptions, or online brokerage being included in the total figures. However, it would be advisable to use a more conservative approach when estimating the total revenues of online merchandise sales. Presented below are estimates for Internet retail sales made by National Retail Federation shortly after the 1998 holiday season.

Competition

Current alternatives.

Direct Competitors

Based on the current intelligence, there is no independent company out there specializing in a "returned merchandise" service to online consumers. No single company is known to be employing a concept of establishing a single point of presence on the Internet for consumers to claim returns. The current situation allows the new company to gain the first-mover advantage and build entry barriers for any possible new entrants.

Internal Competitors

The first competitors to the new service are the online retailers themselves. Since NoHassleReturn.com will need to strike partnerships and strategic agreements with retailers in order to offer its services, they are classified as internal competitors. Retailers may perceive that their internal return procedures are adequate and fully meet customer demands. However, the discussion under the Need Assessment section of this plan clearly indicated that there are significant drawbacks and shortcomings in the return process across the entire industry. Even companies like Amazon.com that touts a quick and easy return policy now sees its customers go to Barnes & Noble superstores to return books. Partnering with brick-and-mortar retailers may be seen as a solution by some e-tailers. However, from the consumer perspective, there still will not be a centralized location to return merchandise, no quick and easy return procedure, and no savings on shipping costs. Consumers may end up having to go from one physical retailer to another to return various items.

Online retailers may try to partner with carriers and service providers such as UPS, Mail Boxes Etc., or Rite Express. Reportedly, eBay.com is working out an agreement with Mail Boxes Etc. to appoint them as a preferred/exclusive service for product returns. eBay.com may receive rebates per shipment for directing its clients to Mail Boxes Etc., but consumers again will have little or no benefit. The standard shipping rates are applied, the choice of carriers is now limited, and online merchants are not informed about product returns ahead of time so that bad sales could be saved. With NoHassleReturn.com, at least one selling opportunity will be given to retailers while consumer is on the Web–something a partnership with a carrier cannot provide. Moreover, serving as a demand aggregator NoHassleReturn.com should be able to arrange necessary agreements and provide consumers with greatly reduced, or even free, shipping for all returned merchandise.

 Channel Competitors

Thinking in reverse to the previous paragraph, service providers such as Mail Boxes Etc. and PostNet may try to forge strategic partnerships with numerous online retailers to simplify the return process. But as it was described, online retailers will be shortchanged in overall customer satisfaction, information exchange, total costs, and additional selling opportunities. Consumers, on the other hand, will lose out on the limited number of "exclusive" carriers for particular retailers, and uniform simplicity in the return process will not be achieved. Moreover, both Mail Boxes Etc. and PostNet combined do not have sufficient physical presence in the market.

Carriers such as UPS and FedEx may try to enter the arena. Those organizations have extensive networks of facilities, experience in shipping, and a track record of quality. The U.S. Postal Service has recently started a TV advertising campaign of a service for online merchants that allows consumers to print return labels online. This is a step towards addressing the shipping end of the return problem, but it falls short of saving bad sales and creating new selling opportunities for merchants. No single shipping company can fully provide the range of benefits the proposed company can. NoHassleReturn.com will be able to arrange strategic alliances with numerous carriers and even play one against the other in negotiating rate reductions and preferential service terms for both merchants and consumers. Being a smaller company with a focus on the e-commerce community, it will also have a greater degree of flexibility in adjusting to customer needs.

Our Advantages

At NoHassleReturn.com, we feel we provide a value-added service to a variety of consumers. By having a safe and easy-to-use return service, the company benefits more people than simply the average customer.

Merchants Advantages

• Increase revenues! NoHassleReturn.com turns the systemic problem of product returns into new selling opportunities.
• Enhance customer satisfaction and retention with the quick and easy return process and boost repeat sales! NoHassleReturn.com provides the opportunity to instantly deal with returns, save bad sales, and turn unhappy customers into loyal patrons.
• Improve customer service with a simple, trouble-free way to return merchandise! NoHassleReturn.com makes it easy for consumers to return products and follow return procedures.
• Simplify the shipping hassle for consumers! NoHassleReturn.com provides the option to print a shipping label since pre-printed labels sometimes get lost or misplaced, which provides added convenience and peace of mind to consumers.
• Improve inventory management and logistics! NoHassleReturn.com immediately alerts you when your customer initiates the return process so that you can act on it right then, not when the merchandise arrives at your door.
• Fine-tune your internal efficiencies and product offerings! NoHassleReturn.com provides you with invaluable new data on all your product returns by customer group, product category, etc., so you can analyze your operations better.
• Enhance your image! NoHassleReturn.com underscores your customer orientation, which you can use to promote your business.

Consumers Advantages

• Return merchandise with ease! NoHassleReturn.com provides one centralized online location with a simple and trouble-free way to return merchandise in just a few easy steps.
• Buy online, return online! No need to call in or email your merchant if authorization is required–NoHassleReturn.com does the communication for you.
• No need to look up every single merchant for return policies every time! NoHassleReturn.com summarizes it for your particular item and makes sure the return time frames are followed.
• Generate a shipping label! NoHassleReturn.com generates a shipping label for you so that you do not have to worry about misplacing the pre-printed label or spending extra time at a shipping company’s counter if the pre-printed label is not included.
• Reduce or eliminate shipping costs! Through strategic alliances, NoHassleReturn.com reduces or completely eliminates the cost of shipping.
• Keep track of your returns! If you would like, NoHassleReturn.com will remind you to ship the claimed item and will maintain a file of your returns for your records.
• Increase awareness in the community! NoHassleReturn.com serves as a "returned merchandise credit bureau," providing discrete information to consumers on merchants and to merchants on consumers.
• Cross reference marketing leads! NoHassleReturn.com maintains a database of purchases that help custom-target online buyers in a more efficient way.
• Improve the overall image of the online merchant! NoHassleReturn.com enhances customer service of online merchants and overall customer satisfaction by simplifying and streamlining the return process.

Keys to Success

In order for the company to operate, a number of specific ingredients are needed. Following are things to put in place before the service can be offered.

• Retrieve all pertinent information on a participating merchant.
• Match appropriate return procedures against the returning item.
• Present procedures to the consumer in the most concise format.
• Provide reference to the merchant’s entire return policies if requested.
• Inform the merchant of the entire transaction as it occurs.
• Gain authorization from the merchant to return merchandise if needed.
• Present the merchant’s website to consumer for selling opportunities.
• Provide confirmation emails to the customer of the actions taking place if requested.
• Interact with the merchant’s database for further customer details if needed.
• Maintain a record of the transactions for the company’s own database.
• Develop successful relationships with online merchants to facilitate exchange of information.
• Develop strategic alliances with online merchants, shipping companies, and credit card issuers to negotiate reduction or elimination of the shipping costs to consumers on returned merchandise.
• Design, maintain, and promote a user-friendly website, the corporate trademark, that offers an easy and trouble-free merchandise return procedure for consumers.

Marketing & Sales

Marketing plan.

Because the company’s service is a business-to-business program, it will be initially promoted to online merchants by direct sales force. Personal selling will be necessary to reach decision makers within online organizations. At first, contacts will be made with Internet service providers, such as America Online, that host online stores and shops. America Online claims to have 20% of the total Internet service provider market in the U.S. Therefore, arranging a strategic partnership where NoHassleReturn.com becomes the preferred or exclusive choice for all returned merchandise bought at AOL.com shops will be invaluable for establishing a well-recognized brand and building up entry barriers for any possible competition. Ideally, a company’s banner with a notation "For an Easy, Trouble-Free Product Return Click Here" will be visibly displayed throughout the shopping section of AOL.com. Portals such as Yahoo! will be approached as well. Reportedly, Yahoo! hosts nearly 6,000 merchants where it charges each merchant at least $100 to $300 per month. Arranging a strategic partnership with Yahoo! will provide a strong leverage in negotiating return contracts with individual merchants. Similar to that of America Online, the company’s banner will be displayed throughout the entire shopping section of Yahoo!

Large online merchants such as Amazon.com and Buy.com will be targeted by the direct sales force during the first stage as well. Those companies have already achieved significant volumes of sales–and therefore product returns–and will find the uniform return process of much benefit to them. Strong "category killers" such as eToys and CDnow are also first sales targets. Auction houses such as eBay.com and uBid.com will be approached with a service offer for products sold to consumers by merchants and direct manufacturers.

Wherever possible, smaller online retailers will be personally approached by the sales force. To stimulate awareness and service penetration among smaller players, industrial marketing techniques will be utilized. Those will include advertising in specialized publications such as Internet World and Red Herring, as well as referral fees for retailers who already use the service. Email campaigns will be used to reach decision makers at smaller companies. The email messages will have an invitation to the NoHassleReturn.com website where a specially designed presentation will explain the benefits of the new service. An invitation to be contacted by a service consultant to discuss details will be included.

The company plans to offer its services right before Thanksgiving 2000. In order to stimulate a quicker adoption of the services, the remainder of the year 2000 will be offered free of charge.

It is estimated that the initial expenses to hire a sales force and a customer service unit of up to five people during the first year will be close to $400,000. Another $200,000 will be needed for sales program development, marketing activities, and training (excludes advertising). The initial compensation package for sales force will include a nominal base salary and a progressive commission structure. This should ensure that during the early stage of the company’s growth not only that sales targets are met, but also that customer (customer here means merchant) satisfaction and retention are fully addressed. The sales force will initially be located at the corporate headquarters. A territorial approach will later be implemented, with sales people located in regions. After one year, sales force members will split into two distinct groups. The first group will include pure sales people, the "go-getters" who will be placed in regions and will work on pure commissions. The commission structure will become more progressive and rewarding for such individuals, including a bonus structure. The estimate for an average commission paid on sales is approximately 5-10%. The second group will include client care professionals who will concentrate on customer satisfaction and retention to ensure the continuity of the program. These individuals will remain at the headquarters and will have a base salary with a bonus structure. The base salary for client care professionals is in the mid-five figures. Industrial advertising and promotional expenses in 2000 are estimated at $250,000.

It is also a possibility to sell the services to merchants via the Internet hosting service providers, portals, and software developers. Those companies will then serve as distributors and agents, compensated on commissions. This approach will eliminate the need for a large sales force. The final layout will depend on how quickly agreements with companies such as America Online and Amazon.com are negotiated, how aggressively they will be able to promote the services, and on what conditions.

The following diagram describes the customer approach (customer here means merchant).

Service consultants are the direct sales force that approaches prospective customers with service offers. Once a customer has been signed, a service consultant will only approach the client with new service offers and product upgrades. A client care professional is then assigned to each customer to deal with all customer service issues. Each customer will be advised to direct all service inquiries to the professional. A professional will also proactively call on customers to ensure high quality of service and customer satisfaction. The consultants and professionals will have direct communication lines between themselves to ensure open information exchange and a quick and efficient problem-resolution culture. This structure will guarantee an aggressive sales approach, client-oriented service, and efficient post-sales support.

NoHassleReturn.com will strive to eliminate the shipping costs to consumers by means of strategic agreements with online merchants, shipping companies, and credit card companies. As stated in the last quote, 58% of all product returns were due to merchants’ faults, hence merchants will have to reimburse shipping costs to consumers in those cases. NoHassleReturn.com therefore proposes that 65% of a given shipping cost should be allocated to corresponding merchants. Due to demand aggregation, the company will be able to negotiate a shipping rate discount with companies such as UPS or FedEx. Hence 20% of shipping costs should be allocated to shipping companies in a form of a discount. Credit card issuers such as Chase and BancOne currently offer a 5% rebate to consumers on purchases with selected online merchants. It is therefore feasible to arrange an agreement with credit card companies and/or issuers to include a 5% shipping cost rebate on all returned merchandise. Since product returns are only 9% of all purchases, it will not represent a large cost to credit card companies to add this differentiating feature to their products. These allocations in total will cover 90% of the shipping cost. The remaining 10% will be absorbed by NoHassleReturn.com via a special "instant rebate."

NoHassleReturn.com will charge merchants a program fee that will average only 0.5% of a given merchant’s total sales. Also, the company will charge a low per-claim fee of 12% of each item’s listed price (each item that has been claimed through the company’s website). However, of the 12% charged per item, up to 4% will be instantly given back to merchants to cover the remaining portion of the shipping cost. The previous table indicates that the 4% rebate is sufficient to cover the remainder of the shipping cost in the first product category. It is actually far more than sufficient in other product categories (refer to ASC Coverage Ratio). NoHassleReturn.com can then decide whether to offer merchants a reimbursement of the remaining portion of shipping costs only or a flat 4% "instant rebate" regardless of shipping costs. For the purpose of this business plan and financial projections, a flat 4% "instant rebate" was used thus reducing the per-claim fee from 12% to 8% across the board.

As it was stated in a prior chapter, retailers should see an average sales increase of at least 15% due to the service offered by the company. On the other hand, based on the proposed pricing structure the service should not cost merchants more than 1.5% of their total revenues. The cost-benefit ratio of 10 will be a strong promotional point for NoHassleReturn.com.

While it is a possibility to charge merchants commissions on all sales made through the company’s website (when consumers claim their returns), it would not capture all sales stimulated by the company. The program will increase consumer satisfaction and loyalty. However, when consumers start buying more due to the program’s effect but dealing directly with the merchant, the company will not receive any commissions and will in effect be giving its services away for free. Hence both fees charged should fully reflect the benefits of the easy-return procedure, early information on all returning items, restored customer satisfaction, selling opportunities created during the claim process, and all repeat sales thereafter.

The company also plans to draw revenues from advertising on its website, but for the purpose of this business plan advertising revenues will be considered negligible. A fee/rebate agreement may be arranged with such companies as UPS and Mail Boxes Etc. for bringing customers to them for shipping needs. Other revenue generating activities such as affiliate programs with VISA, American Express, or Citibank can be arranged to promote certain credit cards as a preferred method of payment online. Those revenues will also be omitted in the financial projections. Once the company has generated a sufficient customer database, it may also market information to retailers and other organizations for a fee. Any fees and payments NoHassleReturn.com could generate from consulting activities in the field of product returns will not be included in the financial projections either.

The service positioning in the eyes of online merchants is imperative to the success of the enterprise. The service proposed by the company is a business-to-business solution offered to online merchants of physical, non-perishable products. However, because online consumers will deal directly with the company via its website, the proposed solution also incorporates some features of a business-to-consumer service. It is therefore of utmost importance to clearly define what this company offers is a customer service & customer satisfaction program for online merchants. The most unique feature is that the proposed company takes the systemic problem of product returns and turns it into new selling opportunities for online merchants.

It is also important to note that NoHassleReturn.com does not try to position itself as a competitor to any incumbents with a similar service, online merchants, or shipping companies. The proposed company strives to position itself as a strategic partner to all parties participating in handling product returns. If nothing else, NoHassleReturn.com should be viewed as an outsourcing company to online merchants with the core competency and focus in handling returned merchandise.

The service offered by NoHassleReturn.com is designed to enhance customer retention and loyalty by offering an easy and trouble-free merchandise return process to online shoppers. According to Jupiter Communications, the goal of the 1999 holiday season was not about generating impressive sales, but rather securing long-term relationships. Retailers now need to focus on retention and loyalty. NoHassleReturn.com will help to achieve just that through establishing lasting, productive relationships with online merchants. Providing an easy, uniform, and trouble-free return process to all online shoppers will enhance the overall image of online merchants. While the number of retailers continues to grow, consumers will not have to look up every single one to find out about return policies and later keep abreast for possible changes. A centralized Internet location–the company’s website–will retrieve, summarize, and present the appropriate policies. Based on product information, it will make sure the correct procedures are used. The company’s banner with a notation "For an Easy, Trouble-Free Product Return Click Here" will be placed visibly on retailers’ websites and will serve as a symbol of customer orientation and care.

Moreover, the shipping process will be streamlined. Customers will be able to generate a shipping label on the company’s website thus reducing the hassle at the shipper’s counter. Although some online retailers already supply pre-printed shipping labels for sold items, customers sometimes lose, or throw away, those labels when they first see and like the products they ordered. Shortly after they may change their mind and would like to return a particular item, but the label is gone. With the proposed program, the label is always available online so that consumers can have peace of mind and also reduce the amount of documents they need to keep just in case. The service therefore offers a dual benefit to consumers. The retailers may then choose to stop including a pre-printed return label with every outgoing shipment thus reducing costs of selling. From a shipping company’s perspective, the shipping process is streamlined because the online-generated label will have all the necessary information, possibly including a tracking number if it is going to be shipped by UPS. That way consumers do not have to spend time at UPS counters filling out forms–both a customer service and operations improvement for UPS. NoHassleReturn.com will be a strategic merger between online merchants, carriers, and their partners targeted at overall improvement of customer satisfaction and ultimately the bottom line of merchants.

Another important feature of NoHassleReturn.com is that shipping of returned merchandise should be free of charge to consumers. (Means of achieving it are discussed in more detail in the Pricing and Revenue Generation section.) This differentiating feature will tremendously increase the consumer acceptance factor of the proposed service. The fact that products purchased online can be returned in an easy and trouble-free way, and that shipping is also free, will help expand the entire online shopping industry. The added convenience and peace of mind consumers will gain with NoHassleReturn.com will translate into more shopping with those online merchants that participate in the NoHassleReturn.com program.

When customers go through the sequence of online entries on the company’s website, the retailer whose product is being claimed for return will be offered at least one selling opportunity. At the end of the sequence the retailer will be able to target the consumer with any new sales offers as its website will appear onscreen. Should an exchange or replacement be preferred by the customer during the online return process, the retailer will receive an additional selling opportunity as its website will appear with offers during that step. These opportunities will translate into more sales for retailers. This will also stimulate customer retention, which means repeat sales. All in all, the program will increase customer satisfaction and generate more sales.

