e commerce business plan sample pdf

How to Make an Ecommerce Business Plan for Your Startup

Darren DeMatas

August 21, 2024

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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!

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• Business plans

Ecommerce Business Plan Template

Used 5,221 times

This Ecommerce Business Plan Template is tailored particularly to e-commerce companies, and all you require to do is add the elements related to your business.

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Prepared by:

​ [Sender.FirstName] [Sender.LastName] ​

​ [Sender.Title] [Sender.Company] ​

​ [Sender.Phone] [Sender.Email] ​

Business Overview

​ [Sender.Company] is headquartered at [Sender.StreetAddress] , [Sender.City] , [Sender.State] [Sender.PostalCode] and operates in the (industry) . [Sender.Company] was founded in (month, year) by (Founder.Name).

​ [Sender.Company] seeks to offer (a general description of specific products or services to be offered) in response to what management has identified as a clear market need.

Products and Services

​ [Sender.Company] will sell (specific products or services to be sold). The products sold by [Sender.Company] will stand apart from the competition due to (explain the unique selling proposition of the product to be sold). [Sender.Company] will also provide (describe any supplementary products or services offered).

Website Design

​ [Sender.Company] will develop a website whose key elements will include the following:

About section explaining the company's mission

Database of products

Shopping cart system

Help and FAQ pages

The website will be built by an established development firm and designed by an accomplished web designer, with the process supervised by [Sender.Company] 's designated supervisor.

Management Team

​ [Sender.Company] is led by (Manager.Name) who has been in the e-commerce industry for (number) years.

Previously, (Manager.Name) worked as (job title) at (previous company) and acquired in-depth knowledge of the e-commerce industry as well as the (industry name) industry and the needs of the mass consumer.

Industry Analysis

​ [Sender.Company] has conducted a thorough analysis of the industry and discovered the following statistics that bode well for the business:

(Provide point-by-point statistics that illustrate the opportunity for your business e.g., growth projections for the e-commerce industry and your specific niche, consumer survey results, cost projections, etc.)

Customer Analysis

​ [Sender.Company] ’s target market is comprised primarily of (describe your ideal customer) .

The demographics of these customers are as follows:

The average income of $XX, XXX

XX% work in (industry)

XX% (married/single)

The median age of XX years

Strong desire for (a specific type of product/service you sell)

Competitor Analysis

There are numerous competitors in the industry in which [Sender.Company] will operate. The most noteworthy competitors consist of:

(List 2-3 competitors and include a brief description of their history, the scope of their businesses, and some noteworthy facts and stats.)

Competitive Advantage

​ [Sender.Company] is positioned for success because:

There are a limited number of competitors.

There's no one selling the exact product/service that [Sender.Company] offers.

The management team is seasoned and has a strong track record of success.

The product/service is on trend, and the industry is growing.

Marketing Strategy

​ [Sender.Company] plans to leverage several strategical prongs to achieve success in its marketing strategy.

Brand Strategy

​ [Sender.Company] will consistently focus its marketing efforts on the brand's unique value proposition, consisting of:

(Describe what makes your product or service stand apart from your competitors)

Promotional Strategy

(List some of the channels or methods your company will use to promote itself, e.g., SEO, email marketing, paid advertising, social media outreach, affiliates, etc.)

Pricing Strategy

​ [Sender.Company] 's pricing, is based on comprehensive market research, and it has been determined that our pricing is fair and attractive compared to competitor offerings.

(State the specific pricing or the general price range of products to be offered.)

Operational Plan

​ [Sender.Company] has determined that the following roles are essential for the success of the company:

(List some of the departments and roles that will need to be in place to operate the business.)

​ [Sender.Company] believes it is reasonable to expect completion of the following milestones at the following times:

(State when you expect the milestone to be completed.)

(Briefly describe what the milestone is e.g., the website goes live, marketing campaigns launch, products ship, etc.)

Financial Projections

​ [Sender.Company] is seeking total funding of $(amount) to launch its business. The capital will be used for (state what funding will be used e.g., building the website, hiring personnel, working capital, marketing, etc.)

Specifically, these funds will be used as follows:

Hiring a content production team: approximately $(amount of money)

Marketing: approximately $(amount of money) design/build and startup business expenses: approximately $120,000

​ [Sender.Company] 's financial projections for the next (number) years are as follows:

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How to Write an Ecommerce Business Plan [Examples & Template]

Published: April 03, 2024

If you have a promising idea for an online e-commerce business , it’s important to create an e-commerce business plan to ensure your vision has enough stock to be profitable.

Having a business plan for your online store will help you define your target market, establish your monthly and quarterly sales goals, and increase the likelihood of long-term e-commerce success.

In this post, we’ll go over an online store business plan and how you can create one for your e-commerce startup. Let’s get started.

What is an e-commerce business plan?

An e-commerce business plan is a document that outlines your business and its goals, analyzes your industry and competitors, and identifies the resources needed to execute your plan. It also lists the e-commerce retailers you’ll use to distribute your products and the marketing strategies you’ll use to drive sales.

Whether a company operates as a startup or has years of operations and growth under its belt, an e-commerce business plan is essential for evaluating a business and determining areas of improvement.

An e-commerce business plan is essential, with increasing numbers of shoppers conducting business online. It's estimated this number has reached over 2 billion . An e-commerce business plan keeps you organized and is useful when seeking investors who need to understand your company.

So, let’s dive into some examples of e-commerce business plans and what goes into writing one using our free template .

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The essential document for starting a business -- custom built for your needs.

• Outline your idea.
• Pitch to investors.
• Secure funding.
• Get to work!

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E-commerce Business Plan Template

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HubSpot's template provides clear steps to structuring one for your ecommerce business. Throughout this section, I’ll use the example of a photography company specializing in online photo editing.

How to Write an Ecommerce Business Plan

• Give an executive summary.
• List and describe your business.
• Detail your products and services.
• Conduct a market analysis.
• Strategize your marketing plan.
• Create a sales plan.
• Outline legal notes and financial considerations.

1. Give an executive summary.

An executive summary is a one-to-two-page overview of your business. The purpose of an executive summary is to let stakeholders know what the business plan will contain. HubSpot‘s free template offers some tips on how to write one, as I’ve done below:

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Ecommerce Business Plan

Written by Dave Lavinsky

Ecommerce Business Plan Template

Whether you are planning to start a new ecommerce business or grow your existing ecommerce business, you’ve come to the right place to write an ecommerce business plan.

We have helped over 10,000 entrepreneurs and business owners create ecommerce business plans and many have used them to start or grow their own ecommerce businesses.

Sample Ecommerce Business Plan

Below is a sample of each of the key elements of an ecommerce business plan template to help you write your own business plan:

Executive Summary

Business overview.

TrendyFit.com is a startup ecommerce store that sells fitness clothes and accessories for the young, trendy, and stylish individual who enjoys working out and staying fit. The clothes are unique and designed to fit the latest trends of the most popular online YouTube or TikTok celebrities, yet functional and comfortable for working out at the gym or just hanging out. All products are made in the United States, are made with the highest quality fabric, and come with a money-back customer guarantee if the fit or style doesn’t satisfy the customer. TrendyFit.com is sold exclusively online; no retailers will be carrying any TrendyFit.com products.

TrendyFit.com is owned by Devon Ming. Devon will utilize a dropshipping company to receive all orders placed on TrendyFit.com, fulfill the order, and ship directly to the consumers. Devon will also employ a team of three creative designers to develop the website and social media presence by utilizing targeted social media ads and will recruit social media influencers as brand ambassadors. Devon will also employ a team of two customer service representatives to ensure complete customer satisfaction.

Product Offering

The following are the services to be offered by TrendyFit.com:

• Fitness clothing
• Fitness accessories such as socks, headbands, and wrist wraps
• Foam rollers

Customer Focus

TrendyFit.com will target all fitness enthusiasts and trendsetters in the United States and internationally. The target market will be social media savvy and spend a large portion of their day browsing through their social media sites. The ideal customer will be young, either in high school or college, a working professional, or a gym rat who frequents the trendiest fitness gyms and establishments.

Management Team

Devon Ming is a graduate of Harvard University’s Business School and after graduation, has spent the last three years developing the brand image, vision, and researching products for TrendyFit.com. Devon wanted to utilize his Master’s degree in Business Strategy & Marketing, and has devoted all of his time and energy into launching his ecommerce store.

As CEO of TrendyFit.com, Devon will oversee the strategy and development of the company. He will be in constant communication with the dropshipper, creative team, and customer service representatives. He will also focus on strategic growth and the long term vision of the company.

Success Factors

TrendyFit.com is primed for success by offering the following competitive advantages:

• Most cost-effective trendy fitness apparel option compared to competition.
• Trendiest and most innovative fitness fashion designs available anywhere.
• 100% customer satisfaction money back guarantee with every product sold.
• A portion of all proceeds will go towards socially-conscious causes and non-profit charities.

Financial Highlights

TrendyFit.com is seeking $200,000 in debt financing to launch TrendyFit.com. The funding will be dedicated for the down payment with the dropshipping company, three months of payroll expenses for the creative team and customer service representatives, and any business licensing necessary. There will also be funding dedicated to the social media campaign and website development. The breakout of the funding is below:

• Dropshipper Good Faith Down Payment: $50,000
• Payroll Expenses for Creative Team and Customer Service Reps (3 mos): $60,000
• Social Media Campaign & Website Development: $80,000
• Contingency and any necessary licensing: $10,000

The following graph below outlines the pro forma financial projections for TrendyFit.com.

