How to Start an E-commerce Business: A 2025 Guide

Starting your own e-commerce business is an exciting venture, especially if you’ve dreamed about the freedom of being your own boss. If you are crafty or know about selling, the entrepreneurial route could be great.

Lifting a business off the ground is hard work. It requires business acumen, creativity, and discipline when taking the necessary steps to put your idea out there. But it can be a very worthwhile and rewarding journey. Global e-commerce sales reached nearly USD 6.3 trillion in 2024, with 60 million e-commerce users in the UK [1, 2]. You’ll find huge potential to profit from e-commerce.

Use this step-by-step guide to starting your online business, learn about the possible costs you may encounter, and explore cost-effective courses to help you gain the skills to set up a successful business.

How to start an e-commerce business

E-commerce is rising, so you’ll need to consider how to stand out because everyone can use digital marketing for their business. Despite the competition, you’ll find a bright future for e-commerce entrepreneurs. Here’s how to get started.

Step 1: Research e-commerce models and decide what to sell.

Today's e-commerce space is vast, with plenty of competition, so it is important to consider your e-commerce business model. You’ll find four basic types:

• Business-to-customer (B2C): A common business model in which a business sells anything from spices to shoes to consumers. B2C brands, such as Amazon, Asda, and Alibaba, can sell under one umbrella.

• Business-to-business (B2B): In B2B models, businesses sell products or services to other businesses. Orders tend to be recurring purchases. Examples include Amazon Business, Alibaba, and Rakuten.

• Customer-to-customer (C2C): C2C models are online marketplaces connecting consumers to exchange and sell goods and services. Online C2C businesses include Craigslist, Etsy, and eBay.

• Customer-to-business (C2B): With C2B, individuals sell their goods and services to companies. A good example is Upwork, which enables businesses to hire freelancers.

At the same time that you're considering your business model, you'll also want to explore the delivery method you'll use to distribute your goods or services. Generally, you'll use one of the following delivery methods:

• Direct-to-consumer (D2C): Sell your own products directly to customers without the help of wholesalers or retailers.

• Dropshipping: Set up a storefront (website) so customers can pay by credit card or PayPal, sourcing from a supplier that manages inventory and packaging. Dropship businesses are quick and inexpensive to start.

• Wholesaling: Purchase products in bulk at a discounted rate from a retailer to sell on your website.

• White label: Put your own name and brand on a generic product that you purchase from a distributor.

• Private label: Hire a manufacturer to create a product to be sold exclusively (by you).

• Subscription: Deliver products such as pet food or fresh vegetable boxes monthly or weekly to loyal customers who prioritise convenience.

Find your niche

To find your niche, you’ll want to consider what type of product you want to sell, to whom, and how you will distribute it. Whether you sell your own hand-crafted products or source generic ones, you make all the decisions when you start a business—and you get to decide what works best.

Step 2: Write a business plan.

After establishing your business's foundation, you’re ready to draft a business plan. This written document details your objectives and finance, operations, and marketing roadmap. You can use it to organise your business and attract potential investors.

Do some research to figure out the current competitors and market landscape for your product or service. Determine your target market and how you might sell to potential customers. Plan the logistics, including when, where, and how you will proceed in the coming months. 

Step 3: Choose a business name and start building your brand.

Next, your business needs a name and brand identity. For those starting white-label e-commerce businesses, the brand is especially crucial to its success. 

Choosing a business name can be fun, but it requires a bit of strategic thinking. In addition to a unique yet uncomplicated name that clearly explains your product, you’ll also want to check if the web domain, social media handles, and legal name are available. Do your research to make sure it translates well across cultures, especially if you aim to go global.

In building your brand, you’ll need to design a logo that you place on all packaging, website design, and marketing materials. Eventually, you may hire a designer to translate your brand’s ethos into beautiful web visuals.

Step 4: Register your business.

Before selling, you must register your business with His Majesty's Revenue & Customs (HMRC). To do this, you need to register as a sole trader or a limited company. Both have various advantages and disadvantages depending on how much money you make, whether you charge VAT, and whether you work alone or share the profits. 

Step 5: Create your e-commerce business website.

With your business officially registered, the next step is to create an e-commerce website. The website is the “storefront” for your business, where customers can arrive, browse, and place items in their shopping carts. Your business website and its functionality are critical to your success.

To start, you’ll need a domain name that matches your business name. Then, select an e-commerce platform that suits your bandwidth for creating and maintaining the online store. The most common type is an all-inclusive software (like Shopify), on which you can conduct business operations such as managing inventory, shipping orders, and more.

Here are just a few e-commerce platforms to choose from:

• Shopify: This popular e-commerce platform is all-inclusive and user-friendly, with plenty of customisation options. This hosted, software-as-a-service (SaaS) platform allows you to choose from several subscription options depending on your business needs.

• Squarespace: Known as a platform for building websites with modern templates, Squarespace also offers e-commerce capabilities. It is user-friendly but offers not as many customisable e-commerce features as Shopify.

