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Guide to starting small ecommerce business

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedNov 20222 min read

These are exciting times for any aspiring entrepreneurs starting a small ecommerce business as the sector continues taking an ever bigger share of the market.

Access to ecommerce tools for small businesses has never been easier, and there are countless examples of successful businesses that have made the most of the booming popularity of online shopping and digital transactions.

Whether you have a unique idea or a fresh take on an established product or service, there are certain steps you must take to get your ecommerce business up and running. Our guide on how to start an ecommerce business maps out the journey from conception to launch, and beyond.

Research and define your business plan

The first step is always research, as you must know what kind of customer will be interested in your idea and what the competition is like. Closely examine any established competitors and identify any gaps in their service or areas where you can offer a superior service.

Also determine the value delivery method of your product, with the most popular types being:

drop-shipping
wholesaling and warehousing
private or white labelling

Drop-shipping

This type of small ecommerce business involves selling products on your website which are manufactured, stored and shipped to the customer by a separate manufacturer or wholesaler, or both.

Wholesaling and warehousing

This value delivery method is the most common and involves you buying stock from a manufacturer or wholesaler and then storing, selling and shipping it yourself.

Private or white labelling

Private labelling means commissioning a manufacturer to make a unique product labelled with your business branding. White labelling involves buying generic stock from a distributor that you then apply your own business branding to.

Choose your business name and legal status

Your business name needs to be something original that has not already been used by another business. Register and trademark your business name and logo, as well as defining your legal status.

Define your legal status as a sole trader where you are liable for all profits and all losses, or a partnership where you share management and profits with another person. You also have the option to be a limited liability partnership (LLP) where the company and its finances are considered a separate entity to yourself.

It is also possible that you could be a limited liability company (LLC) under certain conditions, which is a private company where shareholder assets are protected and their liability restricted to the amount they invested.

Also make sure you have any licences and business permits that are required by law.

Set up your online store

Creating your website is where things really start to get exciting. What is great about modern small ecommerce business is that you don’t necessarily have to hire a developer to build you a website from the ground up. There are a variety of platforms that enable you to create your online store by yourself, including Wix, Shopify, WooCommerce, Squarespace and Magento, so research these to see which one fits with your business plan.

Also set up your payment structure and decide on a payment gateway so you can receive payment for your sold units.

Market your ecommerce business

Once your online store is up and running and able to take payments, it is time to start bringing in the customers with some astute marketing. Use branded social media accounts to engage with customers and maybe even partner with a suitable influencer to promote your brand to their followers. Use search engine optimised content to help you rank high in search results.

Also look into the likes of Google Ads and pay-per-click,33 to get more eyes on your business.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team has to deal with. Find out today how GoCardless can help you with one-off or recurring payments.