The program has a number of unique features. First, it alerts the retailer that a particular customer is claiming a particular product for return as it happens. That way the retailer knows about it as it occurs and not when the merchandise arrives at its warehouse. This allows to plan ahead. Since 9% of all products are returned, this feature offers useful information to better handle logistics and inventory.

Secondly, and more importantly, by asking consumers during the online sequence why they want to return a particular item merchants gain an invaluable piece of information. If the reason for return is defective product (30% of all reported returns), the retailer can save the sale and turn an unhappy customer into a delighted one by sending a new item right away. If the reason for return is wrong color, wrong size, or wrong product altogether (28% of all reported returns), the retailer may choose to send the correct product right then, thus instantly restoring customer satisfaction and saving a bad sale. It will be up to the retailer to decide on payment and credit terms of the exchange. These benefits ultimately translate into increased customer retention, reduced costs, more sales, and improved bottom line.

It is estimated that the program will generate an average sales increase for merchants of at least 15%. Online shopping is still at the early stage of consumer adoption. As stated earlier, about half the people who have not shopped online cited the cost and hassle of returns as a significant factor for not shopping online. Another recent survey found that 89% of online buyers said that return policies influenced their decision to shop with an online retailer. Consumers demand not only convenience but peace of mind. The proposed program offers both and it should increase the number of online shoppers, thus causing a market expansion for online merchants. The first retailers who implement the proposed program will also be able to differentiate themselves and capture a larger market share in their respective segments. Once embraced by the majority of online merchants, the program will become an industry standard.

It is important to note that during the entire process the company will not ask for, or try to gain access to, consumers’ credit card numbers. This will significantly limit possible liabilities and security/confidentiality concerns.

Milestones & Metrics

Milestones table.

Key Metrics

Our Key Metrics: 

• Active clients
• Active client leads
• Monitor Facebook and Twitter and reach out to customers who tweet at us or about us
• Easy to understand website and have a online chat and telephone number for questions 
• # of referrals from strategic alliances 
• # of customer who use us month after month 
• # of returns handled and from which company 
• cost of processing returns, make it as streamlined and well thought out as possible 

Ownership & Structure

Those activities that are not crucial to the corporate success (i.e. payroll) will be outsourced or subcontracted. Below are brief summaries of major responsibilities for corporate officers.

• Board of Directors : oversees the overall strategic direction and progress of the company. Specific areas include operational soundness, financial stability, and long-term well-being of the corporation.
• President : responsibilities include strategic guidance of the enterprise, exploration of expansion opportunities, and strategic alliance facilitation and management.
• Chief Executive Officer : the main responsibility is to maintain a strategic fit between the corporate resources and external factors. Responsibilities include running of the overall day-to-day operations, technological and operational soundness, and financial stability.
• Director of Finance and Operations : responsibilities include financial oversight, safeguarding of assets, and human resources management.
• Director of Information Technology : responsibilities include overall technological efficiency, software development, and information control.
• Director of Sales and Marketing : responsibilities include sales generation, marketing programs development, and public relations.

Management Team

There are two principals that are responsible for the idea and the progress of the firm up. They recognize as the companies quickly grows, certain positions such as CEO and CFO will need to be filled. The company was founded by Steve Logic and Dan Codder. Steve has spent the last ten years at Federal Express. While at FedEx, Steve was responsible for their logistics system. Steve has the incredible skill of perceiving business needs and creating a solution to address the need. At FedEx, Steve was the architect behind their benchmarked logistic system that has the ability to track customer packages and share the information with the client. What this meant for FedEx is that they could tell the customer exactly where their package is at any one point. This logistics system is the main driver behind FedEx’s exponential growth. Dan Codder is a twenty-year veteran in the computer industry. Self taught, Dan has worked at IBM, Cadence, Tektronix, and several other companies. Dan has the ability to design and write computer code very quickly and accurately. NoHassleReturn.com will leverage Dan’s skills for the completion of their customer service software engine.

Personnel Table

Financial Plan investor-ready personnel plan .">

Key assumptions.

• $4.1 million investment
• Status quo in market developments related to returns as part of traditional commerce is online commerce.
• Competition as we foresee it in the plan. 

Revenue by Year

Net profit (or loss) by year, use of funds.

START-UP REQUIREMENTS

Start-up Expenses

Stationery etc. $50

Brochures $450

Insurance $100

Research and development $400

Expensed equipment $1,100

TOTAL START-UP EXPENSES $3,000

Sources of Funds

The two co-owners will each contribute $25,000, for a total startup of $50,000. 

The plan depends on $4.1 million investment in the first month. 

Projected Profit & Loss

Projected Balance Sheet

Projected Cash Flow Statement

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May 24, 2022 | 9 min read

How to Write an E-Commerce Business Plan (Step-by-Step)

Dream of being your own boss? So do lots of other people, including 64 percent of the UK workforce and 65 percent of Americans . And I’m sure you’d see similar figures across a bunch of other countries.

I get it—after all, I did it myself.

But sadly, not every business is destined to become the next Amazon, Google, or Sleeknote.

Much-quoted data from the US Bureau of Labor Statistics show that about one in five new businesses survive for 12 months or less , while only half make it to the five-year mark:

So what separates the successes from the also-rans and the never-weres?

While some people will tell you the secret to “making it” lies in adopting a rise-and-grind mentality , truth is there is any number of reasons why some businesses thrive and others fail. 

But I can categorically tell you there’s one thing every successful startup has in common, and that’s a killer e-commerce business plan.

Basics of Writing an E-Commerce Business Plan

What is an e-commerce business plan, why do i need an e-commerce business plan, how to write an e-commerce business plan.

E-commerce business plans are roadmaps that plot the route to achieving your business goals. They set out who you are, what products you sell, and how you plan to operate (among many other things).

Just like a real roadmap, e-commerce business plans also highlight potential hazards, helping you plot alternate routes well in advance.

No one expects you to stick precisely to your original plan throughout the entire lifespan of your business. But by gathering business-critical information like cash flow, sales projections, and marketing budgets in a single place, your business plan can help you build a persuasive pitch to win backing from investors, which can be absolutely vital at the start of your journey.

And even if you’re not looking for external funding, figuring out your strengths, weaknesses, and objectives early on will save you a lot of pain down the line.

I know what you’re thinking: “I’ve got a to-do list as long as my arm; why should I spend days or weeks writing a business plan? Why can’t I just get on with it?”

You’re not completely wrong. Honestly, if you think buying a house or having a baby is stressful, try starting a business.

One study claims the biggest challenge founders face in the first three months is building a customer base, but there are countless others.

From dealing with suppliers to building a website and chasing invoices, it’s one headache after another, and you never feel like you have enough time to give each problem your full focus.

But you really can’t afford to overlook your e-commerce business plan. Here are five benefits to creating one.

1. Understanding the Competitive Landscape

You might like to think of yourself as a visionary, but I can pretty much guarantee that someone, somewhere has had a similar business idea to yours.

They might have been doing it for years, or they might be gearing up to hit the market at the same time as you.

Either way, you need to know about them, and the research you carry out while building a business plan will naturally help you do that. Which means you’ll be better placed to differentiate yourself through marketing.

2. Getting to Know Your Audience

Another key element of creating a business plan is assessing the market you’re trying to reach. That means digging into who you’re selling to, where they hang out online and “in real life”, and what they’re looking for in a product like yours.

Why would they buy it? When would they buy it? How much would they spend on it?

All of that will help inform your messaging .

3. Locating Potential Investors

Unless you have a metaphorical (or literal) gold mine to fall back on, money is definitely going to cause you a few headaches in the early days of your business.

Even successful e-commerce companies struggled to keep the lights on when they were just starting up.

Building a business plan will help you identify potential sources of financial backing, like angel investors, business loans, venture capitalists, or wealthy business partners.

4. Finding Your Niche

There’s a reason Amazon started out as an online bookstore, rather than immediately selling every product you could ever imagine.

As an e-commerce startup, you need a niche . Ideally, you need to go further and find a niche within a niche. Rather than founding a womenswear e-commerce site, launch one that’s 100 percent sustainable and carbon-neutral. Or instead of selling regular sunglasses, sell sunglasses made from hemp (I don’t know, I’m just spitballing here).

My point is, all the other research you’ve done at this stage—studying your competitors, understanding your audience, figuring out your pricing strategy—will naturally guide you toward the best niche with the biggest opportunities.

5. Sourcing Fresh Talent

Admittedly, recruitment might not be on your immediate agenda.

But if things go well, you’re going to need a little help in the not-too-distant future. You might need people in the warehouse, a customer success agent or two, a marketing team, a developer, someone to handle the finances… The list is huge.

Problem is, a lot of other businesses want to get their hands on those people, too.

If you don’t want recruitment to constrain your growth, start reaching out to potential candidates early, using the information in your business plan to get them bought into your project.

Hopefully, by this point, I’ve demonstrated the value of creating an e-commerce business plan. Now, let’s dive into how to do it.

There are no hard-and-fast rules to how long a business plan should be. The more complex the business, the more in-depth the plan. But as a minimum, your business plan should include these seven sections:

• Executive summary
• Company overview
• Market analysis
• Products and services
• Marketing plan
• Logistics and operations plan
• Financial plan

You might want to add a few more too. For instance, if you’re entering a largely untapped niche, you might want a section dedicated to the audience you’ll be targeting.

But for most e-commerce businesses, those seven categories should do the job.

Section 1: Executive Summary

Think of this as the “elevator pitch” element of your business plan.

Your goal here is to sum up the rest of your business plan in no more than one page, communicating key information to time-poor reviewers, and (hopefully) tempting them to read on.

Generally, you should look to answer the following questions:

• What does your business do?
• What do you want to achieve?
• What do you sell?
• Who will you sell it to?
• What sets you apart from the competition?
• How will you raise awareness among your target audience?
• What is your current monthly/annual revenue?
• What is your projected revenue for next year and the following years?
• Who’s currently on your team?
• What are their backgrounds and skills?
• How much money are you asking for (if you’re looking for financial backing)?

Section 2: Company Overview

Again, heed the word “overview”. Like the executive summary, this is a concise section that demonstrates who you are, what you do, and why people should care.

Whether you’re seeking investment or planning your e-commerce marketing strategy , it’s vital you get all this information down in one place. Make sure to include your:

• Company name
• Business structure (e.g. sole proprietor, partnership, LLC)
• Vision, mission statement, and value proposition
• Product or service
• Business model (e.g. direct to consumer, dropshipping, wholesale)
• Team members, including their roles, backgrounds, and salaries
• Short and long-term business objectives

Section 3: Market Analysis

A bad product in a good market stands a chance of success.

If you don’t believe me, check out your own purchase history—if you’re anything like me, you’ll have bought your fair share of useless products that sounded amazing when you saw them online.

But a good product in a bad market doesn’t have a cat in hell’s chance. You might be completely changing the game; solving a problem that’s never been solved before. But if no one’s prepared to spend money on it, you’ve not got a business—you’ve got a hobby.

The market analysis stage of your e-commerce business plan should help you find the right market: one with lots of customers who have an immediate need for the “thing” you’re selling (and enough money to buy it). Your market analysis should incorporate the following elements:

The Size of Your Market

It’s impossible to come up with a meaningful financial projection without first estimating the number of people who are potentially interested in buying your product.

Of course, to do that, you first need to figure out who your customers are.

The more demographic and psychographic information you have on them, the more accurately you’ll be able to gauge the scale of your market.

At the same time, remember to factor in broader industry trends. If you’re starting an e-commerce store that exclusively sells gas cans, you might have some early growth potential, but bear in mind there’s a good chance we’ll all be driving electric cars within a decade—in which case your whole market will have dried up.

Your Competitors

No e-commerce brand is an island.

To stand out against the competition, you need to find some way to differentiate yourself. That could be through:

• Segmentation: Focusing on a very specific (and, ideally, underserved) niche within a larger market.
• Pricing strategy: Do you plan to undercut your rivals? Or create demand through exclusivity by pricing yourself higher?
• Distinctiveness: Ideally, there’ll be something unique that distinguishes you from the current market leaders.

SWOT Analysis

SWOT analyses are about assessing your business’s:

• Strengths: The things you do best.
• Weaknesses: The things you’re not so good at.
• Opportunities: Gaps and advantages in your market.
• Threats: External challenges you need to tackle.

Typically, a SWOT analysis is presented as a simple, four-section grid, with bullet points under each heading. Here’s a beautifully presented example from the creative geniuses at Asana :

Section 4: Products & Services

In a sense, your whole e-commerce business plan will be centered on your products and services.

However, given their importance to your business prospects, a section of your plan should be dedicated solely to outlining what you’re selling.

If you only sell one product or plan to launch with a very small range, give plenty of detail on each. But if you stock a wide selection of products, stick to general features and benefits such as price, unique selling points, and materials.

Additionally, be sure to reference any new products you’re planning to launch in the near future, along with any intellectual property you own.

Section 5: Marketing Plan

We know who you are and what you’re selling.

Now’s your chance to explain how you’re going to sell it.

As a marketer, I’m well aware that a marketing plan could easily run to thousands of words, and it can be hard to know where to start—you’ve likely got a lot of ideas about positioning and messaging. To make your life a little easier, use the so-called “four Ps of marketing” as the backbone of your marketing plan:

• Product: How does it meet the needs of your customers? What are its unique selling points?
• Price: How much does it cost? What is its value?
• Place: Where are you selling it?
• Promotion: Which channels will you use to reach your target audience? What messaging will you use?

Discuss the first three relatively briefly, as you’ll cover them in greater depth in other parts of your e-commerce business plan.

Reserve the most detail for that final “P”: promotion. That’s the real meat and drink of your marketing strategy.

Section 6: Logistics & Operations Plan

This might not be the “sexiest” part of your e-commerce business plan, but it’s important to discuss the systems and processes that will help you reach your goals. Specifically, you’ll want to cover:

• Suppliers: Who are they and where are they based? What are their payment terms?
• Production: Are you manufacturing your own products, using a third party, or going down the dropshipping route? Can you efficiently scale up or down to cope with changing demand?
• Shipping and fulfillment: Are you handling fulfillment in-house or using a third party? Will you ship internationally? How long will it take for products to reach customers?
• Inventory: How much will you keep, and where will you store it? How will you manage and track it?

Section 7: Financial Plan

Whether you’re seeking backing from an external investor or simply trying to understand your projected revenue and costs, a financial plan is a crucial element of your e-commerce business plan. Most are broken down into three elements.

Income Statement

Designed to demonstrate your revenue sources and expenses over a month, quarter, or year, the income statement also highlights your all-important bottom line. Subtract expenses from revenue and you’ll see whether you’re in profit or loss.

Of course, if you’re yet to launch your e-commerce business, these figures can be projected.

Balance Sheet

The balance sheet is used to calculate the level of equity in your business—that is, the amount you’d be left with if all debts were paid and assets cashed. To work it out, subtract liabilities (things like loan repayments, wages, and accounts payable) from assets (such as stock and equipment).

Cash Flow Statement

Lastly, your cash flow statement is like a real-time version of your income statement. That’s because it takes into account when cash goes in and out of your business, based on when payments are received and debts settled.

Calculating and projecting cash flow should help you identify periods when you’re likely to be in surplus or short on money, which gives you time to prepare.

Sure, an e-commerce business plan requires a whole lot of work.

But as Abraham Lincoln supposedly said: “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”

All that time spent analyzing your audience, honing your messaging , and crunching the financial numbers will give you a better chance of making it through those tough early days and scaling effectively when the time is right.

And honestly, no one ever said starting a business is easy.

Emil Kristensen

Emil is the CMO of Drip. When he’s not busy writing awesome content and building the Drip brand, he spends his time reading blog posts and listening to podcasts.

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Embark on creating your ecommerce business plan, akin to crafting a map for your entrepreneurial journey. Use the provided template as your guide through the maze of market analysis and strategic planning.

Learn how each part, from financial forecasts to competitor analysis, adds to your online success blueprint. Understand the art of making a roadmap that doesn’t only point out your profit route, but also sets your brand for lasting success in the digital realm.

How to create a defensible eCommerce business plan

For a sturdy eCommerce business plan, start by studying the market. Understand the industry, competitors, and customer likes. Set your business apart with a unique selling point.

Plan your finances – predict revenues, identify funding needs, and estimate costs. Sketch out a clear marketing plan. Focus on getting and keeping customers, and boosting brand awareness.

Make a flexible operational plan for logistics, customer service , and fulfillment. By including these in your plan, you lay a robust foundation for your eCommerce venture. This ensures strategic growth and staying power in the competitive online market.

How To Write an Ecommerce Business Plan in 9 Steps

1. draft an executive summary.

Starting an eCommerce business plan requires a solid executive summary. It serves as your business roadmap, offering a brief and clear overview of your business, including key elements like your unique selling point, target market, and competitive edge.

This section is crucial as it summarizes your business and can attract investors and stakeholders by showcasing your business’s potential.

A strong executive summary is essential for outlining the core aspects of your eCommerce business and setting the stage for further detailed planning and development.

It provides a snapshot of your business’s strengths and competitive advantages, guiding the reader towards a deeper understanding of your business concept and potential for success.

2. Describe your company (Qualitative)

Let’s take a closer look at conveying the qualitative aspects of your eCommerce business.

Consider these key points:

• Business Model: Give a clear picture of how your business plans to generate profits and maintain itself.
• Business Structure: Outline your company’s organization, including duties and roles.
• Legal Business Structure: Detail the legal framework your business uses.
• Business Overview: Share a brief synopsis of your company’s mission, values, and aims.
• Online Business Concept: Illustrate the distinctive idea that fuels your online business and distinguishes it from rivals.

3. List your products and services

What products or services will your online store offer? How do these fit with your business plan’s unique selling points?

Setting up your online store requires a clear outline of your product or service. Explain the variety of products you aim to sell and how they meet your target audience’s needs.

Your offerings could be unique items, tailored services, or a mix of both. Ensure your offerings align with your business plan’s vision.