Company Overview

Who is trendyfit.com.

TrendyFit.com is a startup ecommerce store that sells fitness clothes and accessories for the young, trendy, and stylish individual who enjoys working out and staying fit. The clothes are unique and designed to fit the latest trends of the most popular online YouTube or TikTok celebrities, yet functional and comfortable for working out at the gym or just hanging out. All products are made in the United States and come with a money-back customer guarantee if the fit or style doesn’t satisfy the customer. TrendyFit.com is sold exclusively online; no retailers will be carrying any TrendyFit.com products.

TrendyFit.com is owned by CEO Devon Ming and will be sold exclusively through a dropshipper that has agreed to fulfill all product orders placed by TrendyFit.com and ship within the continental United States in 2-3 business days and within one week to anywhere outside of the continental United States. Devon has placed his pricing model to be competitive with other popular online fitness clothing retailers, but more affordable as the base of his customers will be young and not have as much disposable income as other individuals outside of the target market.

TrendyFit.com History

Devon Ming has spent the last three years developing the brand image, vision, and researching products for TrendyFit.com. After graduating from college with a Master’s degree in Business Strategy & Marketing, Devon has devoted all of his time and energy into launching his ecommerce store.

Since incorporation, TrendyFit.com has achieved the following milestones:

• Registered the domain name TrendyFit.com.
• Developed the brand image, logo, and mission statement for TrendyFit.com.
• Signed a dropshipping agreement with the company who will manufacture, fulfill order, and ship all items sold on TrendyFit.com.
• Began a social media campaign to develop hype for the upcoming brand.

TrendyFit.com Products

TrendyFit.com will offer the following ecommerce products:

Industry Analysis

As a result of a significant shift from traditional retail to online retail, the E-Commerce industry is expected to grow to over $835 billion in the next five years.  Data shows that consumers prefer the convenience of finding, comparing and purchasing products online easily and quickly.

The industry’s main drivers include faster internet speeds,  an increase in mobile internet connections, accelerating per capita disposable income growth and the continued surge in internet traffic volume.

Strong economic conditions will also aid retailers that purchase inventory from overseas, while revenue growth and wage growth are expected to continue their strong trajectory over the next five years as technology continues to boost worker productivity.

The greatest opportunity for growth will come from product categories that were traditionally dominated by brick-and-mortar shopping, including groceries, major appliance products and clothing.

Customer Analysis

Demographic profile of target market.

Customer Segments

TrendyFit.com will primarily target the following customer profiles:

• High school students
• College students
• Young working professionals
• Fitness enthusiasts
• Trendsetters who focus on the fitness industry

Competitive Analysis

TrendyFit.com will face competition from other ecommerce businesses with a similar company profile. A summary of the competitor companies is below.

Direct and Indirect Competitors

Nike is a popular consumer products company that designs, develops, and markets their product line of footwear, apparel, equipment, and accessory products worldwide. It designs athletic, casual, and leisure footwear for men, women, and children. Nike’s footwear products include running, training, basketball, football, soccer, sport-inspired urban shoes, and children’s shoes. Nike, named for the greek goddess of Victory, also markets sports-inspired products for children and various competitive and recreational activities. Nike also sells sportswear under the Converse brand. The company, which generates some 60% of sales outside the US, sells through more than 1,090-owned retail stores worldwide and an e-commerce site, and to thousands of retail accounts, independent distributors, licensees and sales representatives. Customers in North America account for about 40% of total revenue.

Nike is headquartered in Beaverton, Oregon and was initially founded as Blue Ribbon Sports in 1962. The company rebranded as Nike in 1972 and the company went public in 1980.

Under Armour

Under Armour makes performance clothes for doing battle on the sports field and in the gym. The company offered collegiate, National Football League (“NFL”) and National Basketball Association (“NBA”) apparel and accessories, baby and youth apparel, team uniforms, socks, water bottles, eyewear and other specific hard goods equipment that feature performance advantages and functionality similar to our other product offerings. The company also makes technology that helps customers track their fitness. It sells online, by catalog, and through retail and outlet stores worldwide. Under Armour operates worldwide but generates most of its revenue in North America.

Under Armour’s marketing and promotion strategy begins with providing and selling their products to high-performing athletes and teams at the high school, collegiate and professional levels. They execute this strategy through outfitting agreements, professional, club, and collegiate sponsorship, individual athlete and influencer agreements and by providing and selling their products directly to team equipment managers and to individual athletes.

Under Armour was founded in Washington, DC, in 1996 and moved to Baltimore, Maryland, two years later. It promoted apparel specifically for athletes, fabric designed to keep them cool when it is hot and keep them warm when it is cold. It continued focusing on the sports world, inking supplier or licensing deals with the NHL, MLB, and USA Baseball in the early 2000s. Under Armour went public in 2005. The following year the company moved into footwear with a line of football cleats; it eventually became the official footwear supplier to the NFL.

Lululemon athletica inc. is a designer, distributor and retailer of lifestyle inspired athletic apparel and accessories. The Company’s segments include Company-operated stores and direct to consumer. Its apparel assortment includes items such as pants, shorts, tops, and jackets designed for a healthy lifestyle including athletic activities such as yoga, running, training, and other sweaty pursuits. It also offers fitness-related accessories. Its direct to consumer segment includes electronic commerce website www.lululemon.com, other country and region-specific websites, and mobile applications, including mobile applications on in-store devices. Its Company-operated stores include approximately 491 stores. Its Company-operated stores are branded lululemon and Ivivva. The Ivivva branded stores specializes in athletic wear for female youth. It also offers weekly live classes, on-demand workouts and one-on-one personal training through its subsidiary.

Competitive Advantage

TrendyFit.com will be able to offer the following competitive advantages over their competition:

Marketing Plan

Brand & value proposition.

TrendyFit.com will offer the unique value proposition to its clientele:

• All materials are made in the United States and made with the highest quality material.

Promotions Strategy

The promotions strategy for TrendyFit.com is as follows:

Social Media

TrendyFit.com will blow up social media sites with targeted ads and TrendyFit.com will be seen on all major social media sites (Facebook, Instagram, Twitter, YouTube, TikTok, SnapChat, etc.). A large portion of the funding will go towards purchasing targeted ads and having a creative team to develop the social media advertising.

Website & SEO Marketing

Devon’s creative team will also develop a professionally designed and visually appealing website to gear customers to when they click on the social media ad. The website will have a gallery of all the available products, shipping information, return information, FAQ’s, etc. The SEO will also be managed to ensure that anyone searching “trendy fitness apparel” or “trendy clothes for young adults”, will see TrendyFit.com listed at the top of the Bing or Google search engine.

Brand Ambassadors

TrendyFit.com will recruit a team of social media influencers who have over 100k followers on at least one social media site. By having the brand ambassadors post of TrendyFit.com and wear the clothing, TrendyFit.com will gain a massive amount of followers because one of their favorite internet celebrities is wearing the brand. The brand ambassadors will include a code in their post and will be paid a portion of revenue for whomever purchases from TrendyFit.com using that code.

Pricing Strategy

The pricing of TrendyFit.com will be moderate and on par with competitors so customers feel they receive value when purchasing its products.

Operations Plan

The following will be the operations plan of TrendyFit.com.

Operation Functions:

• Devon Ming will be Owner and CEO of TrendyFit.com. He will be in charge of strategy, growth, product design, and dropshipper communication.
• Two Customer Service Representatives to answer customer calls, emails, returns, and any other customer issues.
• Team of three Creative Designers to develop the website, social media posts, photography, SEO, and targeted ad campaigns on social media sites.
• TrendyFit.com will have an agreement in place with a dropshipper who will fulfill all product orders and ship them directly to the consumer. TrendyFit.com will not have its own warehouse, all product inventory and shipping will go through the dropshipper.

Milestones:

TrendyFit.com will have the following milestones completed in the next six months.

6/1/202X – Finalize agreement with dropshipping company for them to receive orders directly from TrendyFit.com website, fulfill them, and ship straight to consumers.

6/10/202X – Hire team of Creative Designers to begin design work on the TrendyFit.com website and social media platforms.

7/15/202X – Begin social media campaign for TrendyFit.com.

8/1/202X – Recruit team of brand ambassadors.

8/15/202X – Hire team of Customer Service Representatives.

9/1/202X – TrendyFit.com website officially launches and goes live. Customers are now able to place orders on TrendyFit.com.

Devon Ming will be the Owner and CEO of TrendyFit.com.

Devon Ming, Owner

Devon Ming is a native of San Jose, California and attended college in Cambridge, Massachusetts at Harvard University. After subsequently being accepted into Harvard’s prestigious business school and graduating, Devon spent the next three years developing the brand image, vision, and researching products for TrendyFit.com. Devon wanted to utilize his Master’s degree in Business Strategy & Marketing, and has devoted all of his time and energy into launching his ecommerce store.

