e commerce business plan

How to Make an Ecommerce Business Plan for Your Startup

Darren DeMatas

August 21, 2024

[show_reviewed_by_link]

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 , 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!

About the author

Leave a Comment

You must be logged in to post a comment

Featured on

Join 30K+ entrepreneurs already learning ecommerce.

Ecommerce ceo.

Partner With Us

Editorial Policy

Review Guidelines

Terms Of Use

Affiliate Disclosure

Privacy Policy

[email protected]

Guides & Resources

Ecommerce Learning Center

How To Start An Ecommerce Business

How To Make Money Online

What To Sell Online

How To Sell On Amazon

Online Business Ideas

Best Ecommerce Tools

Ecommerce Platforms

Fulfillment Services

Shipping Software

Inventory Management

Print On Demand

Dropshipping Companies

Amazon Research

Online Course Platforms

POS Systems

3PL Companies

BigCommerce

Shopify vs BigCommerce

2800 N 6th Street #5156 St. Augustine, FL 32084 United States

‪(904) 458-7077 ‬

Copyright © 2024 - Mission Demand LLC . All rights reserved.

Exclusive Member of Mediavine Finance

Your experience and software insights are valuable.

Ecommerce CEO is the only dedicated community for sharing real software reviews. Add your insights and tap into your peers' industry knowledge. Together, we can level up.

• Share on Twitter
• Share on LinkedIn
• Share on Facebook
• Share on Pinterest
• Share through Email

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

Carl Torrence is a Content Marketer at Marketing Digest. His core expertise lies in developing data-driven content for brands, SaaS businesses, and agencies. Carl’s work has been featured in Famous Bloggers, The Inspiring Journal, and AllTopStartups.

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.

Stay in the loop! Discover what’s new in the world of ecommerce.

• Your email *
• Hidden First Name
• Hidden Last Name
• By submitting this form, you agree to receive our newsletter, and occasional emails related to The Ecomm Manager. For more details, please review our Privacy Policy . We're protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
• Phone This field is for validation purposes and should be left unchanged.

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.

Need expert help selecting the right tool?

With one-on-one help, we guide you to your top software options. Narrow down your software search & make a confident choice.

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.

Step 9: Define financial requirements

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. Shopify — Best for a range of integrations
• 4. Ecwid by Lightspeed — Best for social media selling
• 5. Adobe Commerce — Best for data-driven companies
• 6. Sana Commerce Cloud — Best ecommerce platform for B2B sales
• 7. Volusion — Best customer service
• 8. ShopWired — Best for buy-now-pay-later purchasing
• 9. Elastic Path Commerce Cloud — Best for enterprise organizations
• 10. WooCommerce — Best ecommerce plug-in for Wordpress

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.

How To Conduct An Ecommerce Website Audit: Checklist & Benefits

Ecommerce Conversion Rate Optimization: Expert Guide on Boosting Ecomm CRO

Ecommerce Replatforming: How to Migrate Your Store The Right Way

• Credit cards
• View all credit cards
• Banking guide
• Loans guide
• Insurance guide
• Personal finance
• View all personal finance
• Small business
• Small business guide
• View all taxes

You’re our first priority. Every time.

We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners .

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

Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

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.

On a similar note...