Your products and services are the core of your online store. They play a large role in drawing and keeping customers. Keep your focus on delivering value and effectively meeting customer needs .

4. Analyze your target audience

To understand your business, dig deep into your target audience’s minds and actions. This will help you build a bond that fits their needs and likes. To effectively study your target audience, try these steps:

• Do thorough market research. Find out about their demographics, likes, and shopping habits.
• Use surveys, focus groups, and social media analytics. This will help you collect useful insights.
• Split your audience into segments based on shared traits. This will help with targeted marketing tactics .
• Make buyer personas to put a face to your audience and shape your messaging.
• Always keep an eye on and adjust your approach. This will help you keep up with changing consumer trends .

5. Outline the management and organization

For a well-crafted ecommerce business plan, first sketch out the management and organization. This includes the roles you aim to fill and their fit into the overall business plan.

Pinpointing key positions in your firm ensures smooth operations and clear task division. The table below could help organize the roles you aim to fill:

Defining these roles clearly is crucial for an ecommerce business to align with the broader business plan.

6. Perform customer segmentation

To create a strong ecommerce business plan, first break down your customers. Group them based on what they need and like. This is a key part of your marketing strategy. It helps you reach the right people. Customer segmentation is key to make your business approach fit different customer groups.

• Break down customers into groups. You can do this based on age, behavior, or interests.
• Change your marketing messages and product offerings for each group.
• Look at data to see how each customer group buys things.
• Make promotions and campaigns that will attract certain groups.
• Always check and change your customer segmentation strategy to fit market trends.

7. Define a marketing plan

Craft your eCommerce business plan with a defined marketing plan. It outlines key marketing strategies to promote your products effectively and reach your target audience.

Your plan should include specific tactics to attract customers. These may be social media campaigns, influencer partnerships, or search engine optimization.

The success of your online business hinges on this plan. It details your marketing strategies, creating a roadmap for engagement with potential customers and sales drive.

A well-thought-out marketing plan is important for standing out in a competitive eCommerce field and building a strong online presence.

8. Provide a logistics and operations plan

In shaping your ecommerce business plan, don’t forget a comprehensive logistics and operations plan. It details how orders will be efficiently fulfilled. This part is crucial to your ecommerce business running smoothly. Remember these five key points when crafting your logistics and operations plan:

• Make your warehouse layout better for swift order fulfillment
• Create strong ties with trustworthy shipping carriers
• Use inventory management systems for correct stock levels
• Make a returns process that’s easy for customers
• Always check and improve your logistics and operations methods for better efficiency

Following these steps ensures your business operates without hiccups. It also promises a flawless experience for your customers .

9. Make a financial plan

Crafting a strong financial plan is key for your ecommerce business. The plan shows how your business will make money, handle costs, and use resources effectively. It covers topics like startup costs, sales predictions, profit boundaries, and cash flow estimates.

This plan is crucial for getting funding, making savvy decisions, and monitoring your business’s financial health. By grasping the financial parts of your e-commerce business plan, you can identify the funds needed to carry out your plan. Use financial tools and forecasts to build a solid base for your business’s financial triumph.

Adding a thorough financial plan to your overall business plan is central to guaranteeing your e-commerce business’s long-term survival and expansion.

7 tips for creating a small business plan

Crafting a small business plan demands a keen understanding of your audience. Tailor your strategy to them for efficacy.

Always keep a clear objective in the crosshairs, directing your choices and deeds.

Dedicate time to research. It affords crucial knowledge, molding a blueprint for your online shop.

1. Know your audience

Knowing your audience is key in starting an eCommerce business. This helps you shape your products and services to suit their needs. To truly know your audience , take these steps:

• Do deep market research to find your target demographic.
• Study consumer behavior to know their buying habits.
• Use surveys or focus groups to get insights.
• Watch social media interactions to find out customer likes.
• Break down your audience based on traits for custom marketing plans.

2. Have a clear goal

To succeed in your small business plan, set clear, measurable goals. They should guide decisions and track progress effectively.

Have distinct business goals that match your target market and unique selling points. Include detailed financial forecasts for realistic growth planning.

Carry out in-depth market research to grasp industry trends and opportunities for setting your business apart. Craft a focused marketing strategy to enhance brand recognition and drive sales .

Set detailed targets linked to your target market, financial forecasts, market research, and marketing plan. This creates a path to success in your e-commerce business plan.

Keep your eyes on these goals to guide your business towards long-term success.

3. Invest time in research

Have you thought about how spending time on deep research can help your small business plan? Doing market research is vital for a good online business strategy. Here are five reasons why time spent on research can aid your small business plan:

• Knowing the market : Research helps you understand industry trends, rivals, and your audience.
• Smart decision-making : Studying data assists in making wise decisions for your business plan.
• Spotting opportunities and hurdles : Research helps in finding growth areas and challenges.
• Adjusting products/services : Research allows you to understand and meet customer needs.
• Creating strong marketing strategies : Insights from data help in setting up your online business for success in the market.

4. Keep it short and to the point

For a successful small business plan, be brief. Highlight only the essential details. Short business plans are easy to handle and useful for quick decisions. Keeping it short puts emphasis on key points without overwhelming readers. Include only what’s necessary, focusing on clarity and brevity to convey your business strategy.

Concise plans are ideal for presenting to potential investors, they allow for quick understanding. Writing a concise, to the point business plan makes it easy to digest and a handy reference for your business.

5. Keep the tone, style, and voice consistent

Maintaining uniformity in tone, style, and voice is key when crafting a small business strategy. This ensures a unified and polished representation that resonates with your audience and stakeholders.

To make sure your e-commerce business plan hits the mark and effectively conveys your ideas, heed these pointers:

• Stick to a formal language throughout the manuscript.
• Uphold a professional and business-oriented tone.
• Keep the narrative style straightforward and succinct.
• Steer clear of blending informal and formal language.
• Revisit and rectify the strategy for uniformity in tone, style, and voice.

6. Use a business plan template

Use a business plan model for your small business. Go for one designed for e-commerce. Templates give a good system to arrange your ideas. They help cover all key parts of your business strategy. Here’s a simple table to help pick the right model for your e-commerce business plan:

Try business plan software

Think about using business plan software for your e-commerce venture. This software makes the process easier and professional. It offers templates you can change to fit your business needs.

It guides you through each step, making sure you cover everything for your e-commerce plan. It lets you enter your data and ideas quickly. This helps create detailed money forecasts, market studies, and operation plans.

In conclusion, creating a robust ecommerce business plan is akin to constructing a strong ship for sailing the expansive oceans of online trade. Set precise objectives, comprehend your market, and devise unique tactics to guide your business to success.

A well-planned strategy is your beacon in the constantly shifting digital environment, directing you towards expansion and profit. Thus, embark with assurance, equipped with a strategy that will enable you to withstand any tempest.

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Run » technology, building your e-commerce website from scratch: a small business guide.

Create an online store that delights shoppers with fast-loading pages and seamless checkout experiences. Learn how to pick an e-commerce platform and design a high-converting site.

Creating an e-commerce website is a daunting task. Yet, it's a project you can tackle with a solid strategy, an understanding of the best practices, and a step-by-step guide. More importantly, starting with the right online site builder and e-commerce platform prevents future obstacles, like realizing the software is above your skill level or isn’t built for your revenue model.

We put together a comprehensive guide that walks you through building an e-commerce website from scratch, starting with selecting hosting or e-commerce providers. Then, we will dive into the user experience (UX) and the nitty-gritty details of site navigation, product pages, and related features. Let's begin with the basics and go from there.

Registering a domain and choosing a hosting provider

You need a domain and web hosting to build an e-commerce site. Each component (the domain, web hosting, and e-commerce functionality) can be purchased through different vendors or a single provider. You should decide whether to bundle or keep these services separate.

Just like brick-and-mortar stores have a physical address, e-commerce shops have domains. You essentially rent an "address" for one to 10 years at a time. Some e-commerce and web hosting services provide a complimentary domain name for the first year when you buy an annual subscription and pay upfront. The renewal fees may be higher, though, than going through a third party.

Free e-commerce stores include a subdomain that isn’t search engine optimized or user-friendly. The URL looks like this: myshop.providername.com. While the URL may not be your first preference, it'll do for side hustles and startups testing the market or a vendor's e-commerce platform.

Hosting services power your site and store files, images, and information. Most also offer website builders and themes or templates. Select a provider to meet your security and performance specifications, then add your preferred e-commerce plug-ins, such as WooCommerce.

Alternatively, a web host like Bluehost has an online store package. It comes with the content management system (CMS) WordPress and the e-commerce plug-in WooCommerce preinstalled.

E-commerce platforms like Wix and Shopify supply web hosting with all the subscriptions. These all-in-one systems include site-building tools, page templates, storage, payment processing, and everything needed to start an online shop.

[ Read more: Setting Up an E-Commerce Business: A Comprehensive Guide ]

Key takeaways for selecting an e-commerce platform

Every experience hinges on your initial technology decision, from how you build your e-commerce website to what credit card processing fees you pay. Not all vendors make it easy to migrate to a new service if you're unsatisfied, and it's a resource-intensive job.

Review our guide to choosing the best e-commerce platform and consider the following tips when picking services:

• Functionality: Ensure the software meets each business requirement by testing its capabilities fully.
• Integrations: Check for customer relationship management , email marketing, and business phone integrations to see how they work.
• Skill level: Decide who will access the e-commerce site to build pages, add blog posts, or update pricing. Consider the administrative user interface and site tools.
• Payment acceptance: Weigh the pros and cons of using an all-in-one service with integrated flat-rate fees versus connecting a gateway from a processing provider .
• Scalability: Compare step-up plans to understand the value for the money and estimate when you'd need that level. Think in terms of site traffic, storage, and team size.
• Costs: Besides monthly or annual subscription fees, account for overlooked e-commerce business expenses , like hidden fees for domain privacy or email accounts.
• Security: Learn how the e-commerce provider protects customer privacy and your online shop from threats. If the vendor manages payment processing, inquire about payment card industry compliance .

Many excellent options exist, so narrowing down your choices is challenging. Fortunately, most vendors offer demos or free trials.

E-commerce software providers

Here are five web hosting and e-commerce solutions:

• Wix: This versatile all-in-one platform supports multiple revenue models and industries. Wix provides a complete e-commerce store with abandoned cart recovery and shipping tools. It also includes online booking, ticketing, and virtual services capabilities.
• Bluehost: A fast-growing business wanting managed WordPress and WooCommerce hosting might consider Bluehost . It could be cheaper to scale for higher traffic and storage needs.
• Square Online: This solution is for brick-and-mortar businesses that are adding an online store . It connects to other free and paid products, like its point-of-sale system, and it has native payment processing. Square Online caters to the restaurant, retail, and service sectors.
• WordPress.com: If your e-commerce revenue model prioritizes digital content, subscriptions, or memberships but also wants online store functionality, WordPress.com could be suitable. It's a fantastic blogging space and ideal for those monetizing their blog .
• IONOS: This vendor offers online store and website builders for retailers, digital content marketers, and wholesalers. Alternatively, you can configure IONOS servers for Magento, WooCommerce, or PrestaShop hosting.

[ Read more: Top Retail and Commerce Trends for 2024 and Beyond ]

Choose your e-commerce website builder

Depending on your platform, you will have several options when building your e-commerce site. Generally speaking, most web hosts and e-commerce vendors provide no-code website builders. You drag and drop design elements onto page templates, and the system's limitations prevent you from making errors that could break the site.

Conversely, artificial intelligence (AI) can handle some or most of the process. After you answer a few questions, an AI site builder creates a multipage e-commerce site. Then, you can customize it and use AI for additional assistance .

Lastly, web developers and designers may prefer to customize elements or create an e-commerce site from scratch using code. This functionality varies by vendor and subscription tier.

E-commerce website design considerations

Have your e-commerce brand elements and assets ready before starting your site build. Decide on a site color scheme, choose a few fonts, and design your logo . When choosing prebuilt templates and themes, look closely at how layouts differ for visual elements. Imagine your buyer’s journey when clicking through the pages.

[ Read more: How to Improve the User Experience ]

Online store site structure checklist

Use your time efficiently by planning your site on paper. This step helps you avoid site structure and navigation errors that damage user experiences and search engine optimization (SEO). It's much easier to erase and rework a penciled plan than it is to rename URLs and change menus. Compile tasks into stages, starting with must-have website pages .

Here's an example of various e-commerce website elements:

• A homepage welcoming visitors to your e-commerce site.
• Clearly defined and labeled product categories and subgroups.
• About and contact pages to earn customer trust.
• An online store page with a search bar and filter options.
• Individual product or service pages with images and descriptions .
• Menu and navigation bars for accessing site content.
• A footer section to house additional information, like your privacy policy.
• Frequently-asked-question pages for site visitors and SEO.
• An email sign-up form for email marketing lists .
• Testimonials or case studies to demonstrate social proof.
• Customer account portals for viewing order information.
• Industry-related features for subscriptions, online bookings, or e-courses.

Best practices for making an e-commerce website

E-commerce site design affects UX and sales. The best thing you can do is learn how to use your CMS or online store platform inside and out. Watch videos, read tutorials, and devise a high-converting website strategy.

When crafting your online store, consider these tips:

• Stick with your font and color palette throughout your site. Buttons shouldn't look different on every page, and text shouldn't resemble cheesy third-party ads.
• In a world of AI-generated stock images, differentiate your company by producing great product photos . Keep them consistent and show various angles of items.
• Allow shoppers to check out as guests. Forcing humans to give you personal data isn't a great way to start a relationship.
• Enable item previews, save to a wishlist, and product recommendations functionalities when possible. These features are simple ways to increase conversions.
• Review every page, delete placeholder text, and test all links and forms. Don't forget to check how the online store functions on all devices.
• Add meta descriptions to pages and images. Write alt text for photos and only include keywords when doing so improves the user experience.

Shipping products

Order management, inventory tools, and shipping integrations streamline e-commerce operations. Many online platforms centralize administration through dashboards. You can configure shipping rules before or after publishing your site. These let you pick shipping regions, offer local pick up, or apply discounts or free shipping coupons.

[ Read more: AI and E-commerce: Simplifying the Sales Process ]

Choosing a payment gateway

E-commerce services like Wix and Shopify have built-in payment acceptance capabilities powered by Stripe , a company known for its fraud detection and prevention tools. However, companies with a large global customer base may want to add PayPal , as it works well worldwide for consumers without credit cards.

Buy now, pay later and gift card options appeal to shoppers around the holidays. The former has steep fees, whereas the latter may be an add-on service. Regardless of your chosen methods, the checkout flow must remain frictionless. Limit the number of clicks and keep it to a single page when possible.

Once you connect to a payment processor, your e-commerce website is ready. Then, you can begin the forever process of refining your masterpiece.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

Applications are open for the CO—100! Now is your chance to join an exclusive group of outstanding small businesses. Share your story with us — apply today .

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here .

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How to Create a Business Plan for Launching an Ecommerce Website

• Business Plan for Ecommerce Startup

Last Updated: May 17, 2024 By TRUiC Team

This guide will show you how to create a business plan to launch an ecommerce website. It will also offer tips on what to do to increase your chances of success. Here’s what you need to know.

Business Plan Benefits

A business plan is a document which contains all the information about the business in order to help make decisions for the future. It can be used to assess how an organization is performing and to identify any areas that require improvement.

Key benefits of making a business plan are:

• Provides clarity of direction
• Helps identify potential risks
• Assists in executing strategy
• Allows assessment of performance (current or projected)
• Assists in planning for future growth/opportunities
• Aids communication internally and externally

Sections in a Business Plan

There are important sections to include in a business plan. When starting an ecommerce business, you’ll want to ensure your business plan contains the following:

• Executive Summary
• Vision and Mission Statement
• Products and Services
• Market Introduction and Profile
• Competition Section: 
• Company background
• Strategic plans
• Competitive analysis
• Marketing and Sales Strategy: 
• Key opinion leaders
• Marketing objectives
• Market segmentation
• Target market
• Goals of the company
• Marketing strategy
• Marketing activities to achieve marketing objectives
• Various other factors such as  marketing strategies
• Financial: 
• Current or projected  balance sheet
• Income statement
• Cash flow statement  
• Customer information
• Business credit building strategy

Recommended: Use our free business plan generator to master each section of the business plan.

Write a Business Plan

A business plan will help you get your company up and running and prevent you from making costly mistakes. Here is how to create a business plan for an ecommerce company.

1. Start by asking and answering some typical business plan questions:

• What is your company's mission?
• What is your company's vision?
• What is your company's business model?
• What is your company's differentiation strategy?
• What are you selling or offering?
• What is your company's competitive advantage?
• Who are your clients and what value do you provide to them?
• How does your company make money and spend it?
• What is your daily method of operation to generate sales?

2. Next complete the plan:

After answering some vital questions, structure them in a formal business plan arrangement to help your plan take shape.

Questions jumpstart your thinking, while writing helps bring your plan together.

Five Business Plan Attributes

There are five business plan attributes that should be included in your ecommerce business plan to help you define your goals and provide your business with a concrete direction. These attributes ensure that your business plan will help you create a daily method of operation, plan the business’s financials, and develop a forward-thinking exit strategy should you someday want to sell your business.

Business plan attributes:

• "Vision" attribute, which is about defining your goals.
• "Road map" attribute, which includes how you're going to get there.
• "Operations" attribute, which includes how you're going to run the company’s day-to-day operations.
• "Financial" attribute, which includes projections and analyses on cash flow and profitability.
• "Exit strategy" attribute, in case you ever want to sell or go public with your business.

Ecommerce Business Planning Costs

There are many factors that determine the costs of an online store . The type of business, where you are based, and what you sell are all pieces to consider. Here are some steps to help you calculate and manage your ecommerce costs.