As CEO of TrendyFit.com, Devon will oversee the strategy and development of the company. He will be in constant communication with the dropshipper, creative team, and customer service representatives. He values the customer service representatives as much as the rest of the team because he wants to get involved on customer feedback and any issues they are having. He can then implement those issues and feedback to the creative team and adjust product design if necessary. He will also ensure complete customer satisfaction and make sure the dropshipper is aware of any customer issues with product packaging and delivery.

As TrendyFit.com becomes more and more popular, Devon will be prepared for growth and hire a CFO when necessary and when the company is able to afford to do so. When the company is primed for growth and its dominance in the market is made, Devon and future CFO will strategize on a plan to take the company public.

Financial Plan

Key revenue & costs.

The revenue drivers for TrendyFit.com will be the revenue obtained from all products sold on TrendyFit.com.

The cost drivers will be the cost to maintain the dropshipper per the contract. The dropshipper will receive fees on all products it fulfills and ships. Other cost drivers will be the salaries for the creative team and customer service representatives. Lastly, other cost drivers will be the costs for purchasing targeted ads on various social media sites and maintaining the website.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of Initial Visitors to TrendyFit.com per Month: 1,000
• Revenue per Month: $50,000

Financial Projections

Income statement.

Balance Sheet

Cash Flow Statement

Free Business Plan Template PDF for an E-commerce Business

You can download our free e-commerce business plan template PDF here . This is a business plan template you can use in PDF format. You can easily complete your ecommerce business plan using our Ecommerce Business Plan Template here .

Ecommerce Business Plan FAQs

What is an ecommerce business plan.

An e-commerce business plan is a plan to start and/or grow your online business. Among other things, it outlines your business idea , identifies your target customers, presents your marketing strategies and details your financial projections.

What are the Essential Steps to Launch a Successful Ecommerce Business?

Launching an e-commerce business is an exciting venture with the potential for substantial rewards. To maximize your chances of success, follow this strategic roadmap.

1. Conduct In-Depth Market Research: Thoroughly analyze your target market, identify consumer pain points, and discover product gaps. This research will be the cornerstone of your business strategy, informing product selection, pricing, and marketing efforts.

2. Craft a Compelling Business Plan: Develop a solid business plan outlining your business goals, target audience, unique value proposition, business model, sales strategies, and financial projections. This document will serve as your roadmap and a valuable tool for attracting potential investors or securing loans.

3. Choose a Profitable Product Niche: Select a product niche that aligns with your passion and possesses strong market demand. Consider factors such as competition, profit margins, and scalability when making your decision.

4. Build a Strong Brand Identity: Create a memorable brand name, logo, and visual identity that resonates with your target audience. Develop a compelling brand story to foster customer loyalty and emotional connections.

5. Develop a User-Centric E-commerce Store: Design an online store that is visually appealing, easy to navigate, and optimized for conversions. Prioritize fast loading times, clear product descriptions, high-quality images, and secure checkout processes.

6. Source Reliable Suppliers: Establish relationships with reputable suppliers who can provide high-quality products at competitive prices. Consider factors such as order fulfillment times, shipping options, and return policies.

7. Optimize Pricing Strategy: Conduct thorough market research to determine competitive pricing for your products. Implement effective pricing strategies, such as discounts, promotions, and tiered pricing, to maximize revenue and profitability.

8. Masterful Marketing and Promotion: Develop a comprehensive marketing strategy that leverages various sales channels, including social media, search engine optimization (SEO), email marketing, and paid advertising. Create compelling content that engages your target audience and drives traffic to your store.

9. Fulfill Orders Efficiently: Implement a streamlined order fulfillment process to ensure timely and accurate delivery of products. Consider using order management software and partnering with reliable shipping carriers.

10. Prioritize Customer Satisfaction: Build a strong customer support system to address inquiries and resolve issues promptly. Encourage customer feedback and implement improvements based on customer insights.

By following these steps and continuously adapting to market trends, you can build a thriving e-commerce business that generates sustainable profits.

Other Business Plan Templates

Clothing Line Business Plan Template Clothing Store Business Plan Template Beauty Supply Store Bookstore Business Plan Template

Ecommerce Business Plan Guide + Sample

July 6, 2023

Adam Hoeksema

Welcome to the ever-evolving world of ecommerce—a space where countless businesses are launching every day. If you've landed here, we're guessing you too are gearing up to start your own ecom business. Yet, entering ecommerce is not just about setting up a website and listing products—it involves a robust plan that encompasses every aspect from customer acquisition to cash flow forecasting. That's why we've crafted this comprehensive guide. This Ecommerce Business Plan Guide, complete with a sample business plan, should help you check this project off the list. 

Although we focus on ecommerce financial models , we know that some of our clients also need a full business plan, so I decided to take a deep dive into the topic.  I plan to cover:

• Why write a business plan for an ecommerce business?
• What to include in an ecommerce business plan?
• Ecommerce business plan outline

How to Analyze the Market for an Ecommerce Product?

How to analyze the competition in ecommerce, how to estimate customer acquisition costs in ecommerce.

• How to Create Financial Projections for an Ecommerce Brand?
• Example Ecommerce Business Plan?

Ecommerce Business Plan FAQs

With that as our guide, let’s dive in!

Why write a business plan for an ecommerce business? 

It might feel like writing a business plan is a waste of time, and honestly, writing a 40 page plan probably is a waste of time.  So why write a business plan?  I like to say that you write a business plan primarily because the people with the money (the lenders and investors) are asking for your business plan and projections.  

Although I think a business plan could be a good exercise for any ecommerce startup, I know the real impetus for writing a business plan is likely the fact that your potential investors or lenders are asking for one.  

What to include in an ecommerce business plan? 

I don’t think your business plan needs to be a 100 page dissertation, our ecommerce business plan example is roughly 10 pages.  We include the following sections:

Ecommerce Business Plan Outline

We suggest the following business plan sections for your ecommerce business plan:

• Executive Summary
• Company Description
• Market Analysis
• Product and Service Offerings
• Marketing Plan & Customer Acquisition
• Operating Plan
• Financial Plan

Analyzing the market for an ecommerce product is a vital step in any business plan. It gives you a better understanding of your potential customers, competitors, and overall market dynamics. Here's a step-by-step guide to help you do this effectively:

• Identify Your Target Audience: Understanding who will buy your product is crucial. Segment your audience based on demographic and psychographic factors. This might include age, gender, location, lifestyle, interests, income, and more. Analyzing these factors will give you a clear picture of who your customers are and what they need.
• Market Size Estimation: Determine the size of your potential market. This involves looking at the number of potential customers who might be interested in your product. Market size can be categorized into three segments: total available market (TAM), serviceable available market (SAM), and serviceable obtainable market (SOM).

I like to use Google Keyword Planner Tool to see how many people are searching for keywords related to the product I plan to sell as a quick and free way to estimate the market size.  For example, let’s assume that we are selling a yoga mat.  According to Google Keyword Planner Tool there are roughly 90,000 monthly searches for that keyword. 

To put some additional rough math to the opportunity, the first organic search result will often get roughly 40% of the clicks, and a solid ecommerce site will have a 3% conversion rate of visit to purchase.  So if you ranked first and received roughly 36,000 clicks with a 3% conversion rate you could sell 1,080 mats per month. 

• Competitor Analysis: Understanding your competitors is as important as understanding your customers. Identify your direct and indirect competitors, analyze their products, pricing, marketing strategies, customer reviews, and their market share. This will help you identify gaps in the market that you can exploit.

Read More: How to Write a Business Plan Competitor Analysis

• Trend Analysis: Investigate current market trends related to your product. Look at the growth of the market, customer preferences and behavior, and the impact of technology and environmental factors.

I like to suggest using Google Trends to see trends in popularity in your market.  If we stick with our yoga mat example we can see the following seasonal trends and trend over the last 5 years for the search term yoga mat. 

• SWOT Analysis: Carry out a SWOT analysis - strengths, weaknesses, opportunities, and threats related to your ecommerce product. This analysis will help you understand your product's position in the market.
• Pricing Analysis: Understand the pricing strategies of your competitors and the pricing willingness of your potential customers. It will help you to set a competitive and profitable price for your product.
• Regulatory Environment: Check the regulatory environment related to your product. It includes legal regulations, trade policies, and standards that might impact your ecommerce business.
• Customer Behavior and Preferences: With the help of analytics and customer feedback, understand what drives customer behavior. Consider their shopping habits, their product preferences, and what influences their buying decisions.

Each of these steps will provide valuable insights that can shape your ecommerce product's marketing strategy, positioning, pricing, and much more. Remember, market analysis is an ongoing process—it needs to be repeated periodically as markets evolve over time.

There are a couple of tools that I like to use when analyzing the competition in ecommerce.  

• Google’s Ads Transparency Tool – with this tool you can simply enter in the domain name of a competitor and Google will show you all of the ads that they are running.  This is a nifty way to get an idea of ads that might be working well and areas you might be able to compete. 
• Ahrefs – Ahrefs will allow you to look up a competitor’s website and you can see how much organic traffic they are getting and exactly what keywords are sending that traffic. For example, REI ranks 3 rd organically for the keyword “yoga mats” so we looked up their Yoga Mats page on Ahrefs and found that they receive roughly 2,200 organic visits per month to that page:

We can also see what keywords are sending the most traffic to that page below where I have highlighted the monthly organic traffic estimate for each keyword. 

