How To Grow an E-Commerce Business in 8 Quick Steps

Twenty years ago, e-commerce was still an emerging industry with an uncertain future. Now, in 2023, it couldn’t be more clear that e-commerce has come to dominate the modern business landscape. The e-commerce business model affords businesses unparalleled access to global audiences and allows consumers round-the-clock access to their favorite brands — among many other benefits.

E-commerce undoubtedly holds a great deal of promise for today’s entrepreneurs; but how do you grow an e-commerce business from an unknown website into a major market force? 

Any online brand can achieve success with these 8 simple steps:

1. Market research and niche selection
2. Business plan and strategy
3. Setting up an e-commerce website
4. Product sourcing and inventory management
5. Marketing and promotion
6. Customer service and support
7. Scaling and expansion
8. Analyzing and adapting

Let’s dig into each one of these e-commerce tips in more detail. You can expedite your e-commerce business’s growth journey even further by partnering with a startup advisor who can help you tailor each of these steps to your specific circumstances.

Step 1: Market Research and Niche Selection

Regardless of whether you have an e-commerce website or a brick and mortar store, your business’s niche is its unique specialization. A niche market is a narrow group of customers who benefit very specifically from what your business offers. 

Some businesses serve niche markets with a single product line while others provide a variety of products to a broader group of customers. For example, an online music store that sells all kinds of instruments and accessories serves a broad market, whereas an online music store that exclusively sells guitars and guitar accessories serves a niche market. An online store that exclusively sells custom-made guitar straps would be an example of a business that serves an even narrower niche market.

Benefits of Targeting a Niche Market

• You can streamline resource allocation to suit production of a single type of product.
• You will likely have fewer direct competitors.
• You can provide each customer with a higher degree of personalization (which improves customer loyalty).
• You can specialize in something you’re passionate about.

Drawbacks of Targeting a Niche Market

• Your total pool of potential customers will be smaller.
• Not every niche market contains enough demand to be profitable long-term (or even short-term).

Finding a Profitable Niche

To make sure you choose a niche that’s actually profitable, start with market research. Look for an unsolved problem experienced by a narrow group of people that aligns with your area of expertise or interest. Our previous example of an online store that sells custom-made guitar straps could have been founded by a musician who frequently heard their fellow musicians complaining about the quality of their guitar straps.

Once you’ve identified a niche for your online business, research the competition in that niche. If there’s already an established business serving the niche extremely well, consider that you’ll have your work cut out for you making a profit within the same market sliver. Look for a niche with plenty of demand yet to be filled.

Step 2: Business Plan and Strategy

Your business plan and your business strategy are both integral to your business’s growth — but they are not one and the same. Though many people use the terms interchangeably, there are some important distinctions between “strategy” and “plan” in the context of an e-commerce business.

What Is a Business Plan?

Your business plan outlines how your company generates revenue and how it operates on a day-to-day basis. It includes elements like financial information (including funding needs), market scope, an operating plan, and key people like founders and executives.

What Is a Business Strategy?

Your business strategy defines your company’s goals and details the tactics it will use to achieve them. It’s a long-term framework that includes elements like an outline of objectives, a SWOT analysis, an action plan with a timeline for specific initiatives, and more as needed.

Leveraging Your Unique Selling Proposition

Your business’s unique selling proposition (USP) should play a key role in both your business plan and business strategy. Your USP is the specific value your business brings to your niche market that no other business like it can offer.

Step 3: Setting Up an E-Commerce Website

Your e-commerce website is the face of your online brand. The first step to creating a standout website for your e-commerce business is to choose the right platform to host it. There are many different options — you’ve probably heard of popular e-commerce platforms like Shopify or website builders like Wix or Squarespace. The best choice for your business comes down to how complex your needs are, your level of skill with website-building tools, and your budget.

If you aren’t comfortable building your own website, consider hiring a website developer or consulting a web development expert. However, many e-commerce website building tools offer templates that make designing your own website extremely intuitive even if you have no prior experience. 

Whether you use a template or design your website from scratch, it’s crucial to make it attractive and user-friendly. Include information about your brand’s story and mission to connect with website visitors, and don’t forget to include compelling descriptions of your products along with photos and interactive materials.

Besides the customer-facing look and feel of your website, you also need to make sure it's technically streamlined. Every page should be responsive, SEO-optimized, and deliver a seamless experience whether the user is on a desktop computer or mobile device.

Step 4: Product Sourcing and Inventory Management

Next, consider where you’ll get the products you’re going to sell on your e-commerce store. Ultimately, you’ll need to decide whether you want to develop a product or source products from somewhere else.

Sourcing products is when you purchase your inventory from manufacturers or other suppliers. There are many different factors that go into choosing which suppliers to work with, including reputation, product quality, price point, order fulfillment speed, and more.

You can also develop your own products. This is a great option if your product is highly specialized and should have an exceptionally unique or artisan feel to it. Products that will be sold in bulk will usually be more difficult to produce yourself at a fast enough pace to keep up with demand.