1. Start by Understanding Types of Cost.

We can break down costs into two main groupings:

Fixed costs refer to expenses which do not change over time. For example, setting up your website domain name or designing your logo might fall into this category. You will have to pay these expenses upfront before starting your business even if you don't generate any revenue. Fixed costs may also include hiring a lawyer for drafting contracts with suppliers.

Variable costs are ongoing expenditures that vary month to month. These types of expenditures are more challenging to manage. For example, paying utilities or a metered hosting plan would vary monthly.

A good strategy for determining variable costs is to estimate a range. Then factor this range into your business plan.

2. Decide What Products and Services You Need to Purchase

When starting an ecommerce business, you will need a good hosting plan for your ecommerce website. There are a lot of choices to pick from. To help you decide, we've reviewed the best hosting options available.

You may also need additional services:

• Business planning software
• Business bank account
• Business credit card
• Building business credit
• Business phone line
• Accounting software
• Business formation service
• Payroll service
• SEO services
• Tax software
• Registered agent
• Business license
• Annual filing service
• Business insurance

3. Add Up All Costs

Once you know what your ecommerce business needs and know what you want to buy, you should add up all your proposed costs. This is simple math — take the price of each item and add it to the next. 

4. Manage Costs

After you make your purchases, start managing your finances with a business accounting software. 

Managing your costs will help you with future business decisions, make filing taxes easier, and improving the financial side of your business plan.

Keep Your Ecommerce Store Running Successfully

Staying on top of your ecommerce store is a lot of work. However, if you stay on top of your business and put in the effort, you can keep everything running smoothly.

Below, we've listed just a few ways that you can keep your store in tip-top shape and ensure it's always running efficiently and has the best chance of succeeding:

• Keep up with inventory : Keeping up with inventory is an important part of keeping your store running smoothly — and it's important because if something isn't there when someone tries to purchase it, then you may find yourself with an upset customer and a lost sale.
• Keep costs down: Ensuring you manage costs effectively will better help ensure you have more money coming in than going out. The old saying is: Only buy what you need!
• Focus on money producing activities: Running an online business is different from operating a forward-facing business like a brick-and-mortar boutique. For one, you’re typically working remotely where it is easy to get sidetracked and find yourself doing activities that don’t necessarily help your business.
• Keep your store clean and marketing working: Your job is to make sure your online store is clean, inviting, and fully stocked with items your customers want and need and that your marketing is working for you and not against you.
• Stick to your ecommerce business plan: There’s nothing worse than taking time to create a business plan only to never look at it again. The business plan should be something you are constantly looking at to keep you on track and focused on growing your business. Inside your plan, you may have a daily method of operation where you have listed those money producing activities you’ll do everyday to ensure your success. Let’s stick to the plan!

Main Takeaway

Starting an ecommerce business requires planning just like any other business. Start with a good plan. Ask questions that get you thinking about your business and the directions you want for it. Use a business plan template to create a business plan that works for your vision. Factor in financials, deciding what you will need to get started and then to maintain your business. Then transition over to the day-to-day operations and decide what you must do to run a nimble ecommerce business successfully. 

Frequently Asked Questions

What are the disadvantages of not making a business plan.

Insufficient planning can stop a company from growing. It can also cause the company to fail without any comprehensive strategy.

Things to consider:

• Without a comprehensive strategy, any marketing campaign will fail to have an impact on consumers.
• A business plan will help maintain focus on goals which are achievable and measurable.
• New problems will arise and a business plan is an important tool for assessing how to best tackle complex problems.

Who should I involve in my business plan?

The focus of a business plan is to provide a roadmap for the future of the business. It should detail what the company will do, how it will be financed, and what return on investment investors can expect.

Business plans are often written by entrepreneurs outlining their own vision for the company. But, it is important to involve other parties in the process as well. This includes investors, stakeholders, and customers. They can offer valuable insights into your product or service that you may not have considered before.

How do I know if my business plan is successful?

If you are thinking about creating a business plan, it is important to know what qualifies as a successful one. There are many different aspects of a business plan that can qualify it as successful. These aspects include the competition, the market, the financials, and more.

The best way to know whether or not you have created an effective business plan is to assess it at periodic intervals. At each benchmark, decide if you are where you want to be or not. If you are meeting or exceeding benchmarks, consider your plan successful. If you are not meeting your goals, you may need to reevaluate your business plan.

Ecommerce Business Plan Guide + Sample

July 6, 2023

Adam Hoeksema

Welcome to the ever-evolving world of ecommerce—a space where countless businesses are launching every day. If you've landed here, we're guessing you too are gearing up to start your own ecom business. Yet, entering ecommerce is not just about setting up a website and listing products—it involves a robust plan that encompasses every aspect from customer acquisition to cash flow forecasting. That's why we've crafted this comprehensive guide. This Ecommerce Business Plan Guide, complete with a sample business plan, should help you check this project off the list. 

Although we focus on ecommerce financial models , we know that some of our clients also need a full business plan, so I decided to take a deep dive into the topic.  I plan to cover:

• Why write a business plan for an ecommerce business?
• What to include in an ecommerce business plan?
• Ecommerce business plan outline

How to Analyze the Market for an Ecommerce Product?

How to analyze the competition in ecommerce, how to estimate customer acquisition costs in ecommerce.

• How to Create Financial Projections for an Ecommerce Brand?
• Example Ecommerce Business Plan?

Ecommerce Business Plan FAQs

With that as our guide, let’s dive in!

Why write a business plan for an ecommerce business? 

It might feel like writing a business plan is a waste of time, and honestly, writing a 40 page plan probably is a waste of time.  So why write a business plan?  I like to say that you write a business plan primarily because the people with the money (the lenders and investors) are asking for your business plan and projections.  

Although I think a business plan could be a good exercise for any ecommerce startup, I know the real impetus for writing a business plan is likely the fact that your potential investors or lenders are asking for one.  

What to include in an ecommerce business plan? 

I don’t think your business plan needs to be a 100 page dissertation, our ecommerce business plan example is roughly 10 pages.  We include the following sections:

Ecommerce Business Plan Outline

We suggest the following business plan sections for your ecommerce business plan:

• Executive Summary
• Company Description
• Market Analysis
• Product and Service Offerings
• Marketing Plan & Customer Acquisition
• Operating Plan
• Financial Plan

Analyzing the market for an ecommerce product is a vital step in any business plan. It gives you a better understanding of your potential customers, competitors, and overall market dynamics. Here's a step-by-step guide to help you do this effectively:

• Identify Your Target Audience: Understanding who will buy your product is crucial. Segment your audience based on demographic and psychographic factors. This might include age, gender, location, lifestyle, interests, income, and more. Analyzing these factors will give you a clear picture of who your customers are and what they need.
• Market Size Estimation: Determine the size of your potential market. This involves looking at the number of potential customers who might be interested in your product. Market size can be categorized into three segments: total available market (TAM), serviceable available market (SAM), and serviceable obtainable market (SOM).

I like to use Google Keyword Planner Tool to see how many people are searching for keywords related to the product I plan to sell as a quick and free way to estimate the market size.  For example, let’s assume that we are selling a yoga mat.  According to Google Keyword Planner Tool there are roughly 90,000 monthly searches for that keyword. 

To put some additional rough math to the opportunity, the first organic search result will often get roughly 40% of the clicks, and a solid ecommerce site will have a 3% conversion rate of visit to purchase.  So if you ranked first and received roughly 36,000 clicks with a 3% conversion rate you could sell 1,080 mats per month. 

• Competitor Analysis: Understanding your competitors is as important as understanding your customers. Identify your direct and indirect competitors, analyze their products, pricing, marketing strategies, customer reviews, and their market share. This will help you identify gaps in the market that you can exploit.

Read More: How to Write a Business Plan Competitor Analysis

• Trend Analysis: Investigate current market trends related to your product. Look at the growth of the market, customer preferences and behavior, and the impact of technology and environmental factors.

I like to suggest using Google Trends to see trends in popularity in your market.  If we stick with our yoga mat example we can see the following seasonal trends and trend over the last 5 years for the search term yoga mat. 

• SWOT Analysis: Carry out a SWOT analysis - strengths, weaknesses, opportunities, and threats related to your ecommerce product. This analysis will help you understand your product's position in the market.
• Pricing Analysis: Understand the pricing strategies of your competitors and the pricing willingness of your potential customers. It will help you to set a competitive and profitable price for your product.
• Regulatory Environment: Check the regulatory environment related to your product. It includes legal regulations, trade policies, and standards that might impact your ecommerce business.
• Customer Behavior and Preferences: With the help of analytics and customer feedback, understand what drives customer behavior. Consider their shopping habits, their product preferences, and what influences their buying decisions.

Each of these steps will provide valuable insights that can shape your ecommerce product's marketing strategy, positioning, pricing, and much more. Remember, market analysis is an ongoing process—it needs to be repeated periodically as markets evolve over time.

There are a couple of tools that I like to use when analyzing the competition in ecommerce.  

• Google’s Ads Transparency Tool – with this tool you can simply enter in the domain name of a competitor and Google will show you all of the ads that they are running.  This is a nifty way to get an idea of ads that might be working well and areas you might be able to compete. 
• Ahrefs – Ahrefs will allow you to look up a competitor’s website and you can see how much organic traffic they are getting and exactly what keywords are sending that traffic. For example, REI ranks 3 rd organically for the keyword “yoga mats” so we looked up their Yoga Mats page on Ahrefs and found that they receive roughly 2,200 organic visits per month to that page:

We can also see what keywords are sending the most traffic to that page below where I have highlighted the monthly organic traffic estimate for each keyword. 

I like to use Google Keyword Planner Tool to estimate customer acquisition costs as well.  As we saw with the Yoga Mat example below the average cost per click to advertise for that keyword was between $0.39 cents and $3.13.   

Again if we stick with a 3% conversion rate and assume 50 cents per click that means you are likely to spend roughly $16 to acquire one customer.  Not a whole lot of room for margin in this business right?  In this case you would need to hope that you can sell multiple products to the same customer over time.  

Your customer acquisition costs will be a fundamental assumption in your financial model.  Let’s dive into that next. 

How to Create Financial Projections for a Bar Business Plan

Just like in any industry, the ecommerce business has its own unique factors that impact financial projections, such as online traffic, conversion rates, and customer acquisition costs. Utilizing an ecommerce financial projection template can simplify the process and increase your confidence. Creating accurate financial projections goes beyond showcasing your ecommerce venture's ability to generate sales; it's about illustrating the financial roadmap to profitability and the realization of your online business goals. To develop precise projections, consider the following key steps:

• Estimate startup costs for your ecommerce business, including website development or platform setup, inventory acquisition, branding and marketing expenses, and initial fulfillment and shipping costs.
• Forecast revenue based on projected online traffic, conversion rates, average order value, and potential growth in customer base.
• Project costs related to product sourcing or manufacturing, packaging, shipping, and fulfillment services.
• Estimate operating expenses like website maintenance, hosting fees, digital marketing expenses, customer support, and administrative costs.
• Calculate the capital needed to launch and sustain your ecommerce business, covering initial expenses and providing working capital for continued growth.

While financial projections are a critical component of your ecommerce business plan, seek guidance from experienced professionals in the ecommerce industry. Adapt your projections based on real-world insights, leverage industry resources, and stay informed about digital marketing trends and evolving consumer behavior to ensure your financial plan aligns with your goals and positions your ecommerce venture for long-term success.

Example Ecommerce Business Plan

Explore our E-commerce Business Plan, presented below. If you prefer, you can access a downloadable Google Doc version of this bar business plan template, allowing you to personalize and tailor it to your specific needs. Additionally, a helpful video walkthrough is available, guiding you through the process of customizing the business plan to perfectly align with your unique Ecommerce business.

Table of Contents

Executive Summary:

• Business Description
• SWOT Analysis

Marketing and Sales Strategy

• Branding and Identity
• Website, menu, and social media platforms
• Marketing materials and promotional items
• Marketing mix

Operations Plan

• Organizational Structure:
• Location and Facility:
• SOP (Standard Operating Procedures):
• Health and safety protocols:

Financial Projections

• Startup Costs and Use of Funds
• Annual Sales, Gross Profit and Net Profit
• Key Financial Ratios
• Income Statement at a Glance
• Income Statement Annual Summary
• Cash Flow Statement Annual Summary
• Balance Sheet Annual Summary

I. Executive Summary

Our ecommerce store, "Eco-Friendly Fashion," aims to provide consumers with stylish and environmentally-friendly clothing options. 

Our target customer is the eco-conscious, fashion-forward individual who is looking for sustainable alternatives to fast fashion.

The ecommerce market is growing rapidly, and there is a growing demand for sustainable fashion products. We believe there is a gap in the market for an ecommerce store that offers a wide range of eco-friendly clothing options at affordable prices. Our unique selling proposition is to offer high-quality, stylish clothing that is also environmentally friendly, at a price that is accessible to our target customer.

We plan to launch with a product line of 50 items, including t-shirts, hoodies, and dresses, made from organic cotton and recycled materials. Our products will be manufactured in fair trade factories, ensuring ethical labor practices. Our initial funding will come from personal investments and a small business loan. Our financial projections show that we will break even in the third year of operation and achieve a profit by the fourth year.

II. Company Description

Eco-Friendly Fashion is a newly established ecommerce store that will offer a wide range of eco-friendly clothing options for both men and women. The company was founded by two friends, Jane Doe and John Doe, who share a passion for sustainability and fashion. Jane has a background in fashion design and John has experience in ecommerce and marketing.

Eco-Friendly Fashion is a limited liability company (LLC) registered in the state of California. Our team also includes a product sourcing specialist and a freelance graphic designer. Our office and warehouse are located in Los Angeles, CA.

III. Market Analysis

The global ecommerce market is expected to reach $4.9 trillion by 2021, with a significant portion of this growth coming from the fashion industry. Consumers are increasingly turning to ecommerce for their fashion purchases, and there is a growing demand for sustainable fashion products.

Our target customer is the eco-conscious, fashion-forward individual, aged 18-35, with a moderate to high income. This demographic is highly concerned about the environmental impact of their clothing choices and is willing to pay a premium for sustainable fashion options.

Competitors in the eco-friendly fashion market include established brands like Patagonia and smaller, niche brands like Tentree. However, these brands tend to focus on outdoor and athletic wear, rather than everyday fashion, and their products can be expensive. Our competitors in the sustainable everyday fashion market include companies like Reformation and Everlane, but these brands have limited product offerings and their products can also be expensive.

Our marketing and sales strategies will focus on leveraging social media, influencer marketing, and targeted online advertising to reach our target customer. We will also attend sustainable fashion trade shows and events to network and showcase our brand.

IV. Product and Service Offerings

Eco-Friendly Fashion will launch with a product line of 50 items, including t-shirts, hoodies, and dresses, made from organic cotton and recycled materials. Our products will be manufactured in fair trade factories, ensuring ethical labor practices. Our products will be designed in-house, with a focus on creating stylish, on-trend pieces that are also environmentally friendly.

Our pricing strategy will be to offer high-quality, stylish clothing at a price that is accessible to our target customer. Our products will be priced slightly higher than fast fashion options, but lower than sustainable fashion competitors like Reformation and Everlane.

We will continuously expand our product line and source new materials and manufacturing partners to ensure we are always offering the latest in sustainable fashion. In addition to our clothing line, we will also offer a recycling program for customers to trade in their old clothing for store credit. This will further demonstrate our commitment to sustainability and encourage customers to make more sustainable fashion choices.

V. Marketing Plan & Customer Acquisition

Our plan to grow our ecommerce business and reach our financial targets will follow a 5 pronged marketing approach in order to acquire customers. 

Brand Awareness:

• Partner with influencers and bloggers in the sustainable fashion and lifestyle space to feature your products and increase brand exposure.
• Utilize social media platforms such as Instagram and Facebook to showcase your products and educate your audience on the importance of environmentally responsible and ethically sourced apparel.
• Participate in local events and festivals that align with your values to increase visibility and connect with potential customers in person.

Content Marketing:

• Create a blog that features articles on sustainable fashion and how your products are made in an environmentally responsible and ethical manner.
• Offer styling tips and suggestions for incorporating eco-friendly fashion into everyday outfits to engage and educate your audience.
• Share customer testimonials and reviews on your website and social media channels to build trust and credibility with potential customers.

Email Marketing:

• Build an email list by offering an incentive such as a discount code to customers who sign up.
• Send newsletters that include information on new product launches, sales, and events.
• Use email automation to send abandoned cart reminders and follow-up emails to potential customers who have shown interest in your products.

Paid Advertising:

• Utilize targeted Facebook and Instagram ads to reach a wider audience and drive traffic to your website.
• Partner with eco-friendly and sustainable lifestyle websites to run display ads and reach potential customers who are already interested in these topics.
• Consider using Google Ads to target customers who are actively searching for environmentally responsible and ethically sourced apparel.

Referral Program:

• Encourage satisfied customers to refer friends and family by offering a discount code or other incentive for each successful referral.

VI. Operating Plan

Eco-Friendly Fashion will operate as an online ecommerce store, with all sales taking place through our website. Our website will feature a user-friendly interface, detailed product descriptions, and multiple payment options. We will also offer free shipping on all orders within the United States, with the option for international shipping at an additional cost.

Our fulfillment and delivery strategies will include partnerships with established logistics companies to ensure efficient and cost-effective shipping. We will also implement a comprehensive returns and exchanges policy to ensure customer satisfaction.

Our ecommerce platform will be powered by Shopify, which offers a range of tools and integrations to manage our website, inventory, and customer data. We will also use a customer relationship management (CRM) system to track customer interactions and improve our marketing and sales strategies.

VII. Financial Plan

Our start-up costs will include the cost of product development and manufacturing, website development, marketing, and rent for our office and warehouse. Our initial funding will come from personal investments and a small business loan.