I like to use Google Keyword Planner Tool to estimate customer acquisition costs as well.  As we saw with the Yoga Mat example below the average cost per click to advertise for that keyword was between $0.39 cents and $3.13.   

Again if we stick with a 3% conversion rate and assume 50 cents per click that means you are likely to spend roughly $16 to acquire one customer.  Not a whole lot of room for margin in this business right?  In this case you would need to hope that you can sell multiple products to the same customer over time.  

Your customer acquisition costs will be a fundamental assumption in your financial model.  Let’s dive into that next. 

How to Create Financial Projections for a Bar Business Plan

Just like in any industry, the ecommerce business has its own unique factors that impact financial projections, such as online traffic, conversion rates, and customer acquisition costs. Utilizing an ecommerce financial projection template can simplify the process and increase your confidence. Creating accurate financial projections goes beyond showcasing your ecommerce venture's ability to generate sales; it's about illustrating the financial roadmap to profitability and the realization of your online business goals. To develop precise projections, consider the following key steps:

• Estimate startup costs for your ecommerce business, including website development or platform setup, inventory acquisition, branding and marketing expenses, and initial fulfillment and shipping costs.
• Forecast revenue based on projected online traffic, conversion rates, average order value, and potential growth in customer base.
• Project costs related to product sourcing or manufacturing, packaging, shipping, and fulfillment services.
• Estimate operating expenses like website maintenance, hosting fees, digital marketing expenses, customer support, and administrative costs.
• Calculate the capital needed to launch and sustain your ecommerce business, covering initial expenses and providing working capital for continued growth.

While financial projections are a critical component of your ecommerce business plan, seek guidance from experienced professionals in the ecommerce industry. Adapt your projections based on real-world insights, leverage industry resources, and stay informed about digital marketing trends and evolving consumer behavior to ensure your financial plan aligns with your goals and positions your ecommerce venture for long-term success.

Example Ecommerce Business Plan

Explore our E-commerce Business Plan, presented below. If you prefer, you can access a downloadable Google Doc version of this bar business plan template, allowing you to personalize and tailor it to your specific needs. Additionally, a helpful video walkthrough is available, guiding you through the process of customizing the business plan to perfectly align with your unique Ecommerce business.

Table of Contents

Executive Summary:

• Business Description
• SWOT Analysis

Marketing and Sales Strategy

• Branding and Identity
• Website, menu, and social media platforms
• Marketing materials and promotional items
• Marketing mix

Operations Plan

• Organizational Structure:
• Location and Facility:
• SOP (Standard Operating Procedures):
• Health and safety protocols:

Financial Projections

• Startup Costs and Use of Funds
• Annual Sales, Gross Profit and Net Profit
• Key Financial Ratios
• Income Statement at a Glance
• Income Statement Annual Summary
• Cash Flow Statement Annual Summary
• Balance Sheet Annual Summary

I. Executive Summary

Our ecommerce store, "Eco-Friendly Fashion," aims to provide consumers with stylish and environmentally-friendly clothing options. 

Our target customer is the eco-conscious, fashion-forward individual who is looking for sustainable alternatives to fast fashion.

The ecommerce market is growing rapidly, and there is a growing demand for sustainable fashion products. We believe there is a gap in the market for an ecommerce store that offers a wide range of eco-friendly clothing options at affordable prices. Our unique selling proposition is to offer high-quality, stylish clothing that is also environmentally friendly, at a price that is accessible to our target customer.

We plan to launch with a product line of 50 items, including t-shirts, hoodies, and dresses, made from organic cotton and recycled materials. Our products will be manufactured in fair trade factories, ensuring ethical labor practices. Our initial funding will come from personal investments and a small business loan. Our financial projections show that we will break even in the third year of operation and achieve a profit by the fourth year.

II. Company Description

Eco-Friendly Fashion is a newly established ecommerce store that will offer a wide range of eco-friendly clothing options for both men and women. The company was founded by two friends, Jane Doe and John Doe, who share a passion for sustainability and fashion. Jane has a background in fashion design and John has experience in ecommerce and marketing.

Eco-Friendly Fashion is a limited liability company (LLC) registered in the state of California. Our team also includes a product sourcing specialist and a freelance graphic designer. Our office and warehouse are located in Los Angeles, CA.

III. Market Analysis

The global ecommerce market is expected to reach $4.9 trillion by 2021, with a significant portion of this growth coming from the fashion industry. Consumers are increasingly turning to ecommerce for their fashion purchases, and there is a growing demand for sustainable fashion products.

Our target customer is the eco-conscious, fashion-forward individual, aged 18-35, with a moderate to high income. This demographic is highly concerned about the environmental impact of their clothing choices and is willing to pay a premium for sustainable fashion options.

Competitors in the eco-friendly fashion market include established brands like Patagonia and smaller, niche brands like Tentree. However, these brands tend to focus on outdoor and athletic wear, rather than everyday fashion, and their products can be expensive. Our competitors in the sustainable everyday fashion market include companies like Reformation and Everlane, but these brands have limited product offerings and their products can also be expensive.

Our marketing and sales strategies will focus on leveraging social media, influencer marketing, and targeted online advertising to reach our target customer. We will also attend sustainable fashion trade shows and events to network and showcase our brand.

IV. Product and Service Offerings

Eco-Friendly Fashion will launch with a product line of 50 items, including t-shirts, hoodies, and dresses, made from organic cotton and recycled materials. Our products will be manufactured in fair trade factories, ensuring ethical labor practices. Our products will be designed in-house, with a focus on creating stylish, on-trend pieces that are also environmentally friendly.

Our pricing strategy will be to offer high-quality, stylish clothing at a price that is accessible to our target customer. Our products will be priced slightly higher than fast fashion options, but lower than sustainable fashion competitors like Reformation and Everlane.

We will continuously expand our product line and source new materials and manufacturing partners to ensure we are always offering the latest in sustainable fashion. In addition to our clothing line, we will also offer a recycling program for customers to trade in their old clothing for store credit. This will further demonstrate our commitment to sustainability and encourage customers to make more sustainable fashion choices.

V. Marketing Plan & Customer Acquisition

Our plan to grow our ecommerce business and reach our financial targets will follow a 5 pronged marketing approach in order to acquire customers. 

Brand Awareness:

• Partner with influencers and bloggers in the sustainable fashion and lifestyle space to feature your products and increase brand exposure.
• Utilize social media platforms such as Instagram and Facebook to showcase your products and educate your audience on the importance of environmentally responsible and ethically sourced apparel.
• Participate in local events and festivals that align with your values to increase visibility and connect with potential customers in person.

Content Marketing:

• Create a blog that features articles on sustainable fashion and how your products are made in an environmentally responsible and ethical manner.
• Offer styling tips and suggestions for incorporating eco-friendly fashion into everyday outfits to engage and educate your audience.
• Share customer testimonials and reviews on your website and social media channels to build trust and credibility with potential customers.

Email Marketing:

• Build an email list by offering an incentive such as a discount code to customers who sign up.
• Send newsletters that include information on new product launches, sales, and events.
• Use email automation to send abandoned cart reminders and follow-up emails to potential customers who have shown interest in your products.

Paid Advertising:

• Utilize targeted Facebook and Instagram ads to reach a wider audience and drive traffic to your website.
• Partner with eco-friendly and sustainable lifestyle websites to run display ads and reach potential customers who are already interested in these topics.
• Consider using Google Ads to target customers who are actively searching for environmentally responsible and ethically sourced apparel.

Referral Program:

• Encourage satisfied customers to refer friends and family by offering a discount code or other incentive for each successful referral.

VI. Operating Plan

Eco-Friendly Fashion will operate as an online ecommerce store, with all sales taking place through our website. Our website will feature a user-friendly interface, detailed product descriptions, and multiple payment options. We will also offer free shipping on all orders within the United States, with the option for international shipping at an additional cost.

Our fulfillment and delivery strategies will include partnerships with established logistics companies to ensure efficient and cost-effective shipping. We will also implement a comprehensive returns and exchanges policy to ensure customer satisfaction.

Our ecommerce platform will be powered by Shopify, which offers a range of tools and integrations to manage our website, inventory, and customer data. We will also use a customer relationship management (CRM) system to track customer interactions and improve our marketing and sales strategies.

VII. Financial Plan

Our start-up costs will include the cost of product development and manufacturing, website development, marketing, and rent for our office and warehouse. Our initial funding will come from personal investments and a small business loan.

Our financial projections show that we will achieve $75,000 in sales in the first year, increasing to $500,000 in the second year and $1 million in the third year. Our expenses will include product manufacturing, marketing, salaries, and other operating costs. Our projections show that we will break even in the third year of operation and achieve a profit by the fourth year.

To minimize risk, we will continuously monitor our financial performance and adjust our strategies as needed. We will also implement a thorough risk management plan, including carrying appropriate insurance coverage and implementing strong data security measures to protect our customer information.

All of the unique financial projections you see below were generated using ProjectionHub’s Ecommerce financial projection template . Use PH20BP to enjoy a 20% discount on the template. 

Startup Costs:

Projected Financial Summary:

Annual Sales, Gross Profit and Net Profit:

Key Financial Ratios:

Watch how to create financial projections for your very own ecommerce business:

Income Statement:

Balance Sheet:

Cash Flow Statement:

VIII. Conclusion

Eco-Friendly Fashion is poised to fill a gap in the sustainable fashion market, offering a wide range of stylish and environmentally friendly clothing options at affordable prices. With a growing demand for sustainable fashion and our commitment to ethical and sustainable business practices, we are confident in our ability to succeed in the competitive ecommerce market.