• WooCommerce: WooCommerce is an open-source plug-in that you can add to your WordPress site to start selling. It is free to download and offers a wide range of e-commerce tools, which are best for entrepreneurs with prior technical experience.

• Magento: If you’re tech-savvy, you might want to use Magento, an open-source platform that allows you (or a hired developer) to customise every element of your online store.

How to create your own e-commerce website

After you’ve selected an e-commerce platform, you can move forward with building, customising, and launching your online store. You’ll decide on the template design, create a wireframe, add your product inventory, and write out descriptions to introduce your business.

Step 6: Source and develop your products or services.

Once you’ve set up a prototype of your website, you can add your product names, descriptions, and photos. You’ll also need to obtain your products, whether you go into production to develop them or source them from a wholesaler.

If you are a craftsperson, you’ll want to produce enough inventory to last the first few months. That might mean creating one of each clothing line's colour and sizes or twenty of each ceramic pot. This number will vary depending on your labour bandwidth and marketing strategy, like how much traffic you drive to your website’s launch.

Then, you’ll need to arrange logistics such as branded packaging, warehousing, inventory management, and shipping.

Tip: Startup on an e-commerce marketplace

If you're starting out, consider selling on an e-commerce marketplace like Etsy or Amazon. These established companies host thousands of sellers and use advanced algorithms to show desirable products to the right customers, so you can rely less on SEO and social media marketing.

Step 7: Launch and market your business.

Congrats! Once you have successfully launched the business, you can begin monitoring your metrics and key performance indicators (KPIs) as your business grows. Continue experimenting with different types of digital marketing to drive traffic to your brand. 

In addition to inventory management, logistics, and marketing, you’ll want to ensure that your shipping and fulfillment go smoothly for every customer. It is wise to prepare contingency plans in case anything goes wrong. 

How much does it cost to start an e-commerce business?

Starting an e-commerce business is an investment that can reap generous profits, especially if a large consumer base connects with your brand. However, it also requires time: getting an online business and earning a profit can take up to two years.

 Consider these upfront costs:

• E-commerce platform, domain name, and hosting: Software like Shopify will set you back £19 a month for basics, £49 for a regular plan, and £259 per month for an advanced plan. Open-source platforms are free to download, but you must consider hosting and developer fees. Some platforms include a domain name and hosting, while others require a separate purchase—a domain can cost between £0.01 and £20 for the first year while hosting can range from a few pounds to £400 per month.

• Product inventory: Inventory might be your biggest and most strategic expense since you’ll want to have enough to sell but don’t want to waste money on items that won’t sell. You may also need warehouse space and equipment.

• Shipping: Shipping costs will vary depending on your products, sales, shipping services, speeds, methods, and whether it is an add-on to your e-commerce platform. You may outsource the shipping process to focus on the products and other business operations.

• Marketing: When starting, you may want to invest more in marketing and advertising. Some new e-commerce businesses invest in customer acquisition, but professionals recommend using free resources and experimenting first.

• Employees: Depending on your company's size and growth rate, you may run the show for the first few months or years. Some experience rapid growth and need to hire employees shortly after launching the business, while others remain solopreneurs.

Generally, there are fewer costs associated with e-commerce than brick-and-mortar. With rent prices and inflation escalating and a behavioural shift in the way consumers shop, e-commerce might just deliver a higher return on investment (ROI). Going online has many attractive benefits and a bright future for anyone interested in starting a business.

The initial start-up can cost up to thousands of pounds. New business owners can self-fund, rely on support from friends and family, or take on loans.

Tips for starting an e-commerce business

Creating a successful e-commerce business requires motivation, strategy, and passion. Starting a business typically requires hard work but can be extraordinarily rewarding. Consider these tips when you’re starting:

• Start small: You don’t have to invest in hundreds of products initially. Create an Instagram account and simple branding to gauge interest if you're a craftsperson. If you’re sourcing products, give yourself a timeline to procure items, create a website, and soft-launch with targeted Google or Facebook ads. Then, build your business from there.

• Experiment with marketing: People won’t know about your business unless you promote it. Thankfully, many ways exist to conduct A/B testing on platforms like Google Ads with fewer dollars before launching a major campaign.

• Take advantage of partnerships and multi-channel strategies: Even though D2C sales are trending, your brand awareness and sales can benefit from featuring your products on channels such as large online retailers like Amazon and Etsy. Social media partnerships, including influencer and affiliate marketing and public relations (featured in select publications), can also help your recognisability and gain traction.

Get e-commerce skills for your business with Coursera

With the proper research and planning, you can help set your e-commerce business up for success. Consider taking a cost-effective online course to get started. Gain strong marketing skills for your next online business by obtaining professional certificates from industry leaders Meta or Google in Social Media Marketing or Digital Marketing & E-commerce. No degree or experience is required. Learn at your own pace on Coursera.