Guide to start an online business for dummies

Online shopping continues to boom. the COVID-19 pandemic changed the way people buy things. 95% of purchases are expected to be made through eCommerce by 2040. However, running an eCommerce company can be overwhelming at first. Thus, we have drawn up this blueprint of sorts as a step-by-step guide to start an online business.
Guide on how to start an online business for dummies
Step 1. Identify What Products to Sell
This is the most challenging part, with many people giving up here. Here are some strategies for you to find your perfect product quickly.
Pinpoint A Problem and Solve It
Now you should think about an issue that customers usually face, make a problem statement, and then list several products or services that serve as a solution. For example, many people want to wear luxury clothes and accessories from top fashion houses, but they can not afford brand new ones. In this case, why don’t you consider selling second-hand items that are still in good condition at reasonable prices?
Hop on Trends If You Need Inspiration to jump start your online business
Future business owners can check out what is hot on the marketplace right now and following new trends before they peak in their popularity. We have gathered several tools for you here.

Online business is data driven so start gathering info and inspiration
You can gather inspiration by checking out what is popular on the marketplaces, for example, Etsy. (Source: etsy.com) or Pintrest
- Amazon, Etsy, or eBay. Look at the curated lists or categories to know customers’ demands.
- Reddit is home to thousands of communities that showcase every topic. Diving into subreddits like Reddit eCommerce could help you discover some exciting business ideas. Quora is also a good way to uncover what people are searching for and how you can provide value to them.
- Social listening is another helpful tactic. You can join Twitter, Facebook groups, and other online forums to see what people need help with. Once you have become a merchant with a running store, you might use advanced tools like: Google Ads, BuzzSumo, and Google Trends.
After getting a list of potential items, it’s time to narrow it down.
You should remove any products if they are:
- Too bulky, which leads to high shipping rates.
- Fragile, as you will take the risk of losing money on refunds if the item is broken while being delivered.
- Highly perishable goods that are difficult to preserve.
Now you have shortlisted what’s in hand, and it’s time to take further action. Before devoting more effort and money, you must have a decent understanding of the market, your competitors, target customers, and market demands. And maybe consider leveraging your knowledge of your niche to create useful digital content one time that could potentially make money for you on a regular basis. I think you can see the big picture here, right?
Step 2. Identify the Competitors to your online business
The second step in this monetary journey is to see who your business competitors are and how they are making money. almost every market with any sales volume is going to have more than one company offering some similar products or services to the customers as you. Because the more you know about the competition, the less surprised you will be later. You can research with Google (on top-ranking sites) as well as Semrush, Ahrefs free SEO tools, Spyfu, TheHOTH, and the list goes on and on. Research to identify your competitors. Or use any Tools you prefer to find out who ranks for the keywords you want to rank for. To find out how the other guys are getting the most traffic.
Or even better find low difficulty keywords that your competition doesn’t rank for on the first page of google, but that you can within the realm of reason anyway

A complete competitor analysis aims to provide potential entrepreneurs with the insight needed to make the most educated decisions on the best strategies, business models, marketing tactics, overall strategy, product development, and potential costs.
Every online business owner should know how to do an in depth competitor analysis/market evaluation.
Here are a few reasons why:
- Make your market positioning clear in terms of marketability and why.
- Evaluate any barrier of entry possible for your Service, Product or Business Plan
- Classify customer Needs, expectations as well as market volume/saturation.
- Identify a gap in the market as well as development opportunities.
- Unveil potential weaknesses and risks in the marketing plan.
When conducting competitor analysis, it’s worth taking note of these critical aspects:
- Who their target customers are
- What market share they currently own
- What is their unique value proposition for their business and products
- Key features highlighted in their sales material
- Price points for products across different marketplaces
- How they approach shipping
- Marketing strategy including the social media channels they are using
- Customer reviews/feedback
To make the process easier and to stay updated about your rivals, you could use the following methods:
- Analysis frameworks like SWOT analysis, perceptual mapping template, the resource-based view framework, or Porter’s Five Forces model.
- SimilarWeb is a tool that tracks traffic volume and the primary referrals.
- Google alerts will notify you when their brand name gets mentioned by the influencers or media and in what context.
- Semrush and Ahrefs are great tools to analyze competitors’ keywords and their backlink profiles.
- TheHoth also has a few useful FREE tools
- Add the competitors’ brand names into your social media analytics tools to keep track of their online activities that enhance audience engagement.
Step 3. Validate Your Idea and Obtain Your Product
By now, you should have narrowed down your product idea to a winning product. Here are two options that help you validate your idea or test the demand.
- Build a landing page to promote your product. Then, run a few paid ads driving traffic to your site. Collect the emails of interested customers. Build a customer list for continual profits.
- Run a crowdfunding campaign.
Once you have validated your idea, your next step is to obtain your products. There are four common ways to do so.
- Making your product will give you complete control over the quality while keeping your startup costs low. Hence, this is appropriate for do-it-yourself businesses.
- Hire a manufacturing company. eCommerce merchants have two options: choose a domestic manufacturer, or find a cheaper manufacturer overseas. These approaches are a good idea for businesses that have a unique concept.
- Buying wholesale is a less risky business model for several reasons. Firstly, you will deal with validated brands. Secondly, you do not have to purchase a high quantity of products compared to manufacturing your products. Although products are not exclusive, you can sell a variety of products and brands.
- Many eCommerce merchants choose drop shipping/print-on-demand because it is the cheapest option to kick off. By nature, this choice is for those who like to keep startup costs as low as possible.
Step 4. Craft A Business Plan
With a competitive analysis and the knowledge of how you will procure products, it’s time to come up with a roadmap aligning your efforts and giving you focus. In short, a business plan clarifies your strategy and specifies what resources you need as well as potential obstacles. However, if you find it daunting to formulate a traditional business strategy, a One-Page Business Plan template might be a better choice of how to start an online business plan.
Now, let’s see how entrepreneurs put together a successful business plan. Here are the vital components of a complete plan.