Our team is dedicated to offering the highest quality products and customer service, and we are excited to bring our vision of sustainable fashion to life. Our next steps include finalizing our product line and manufacturing partnerships, launching our website, and beginning our marketing and sales efforts.

How do I start an ecommerce business?

To start an ecommerce business, you'll need to identify your target market and products, create a business plan, set up an online store or website, source or create products, establish secure payment and shipping methods, and implement marketing strategies to drive traffic and sales.

Which ecommerce platform should I use for my online store?

Popular ecommerce platforms include Shopify, WooCommerce, Magento, and BigCommerce. Consider factors such as ease of use, customization options, scalability, pricing, and integration with other tools or marketplaces when choosing the right platform for your business.

How can I drive traffic to my ecommerce website?

You can drive traffic to your ecommerce website through various strategies, including search engine optimization (SEO), social media marketing, content marketing, influencer partnerships, email marketing, paid advertising, and utilizing marketplace platforms such as Amazon or Etsy.

What are the essential elements to include in product descriptions for ecommerce?

Essential elements for product descriptions in ecommerce include clear and concise product titles, detailed descriptions highlighting key features and benefits, high-quality product images, pricing information, sizing or specifications, and customer reviews or testimonials, if available.

How can I optimize the checkout process to increase conversions?

To optimize the checkout process, streamline the steps involved, offer guest checkout options, provide multiple payment methods, ensure security and trust indicators, display shipping options and costs upfront, minimize form fields, and offer incentives such as discounts or free shipping for completing a purchase.

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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Ecommerce Business Plan Template [Updated 2024]

Ecommerce Business Plan Template

If you want to start an online business or expand your current ecommerce business, you need a solid business plan.

A successful ecommerce business plan will accomplish several key objectives. First, it will help you create business goals for your online business and give you a roadmap to follow to reach them. It will also help you develop the right sales strategies to attain your goals. For example, by understanding market trends, the strengths and weaknesses of other ecommerce businesses, and the demographic and psychographic needs of your target audience, you can craft a better business strategy and marketing strategies to reach your target customers.

You can download our Ecommerce Business Plan Template (including a full, customizable financial model) to your computer here.

The following Ecommerce business plan template gives you the key elements to include in a winning business plan for an ecommerce startup or an existing ecommerce business.

Sample Ecommerce Business Plan

I. executive summary, business overview.

[Company Name], headquartered at [insert location here] is a new eco-friendly baby supplies e-commerce website that seeks to offer an alternative resource to the mass-market of baby care items. It will feature products that specialize in all-natural, environmentally friendly baby, feminine and maternity items.

Products and Services

[Company Name] will sell an exclusive collection of baby care items with a focus on eco-friendly and environmentally safe products. Product offerings also include an array of feminine and maternity items. It is a priority of [Company Name] to offer only the best products with all-natural ingredients and materials.

[Company Name] is also dedicated to providing educational information on baby care, pregnancy, and holistic lifestyles.

Customer Focus

[Company Name]’s target market is comprised primarily of online consumers with a specific focus on moms and eco-friendly consumers.

The demographics of these potential customers are as follows:

• Roughly 200 million Americans shop online
• Average income of $76,000
• 82% married
• 49.6% in Mgt./Professional occupations
• Median age: 34 years
• Green consumers are found in substantial numbers across all demographic groups, but ages 18 to 34 year olds and high-income households are the top groups for green shopping.

Management Team

[Company Name] is led by [Founder’s Name] who has been in the e-commerce business for 10 years. While [Founder] has never run an e-commerce portal himself, he was previously director of strategic development for an e-commerce site. As such [Founder] has an in-depth knowledge of the e-commerce business as well as the needs mothers, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).

Success Factors

[Company Name] is uniquely qualified to succeed for the following reasons:

• There is currently noe-commerce site dedicated to eco-friendly baby and feminine products. [Company Name]’s focused approach on eco-friendly products is unique in a market where websites look to offer a broad range of products.
• The management team has a track record of success in the e-commerce and consumer product business.
• The e-commerce business is a proven business and has succeeded throughout the world.
• Market trends,such as the growth in e-commerce purchases and the “green” movement favor this business.

Financial Highlights

[Company Name] is seeking a total funding of $430,000 to launch its business. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.

Specifically, these funds will be used as follows:

• Website design/build and startup business expenses: approximately $120,000
• Working capital: approximately $310,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even

Top line projections over the next five years are as follows:

II. Company Overview

Who is [company name].

[Company Name] headquartered at [insert location here] is an eco-friendly baby supplies website that seeks to offer an alternative resource to the mass-market of baby care items. Our goal is to shift consumer sentiment to a more eco-conscious attitude through education of eco-friendly baby care products and practices.

The website aims to increase accessibility to these products and lifestyle by creating a user-friendly portal that connects parents to a wide variety of manufacturers, small businesses and products that specialize in all-natural, environmentally friendly baby, feminine and maternity items. The website’s goal is to not only sell goods, but to build a community of parents and eco-friendly businesses in order to become the premier, trusted provider of online services and products in the green space.

[Company Name] was founded by [Founder’s Name]. While [Founder’s Name] has been in the e-commerce business for some time, it was in [month, date] that he decided to launch [Company Name]. With active memberships in the Real Diaper Industry Association, International Center for Traditional Childbearing, Doulas of North America, Real Diaper Association, Baby Carrier Industry Alliance and Baby wearers Institute, [Founder’s Name] has become well connected and respected in the industry, which makes him the ideal leader for the brand.

It was apparent to [Founder’s Name] that an unserved market need existed for the product.

[Company Name]’s History

After surveying the e-commerce landscape, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].

[Founder’s Name] has selected a technology director with project management experience in the development of e-commerce websites.

Since incorporation, the company has achieved the following milestones:

• Developed the company’s name, logo and placeholder website located at www…
• Determined the list of products to be offered
• Determined web platform requirements
• Identified three potential web development companies and solicited proposals from them

[Company Name]’s Products

Below is [Company Name]’s initial product list. As you can see all items are classified under the following five main categories:

• Diapering: Diapers, wipes, creams, cloth diapers, diaper bags
• Feeding: Bottles, utensils, breastfeeding, formula, bibs
• Toys & books: infant toys and board books
• Safety: Baby monitors, gates, first aid, medicine and baby proofing items
• Gear: Strollers, high chairs, car seats, swings, portable cribs

The website will feature a rotating display of featured and new products on its homepage as well as a searchable database. Products will be sent directly via manufacturer to client’s home.

Website Design

[Company Name] will develop a website whose key elements will include the following:

• Search Engine
• Database of products
• Cart System
• Help and FAQ pages

The website will be built by an established development firm and designed by an accomplished web designer, with the process supervised by the company’s technology director. Where appropriate, existing software applications will be purchased to fill standard needs to keep costs down without sacrificing functionality and to avoid the problems associated with newly-developed software.

[Company Name]’s website will be available at all times, but customer service representatives, answering email requests, will only work 7 days a week, from 9AM to 6 PM.  

III. Industry Analysis

Industry statistics & trends.

The following industry size facts and statistics bode well for [Company Name]. The E-Commerce industry will attract a larger customer market as more households purchase items online. Over the past five years, revenue is expected to increase at an annualized 13.4% to $526.6 billion. However, the looming threat of regulation may hamper sales, and heightened competition is projected to slow profit growth in the coming years.

Trends and drivers include:

• Per capita disposable income is projected to accelerate an average 2.4% per year on average during the period, and employment is on the rise. When income increases and consumers are more willing to spend money, industry operators will experience a revenue boost.
• Moreover, heightened employment will limit leisure time and encourage consumers to leverage the convenience of online shopping.
• Rather than spending more on goods in department stores or other retail outlets, consumers will increasingly turn to price-competitive options offered online. As a result of this shift in customers’ shopping tendencies, the industry is expected to continue to experience solid growth.
• Internet traffic volume will continue to steadily grow during the next five years, further contributing to industry growth. Internet traffic volume is anticipated to grow as consumers gain easier and more convenient access to the internet with improved technology and the rise of smartphones and public Wi-Fi access. More consumers will have access to online retailers and therefore, will shop at online industry establishments.
• Online retailers will also continue to benefit from low operational costs because they do not have to rent, staff or operate brick-and-mortar stores. Improvements in productivity and efficiency will aid profit growth; however, price-based competition and the continued flood of new entrants is expected to limit industry returns.
• Operators will attempt to expand the number of regions they service to capture a wider range of customers. Therefore, shipping and handling costs will also be a point of differentiation among players, as will the ability to provide timely product delivery and refunds.
• The functionality of shopping websites and the ease by which consumers can place orders will contribute to the number of repeat and loyal customers as well.
• To increase their customer base, online retailers will continue to improve the online sales process. These efforts will include more accurate product descriptions, more competitive prices and lower freight and delivery costs.
• Furthermore, operators will gradually place a greater emphasis on customer service, increasing their efforts to meet the various needs of online shoppers. Operators will strive to deliver superior after-sales service and devise ways of assuaging consumer concerns regarding privacy and credit card payment issues.
• Online retailers that meet these requirements will ultimately benefit from strengthened brand recognition and higher consumer spending.