Our financial projections show that we will achieve $75,000 in sales in the first year, increasing to $500,000 in the second year and $1 million in the third year. Our expenses will include product manufacturing, marketing, salaries, and other operating costs. Our projections show that we will break even in the third year of operation and achieve a profit by the fourth year.

To minimize risk, we will continuously monitor our financial performance and adjust our strategies as needed. We will also implement a thorough risk management plan, including carrying appropriate insurance coverage and implementing strong data security measures to protect our customer information.

All of the unique financial projections you see below were generated using ProjectionHub’s Ecommerce financial projection template . Use PH20BP to enjoy a 20% discount on the template. 

Startup Costs:

Projected Financial Summary:

Annual Sales, Gross Profit and Net Profit:

Key Financial Ratios:

Watch how to create financial projections for your very own ecommerce business:

Income Statement:

Balance Sheet:

Cash Flow Statement:

VIII. Conclusion

Eco-Friendly Fashion is poised to fill a gap in the sustainable fashion market, offering a wide range of stylish and environmentally friendly clothing options at affordable prices. With a growing demand for sustainable fashion and our commitment to ethical and sustainable business practices, we are confident in our ability to succeed in the competitive ecommerce market.

Our team is dedicated to offering the highest quality products and customer service, and we are excited to bring our vision of sustainable fashion to life. Our next steps include finalizing our product line and manufacturing partnerships, launching our website, and beginning our marketing and sales efforts.

How do I start an ecommerce business?

To start an ecommerce business, you'll need to identify your target market and products, create a business plan, set up an online store or website, source or create products, establish secure payment and shipping methods, and implement marketing strategies to drive traffic and sales.

Which ecommerce platform should I use for my online store?

Popular ecommerce platforms include Shopify, WooCommerce, Magento, and BigCommerce. Consider factors such as ease of use, customization options, scalability, pricing, and integration with other tools or marketplaces when choosing the right platform for your business.

How can I drive traffic to my ecommerce website?

You can drive traffic to your ecommerce website through various strategies, including search engine optimization (SEO), social media marketing, content marketing, influencer partnerships, email marketing, paid advertising, and utilizing marketplace platforms such as Amazon or Etsy.

What are the essential elements to include in product descriptions for ecommerce?

Essential elements for product descriptions in ecommerce include clear and concise product titles, detailed descriptions highlighting key features and benefits, high-quality product images, pricing information, sizing or specifications, and customer reviews or testimonials, if available.

How can I optimize the checkout process to increase conversions?

To optimize the checkout process, streamline the steps involved, offer guest checkout options, provide multiple payment methods, ensure security and trust indicators, display shipping options and costs upfront, minimize form fields, and offer incentives such as discounts or free shipping for completing a purchase.

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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5 Key Tips to Make Your Startup Business Plan Shine for an SBA Loan

Learn 5 key tips to make your startup business plan stand out and secure an SBA loan, from demonstrating market potential to creating realistic financial projections.

How to Know if Your Financial Projections are Realistic

It is important for financial projections for a small business or startup to be realistic or else an investor or lender may not take them seriously. More importantly, the founder may make a financial mistake without a reliable plan.

Have some questions? Let us know and we'll be in touch.

• Sample Business Plans
• Retail, Consumers & E-commerce

How to Write E-commerce Business Plan + Template

So apparently everyone is jumping in to start an ecommerce business. Considering you already have your star product or service ready, you must be very thrilled to launch your business and make your first sale.

However, wait. Is your business plan ready? If you haven’t marked writing a business plan as the most important task on your checklist, you need to do that right away.

We know writing an ecommerce business plan is challenging. As a business owner of this new challenging enterprise, you don’t have much time. But this detailed guide with step-by-step procedures is likely to make the entire process of writing easier for you.

Don’t waste a minute further. Let’s dive right into the topic.

Key Takeaways

• Elements like executive summary, product or service, operations, marketing and sales plan, management team, and financial plan come together to make a compelling business plan.
• Determine marketing strategies for your ecommerce business and lay a clear action plan for building a solid brand image.
• Clearly establish your value propositions, business goals, and objectives to form relevant strategies for your ecommerce company.
• Make financial projections and consider various progressive and aggressive scenarios to establish the feasibility of your business idea.
• Identify the gaps and loopholes in your planning and make changes to your business idea accordingly.

Why do you need an Ecommerce business plan?

A business plan has many more advantages apart from helping you get approved for a business loan. Here are a few potential benefits of having one for your ecommerce company:

• Goals fulfillment: You will have to juggle multiple roles while running your ecommerce store. A well-crafted business plan will offer a roadmap to your business while helping you realize your business goals.
• Business strategies: A  business plan simplifies your business strategy and helps put the strategies for sales, marketing, and operations in perspective.
• Market analysis: A business plan strengthens your stand in the market by compelling you to conduct a detailed market analysis of the industry, competitors, and potential customers.
• Test ideas: An ecommerce plan will help you realize the gaps and errors in your planning. This allows you the luxury to make changes in the business model before investing your money in it.
• Simplifies the finance: A well-structured business plan lays a clear financial plan for your ecommerce business. The figures will help you understand the profitability, costs, and expenses of the company and its viability in monetary terms.

There’s much more to it. A business plan is like a beam of bright light that will make walking through the woods easier. It’s a living document that will evolve as the business grows.

Key components of an ecommerce business plan

Wondering what goes into making a perfect ecommerce business plan? Well, these are the key components you shouldn’t be missing.

• Executive summary: The executive summary will highlight the key details of your entire business plan.
• Business overview: This section will include a brief business overview along with its value proposition, objectives, mission, and vision statement.
• Market analysis: This section will define your potential customers and competition. A detailed industry analysis and competitors analysis will lay a foundation for important business strategies.
• Products and services: Define the products and services you will sell to your ideal customer. Also, offer a brief description of each product.
• Sales and marketing strategy: Highlight your sales and marketing plan to attract your potential customers. From content marketing to social media- include every detail of your strategies here.
• Operations plan: A well-defined plan that will help you run a smooth online business. Clearly defined process for inventory, order fulfillment, sales, storage, etc.
• Management team: A brief introduction of your company’s management team and their expertise in the field.
• Financial plan: Includes detailed financial forecasts and key reports like balance sheet, cash flow, P&L, and investment plan.

There is no definite format for business plans. However, a comprehensive plan accounts for all these components and makes it effective.

How to Write an Ecommerce Business Plan: A Complete Guide

From undertaking thorough market research to creating a marketing plan- uncover every detail on writing an effective plan for your online business with this guide.

1. Get an Ecommerce business plan template

Crafting a stellar business plan is a challenge. However, it can be the most precious reward for your business if you manage to write it comprehensively.

The process of translating your business idea into a business plan is lengthy and time-consuming. One is likely to leave behind an important detail or two without any definite format.

This is why you need an Ecommerce business plan template to write your plan in a structurally organized format. A template will help streamline your thoughts, organize the vision, and bring your ideas to life effortlessly.

Let’s not look elsewhere for a perfect template. Upmetrics business plan template is intuitive and is enriched with relevant examples that can be easily used as a reference while writing your plan.

Need Assistance Writing a Ecommerce Business Plan?

Get Upmetrics’ business plan template, import data directly into the editor, and start editing using Upmetrics AI Assistant.

Start Planning Now

2. Write an executive summary

Executive summary is a concise rundown of key points that summarizes your business plan. Though presented at first, it should be written in the end after you have walked through all the other aspects of planning.

Consider it as a document that will offer a brief insight into your overall business. Investors will read this part and gauge the viability of your business idea. If they find it fascinating and intriguing enough they will read it further in detail.

Add brief details of your ecommerce business, target market, problem, solution, service model, business goals, and financial figures in this section.

Adapt a narrative tone to make it interesting and keep it highly informative. And, most importantly keep it within a limit of 1-2 pages.

Say goodbye to boring templates

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3. Create a company overview section

As the title suggests, this section offers a brief company description of your ecommerce business. You must also include brief details about the company’s history in this section if it’s not a new venture.

So what does this section include?

• Name and location of the business , i.e. location of your warehouse, back end office.
• Type of your Ecommerce business , i.e. B2B, B2C, D2C, C2C, etc.
• Business structure of your e-commerce brand , i.e. sole proprietorship, Partnership, LLC, limited partnership, etc.
• Business goals : Highlight milestones such as sales or revenue goals.
• Mission statement : Describe the fundamental purpose of your business explaining why the business exists. For instance, the mission of First Cry is to offer eco-friendly baby care and maternity items to conscious buyers through its website and listings on a third-party platform.
• Vision statement : It is a declaration of what you want to achieve with your ecommerce business. For instance, First Cry wants to become the preferred brand for baby care products in the markets of North America, Asia, and Europe.

4. Conduct a competitive and market analysis

In this section of competitive and market analysis, you will dive deep into the study of the target market, industry trends, and your competition. Only a thorough understanding of these key elements will help you build a resilient business.

Target market and market opportunities

Begin by determining the Total Addressable Market (TAM) for your products and services. This part of the market analysis will offer a realistic idea of your market size.

Further, strengthen the understanding of your target market by identifying your target audience. Create a buyer persona by considering the psychographic and demographic details of your ideal customer.

Collect data from US census boards, government websites, and industrial publications for solid and foundational market research.

Lastly, identify the market trends and highlight your business strategy to fill the gaps in the existing market.

Competitive analysis

Ecommerce companies operate in a severely competitive marketplace. Understanding your competition will help you safeguard the business against potential threats and risks from your direct and indirect competitors.

Collect the data and analyze your competitors on the grounds of prices, services, quality, product offering, target market, and market size to make conclusive points. Evaluate their strengths and weaknesses using methods like SWOT analysis.

Now, detail the competitive advantage of your products and service offerings. This analysis should reflect that your business idea has a solid advantage over competitors’ offerings.

Focus on quality research. The study of the target market and competition will lay a foundation for crafting efficient business strategies.

5. Detail your products and services

After completing your market analysis, you will create a detailed section for your products and services.

Highlight all the product lines that your online business will offer. Also, mention the products within each product line and the product source.

If you are amongst the ecommerce businesses that sell digital products or services, mention those and explain how the customers will access them.

For instance, an OTT platform offers streaming services to its clients through an application.

Keep this section detailed by adding a brief description of each product and its pricing.

Consider this as a checklist of questions you must answer within this section:

• What are the products of your online store?
• Will you manufacture the products or source them from vendors?
• How will your customers buy the product- Website, application, shopping platforms, etc.
• What will be the pricing of your product offerings?

6. Develop a sales and marketing plan

By now, the readers are aware of the products and services that your online business will offer. It’s now time to tell them your sales and marketing plan.

Millions of ecommerce businesses start every year. But very few manage to crack their desired sales.

In this section, you will make sales strategies to ensure that your desired sales become achievable.

Try answering the following to form an efficient sales plan:

• Sales channels: website, application, ecommerce platforms, subscription box platforms, flash sale sites, etc.
• Sales method: Inbound methods or outbound methods
• Sales personnel: Who will be responsible for product/service sales
• Sales tools: CRM

The decisions you make here will influence the marketing strategy of your online store.

Marketing strategy

Now you need a well-rounded marketing plan to market your online store. After all, marketing is crucial to developing a brand, reaching your target customers, and acquiring sales.

In this section of a business plan, you will highlight the marketing plan for your ecommerce business. Identify the marketing channels that will be most effective for your target customers and design your strategies accordingly.

Here are a few prevalent marketing methods that can help you grow your online store:

• Content marketing: Start writing informative and useful blog posts for your target audience. Focus on principles of SEO and keyword research to grow your reach organically. Also, post guest blogs on websites to increase your chances of reaching a wider audience.
• Social media marketing: Identify the social media platforms that are used the most by your target audience and dedicate your marketing efforts accordingly.
• Email Marketing: Email marketing is the most rewarding marketing channel for thousands of ecommerce businesses out there. Explain how you will build your Email list and draw conversions through them.
• PPC: Design strategies for running paid ads on Google, Facebook, and other platforms and determine your budget for the same.
• Traditional PR: Traditional methods of publications can also help you market your product effectively. If you will be using such methods, highlight the details regarding the same.
• Influencer marketing: Will you hire or barter with influencers to promote your product? If so, define your strategy for the same.

All in all, the marketing plan should clearly define a roadmap to reach your target audience. Also, highlight different marketing tools you will use for your online business.

7. Introduce your management team

Having the right team will help you build a successful ecommerce business. So take your time and figure out the manpower needs for your business.

In this section of your business plan, you will introduce the key management members at your ecommerce store. Define their role, responsibility, experience, expertise, and achievements to prove their suitability in your organization.

Outline the organizational structure of your online store and explain how these people will be responsible for the smooth functioning of your business.

8. Outline your operational plan

Running an ecommerce store is not an easy task. From managing the backend to offering timely deliveries- a lot goes into ensuring smooth business operations.

A solid business plan cannot be complete without a detailed section of operations in it. So take your time and set your operations in line before you start with the store.

Here are a few things that most ecommerce business plans have in common. Consider adding them to your operations plan as well.

• Order fulfillment process: Everything from getting an order to delivery, managing returns, shipment, packaging, exchange, and tracking is defined at this step. Explain how the order will be fulfilled at your online store.
• Manufacturing and quality control: If the products will be manufactured in-house, what will be the manufacturing process? How will you ensure quality? Where will the goods be manufactured? What machinery will you use?
• Suppliers: Who will be your supplier for products and services? What will be the purchase terms? Will there be an agreement or contract? What would be the contingency plan in case of casualty?
• Storage: Will you dropship the products or store them in a warehouse? Where will be the storage located? How will you manage stock? What methods will you use?
• Technology and payment processors: How will the customers pay for online shopping? What payment methods are available for them? What technologies will you use to facilitate payments? How will you secure their personal information?
• Customer service: How can the customers reach you? What will be your order policies? Will there be any customer service team?

The logistics and operations plan will serve as a policy book for your organization. It will answer every query and doubt regarding the process.

9. Prepare financial projections

Now comes the most taxing part of creating a business plan- preparing a financial plan.

A financial plan is crucial because it will help you determine the feasibility of a business idea. Moreover, if you plan to seek funding for your online business, the projections in this plan will compel potential investor’s interest in your business.

Here are a few things to include in your financial plan:

• Startup costs: Estimate the startup costs for your ecommerce business . From website development to inventory costs, licensing fees, security, and software charges- include every cost that will go into establishing your online business.
• Funding source: Determine your funding requirements and what sources will you use to acquire the funds, i.e. business loans, angel investors, friends and family, etc.
• Pricing strategy: Include your pricing plan for the products and services. Consider various overhead and operational costs to determine the final pricing.
• Sales projections: Include your monthly, quarterly, and annual sales projections through different sales channels and also estimate your revenue.
• Income statement: Also known as profit and loss statement, in this key report you will forecast the company’s profit and loss for the next 3-5 years. The difference between a company’s revenue and expenses will give you gross profits and net profits.
• Cash Flow Statement:   A clear documentation of cash that is generated and spent in a business. This will help potential investors understand whether your business will make or lose money.
• Balance sheet: A key summary of your business assets and liabilities that indicates your net worth. Calculate your equity in the business by deducting all the liabilities from your assets.
• Break-even analysis: Break-even will help you evaluate how long before the business will start making money.

Too much of calculations right? Not with the financial forecasting tool from Upmetrics. Simply enter your numbers in the tab and the tool will do all the detailed calculations for you. Import the data from Excel sheets and before you know your projections will be done.

Ecommerce Industry Highlights 2023

Ecommerce is a trillion-dollar industry. It’s indeed a rewarding market for anyone who wants to start an ecommerce business. But before that, you must check out these latest industry highlights of 2023.

• Global market size: The global Ecommerce market size is expected to reach 6.3 trillion dollars in 2023. There is ample room for new businesses to venture into this market.
• Online marketplace : According to Forbes , 24% of total retail purchases will be made online by 2026.
• Market leader: Amazon accounts for 37.8% of Ecommerce sales , which is far more than other ecommerce businesses.
• Cart abandonment: 48% of online shoppers abandon their carts because of extra costs on shipping and taxes. You are likely to lose your potential customers if you fail to consider these aspects.
• Frequency to shop: 79% of online shoppers will shop for something or the other at least once a month. Considering the customer segments, nearly 96% of Gen Z shop at least once a month online.
• Social media commerce: If you think websites and platforms are the only way to reach your potential customers, you are wrong. 96.9 million people in the USA are reported to shop on social media.

The US online marketplace is expected to reach 940.9 billion by 2023 end. There is enough scope for new businesses to emerge and grow in this competitive market space.

Related Ecommerce Resources

• Creating a Successful E-commerce Marketing Plan
• E-commerce Financial Plan
• E-commerce Industry Statistics
• Calculating Your Online Store Startup Budget
• How To Open n E-commerce Business

Download a sample ecommerce business plan

Looking for help to write your business plan? Well, we have something absolutely perfect for you. Download our ecommerce business plan sample pdf and get a detailed guide to write a plan along with relevant examples.

Upmetrics business plan templates are designed specifically for entrepreneurs and business owners who want to write their own business plans. Our templates are modern, intuitive, and easily available to kickstart your plan writing.

The Quickest Way to turn a Business Idea into a Business Plan

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So whether you are aiming to start a business-to-business or business-to-customer or any other type of ecommerce business, you are well equipped to write the most stellar plan with our business planning app .

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Frequently asked questions, can i get expert help to draft my ecommerce business plan.

Of course, you can. Writing a business plan is not an easy task. You may lose context or can leave behind an important detail while writing. A plan writer can translate your business idea into a plan efficiently with his compelling skills. If not, you can take the help of online tools and search for relevant templates to write your own business plan.

Can I customize my ecommerce business plan as per my business needs?

Absolutely yes. No two ecommerce businesses are the same. The very purpose of a business plan is to address the unique concerns, ideas, and questions relating to your ecommerce business. From executive summary to a financial plan, customize every aspect of your plan with Upmetrics business plan builder.