Beyond a document, your business plan will guide you through each phase of running your online commerce to success.
Executive Summary
We highly recommend you to write this section last as it is a high-level overview of your plan, summarizing the essential points.
Company Overview
This section needs to answer two questions: Who are you and what you plan to do, including your mission statement, value proposition, company structure, objectives, key members, and what you sell.
Market Analysis
A big picture shows how big you estimate your market, including analyzing your business position in the market and an overview of competitors. Doing searches online will help you gather insights about the industry, your competition, and your market segment. Here are some resources that make your research more focused and valuable:
- Quantcast offers users reliable and accurate information about target audience insights for free. Data are collected from about 100 million web and mobile addresses.
- Alexa is a beneficial tool as it transforms data into meaningful knowledge so business owners can find a competitive advantage with ease. and they offer a set of very useful free tools as well for checking: Keyword research, Keyword Difficulty, What your competition is making money with, checking backlinks as well as Keyword volume and SERP results.
Marketers are familiar with other keyword tools such as Ahrefs as it can check the backlink profiles of any competitors they want and Semrush is another good paid option. Hence, this is one of the best marketing tools to uncover SEO and online chances.
Customer Segmentation
Although your products or services would attract many beneficial people, it does not make sense to market to everyone. Thus, you need to identify shared traits of ideal consumers (where they live, expected behaviors, beliefs, how much they earn, and where they spend their leisure time). Conducting surveys, interviews, or gathering data are methods that business entrepreneurs often use.
Every business is different so try to craft a specific customer profile. Based on the target audience persona, you can arrive at wise decisions to conduct compelling campaigns, and this will set you up for long-term goals. Thus, bear in mind that the more you know about consumers, the better you will sell to them.
Products & Services
Business owners dig up detailed information on products they want to sell and their sources in this stage. Here, you should point out how your winning product is different (in terms of price, design, and functions). Some key questions that every entrepreneur must answer are:
- What are the central features of their business, products, or services?
- What benefits would those features provide?
- How the mentioned benefits help customers solve their problems?
A Marketing Plan- how to start an online business
The first and foremost purpose of a marketing strategy is to drive shoppers to your online store. According to Impact, nearly 33% of clicks from the organic results belong to the first listing on Google. Thus, Google Ads is the top choice for attracting visitors to both new and old websites. However, the budget might be a significant concern to SMBs, so we will show a marketing mix of SEO and social media (Step 9) to generate leads without spending much money. Overall, your marketing strategy should include:
- How much your product costs
- What problem it solves
- How your brand is different
- What marketing channels you will use to reach your target audience
- Where you will sell your product
Logistics and Operations
This part refers to the whole process of moving products from the manufacturer to the end customers. To be more specific, it deals with the following factors:
- Who are your suppliers?
- How much inventory do you plan to keep?
- How will you ship and fulfill orders?
- What tools do you need to keep up and run?
Large enterprises often work with multiple parties to keep up with the high demands. Small businesses, on the contrary, do not necessarily partner with different companies due to small operations. Once consumers place orders, the transaction will trigger your inventory software, and then it’s time to deliver products to customers. Depending on your operation size, the next phase could be:
- Office/home operation – this fantastic option is for small businesses that run their online commerce and store inventory at home or office. If you are following this way, you do not have to worry about outsourcing warehouse management to a third party.
- Brick-and-mortar retailer – if you are running both an eCommerce site and a storefront location, you can apply the process as mentioned above.
- Outsourced logistics – if your operation is large enough to outsource online logistics, you need to sync your platform with a third party. Their operation will get a notification when your customers place an order, and then they will send the package to awaiting customers.
Planning About how to start an online business
It would be remiss to lack a financial plan in your strategy. In short, it is a document that contains your money situation as well as long-term goals. It would help determine how to cover all costs, whom to fund your company, or borrow money. Also, think about whether you have the finances to run your business until it makes a profit. But first, you must work out a break-even analysis – a formula that shows you the minimum performance required to work and when/if it will be profitable.

According to The Balance Small Business, whether you start a large enterprise or a medium-sized business, the break-even point formula is a crucial tool to assessing your finances.
Looking at the picture, you might have some concerns about reducing the fixed costs, variable costs per unit, and increasing sales. To deal with them, here are some practical tips:
- Avoid unnecessary expenses like fancy office equipment that will not lead you to your business goals.
- Look for financial assistance. As startup capital comes from different means, you could consider choosing some options, for instance, business loans through a bank, business grants, attracting investors, or running a crowdfunding campaign.
Before moving to the next step, here is one thing to note down. Startup founders seem to be over-excited about their idea. Consequently, they often forget to set out an exit strategy to avoid confusion in the worst-case scenario, even the closure of your business.
Step 5. Build The Brand
Once your business plan is functioning, start building your brand right away.
So for eCommerce, a memorable brand name might make you feel like all the ones are in use. So do not analysis paralysis (when you get stuck because you have to many options) here, if you do get stuck try some name generator tools such as Shopify name generator or Nameforce.com to help you come up with something outside the box.
After you secure your domain name, the following step is to design a logo. A good logo is simple, but memorable. It is enduring, but not over the top and still business-appropriate. Other than forking out some serious $$$ on finding a pro designer, you could go to online logo makers as a time-saving and cost-effective like Canva.com, or out source the logo creation such as Fiver.com
And these are the first steps to on how to start an online business.
Come back to our blog soon to find out what else you need to take your eCommerce company to the next level!