IV. Customer Analysis

Demographic profile of target market.

[Company Name] will primarily serve e-commerce customers. The demographics of these customers are as follows:

• According to Invesp, 79% of females and 77% of males who have internet access have purchased something online in the past 12 months. Those aged 50 to 64 are the most likely to make an online purchase, followed closely by those aged 30 to 49.
• Unsurprisingly, more online purchases are made by those households with income above $75K per year, though 67% of households with income below $30K have made online purchases.
• When it comes to e-commerce, men drive nearly as much spending online in the U.S. as women. Many men want to buy everything online: 40% of men aged 18-34 say they would ideally “buy everything online,” compared to only 33% of women in the same age group.
• Globally, Generation X (age 35-49) respondents comprise about 28% of those willing to make a purchase online and Baby Boomers (age 50-64) make up about 10%. The Silent Generation (age 65+) contributes roughly 2%. The youngest age group, Generation Z (under age 20), represents about 7% of those who intend to purchase online.

Customer Segmentation

We will primarily target Consumer age groups that have the greatest exposure to the internet for work and leisure are most likely to shop online:

• Consumers aged 18 to 30 – Consumers in this segment have the least discretionary income to spend on e-commerce. This segment’s purchases are mostly in clothing and footwear and small electronic devices.
• Consumers aged 31 to 44 – Consumers in this segment also have significant exposure to the internet and can afford higher-priced goods, such as larger electronics purchases and discretionary items. Moreover, these time-strapped consumers are driven to e-commerce and online auctions by convenience.
• Consumers aged 45 to 54 –  Consumers aged 45 to 55 generally have higher disposable income for industry goods. This segment is often more concerned with the convenience than the price of online items.

V. Competitive Analysis

Direct and indirect competitors.

The following e-commerce sites are expected to be the key competitors for [Company Name] due to their current brand and resources:

Diapers.com

Diapers.com is currently the largest online specialty retailer for baby products. Initially founded as 1800 DIAPERS, the company set out delivering consumables, such as diapers, wipes and formula, to parents with free 1-2 day shipping and a focus on customer service. Diapers.com expanded its selection into far-reaching baby categories, including clothes, car seats, strollers, and toys. Today, Diapers.com is the largest online retailer for everything baby.

Sister sites include Soap.com, BeautyBar.com, Wag.com and Yoyo.com. Amazon.com acquired Quidsi, Inc., which operates Diapers.com and Soap.com for $550 million.

Babies “R” Us.com

Babies “R” Us is owned and operated by Toys”R”Us. Founded in 1948, as a toy and juvenile-products retailer, the company expanded into baby care products in 1996 with the launch of the first Babies “R” Us location. Babies“R”Us operates as a specialty baby products retailer and has grown to approximately 260 locations across the country since its first store opened. The stores offers new and expectant parents a broad assortment of products for newborns and infants, including cribs and furniture, car seats, strollers, formula, diapers, bedding, clothing and toys. Over 11 million moms have utilized the popular Babies“R”Us Registry.

Last year, Toys“R”Us, Inc. reported that its Internet sales grew 29.9% year-over-year to $782 million from $602 million, and the company announced plans to open a dedicated e-commerce fulfillment center in McCarran, NV.

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantages include:

• Niche Market Focus:  By serving the niche market of eco-conscious products, [Company Name] will be able to focus its products on the needs of these customers more so than larger, entrenched competitors.
• Relationships: [Founder’s Name] and the technology director know many of the best programmers and web development companies. As such, it will be relatively easy for us to build the website’s functionality.
• Community: By developing a community of moms and online shoppers, [Company Name] will strengthen its brand loyalty

VI. Marketing Plan

The Marketing Plan describes the type of brand [Company Name] seeks to create and the Company’s planned promotions and pricing strategies.

The [Company Name] Brand

The [Company Name] brand will focus on the Company’s unique value proposition:

• Offering a wide variety of eco-friendly baby and feminine items
• Making the online shopping experience easy, enjoyable and informative
• Providing excellent customer service, with dedicated customer service representatives

Promotions Strategy

The Company’s promotions strategy to reach the target market of e-commerce customers includes:

Public Relations

We will contact family and baby magazines, family and life sections of newspapers, and television stations and send them a press release describing the opening and unique value proposition of [Company Name].

Search Engine Optimization

The Company will develop its website in such a manner as to direct as much traffic from search engines as possible. The original website designer will use knowledge of search engine optimization to orient the website’s content towards this end and begin a program of link exchange to move up the search engine rankings (particularly Google). Ongoing search engine optimization of this type will be executed by an experienced SEO firm contracted on a monthly basis.

Pay-Per Click Advertising

Additionally, [Company Name] will use highly-focused, specific keywords to draw traffic to its website through text pay-per click advertising on Google Adwords and banner ads on other appropriate websites (brokered by Google or another ad placement company). Advertisements will be targeted at potential clients who will find our content-rich site to be a valid resource and applicable to their interests, rather than an interruption or distraction.

Email Marketing

[Company Name] will publish a monthly email newsletter to tell customers about trends in motherhood, baby products and child care. Email addresses will be gathered from users who opt-in when using the website and the email newsletters will support the brand of the site as an expert in baby care. In addition, emails presenting exciting new offers or products may be sent as often as once a week to customers who have opted-in to keep them informed of the latest information on the website.

Affiliate Website Partnerships

[Company Name]’s affiliate web program will allow other businesses and websites to earn commissions on products sold on the [Company Name] website by referring their site visitors to our website through links to the homepage or to specific products.

Print Advertising

[Company Name] will initially advertise in family magazines and mom-focused websites and blogs in order to gain awareness.

Pricing Strategy

[Company Name] pricing will be appropriate for the digital medium. That is, they will be priced lower than other big box retailers. The ecommerce store will carry products offered at a range of prices to allow even those with modest budgets to have options.  

VII. Operations Plan

Functional roles.

In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:

Administrative Functions

• General &administrative functions including legal, marketing, bookkeeping, etc.
• Sourcing suppliers of content and managing supplier relations
• Hiring and training staff

Website Functions

• Developing additional website features
• Site maintenance, updates, and bug-fixing
• Ongoing search engine optimization

Service Functions

• Customer service
• Writing and producing copy for monthly newsletter and blog

[Company Name] expects to achieve the following milestones in the following [] months:

VIII. Management Team

Management team members.

[Company Name] is led by [Founder’s Name] who has been in the e-commerce business for 10 years. While [Founder] has never run an e-commerce portal himself, he was director of strategic development for an e-commerce site devoted to baby products previously. As such [Founder] has an in-depth knowledge of the e-commerce business as well as the needs of mothers, including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc).

[Founder] graduated from the University of ABC where he majored in Business.

The technology director, [Tech Director Name], has 15 years of web development management experience. He has experience managing web development projects for e-commerce at for squidoo.com, creating an e-commerce portal much like that of [Company Name]. He received an MBA in Business Information Systems from XYZ College.

Hiring Plan

In order to launch the e-store, we need to hire the following personnel:

• Sourcing Product Assistants (2 – responsible for finding products and making deals with wholesalers and manufacturers)
• Customer Service Representatives (2– responsible for fielding emails and calls from customers about potential, current, and past orders).
• Part-Time Bookkeeper (1 – will manage accounts payable, create statements, and execute other administrative functions)

At a future date, the following staff will be added:

• Programmer (1 – to be hired in the second year of operation, will work under the technology director implementing new developments and bug fixes in the website. Before this time, programming services will be on a contract basis).

IX. Financial Plan

Revenue and cost drivers.

[Company Name]’s revenues will come from the sale of baby and feminine products.

The major costs for the company will be cost of goods, internet connection fees, and salaries of the staff. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.

Capital Requirements and Use of Funds

[Company Name is seeking a total funding of $430,000 to launch its business. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.

Key Assumptions & Forecasts

Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.

5 Year Annual Profit and Loss Statement

5 Year Annual Balance Sheet

5 Year Annual Cash Flow Statement

Download a Free Business Plan Template PDF

Use this ecommerce business plan PDF to get started on your own business plan.

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How to Write an Ecommerce Business Plan

If you’ve got an exciting concept for an e-commerce venture, it’s crucial to develop a business plan tailored to your online store. This plan will play a pivotal role in ensuring that your vision has the necessary resources to thrive and generate profits. By crafting a comprehensive business plan for your online retail operation, you can effectively pinpoint your target audience, set clear monthly and quarterly sales targets, and significantly enhance the prospects of achieving long-term success in the e-commerce industry.

As a business plan writer and consultant , I’ve authored over 15,000 business plans for various enterprises, many of which have gone on to achieve substantial growth and success. In this article, I offer insights based on my experience and expertise in creating an e-commerce business plan.

What is an ecommerce business plan?

An ecommerce business plan is a comprehensive document that outlines the goals, strategies, and financial projections of an online business. It serves as a roadmap for the business, guiding entrepreneurs in making informed decisions and attracting investors.

How to Write an E-commerce Business Plan Step By Step

• Provide an executive summary.
• Business overview.
• Explain your offerings.
• Analyze the market.
• Develop your marketing strategy.
• Establish a sales plan.

l. Provide an executive summary

An executive summary serves as a succinct, one-to-two-page overview of your business, meticulously crafted to inform stakeholders about the essential elements of your comprehensive business plan. It’s a window into your business’s aspirations, strategies, and financial projections, providing a clear roadmap for decision-making and attracting potential investors.