What are the common mistakes to avoid while crafting an ecommerce business plan?

Here are a few mistakes to avoid while drafting a business plan for your new business:

• Lack of market research
• Inadequate financial planning
• Overlooking the competition
• Not having a clear value proposition
• Undermining the technology needs
• Not considering casualties and emergencies
• Using complex language

Can I create an e-commerce business plan on my own, or should I hire a professional?

Ideally, you should be the one drafting your business plan. This is because no one knows your business better than you yourself and your business partners. So instead of hiring a professional, take the assistance of plan builders and step-by-step guides and create a compelling plan. Upmetrics AI assistant will simplify the writing process by helping you put together a cohesive write-up.

What are some emerging payment technologies to consider in your e-commerce business plan?

If you are planning to start a competitive ecommerce brand, you need to offer a bunch of payment solutions preferred by your target audience. Here are a few payment technologies you must definitely have in your business:

• QR code payments
• Mobile wallet
• Contactless payment
• Real-time payments
• Buy now pay later solutions

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How to Start an E-Commerce Business In 2024

Updated: Feb 14, 2024, 2:00pm

Table of Contents

• What Is E-Commerce?

Types of E-Commerce Businesses

Why start an e-commerce business, 8 steps to start an e-commerce business, 5 tips for running your e-commerce business, bottom line, frequently asked questions (faqs).

E-commerce is more popular today than ever before. In fact, the number of e-commerce websites has increased from 9.2 million to 26.5 million between 2019 and 2023. If you’re looking for a way to earn money online while being your own boss, an e-commerce business may be worthwhile.

While it takes a great deal of time, effort and dedication, it has the potential to turn into a profitable, enjoyable venture. With our handy guide on how to start an e-commerce business, you can hit the ground running and bring a successful e-commerce store to life.

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Before we go into what it takes to start and run an e-commerce business, let’s define what e-commerce actually is. Put simply, e-commerce refers to the buying and selling of products or services online. An e-commerce website acts as a virtual storefront and allows customers to purchase what they want from their desktop or mobile devices. While there can be brick-and-mortar locations attached to e-commerce websites, many e-commerce businesses solely operate online.

In general, e-commerce businesses fall into these four categories:

• Business to customer (B2C): A B2C website sells to individual customers, similar to brick-and-mortar storefronts. A customer can choose a product, check out and wait for the product to be shipped to them.
• Business to business (B2B): A B2B website sells products or services to other businesses. They usually have many bulk and recurring orders.
• Consumer to consumer (C2C): A C2C website or marketplace is one that allows customers to sell to one another. Etsy and eBay are a few popular examples of C2C sites.
• Consumer to business (C2B): A C2B website allows individuals to sell to businesses. In many cases, customers can write reviews, exchange affiliate links or provide places on their websites in exchange for compensation.

There are a number of benefits to e-commerce stores, including:

• Lower overhead costs: Compared to running a brick-and-mortar store, an e-commerce website is often more affordable. There’s no need to pay for a commercial property and the utility costs that come with it. Instead, you’ll invest in a domain name, web hosting, inventory and digital marketing.
• Chance to reach a broader audience: With an e-commerce store, you don’t have to limit your customer base to where you’re located. Even if you’re in a small town, you may reach customers across the country and world. This can lead to higher profits and greater success.
• Ability to easily scale: It’s much more difficult to grow a business with physical storefronts than one that operates online. If you go the e-commerce route, your website and store can grow as your business grows. You won’t have to open and manage more brick-and-mortar locations.
• Flexibility for customers: In today’s day and age, customers are busy and often lack the time or desire to drive to a store and purchase what they need. If you can serve them through an e-commerce website, they’ll be able to make purchases whenever they want, from the comfort of their own home, office or anywhere with an internet connection. Flexibility can lead to happy customers who return to your store and refer their friends.
• Access to customer data: An e-commerce business can allow you to collect valuable customer data. You may gain insights on your customers’ buying habits and demographics. In addition, you’ll have a better understanding of demand and be able to reduce the risk of understocking or overstocking as a result.

1. Define your e-commerce business idea

First and foremost, figure out what you’re going to sell. Ideally, you’d choose a product or service in a very specific niche. This way, you’ll have less competition and increase your chances of success.

If you decide to sell clothing, for example, you can target young professionals with affordable suits for young children with comfortable formal wear. Make sure that you’re passionate about whatever you’re trying to sell and/or can do or make well.

2. Validate your idea

A business idea is only worth pursuing if you determine it’s actually viable. To do so, consider the following:

• Market-based criteria: Market-based criteria focuses on market factors that will impact your business. It considers market size, competition, target customers and whether your products or services are trends or part of a flat or growing market.
• Product-based criteria: Product-based criteria revolves around your products and services. It examines your potential selling prices, size, weight and durability, how seasonality may affect demand, product regulations and whether your product caters to a passion or solves a pain point.

Both market-based and product-based criteria can help you understand whether your products or services have potential. If you believe that there is a market for your offerings, you can move on to the next steps.

3. Write a business plan

Once you hone in on your business idea and validate it, it’s time to create a business plan. Think of your business plan as a blueprint that outlines what you hope to accomplish and how you’ll get there. In general, a business plan involves the following components:

• Executive summary: This is where you discuss your structure, industry, leadership team and offerings.
• Competitor research: Competitor research is all about your competitors and their tactics.
• Product or service descriptions: Product or service descriptions explain what each offering is and how customers may benefit from it.
• Marketing and sales strategy: The marketing and sales section should describe what you’ll do to reach prospective customers and retain the ones you land.
• Financial projections: Here’s where you may want to work with an accountant to estimate your pricing strategy and profit goals.

Learn more: How To Write a Business Plan Learn more: Simple Business Plan Template Learn more: Business Plan Executive Summary Example & Template

4. Set up your business

After you solidify your e-commerce business idea and finalize a business plan, you can take the plunge and set up your business. You’ll choose a business structure, name your business, apply for an employer identification number (EIN) and open a business checking account. It’s also a good idea to get all of the licenses and permits you’ll need to operate legally. For help with the setup process, don’t hesitate to reach out to an attorney, accountant or other professionals who can answer any questions you may have and steer you in the right direction.

5. Develop or source your products

Next, you’ll need to develop the products you plan to sell. If these are tangible products, you may make them yourself or leave the task to a manufacturer. At this point, you should decide whether you’ll want to produce or order your products in bulk so you’ll have inventory in stock.

You may decide to start small and only stock a few products until you get a better sense for demand and determine whether bulk inventory makes sense. Another option is dropshipping , which is when products are manufactured and sourced when orders are placed. If you’re selling professional services online, such as graphic design or bookkeeping, you should zero in on what they’ll be and how much you’ll charge for them.

Learn more: How To Start A Dropshipping Business In 6 Simple Steps Learn more: 13 Profitable Dropshipping Products To Sell In 2024

6. Create your e-commerce website

Your e-commerce website will be one of your most important assets. Customers will visit your site to learn about you, explore your offerings and, hopefully, make purchases. The easiest way to launch a site is through an e-commerce website builder, such as Shopify or BigCommerce . While every builder is different, most of them allow you to market your offerings, manage inventory, collect payments, ship orders, access analytics and more.

If you’re limited on funds or don’t want to invest too much in your business at first, a free e-commerce platform can come in handy. You may always upgrade to a paid plan or platform as your business grows. Do your research and compare your options so you can figure out the best e-commerce tool for your unique budget, preferences and goals.

7. Figure out order fulfillment

Fulfillment is an important part of your e-commerce store because it ensures your customers receive the products or services they paid for. Fortunately, most e-commerce website builders come with shipping label printing and allow you to automatically add shipping costs at checkout. If you want to take the entire fulfillment process off your plate, you might want to outsource it to a company. Just make sure your potential profits outweigh the fees they’ll charge.

8. Market your e-commerce business

In a perfect world, you’d launch your e-commerce website and countless customers would run to it. The reality, however, is that you’ll need to find, attract and convert your target audience. While your marketing plan will depend on your budget, products or services, and capabilities, it may include search engine optimization (SEO), social media marketing, paid search, email marketing and/or influencer marketing. Regardless of which strategies you choose, be consistent and establish a brand that allows you to stand out from your competitors.

Once you have all your ducks in a row and your e-commerce store is ready for business, keep these tips in mind:

• Focus on customer retention: It’s easier and less expensive to retain a current customer than to land a new one. That’s why you should make every effort to keep your customers coming back through excellent service, loyalty programs, exclusive discounts and new products and services.
• Optimize your shipping strategy: While an e-commerce store offers many benefits to customers, high shipping costs can turn them off. If possible, offer free shipping or shipping deals for loyal customers or those who spend over a certain amount.
• Offer excellent customer service: In the world of e-commerce, the customer truly is king. That means that you must be responsive and cater to customer needs and preferences through friendly agents, live chat and 24/7 availability. Otherwise, your reputation and profits will likely take a hit.
• Diversify your distribution channels: To raise your likelihood of success, go beyond your website and use other channels to sell your offerings. Amazon, social media and affiliate marketing are a few options to consider.
• Upsell and cross-sell: When you upsell, you encourage customers to purchase a higher-end product or service than the one they were considering. A cross-sell is when you encourage customers to buy products that are related to complementary products. Both strategies can boost profits.

An e-commerce business can be very rewarding. It may give you the opportunity to share your passions, interests or experience with customers near and far while providing some great income. By following the steps and tips listed above, you’ll put yourself on the path to success. Best of luck!

How much does it cost to start an e-commerce business?

There are a number of factors that will determine how much you’ll pay to launch an e-commerce business. These include fees for your website, payment processing, stocking, order fulfillment and warehousing. The general costs of running a business for things such as accounting, marketing and employee payroll will also play a role in your overall cost.

What are three types of e-commerce?

The three main types of e-commerce businesses include B2B businesses, B2C businesses and C2C businesses. Your products or services will help you figure out the right business model for your particular e-commerce store.

Is e-commerce actually profitable?

Just like a business with a physical storefront, an e-commerce business has the potential to be profitable. However, profitability often takes time, so you may have to be patient before your efforts truly pay off.

• Best eCommerce Platforms
• Best eCommerce Hosting
• Best Etsy Alternatives
• Best Website Builder
• Best Web Hosting
• Best Apps To Sell Stuff
• Best Websites To Sell Stuff
• Squarespace Review
• Shopify Review
• Ecwid Review
• GoDaddy Review
• Weebly Review
• Big Cartel Review
• Woocommerce vs. Shopify
• Wix vs. Squarespace
• Wix vs. Shopify
• Wix vs. WordPress
• Squarespace vs. Shopify
• Squarespace vs. WordPress
• Shopify vs. WordPress
• eCommerce Statistics
• E-Commerce Business Ideas
• How to Sell Products Online
• How to Make an Online Store for Free
• How to Sell on Amazon
• How to Start an Etsy Shop
• How to Sell Books Online
• How to Sell Furniture Online
• How to Sell Jewelry Online
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• Online Business Ideas

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Anna Baluch is a freelance writer from Cleveland, Ohio. She enjoys writing about a variety of health and personal finance topics. When she's away from her laptop, she can be found working out, trying new restaurants, and spending time with her family. Connect to her on LinkedIn.

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Top Web Hosting Companies for Growing Websites & Businesses

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Starting a website is easier than ever. All you need is a domain name and web hosting. Though there are thousands of website hosts in the market, most of them aren’t worth your time. Before you decide which one to go with, let’s compare the best web hosts ⇣ on the market right now.

Key Takeaways:

Look for a web hosting company that offers reliable uptime and speedy loading times, as this can have a significant impact on your website’s user experience and search engine ranking.

Compare different hosting plans to find one that meets your website’s specific needs and scale as your site grows.

Read reviews from other users to get a sense of a company’s customer support, security features, and overall reputation within the industry.

But that doesn’t mean all website hosts are the same. There are some that are the best on the internet. Not only do they offer amazing support, but they are also good cheap web hosting services that make it easy for you to launch and manage your website.

Best Web Hosting: Our Shortlist

SiteGround stands out in the web hosting industry - they're not just about hosting your website but about enhancing your site's performance, security, and management. SiteGround's hosting package blends advanced technology and user-friendly features, ensuring your website operates at its best. Get premium website performance with Ultrafast PHP, optimized db setup, built-in caching & more! The ultimate hosting package with free email, SSL, CDN, backups, WP auto-updates, and much more.

Powering over 2 million sites on the Internet, Bluehost offers the ultimate web hosting for WordPress sites. Tuned for WordPress, you get WordPress-centric dashboards and tools along with 1-click installation, a FREE domain name, email, AI website builder + lots more. Whether you're starting a blog, running a business website, or setting up an online store, Bluehost's WordPress-focused hosting provides the tools and resources you need to succeed online.

Hostinger is highly regarded for its user-friendly and responsive custom hPanel, offering an intuitive and well-organized interface for managing web hosting features. The platform's shared hosting plans are lauded for their affordability and comprehensive features, including free SSL certificates, 1-click app installations, and tools for seamless website import and migration. Plans come with perks like free domain names and automatic daily backups. Performance-wise, Hostinger boasts impressive load times and a recent uptrend in reliability, positioning it as a competitive choice for those seeking feature-rich, yet budget-friendly web hosting solutions.

Cloudways m anaged WordPress hosting is renowned for its high performance, offering a user-friendly platform with extensive control over hosting elements like server selection, data center location, and cloud provider. It simplifies WordPress installations and boosts site speed with features like multisite installs, WooCommerce setups, CloudwaysCDN, and the Breeze plugin. Speed and security are robust, including Cloudflare Enterprise caching, SSL certificates, 'Bot Protection,' and SafeUpdates for safely testing WordPress changes.

GreenGeeks web hosting is recognized for its commitment to eco-friendly hosting, delivering high-speed, secure, and WordPress-optimized services. Their plans include a free domain name, website migrations, SSD storage, and LiteSpeed technology. Users benefit from GreenGeeks' 24/7 expert support and AI-powered performance optimizations, ensuring a smooth and responsive web experience. The platform is known for its environmentally responsible approach, offsetting three times its energy consumption with wind energy credits, and partnering with organizations to plant trees for each new hosting account.

Top Web Hosting Companies: Full List

Here I break down the best website hosting services in terms of features and price so that you have all the information you need to find the best web host to launch your website or online store.

At the end of this list, I also highlight three of the worst website hosts in 2024 that I strongly recommend you stay well clear of.

1. SiteGround (Best speed and security features)

Price: From $2.99 per month

Hosting Types: Shared, WordPress, WooCommerce, Cloud, Reseller

Performance : Ultrafast PHP, HTTP/2 and NGINX + SuperCacher caching. SiteGround CDN 2.0. Free SSH and SFTP Access

WordPress Hosting : Managed WordPress hosting. Easy WordPress 1-click installation. Officially recommended by WordPress.org

Servers: Google Cloud Platform (GCP)

Extras: On-demand backups. Staging + Git. White-labelling. WooCommerce integration

Current Deal: Get up to 83% OFF SiteGround's plans

Website: www.siteground.com

Siteground is one of the most popular hosts on the internet. They are trusted by thousands of businesses around the world.

• Friendly customer support team available 24/7.
• Trusted by thousands of businesses around the world.
• Free WordPress website migration on all plans.
• Powerful speed tools and performance features
• Hosted on Google Cloud infrastructure
• 30-day money-back guarantee

The best part about hosting your site with Siteground is that their friendly support team is available around the clock to answer your questions. It takes less than 2 minutes to get in touch with them through Live Chat. They will help you out if you get stuck anywhere in the process of starting your site.

If you already have your website hosted on some other web host, you don’t have to worry about spending hours migrating your site to Siteground. They offer a free site migration service for WordPress sites.

For non-WordPress sites and for those who want expert help transferring sites. SiteGround’s professional site migration service is done by experts and costs $30 per website.

• Affordable prices for beginners and small businesses.
• Unlimited email on all plans.
• Free daily automated backups on all plans.
• Free website migration service.
• Live chat support & telephone support from industry experts.
• Google Cloud shared VPS infrastructure.
• Renewal prices are much higher than first-time prices.
• No unlimited storage.

Visit SiteGround.com

… or read my detailed SiteGround review

2. Bluehost (Best beginner-friendly hosting in 2024)

Price: From $2.95 per month

Hosting Types: Shared, WordPress, VPS, Dedicated

Performance : PHP8, HTTP/2, NGINX+ Caching. Free CDN. Free backups

WordPress Hosting : Managed WordPress hosting. Easy WordPress 1-click installation. Online store builder. Officially recommended by WordPress.org

Servers: Fast SSD drives on all hosting plans

Extras: Free domain name for 1 year. $150 Google Ads credits. Custom WP themes

Current Deal: Get up to 75% off on hosting

Website: www.bluehost.com

Bluehost is one of the most popular hosts on the Internet. They are one of the only few officially recommended web hosts on the official site for WordPress (the most popular content management system used by millions of websites).

• Free domain name on annual plans.
• 24/7 customer support teams.
• Free Content Delivery Network

They are not only one of the most popular but also one of the most affordable on the market. They are known for their amazing support team and have won many awards for their 24/7 available customer support. If you ever get stuck in the process of starting your site, you can reach them at any time via email, live chat, or phone.

* The Choice Plus plan renews at $19.99/mo, and the Online Store plan renews at $24.95/mo.

• Affordable prices for small businesses (#1 best hosting option for a small business site)
• Easily scalable and WordPress for website creation tools.
• Award-Winning Customer Support team available 24/7.
• Best shared hosting company in 2024
• The renewal prices are higher than the starting prices.
• The domain name is only free for one year.
• Owned by Newfold Digital (expect lots of upselling)

Visit Bluehost.com

… or read my detailed Bluehost review

3. Hostinger (Cheapest web hosting you can get)

Hosting Types: Shared, WordPress, Cloud, VPS, Minecraft hosting

Performance : LiteSpeed, LSCache caching, HTTP/2, PHP8

WordPress Hosting : Managed WordPress hosting. Easy WordPress 1-click installation

Servers: LiteSpeed SSD hosting

Extras: Free domain. Google Ads credit. Free website builder

Current Deal: Get 75% OFF Hostinger's plans

Website: www.hostinger.com

Hostinger has made a name for itself by offering the cheapest web hosting packages in the industry. You can’t possibly find a web host that offers cheaper prices without losing quality.