Whatever you decide, make sure you do ample research to find reputable suppliers for products or materials. Your e-commerce business is a reflection of its entire supply chain. Don’t be afraid to look into your competitors’ supply chains and imitate the most successful ones you find.

Step 5: Marketing and Promotion of E-Commerce

Once you’ve established a sturdy foundation for your e-commerce business, you can turn your attention to how to boost e-commerce sales. There are several types of digital marketing and promotion that work great for e-commerce businesses:

1. Social Media Marketing for E-Commerce

You can use social media to build an online following around your brand and create personal connections with your customers. Make sure your social media content links back to your site so you can translate social media engagement into actual web traffic with the potential to increase e-commerce sales and generate conversions.

2. Email Marketing for E-Commerce

Email marketing is still a great marketing channel for e-commerce promotion in 2023. While it may sound outdated to some, the truth is that email marketing campaigns still dominate when it comes to sharing information with your customer base quickly and conveniently.

3. Paid Advertising and SEO

You can also use paid advertising and SEO to attract traffic to your e-commerce website. Paid advertising is when you spend money on traditional online ads that appear as banners or promoted content alongside relevant Google Search results (for example). 

Search engine optimization (SEO) is when you tailor every aspect of your content marketing strategy and technical website framework to appeal to search engine algorithms, increasing your site’s likelihood of appearing organically in relevant search engine results pages.

4. Influencer Marketing

Influencer marketing is another type of marketing strategy that leverages the existing audiences of public figures, celebrities, or popular social media personalities to gain visibility. Collaborating with influencers who your target audience cares about is a great way to quickly boost your e-commerce traffic and conversion rate.

Step 6: Customer Service and Support for an E-Commerce Business

Customer support and customer service are both key parts of a healthy, growing e-commerce business. But, while customer service and customer support are frequently considered synonymous, customer support is actually a specific type of customer service.

• Customer service is any kind of courtesy or assistance that your business provides to its shoppers.
• Customer support is when your team helps a customer troubleshoot or learn how to use a specific product.

Providing your shoppers with excellent customer service is all about making sure the customer has a great experience with your company overall. For example, it might include guiding a customer through the online sales process and following up with them afterward to see if they’re satisfied with their purchase.

Providing fantastic customer support is about making sure your customers have the resources and assistance they need to get the intended value from your products. For instance, customer support could look like a customer support rep helping a customer solve a problem with a product over the phone or via email.

To grow an e-commerce business, you need customer service and customer support processes working in tandem. Don’t forget that your customer support efforts are a subset of your customer service efforts — in many cases, customer service interactions will transition into customer support interactions as you discover more about the specific type of assistance the customer needs.

Step 7: Scaling and Expansion of E-Commerce

Once you’ve built a thriving e-commerce business, you can begin scaling it up and expanding into new territory. 

To begin, you’ll need to carefully analyze all your available sales data and marketing metrics to identify where the most promising opportunities lie. Look for adjacent markets with similar demands to your current niche that you can segue into, or look for unmet demands within your current market you could expand your product line to meet.

As your e-commerce business expands, so will its logistics needs. As you scale up your supply chain, make sure you’re building a reliable network of partnerships with reputable manufacturers and suppliers. 

Another way to streamline logistics is to take advantage of automation wherever you can. Look for ways to automate your marketing campaigns or operations (like incorporating chatbots) to support even more rapid growth. At a certain point, you will probably also need to expand your team by hiring more employees.

Step 8: Analyzing and Adapting

Even after your efforts to scale your e-commerce business are well underway, there’s still more to do. Make sure you’re continuously monitoring and evaluating your business’s performance in the areas where you’ve recently expanded. 

By adapting your strategy based on lessons learned from real-time business results, you can not only ensure the best possible outcome for your current growth initiative but also drive success for future growth initiatives. Moreover, keeping a close eye on industry trends ensures your growth strategy is prepared to weather whatever unexpected market fluctuations come your business’s way.

Expert Growth Advice for E-Commerce Entrepreneurs

Scaling an e-commerce business quickly is an entirely achievable goal with the right growth framework:

1. Research your market and select your niche.
2. Solidify your business plan and business strategy.
3. Set up your e-commerce website.
4. Determine how you’ll source products or materials and manage inventory.
5. Create a plan for marketing and promoting your products.
6. Invest in excellent customer service and customer support.
7. Choose a direction to expand and make your move.
8. Analyze your growth outcomes and adapt accordingly.

Scaling an e-commerce business may be attainable with these simple steps, but you may find that your business’s growth journey doesn’t go exactly according to plan. This is often the case for new and experienced entrepreneurs alike. It’s very important to remain flexible and adapt your business strategy to whatever challenges arise. Consider getting tailored advice from a successful e-commerce business expert to find out how you can hone your e-commerce growth strategy even further.