An ecommerce business plan executive summary can look something like this:

Here’s a complete guide on how to write an effective executive summary with examples.

ll. Business overview

Business overview section beckons for meticulous attention to detail, as it showcases the very essence of your business – your product or service. It’s the stage upon which your offering takes center stage, captivating the audience with its unique value proposition and compelling features. Begin by painting a vivid overview of what you’re bringing to the market, piquing the interest of potential customers and investors alike.

A business overview of Pet Planet online store may look something like this:

Here are 14 profitable eCommerce business ideas you can start today!

lll. Explain your offerings

Having established the foundation of your business and its purpose, it’s time to embark on a deeper exploration of your plan. The spotlight now falls upon the products and services that will form the cornerstone of your venture. Begin by meticulously listing each offering, accompanied by a clear explanation of its purpose. Address the fundamental question of ‘why’ – why have you chosen to offer these specific products and services ? What unique value do they bring to the market?

Once the products and services have been comprehensively described, it’s time to illuminate the pricing model that will govern your offerings. Assign a clear cost to each service, considering factors such as production costs, market demand, and competitive pricing. Determining pricing, especially for a startup, can be a complex endeavor. Fortunately, sales pricing calculators can serve as valuable allies in identifying the optimal pricing strategy .

A explain your offerings of smart home products may look something like this:

• Business Plan Template

For your E-store business, download this ecommerce business plan template now.

lV. Analyze the market

A comprehensive market analysis serves as a compass, guiding your business through the intricate terrain of the marketplace. It begins with a deep understanding of your target audience, delving into their demographics, preferences, and purchasing behaviors. This knowledge empowers you to tailor your products, services, and marketing strategies to resonate with their needs and aspirations.

Here is how analyze the market in our ecommerce business plan.

How to Write Products and Services Section of Business Plan

Your perfect Ecommerce business plan is just a click away.

You have a great business idea. We can help you turn it into a perfect business plan..

V. Develop your marketing strategy

An ecommerce business’s marketing plan is its secret weapon, guiding it towards brand awareness, target audience reach , and enhanced sales and revenue. This plan revolves around positioning strategy, acquisition channels, and tools and technology. Positioning strategy determines how you will differentiate yourself in the market, while acquisition channels identify how your target audience discovers your business.

Finally, tools and technology harness the power of innovation to enhance your reach, automate tasks, and gain valuable insights into customer behavior. By crafting and implementing a comprehensive marketing plan , you can effectively build brand awareness, attract your target audience, and drive growth and profitability for your ecommerce venture.

How to Write the Marketing Plan in Ecommerce Business Plan?

Vl. Establish a sales plan

Importance of an ecommerce business plan.

The significance of an ecommerce business plan cannot be overstated. It plays a pivotal role in:

• Defining Your Business Goals: Clearly articulating your business objectives provides a sense of direction and ensures that your actions are aligned with your overall vision.
• Identifying Your Target Market: Understanding your target audience's needs, preferences, and behaviors is crucial for tailoring your products, services, and marketing strategies effectively.
• Developing Effective Marketing Strategies: A well-defined marketing plan outlines the strategies you will employ to reach your target audience, generate leads, and drive sales.
• Securing Funding: Investors and lenders often require a comprehensive business plan to assess the viability of your venture and the potential return on their investment.

Tips for Writing an Effective Ecommerce Business Plan

• Conduct Thorough Research: Gather comprehensive data and insights into your target market, competitors, and industry trends.
• Set Realistic Goals: Establish achievable and measurable goals that align with your business's resources and capabilities.
• Update Regularly: Review and update your business plan periodically to reflect changes in your market, strategies, or goals.
• Quantify Your Financial Projections: Back up your financial projections with sound assumptions and calculations.
• Seek Feedback: Share your business plan with trusted advisors and mentors for constructive feedback and suggestions.

Revenue projections can be determined by conducting market research, analyzing industry trends, evaluating your target market size, and considering your pricing strategy. Additionally, factors such as marketing efforts, customer acquisition rates, and competition should be taken into account.

Managing operating expenses effectively involves careful budgeting, identifying cost-saving opportunities, negotiating with suppliers, optimizing operational processes, and regularly reviewing expenses. It’s important to strike a balance between controlling costs without compromising the quality of your products or services.

Funding options for an eCommerce business may include self-funding, loans from financial institutions, angel investors, venture capital, crowdfunding platforms, or partnerships. Consider your business’s financial needs, growth plans, and potential risks when exploring funding options.

The break-even point is the point at which your total revenue matches your total expenses, resulting in neither profit nor loss. It can be calculated by dividing your fixed costs by the contribution margin (selling price per unit minus variable costs per unit). This calculation helps you determine the minimum sales volume required to cover costs.

Tracking CAC and CLV is crucial for understanding the effectiveness of your marketing and sales efforts. CAC helps determine the cost of acquiring a new customer, while CLV estimates the value a customer brings to your business over their lifetime. By analyzing these metrics, you can optimize your marketing strategies and ensure that the cost of acquiring customers aligns with their long-term value.

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Ecommerce business startup guide: checklist & business plan | ecommerce ceo, e-commerce & retail.

Are you one of the ambitious eCommerce startups and want to have your own business someday? Or even like to be your own boss and start whatever business you are passionate about?

The first thing you have to do in order to start your startup company is to make a business plan , so it is important to know about business plan writing and the rest follows.

This guide will be your blueprint; you should take a look at it before launching your startup eCommerce company.

Before Launching Your eCommerce Business

There are a variety of business models out there; however, they might not be “the one” for everyone. At first, you want to save time and energy besides finding the perfect business model that suits you best.

You do not need to rush into a specific business model because someone said this was best for them, as mentioned earlier, what fits others might not fit you.

However, this guide covers the top 5 popular eCommerce business models, research them and take a  good look just to make up your mind, and they are:

• Research Private Label Business Ideas
• Research Amazon Affiliate Marketing
• Research Dropshipping
• Research Print On Demand
• Research Selling Digital Products

Related Guide: The Guide to Dropshipping 101: Ecommerce Without Inventory

Create Your Ecommerce Business Plan

So, you have got your business model after you’ve researched the, what’s next?

Here are the main points to know that you should bear in mind while building your eCommerce startup;

• Research Product Ideas and Target Markets: Once you have this you can implement various business models.
• Competitive Market Research: To do this you have to have an idea about your product and market niche when you do, you need to know who your competitors are.

For this one, KW Finder can help you find accurate results for the most difficult keywords in the market.

• Initial Brand Development: You can use your competitive market research to create a brand that establishes points of parity and points of differentiation.
• Set up a Business and Complete Plan: It is time to make your brand official after you got it established.
• Email Marketing Automation : You need to consider this phase – adding email automation to your marketing; this is the phase where most people selling products fail.

Download the full guide and get a full eCommerce Business Plan for your eCommerce startup

The Table of Content of “Ecommerce Business Startup Guide: Checklist & Business Plan”:

• Before you start
• Research product ideas and target markets
• Competitive market research
• Initial brand development
• Set up a business and complete plan
• Plan your website content and launch
• Email marketing automation (As needed)
• Ecommerce business plan
• Marketing and operation plan
• Financial plan
• Additional notes

Number of Pages:

Affiliate marketing, dropshipping, ecommerce business, ecommerce market.

Ecommerce CEO

• What should I sell online?
• What business models are legit?
• Should I sell on Amazon or my own website?
• Should I use Shopify or WooCommerce?
• How will I get traffic and sales?
• How will I manage fulfillment – Amazon or ShipBob?
• How do I avoid bad business investments?

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Ecommerce Business Plan Sample

Published Oct.12, 2016

Updated Sep.14, 2024

By: Cynthia Turner

Average rating 5 / 5. Vote count: 6

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Table of Content

Ecommerce Business Plan for starting your own online store

Are you looking for startup ideas that can easily be initiated and run from home? Well, you must then consider ecommerce business as after the prevalence of coronavirus pandemic internet sales have really shot up.

E-commerce business is based on selling things through the Internet. The line of products may vary from electronic possessions such as e-books or audio/videos to actual physical entities including clothes, furniture, toys, vehicles, etc.

To guide you about each and every aspect of this business, we are providing here a sample business plan for ecommerce of a recent startup ‘TradeE’.

Executive Summary

2.1 the business.

TradeE will be a licensed B2C ecommerce startup that will be run through its ecommerce website. The online enterprise will be owned by Diana Blunt.

The business will sell downloadable products throughout the world, however, delivery services for physical items will be provided in just three cities, San Jose, San Francisco, and Oakland.

2.2 Management of Online Retail Store

Management is an important aspect of business as it ensures that everybody clearly knows what they have to do and there is a check on every employee to ensure a perfect workflow.

Starting an online business usually seems easy since you don’t have to personally interact with customers and employees. However, this too can end up in a mess if you are failed at managing it.

Online management is a challenge because your ecommerce site and online transactions are always prone to hackers, frauds, and copycats. To make sure that your and your customer’s data is protected and everything goes like you intended, you must write a detailed business plan.

If you are looking for how to write a business plan for online store you can take help from here.