• Cheapest prices on the market
• Free SSL certificates for all domains
• Free email accounts on all plans
• LiteSpeed powered servers

Their cheapest plans are great for anyone just starting out. The best part is Hostinger makes it very easy to scale your websites with simple plans that you can upgrade at any time.

Even though their pricing starts at From $2.99 per month (when you sign up for 48 months) they offer 24/7 support and are trusted by thousands of businesses around the world.

• Cheap web hosting is one of the most affordable prices on the market.
• Free SSL certificates on all domain names.
• 24/7 online support.
• Great for beginners who are just starting out.
• Great for other types of hosting like Minecraft servers .
• Free SSL is not included for addon domains.
• Renewal prices are much higher than starter prices.

Visit Hostinger.com

… or read my detailed Hostinger review

4. DreamHost (Best flexible pricing option)

Price: From $2.59 per month

Hosting Types: Shared, WordPress, Cloud, VPS, Dedicated

Performance : HTTP/2, SSD, latest PHP and propriety built-in server caching

WordPress Hosting : Managed WordPress hosting. Easy WordPress comes pre-installed. Free site migration. Officially recommended by WordPress.org

Servers: Fast loading SSD drives

Extras: Free domain name for 1 year, incl. WHOIS privacy

Current Deal: Get started with DreamHost now! Save up to 79%

Website: www.dreamhost.com

DreamHost is one of the most popular choices among professional bloggers and small businesses. They offer affordable web hosting for businesses of all shapes and sizes. Over 1.5 million websites rely on DreamHost.

• 24/7 support via phone, email, and live chat.
• Free domain name with privacy on all plans.
• Flexible and worry-free month-to-month hosting, pay monthly and cancel anytime (no need to sign up for a 12/24/36 months plan).
• Free automated WordPress migrations on all plans.
• 97-day money-back guarantee.

If this is your first time launching a new website, don’t worry. DreamHost offers a 97-day money-back guarantee. You can ask for a refund within the first 97 days of service if you are unhappy with the service for any reason.

DreamHost offers a free domain name on all plans with free domain privacy, which others charge extra for. Domain registration information is publicly available and searchable by anyone. Domain privacy makes this information private.

• Free domain name on all plans.
• Free automated WordPress migration.
• 24/7 customer support.
• Free automated daily backups on all plans.
• No free email accounts on the Starter plan.

Visit DreamHost.com

… or read my detailed DreamHost review

5. Hostgator (Free website builder included)

Price: From $3.75 per month

Hosting Types: Shared, WordPress, VPS, Dedicated, Reseller

Performance : HTTP/2, NGINX Caching. Cloudflare CDN, Increased performance (3 vCPU's)

Extras: Free 1-year domain. Free website builder. Free website transfer

Current Deal: Get 70% OFF HostGator's plans

Website: www.hostgator.com

HostGator is one of the oldest and most popular web hosting companies on the Internet. They are trusted by thousands of business owners around the world. Hostgator is known for its shared web hosting and WP hosting services, but they also offer VPS and Dedicated Hosting.

• Free email on all plans.
• One of the best web hosting services for anyone just starting out.
• Unmetered disk space and bandwidth data transfers.
• 24/7 customer support you can reach via live chat.

Hostgator’s affordable plans are designed to scale your business. They all offer unmetered bandwidth and disk space. They also offer a 45-day money-back and uptime guarantee on all plans. And unlike a lot of other web hosting providers, they offer free email on all their plans.

• 45-day money-back guarantee
• Free email hosting on all plans. Get an email on your own domain name for free
• Free domain name on all plans for the first year
• Free automated daily backups you can restore at any time with a single click

Visit HostGator.com

… or read my detailed HostGator review

6. A2 Hosting (Best value for money option)

Performance :

Servers: LiteSpeed. NVMe SSD Storage

Extras: Anycast DNS. Dedicated IP address. Free site migration. Built-in staging

Current Deal: Use code webrating51 & get 51% OFF

Website: www.a2hosting.com

A2 Hosting offers affordable web hosting solutions to small businesses around the world. Whether you are in the process of starting your first site or own a business that gets thousands of visitors every day, A2 Hosting has the right solution for you. They offer everything from shared hosting to dedicated hosting.

• 24/7 support.
• 4 different data center locations to choose from.
• Free website migration service provided.
• LiteSpeed powered servers.

A2 Hosting gives you free email accounts on all plans and a free CDN service for all your websites. They also offer a free website migration service in which they migrate your website from any other web host to your A2 Hosting account for free without any downtime.

• Impressive speed and performance features on Turbo plans (powered by LiteSpeed)
• Free email accounts on your domain name on all plans.
• Free CDN on all plans to give your website a speed boost.
• Free website migration service on all plans.
• Free automated backups are not available on the starter plan.

Visit A2Hosting.com

… or read my detailed A2 Hosting review

7. GreenGeeks (Best LiteSpeed server hosting)

Hosting Types: Shared, WordPress, VPS, Reseller

Performance : LiteSpeed, LSCache caching, MariaDB, HTTP/2, PHP8

Servers: Solid state RAID-10 storage (SSD)

Extras: Free domain name for 1 year. Free website migration service

Current Deal: Get 70% OFF on all GreenGeeks plans

Website: www.greengeeks.com

GreenGeeks is popular for its green web hosting services. They were one of the first in the market to introduce green web hosting. Their servers run on green energy to reduce their carbon footprint. Hosting your website with GreenGeeks is the easiest way to reduce your carbon footprint.

• One of the few green website hosts on the internet.
• Private servers that run on green energy to reduce carbon footprint.
• Affordable prices for premium services trusted by businesses around the world.
• 30-day money-back guarantee.

GreenGeeks web hosting services offer free CDN service on all their plans. They also offer a free-of-charge domain name for the first year on all plans. The best part about GreenGeeks’ service is that their tech-savvy support team is available around the clock and will help you out whenever you get stuck with anything at all.

• Free email accounts on all plans.
• Eco-friendly “green” web hosting at affordable prices.
• 24/7 online support can reach via live chat, phone, and email.
• Free CDN to give your website a boost.
• Free-of-charge domain name on all plans for the first year.

Visit GreenGeeks.com

… or read my detailed GreenGeeks review

8. Scala Hosting (Cheapest cloud VPS hosting)

Price: From $29.95 per month

Hosting Types: Cloud VPS, Shared, WordPress

Performance : LiteSpeed, LSCache caching, HTTP/2, PHP8, NvME

WordPress Hosting : Managed WordPress cloud VPS hosting. WordPress comes preinstalled

Servers: LiteSpeed, SSD NvME. DigitalOcean & AWS data centers

Extras: Free website migration. Free domain name. Dedicated IP address

Current Deal: Save Up To 57% (No Setup Fee)

Website: www.scalahosting.com

Scala Hosting makes it easy for small businesses to build their websites on VPS Hosting. They offer Fully Managed VPS Hosting that removes the pain of maintenance and management from it.

• Fully Managed VPS Hosting at affordable prices.
• Most affordable cloud VPS service on the market.
• Free website migration from any other platform at no cost.
• Free custom control panel called SPanel.

With Scala Hosting, you can give your site a speed boost by hosting it on a VPS without having to learn any technical commands and codes to manage the server.

Although they are known for their Managed VPS Hosting, they also offer other services such as WP Hosting, Shared Hosting, and Unmanaged Hosting (VPS). Their support team is available 24/7 to help you get unstuck and answer any questions you might have.

• Free automated daily backups.
• Cloud VPS for the price of shared hosting.
• LiteSpeed powered Turbo-fast NVMe SSDs.
• Automated 2 free VPS snapshots of the last two days.
• A custom control panel called SPanel saves you money and makes it easy to manage your VPS.
• Generous amounts of resources for affordable prices.
• Virtual private server (VPS) isn’t suited for total beginners.
• A little more expensive than similar providers.

Visit ScalaHosting.com

… or read my detailed Scala Hosting review

9. Rocket.net (Fastest Cloudflare hosting right now)

Price: From $25 per month

Hosting Types: WordPress & WooCommerce hosting

Performance : Optimized & delivered by Cloudflare Enterprise. Built-in CDN, WAF and edge caching. NVMe SSD storage. Unlimited PHP Workers. Free Redis & Object Cache Pro

WordPress Hosting : Managed WordPress cloud hosting

Servers: Apache + Nginx. 32+ CPU Cores with 128GB RAM. Dedicated CPU and RAM resources. NVMe SSD disk storage. Unlimited PHP Workers

Extras: Unlimited free site migrations, free automated backups, free CDN & dedicated IP. One-click staging

Current Deal: Ready for speed? Let Rocket do a FREE test migration for you!

Website: www.rocket.net

Rocket.net is a fully-managed WordPress hosting platform that offers high-performance hosting services, excellent security features, and easy website management. With its intuitive dashboard and 24/7 support team, Rocket.net ensures that users can focus on their website content and leave the technical aspects to the experts.

Key Features:

• Managed WordPress Hosting: Rocket.net is a fully-managed WordPress hosting platform that provides users with the ease and flexibility of managing their WordPress websites without worrying about the technical aspects.
• Fast Load Times: With Rocket.net, websites load faster due to its global content delivery network (CDN), which provides high-performance hosting services and reduces load times.
• Security: Rocket.net provides website security features such as malware scans, firewall protection, and automatic updates to keep websites safe and secure.
• Easy to Use: Rocket.net has an intuitive and user-friendly dashboard that allows users to manage their website easily, and its 24/7 support team provides assistance whenever needed.
• Automatic Backups: Rocket.net automatically backs up all website data, which ensures that users can restore their website to a previous version if necessary.
• #1 winner as the fastest WordPress hosting company in our testing
• Fast load times due to its global content delivery network
• Excellent security features to keep websites safe from cyber threats
• User-friendly interface and dashboard make it easy to manage websites
• Automatic backups ensure that website data is always secure
• 24/7 support team available to provide assistance when needed
• Limited flexibility in terms of customizing the hosting environment
• Higher pricing compared to other hosting providers
• Limited storage and bandwidth options for smaller plans.

Starter plan:   $25/month when billed annually

• 1 WordPress site
• 250,000 monthly visitors
• 10 GB storage
• 50 GB bandwidth

Pro plan:  $50/month when billed annually

• 3 WordPress sites
• 1,000,000 monthly visitors
• 20 GB storage
• 100 GB bandwidth

Business plan: $83/month when billed annually

• 10 WordPress sites
• 2,500,000 monthly visitors
• 40 GB storage
• 300 GB bandwidth

Expert plan: $166/month when billed annually

• 25 WordPress sites
• 5,000,000 monthly visitors
• 50 GB storage
• 500 GB bandwidth

Visit Rocket.net

… or read my detailed Rocket.net review

10. Cloudways (Cheapest cloud hosting)

Price: From $11 per month

Hosting Types: Managed Cloud Hosting

Performance : NVMe SSD, Nginx/Apache servers, Varnish/Memcached caching, PHP8, HTTP/2, Redis support, Cloudflare Enterprise

WordPress Hosting : 1-click unlimited WordPress installations & staging sites, pre-installed WP-CLI and Git integration

Servers: DigitalOcean, Vultr, Linode, Amazon Web Services (AWS), Google Cloud Platform (GCP)

Extras: Free site migration service, free automated backups, SSL certificate, free CDN & dedicated IP

Current Deal: Get 10% OFF for 3 months using code WEBRATING

Website: www.cloudways.com

Cloudways offers fully managed VPS Hosting. They remove the management and maintenance part of Hosting that limits a lot of businesses from using them. The best part about Cloudways is that they let you pick between 5 different cloud hosting platforms including Google, AWS, and Digital Ocean.

• Affordable fully managed VPS hosting plans.
• Dozens of data centers to choose from.
• 5 different cloud hosting platforms to choose from.
• Cloud hosting plans using DigitalOcean servers start from From $11 per month

The choice of cloud platforms also increases your choice of data center locations. You can choose to host your website in any of the dozens of data center locations available.

If you already have your website hosted on some other platform or web host, Cloudways will migrate your website to your Cloudways account for free.

• Fully managed VPS hosting service that can give your website a speed boost.
• Choose between 5 different cloud hosting platforms that are trusted by some of the biggest tech companies in the world.
• 24/7 support to solve all your problems.
• No cPanel or a custom control panel such as SPanel is offered by Scala Hosting.
• No free CDN.

Visit Cloudways.com

… or read my detailed Cloudways review

11. Kinsta (Fastest Google Cloud hosting right now)

Price: From $35 per month

Hosting Types: WordPress & WooCommerce Hosting. Application Hosting & Database Hosting

Performance : Nginx, HTTP/2, LXD containers, PHP 8.0, MariaDB. Edge caching. Cloudflare CDN incl. Early Hints

WordPress Hosting : Fully managed and optimized self-healing technology for WordPress

Extras: Free premium migrations. Self-healing technology, Automatic DB optimization, Hack and malware removal. WP-CLI, SSH, Git, built-in Application Performance Monitoring Tool

Current Deal: Pay yearly & get 2 months of FREE hosting

Website: www.kinsta.com

Kinsta offers premium managed WP hosting services for businesses of all shapes and sizes. Unlike other companies, Kinsta specializes in WP Hosting. If you want your website to perform as fast as it can, you need Kinsta.

• Free CDN service on all plans.
• Free unlimited migrations from other web hosts.
• Google Cloud Platform powered servers.
• 24 global data center locations to choose from.

Their servers are optimized for WordPress performance and they offer free CDN service on every plan.

The best part about hosting your website with Kinsta is the easy scalability you get. Your website can go from 10 visitors a day to a thousand on Kinsta without any hiccups. You can upgrade your website’s plan at any point with just a click.

Kinsta is powered by the Google Cloud Platform which is trusted by millions of businesses large and small around the world. It is the same infrastructure used by tech giants.

• Cloud hosting plans powered by Cloud (Google) Platform.
• Free automatic daily backups you can restore with a single click.
• Free premium migration of your website and unlimited basic migrations.
• Can be a little expensive for small businesses.
• No email hosting.

Visit Kinsta.com

… or read my detailed Kinsta review

12. WP Engine (Best premium managed WordPress hosting)

Price: From $20 per month

Hosting Types: Managed WordPress & WooCommerce Hosting

Performance : Dual Apache and Nginx, HTTP/2, Varnish & Memcached server and browser caching, EverCache®

WordPress Hosting : WordPress is auto-installed. Automatic WordPress core updates. WordPress staging

Servers: Google Cloud, AWS (Amazon Web Services), Microsoft Azure

Extras: Free Genesis StudioPress themes. Daily and on-demand backups. Free migration service. One-click staging. Smart Plugin Manager

Current Deal: Limited special offer - Get $120 off annual plans

Website: www.wpengine.com

WP Engine is a premium managed WP hosting company trusted by some of the biggest websites on the internet. They are one of the oldest in the industry and have made a name for themselves by providing affordable Managed WordPress solutions.

• Premium managed WP hosting.
• Free global CDN service is included in all plans.
• 24/7 chat support and industry leading customer service.
• Free Genesis Framework and 35+ StudioPress Themes on all plans.

WP Engine can help your business scale on any level, whether you are a hobby blogger or a business that serves thousands of customers every day. Their web hosting solutions are optimized for WordPress websites and as a result, offer a huge boost in speed.

The best part about going with WP Engine WordPress web hosting services is that they offer you the Genesis Theme Framework and 35+ StudioPress themes for free on all plans. Together this bundle would cost well over $2,000 if bought separately.

• Scalable Managed WP hosting at affordable prices.
• Servers that are optimized for WordPress performance and security.
• Genesis Framework and dozens of StudioPress themes are included with every plan.
• Website and database backups.
• A little expensive for beginners.
• Limits pageviews unlike some of their competitors.

Visit WPEngine.com

… or read my detailed WP Engine review

13. InMotion Hosting (Best small business hosting)

Price: From $2.29 per month

Hosting Types: Shared, WordPress, Cloud, VPS, Dedicated, Reseller

Performance : HTTP/2, PHP8, NGINX & UltraStack caching

Servers: Ultra fast and reliable NVMe SSD storage

Extras: Free no-downtime website migrations. Free BoldGrid website builder

Current Deal: Get 50% OFF InMotion Hosting plans

Website: www.inmotionhosting.com

InMotion Hosting is home to over 500,000+ WordPress websites. They offer everything from Shared business hosting to dedicated servers. Their customer support team is available around the clock to help you out with anything when you get stuck.

• Free-of-charge domain name on all plans.
• 90-day money-back guarantees.

They also offer a free website migration service. You can contact the customer support team and they will migrate your website from any other web host to your InMotion account for free without any downtime.

• 90-day money-back guarantee.
• Free SSL certificate for all your domain names.
• 24/7 customer support team you can reach any time via Live Chat, Email, or Phone.
• Doesn’t offer unlimited email addresses on all plans.
• Renewal prices are much higher than the starter prices.

Visit InMotionHosting.com

… or read my detailed In Motion Hosting review

14. Liquid Web (Best WooCommerce hosting)

Price: From $12.67 per month

Hosting Types: WordPress, WooCommerce, Cloud, VPS, Dedicated

Performance : Platform built on PHP8, SSL and Nginx. Nexcess page cache

WordPress Hosting : Managed WordPress hosting

Servers: SSD installed on all servers

Extras: 100% network and power uptime guarantee, site migration service at no extra cost, Heroic Support

Current Deal: Use code WHR40VIP to get 40% OFF

Website: www.liquidweb.com

Liquid Web specializes in fully managed cloud and web hosting services. They let your business harness the power of web hosting services that require a lot of technical knowledge to manage and maintain.

• Affordable Managed Web Hosting.
• Free unlimited email accounts.
• 24/7 online Support.

Their managed offerings include everything from Managed WordPress to Dedicated Servers and Server Clusters and everything in between.

All their WordPress plans come with free iThemes Security Pro and iThemes Sync. You also get Beaver Builder Lite and unlimited email accounts. They even offer a 14-day free trial for their WP hosting service.

• Free unlimited email accounts on all plans.
• Free iThemes Security Pro and iThemes Sync WordPress plugins on all plans.
• Free automatic daily backups on all plans are retained for 30 days.
• Complete access to the server.
• No caps on pageviews/traffic.
• Comes with developer tools such as SSH, Git, and WP-CLI.
• Can be a little expensive for beginners.

Visit LiquidWeb.com

… or read my detailed Liquid Web review

Worst Web Hosts (Stay Away!)

There are a lot of web hosting providers out there, and it can be hard to know which ones to avoid. That’s why we’ve put together a list of the worst web hosting services in 2024, so you can know which companies to steer clear of.

PowWeb is an affordable web host that offers an easy way to launch your first website. On paper, they offer everything you need to launch your first site: a free domain name, unlimited disk space, a one-click install for WordPress, and a control panel.

PowWeb offers only one web plan for their web hosting service. This might look good to you if you’re building your first website. After all, they offer unlimited disk space and have no limits for bandwidth.

But there are strict fair-usage limits on server resources . This means, if your website all of a sudden gets a huge surge in traffic after going viral on Reddit, PowWeb will shut it down ! Yes, that happens! Shared web hosting providers who lure you in with cheap prices shut your website down as soon as it gets a small surge in traffic. And when that happens, with other web hosts, you can simply upgrade your plan, but with PowWeb, there’s no other higher plan.

I would only recommend going with PowWeb if you’re just starting and are building your first website. But even if that’s the case, other web hosts offer affordable monthly plans . With other web hosts, you might need to pay a dollar more every month, but you won’t have to sign up for an annual plan, and you’ll get better service.

One of the only redeeming features of this web host is its cheap price, but to get that price you’ll need to pay upfront for 12 months or more. One thing I do like about this web host is that you get unlimited disk space, unlimited mailboxes (email addresses), and no supposed bandwidth limits.

But it doesn’t matter how many things PowWeb does right, there are just too many poor 1 and 2-star reviews plastered all over the internet about how terrible this service is . All those reviews make PowWeb look like a horror show!

If you are looking for a good web host , I would highly recommend looking elsewhere . Why not go with a web host that’s not still living in the year 2002? Not only does its website look ancient, it still uses Flash on some of its pages. Browsers dropped support for Flash years ago.

PowWeb’s pricing is cheaper than a lot of other web hosts, but it also doesn’t offer as much as those other web hosts. First of all, PowWeb’s service isn’t scalable. They only have one plan . Other web hosts have multiple plans to make sure you can scale your website with just one click. They also have great support.

Web hosts like SiteGround and Bluehost are known for their customer support. Their teams help you out with anything and everything when your website breaks down. I’ve been building websites for the last 10 years, and there’s no way I would ever recommend PowWeb to anyone for any use case. Stay away!

For an affordable price of $4.08 per month, FatCow offers unlimited disk space, unlimited bandwidth, a website builder, and unlimited email addresses on your domain name. Now, of course, there are fair-usage limits. But this pricing is only available if you go for a term longer than 12 months.

Although the pricing seems affordable at a first glance, be aware that their renewal prices are much higher than the price you sign up for . FatCow charges more than twice the sign-up price when you renew your plan. If you want to save money, it would be a good idea to go for an annual plan to lock in the cheaper sign-up price for the first year.

But why would you? FatCow may not be the worst web host in the market, but they are also not the best. For the same price, you can get web hosting that offers even better support, faster server speeds, and more scalable service .

One thing I don’t like or understand about FatCow is that they only have one plan . And even though this plan seems to be enough for someone who’s just starting, it doesn’t seem like a good idea for any serious business owner.

No serious business owner would think that a plan that is suitable for a hobby site is a good idea for their business. Any web host that sells “unlimited” plans is lying. They hide behind legal jargon that enforces dozens and dozens of limits on how many resources your website can use.

So, It begs the question: who is this plan or this service designed for? If it’s not for serious business owners, then is it just for hobbyists and people building their first website? 

One good thing about FatCow is that they offer you a free domain name for the first year . The customer support may not be the best available but is better than some of their competitors. There’s also a 30-day money-back guarantee in case you decide you’re done with FatCow within the first 30 days.

Another good thing about FatCow is that they offer an affordable plan for WordPress websites. If you’re a fan of WordPress, there might be something for you in FatCow’s WordPress plans. They are built on top of the regular plan but with some basic features that might be helpful for a WordPress site. Same as the regular plan, you get unlimited disk space, bandwidth, and email addresses. You also get a free domain name for the first year.

If you are looking for a reliable, scalable web host for your business, I wouldn’t recommend FatCow unless they wrote me a million-dollar check. Look, I am not saying they are the worst. Far from it! FatCow may be suitable for some use cases, but if you are serious about growing your business online, I can’t recommend this web host. Other web hosts might cost a dollar or two more every month but offer a lot more features and are much more suitable if you run a “serious” business .

3. Netfirms

Netfirms is a shared web host that caters to small businesses. They used to be a giant in the industry and were one of the highest web hosts.

If you look at their history, Netfirms used to be a great web host . But they are no longer what they used to be. They got acquired by a giant web hosting company, and now their service no longer seems competitive. And their pricing is just outrageous. You can find better web hosting services for much cheaper prices.

If you still believe for some reason that Netfirms might be worth a try, just look at all the horrible reviews about their service on the internet. According to the dozens of 1-star reviews I’ve skimmed, their support is terrible, and the service has been going downhill ever since they got acquired.

Most Netfirms reviews you’ll read all start the same way. They praise how good Netfirms was about a decade ago, and then they go on to talk about how the service is now a dumpster fire!

If you take a look at Netfirms’ offerings, you’ll notice that they are designed for beginners who are just getting started with building their first website. But even if that’s the case, there are better web hosts that cost less and offer more features.

One good thing about Netfirms plans is how generous they all are. You get unlimited storage, unlimited bandwidth, and unlimited email accounts. You also get a free domain name. But all these features are common when it comes to Shared Hosting. Almost all shared web hosting providers offer “unlimited” plans.

Other than their Shared Web Hosting plans, Netfirms also offer Website Builder plans. It offers a simple drag-and-drop interface to build your website. But their basic starter plan limits you to only 6 pages . How generous! The templates are also really outdated .

If you’re looking for an easy website builder, I wouldn’t recommend Netfirms . Many website builders on the market are much more powerful and offer a lot more features. Some of them are even cheaper…

If you want to install WordPress, they offer an easy one-click solution to install it but they don’t have any plans that are optimized and designed specifically for WordPress sites. Their starter plan costs $4.95 a month but only allows one website. Their competitors allow unlimited websites for that same price.

The only reason I can think of to host my website with Netfirms is if I was being held hostage. Their pricing doesn’t seem real to me. It’s outdated and is much higher when compared to other web hosts. Not only that, their cheap prices are only introductory . That means you’ll need to pay much higher renewal prices after the first term. The renewal prices are twice the introductory sign-up prices. Stay away!

What is Web Hosting?

Web hosting is a type of internet hosting service that allows individuals and organizations to make their website accessible on the Internet (Source: Wikipedia )

A website is simply a set of code files stored on an external computer. When you open a website, your computer sends a request to another computer on the internet called a server for those files and renders that code into a web page.

To start a website, you need a server. But servers are expensive; they cost thousands of dollars to own and maintain. This is where web hosting companies come in. They let you lease a small space on their servers for an affordable fee. This makes web hosting affordable for businesses of all sizes.

Reddit is a great place to learn more about good web hosting options. Here are a few Reddit posts that I think you’ll find interesting. Check them out and join the discussion!

Best hosting reddit guide to picking the best web hosting for wordpress and websites (cheap hosting reddit likes) by u/meyerscarat in EverythingWeb

Best hosting options? by u/uncle_chariot in webhosting

Best web hosting service for beginners/small business by u/Long-Night15 in webhosting

Why Free Web Hosting is Never Worth It

If this is your first time building a website , you might have considered free web hosting platforms. They might sound like a good idea to test the waters. But they are never worth it.

Most free web hosts display adverts on your free website. Not only that, some of them are in the business of collecting your information and selling it to spammers.

The worst part about free web hosts is that they limit your ability to scale. Imagine getting a surge in traffic to your website and finally catching a break. In a scenario like that, your website will probably go down and you will lose hundreds of potential customers.

And that’s not all. Free web hosts don’t much care about security or your data. Don’t believe me? The biggest free web hosting company 000WebHost once got hacked and hackers got access to the information of thousands of users.

Types of Web Hosting

There are many options available, from shared hosting, and VPS hosting to  Podcast hosting  and  Minecraft server hosting , and each caters to different website needs. Don’t rush when choosing, because picking the wrong type of hosting can cause you a lot of problems down the line.

That being said, here is a breakdown of the most used types of web hosting.

• Features: Multiple websites are hosted on a single server, sharing resources such as memory, disk space, and processing power.
• Advantages: Cost-effective, easy to manage (often comes with a control panel like cPanel), and requires no technical maintenance from the user’s side.
• Use Cases: Ideal for small businesses, bloggers, and personal websites with lower traffic volumes.
• Features: A physical server is divided into multiple virtual servers, each with allocated portions of the server’s resources. While sharing a physical server, each VPS functions independently.
• Advantages: Greater control and customization than shared hosting, better performance, and still cost-effective compared to dedicated hosting.
• Use Cases: Suited for medium-sized businesses, e-commerce sites, and websites with moderate traffic that require more resources.
• Features: A single client leases an entire server with all its resources. This offers maximum control, including root access and the choice of operating system.
• Advantages: High performance, security, and stability. No resource sharing with other websites.
• Use Cases: Large businesses, high-traffic websites, and those with specific customization and security requirements.
• Features: Hosting services are offered across a network of interconnected virtual servers, allowing for easy scalability and flexibility.
• Advantages: Highly scalable, reliable (no single point of failure), and you generally pay only for the resources you use.
• Use Cases: Businesses with fluctuating traffic, growth-phase startups, and websites requiring high uptime and scalability.
• Features: The hosting provider takes care of the setup, administration, management, and support of the server and/or application.
• Advantages: Hassle-free hosting with technical aspects handled by experts. Often includes automated backups, updates, and security measures.
• Use Cases: Businesses without a dedicated IT team, those who prefer to focus on their core operations rather than server management.
• Features: Instead of housing servers in-house, they are located in a third-party data center. You own the server but share data center facilities.
• Advantages: Access to higher levels of bandwidth than typical office server rooms, along with professional infrastructure and security.
• Use Cases: Companies that own physical hardware but want the benefits of a professional data center.
• Features: Tailored for software applications, offering hosting services that support various web-based and enterprise applications.
• Advantages: Scalable resources, optimized performance, maintenance and updates handled by the provider, accessible from anywhere.
• Use Cases: Ideal for businesses and developers focusing on SaaS products, mobile app backends, e-commerce apps, and enterprise software without managing server complexities.

Web Hosting Glossary

• Content Delivery Network (CDN): A system that uses multiple servers located in various places to store static parts of your website. This setup helps in delivering content to users more quickly.
• Content Management System (CMS): A software like WordPress that helps you manage the creation and modification of digital content on your website. It often includes tools for designing web pages and adding content.
• Time to First Byte (TTFB): A measurement used to evaluate the performance of a hosting provider. It indicates the time taken for a user’s browser to receive the first byte of page content, reflecting the efficiency of the network and servers.
• Solid-State Disk (SSD): A storage device used in servers and computers, known for its fast data access speeds because it doesn’t have any moving parts, unlike traditional hard drives.
• Non-Volatile Memory Express ( NVMe ): A modern, high-performance SSD technology that provides faster data transfer rates and improved efficiency compared to traditional SSDs.
• Virtual Private Server (VPS): A hosting service where a single physical server is divided into multiple virtual servers. Each virtual server operates independently, providing users with private resources and possibly better performance than shared hosting.
• Domain Name System (DNS): This system translates human-readable domain names (like “example.com”) into IP addresses that computers use to identify each other on the network. DNS ensures that when you type a website’s name into your browser, you are directed to the correct server.
• Shared Hosting: A type of web hosting where multiple websites are stored on a single server. It’s an economical option for small websites, as resources and the cost of the server are shared among all users. However, it might have limitations in performance, security, and flexibility compared to other hosting types.
• Dedicated Hosting: In contrast to shared hosting, dedicated hosting provides a server solely for one client. This offers more control, better performance, and higher security but at a higher cost. It’s suitable for large, high-traffic websites and businesses with specific server requirements.
• Bandwidth: This term refers to the amount of data that can be transferred to and from your website within a certain period, usually a month. Higher bandwidth allows more data to be transferred, which is important for sites with a lot of traffic or large files.
• Secure Sockets Layer (SSL) Certificate: An SSL certificate is a digital certificate that provides secure, encrypted communication between a website and a user’s browser. It’s crucial for protecting sensitive data and is often indicated by a padlock icon in the address bar. Websites with SSL are accessed via HTTPS (Hypertext Transfer Protocol Secure) rather than HTTP.

Go here for more web hosting terms .

Questions and Answers

Our verdict ⭐.

If you want to grow your business without any hiccups, you need reliable web hosting that you can trust. However, most web hosts aren’t worth your time or money.

That’s why I made this list. All the companies on this list get my stamp of approval. If you can’t decide between all the options, let me make the choice easy for you:

Highly popular and well-rated in the WordPress community, SiteGround offers unique WordPress speed and security solutions. Known for the best 24/7 support in the industry, it features automatic upgrades, daily backups, built-in WP caching, free CDN, free SSL, one-click staging, and GIT version control. They have data centers in the USA, Europe, Asia, and Australia.

One of the oldest web hosts since 1996, Bluehost is a large brand in WordPress hosting and is officially recommended by WordPress. Known for its ability to handle high traffic, it offers 24/7 expert support by phone, email, or live chat, and is highly rated for small businesses. Features include a free domain, free SSL, and a free site builder with templates.

Gaining strong recognition in the WordPress hosting industry, Hostinger offers affordable hosting with 24/7 live chat support. Features include automatic 1-click WordPress install, managed updates, enhanced security, free CDN, WordPress speed acceleration, free site migration, and geolocation specific hosting with data centers across various continents.

With 18 years in the industry, DreamHost is known for making web hosting easy with a custom dashboard, 1-click WordPress install, automatic updates, unlimited space and bandwidth, and free SSDs. They power over 1.5 million WordPress blogs and websites and are an officially recommended WordPress hosting provider.

Hosting over 10 million domains, HostGator is popular for its 1-click WordPress installation, 99.9% uptime guarantee, and 24/7 support. They are considered one of the best web hosting services for businesses.

Known for ultra-fast and reliable WordPress hosting since 2002, A2 Hosting is developer-friendly and offers flexibility and advanced features. They provide 24/7/365 support and cater to a range of users from bloggers to large businesses.

Known for its fast website performance and 24/7 U.S. based support, GreenGeeks is an environmentally responsible platform. They offer automatic 1-click WordPress install, managed updates, enhanced security, free CDN, free site migration, and various data center location choices.

Cloudways stands out for its managed cloud hosting services, offering flexibility, performance, and ease of use. It provides users with the ability to choose their cloud provider and supports various applications including WordPress. Cloudways is known for its scalable hosting solutions, 24/7 support, and user-friendly platform, making it a popular choice for both beginners and experienced users.

If you are a beginner, go with Siteground or Bluehost . Both offer 24/7 customer support that is friendly and will help you get unstuck at any time of the day.

If you own a growing WordPress site, I recommend going with WP Engine or Kinsta . Both are known for their affordable premium managed WP hosting services. They offer 24/7 support and are trusted by thousands of big brands around the world.

How We Review Web Hosts: Our Methodology

When we review web hosts, our evaluation is based on these criteria:

• Value for Money : What types of web hosting plans are on offer, and are they good value for money?
• User Friendliness : How user-friendly is the signup process, the onboarding, the dashboard? and so on.
• Customer Support : When we need help, how quickly can we get it, and is the support effective and helpful?
• Hosting Features : What unique features does the web host provide, and how do they stack up against competitors?
• Security : Are essential security measures like SSL certificates, DDoS protection, backup services, and malware/virus scans included?
• Speed and Uptime : Is the hosting service fast and reliable? What types of servers do they use, and how do they perform in tests?

For more details on our review process,  click here .

List of web hosting services we have tested and reviewed:

• Scala Hosting
• InMotion Hosting
• WPX Hosting

SiteGround versus Bluehost

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About Author

Matt Ahlgren

Mathias Ahlgren is the CEO and founder of Website Rating, steering a global team of editors and writers. He holds a master's in information science and management. His career pivoted to SEO after early web development experiences during university. With over 15 years in SEO, digital marketing, and web developmens. His focus also includes website security, evidenced by a certificate in Cyber Security. This diverse expertise underpins his leadership at Website Rating.

The "WSR Team" is the collective group of expert editors and writers specializing in technology, internet security, digital marketing, and web development. Passionate about the digital realm, they produce well-researched, insightful, and accessible content. Their commitment to accuracy and clarity makes Website Rating a trusted resource for staying informed in the dynamic digital world.

Ibad Rehman

Ibad is a writer at Website Rating who specializes in the realm of web hosting and has previously worked at Cloudways and Convesio. His articles focus on educating readers about WordPress hosting and VPS, offering in-depth insights and analysis in these technical areas. His work is aimed at guiding users through the complexities of web hosting solutions.

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