Diana will govern the business herself. To manage the online store , the company will be hiring social media manager, digital marketing director, virtual assistants, IT specialists, and delivery personnel.

2.3 Customers of Online Retail Store

The groups that are expected to be our major customers will mostly comprise of young, adults, and senior citizens. We believe that college students, working moms and dads, and senior members of households will surely find many things to buy from us.

2.4 Business Target

Our target is to become a renowned online store in our service areas. We believe in generating profits by serving our customers with our best.

Company Summary

3.1 company owner.

Diana Blunt is the owner of TradeE. She has recently completed her MBA from the Lucas College and Graduate School of Business.

During the years of her graduation, she was constantly involved in learning emerging disciplines and skills such as graphic editing and ecommerce management.

Besides being tech-savvy she is also a great communicator, leader, and tourist.

3.2 Why the online store is being started

Diana had always wished to start a business that can be expanded or contained whenever she wants. Viewing her digital skills and interests she decided to go for an online shop.

Another factor that helped her in this decision was her extreme love for traveling. She wanted to start a business that she can govern without being actually present there.

From this sample business plan ecommerce you can see how the online business TradeE was planned and executed.

3.3 How the online store will be started

Before starting the business, the company owner will do research on which product line should be chosen to get the most recognition. The company will also collaborate with other online businesses to buy their products and sell them on the company’s platform.

Since the business will mainly sell toys, clothes, bags, and accessories, a storage room will be taken on rent to keep the things.

Following the making of business plan ecommerce template, the company will hire the required personnel. TradeE will seek the services of a web developer and IT specialist to create a website that fulfills the criteria of secure transactions, foolproof client database, and copy-protected access. It will be ensured that the web design is user-friendly and descriptive.

The business owner aims at hiring the digital marketing team and director two weeks before the launch so that ecommerce business marketing plan could be executed.

Products and Offers

Deciding your line of products is the most important part of your startup as it depends on your surroundings, budget, and target customers as well. Rather than being just fashion ecommerce or specifically jewelry ecommerce TradeE has decided to introduce itself as a multiple product line company.

The large range of products offerings by TradeE includes:

Clothes: We will provide all departments of garments for men, women, and children ranging from casual dresses, suits, daily wears to sports & swimming outfits. All the dresses, shirts, T-shirts and suits offered by us will be branded and designer-made.

Bags & Accessories : We will offer branded bags and clutches and a range of accessories including wristwatches, jewelry items, hats, sunglasses, keyrings, mobile covers, socks, gloves, umbrellas, hair accessories, and stationery.

Household Items : We will offer small household items such as home linens, baking dishes, baby items, and kitchen essentials.

Gifts: We will also provide packed as well as un-packed gifts to be given to people of all age groups.

Downloadable Products: We will also be selling e-books, audio and video files, games, movies, stock images, etc.

Marketing Analysis of Online Retail Store

If you are planning e commerce business you must not ignore the fact that market analysis is equally important like all other aspects of a business. Before setting out for a new ecommerce venture, you must analyze where and how you can find the most people to turn into your customers.

Especially if your online business is based on physical products you must figure out which areas for delivery services will be suitable and which cities can help you in getting a maximum number of customers.

Analyzing and discovering your target people is also essential in the case when you are making decisions about social media campaigns. Your approach to promote your startup can only be effective if you know the age groups and the mindset of your target customers.

5.1 Market Trends

Ecommerce businesses are flourishing day by day because people found it convenient to have their favorite thing in their hands by a mere click. Another reason for increased sales is that many people avoid visiting shops personally after the pandemic has hit the earth.

The figures reported by IBISWorld supports the fact that one can’t be at a loss if they devise a comprehensive and workable ecommerce project plan before starting. According to the market research company, 234,699 online businesses are successfully running in the United States. A 10.2% growth rate in the ecommerce businesses has been observed in the past five years and a 6.9% growth rate has been predicted for this year that is 2020.

5.2 Marketing Segmentation

TradeE has categorized its target customers into three groups so that their corresponding choices, preferences, and needs could be thoroughly studied. It is advisable to also classify your intended clientele when you are writing a business plan for ecommerce startup.

The detailed marketing segmentation of our target audience is as follows:

5.2.1 Young & Adults: Our major target group will comprise of young people. They are expected to avail most of our downloadable products such as e-books, music, games. Moreover, we also believe them to be the biggest buyers of our clothes, bags, and accessories.

In addition, moms, the homemakers are also included in this category. Thus, we are confident that the major customer of our home items such as house linens and eating utensils will also be catered for in this category.

5.2.2 Senior Citizens: Our second target group comprises of senior citizens. They are expected to avail all of our services. The elderly persons will also purchase household items as they usually are devoted to homemaking.

Moreover, we expect this respectable category of our customers to be the biggest purchaser of our gifts, as grandpas and grandmas are the ones who want to make kids and grandkids feel special on various events.

5.2.3 Teens & Kids: Our third target group is comprised of children and teens. They are expected to purchase accessories such as wristwatches, mobile covers, stationery, and jewelry items. We also think that they could be the major consumers of our audio and video files and games.

5.3 Business Target

Business targets as specified by TradeE to be achieved over a certain period of time are given here:

• To maintain an average rating above 4.65 throughout the year
• To increase our marketing qualified lead by 30% every four months
• To improve our lead conversion rate by 10% every month
• To reduce the time we take for delivering items by 15% by the first six months
• To earn a net profit margin of $10k per month by the end of the first six months
• To achieve customer repeat rate of 40% by the end of the first year

5.4 Product Pricing

Our prices are in similar ranges as those of our competitors. However, we will keep on providing several discounts to our repeat customers.

Marketing Strategy

If you are going to start any ecommerce company such as an online boutique you must focus on your marketing plan because that’s what makes an ecommerce site successful.

Without a detailed and perfect marketing strategy, it would be very difficult for you to reach out to people who are most likely to purchase your products.

Considering its importance, TradeE will start executing its sales strategy plan two weeks before the launch.

6.1 Competitive Analysis

Our biggest competitive advantage is that we are providing a very vast product line so to increase the niches of our target groups. All our products will be authentic, and replaceable within 2 days. Moreover, we’ll be offering several discounts in the startup phase to attract more and more customers.

And finally, another thing that will be in our favor is that we will be able to deliver items fast as we are offering delivery services in the three cities that are really close to each other.

6.2 Sales Strategy

• We’ll run a campaign through social media & ensure a strong web and social media presence
• We’ll advertise our startup through local newspapers
• We’ll send gifts to our first 200 customers
• We’ll offer a 15% discount on every shopping above $60 for the first three months

6.3 Sales Monthly

6.4 Sales Yearly

6.5 Sales Forecast

Personnel plan

Your planning for electronic commerce couldn’t be justified as ideal unless you include in it the ways you will adopt to hire the most competent persons.

Since most of the employees of TradeE will be freelance workers, the company will conduct rigorous online interviews to find the most suitable employee.

7.1 Company Staff

The company’s owner will perform the duties of CEO and HR Manager. The list of company’s required staff, as well as their jobs descriptions, is given below:

• 1 Co-Manager to manage company’s store and delivery operations
• 1 Digital Marketing Officer to manage company’s graphic team
• 1 Social Media Manager to run company’s web pages and social media pages
• 2 IT specialists/Web Developers to maintain and update company’s website
• 1 Graphic Designer to create graphic for company’s site
• 1 Content Writer to write products description and general content for website
• 10 Drivers to ensure quick delivery
• 1 Customer Care Representative to manage client’s requests

7.2 Average Salary of Employees

Financial Plan

One of the biggest advantages of online businesses is that even if you starting an ecommerce business from scratch you won’t need a huge amount to invest. Your major spending will be the salaries of your employees and rent of your storeroom.

So in order to analyze expected profits or future investments and identify the resources that are available or could be needed in the coming days, you must prepare a financial plan.

Your financial plan should also include the details of at what financial status you would prefer to contain or expand your product line or service area.

The financial plan for TradeE is given as follows:

8.1 Important Assumptions

8.2 Brake-even Analysis

8.3 Projected Profit and Loss

8.3.1 Profit Monthly

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

8.5 Projected Balance Sheet

8.6 Business Ratios

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E-Commerce Start-Up Business Plan

Start your own e-commerce start-up business plan

NoHassleReturn.com

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.

As E-commerce continues to accelerate, so does the problem of merchants and manufacturers needing to process returns. The average rate of returns for Internet-based companies is 9%. In the coming year the value of returned merchandise was $1.5 billion. Every one of these transactions involves financial processing. Many of them require physical shipping of physical goods, plus processing the goods as received. This is a huge hassle. 

NoHassleReturn.com strives to position itself as a strategic partnership between online merchants, Web hosting companies and portals, shipping companies, and online payment agents such as credit card issuers. Due to demand aggregation, the strategy will produce reduced or totally free shipping of returned merchandise to consumers. This differentiating element will multiply the consumer acceptance factor and will draw more revenues to all participating companies. The proposed program is therefore a win-win solution to all parties involved. Moreover, the software architecture and website format will be wireless-friendly thus designing the service in such a way that consumers will later be able to easily use it via cellular phones and other personal wireless devices

E-commerce continues to accelerate and the amount of money spent on purchases made through the Internet shows no sign of decline. During the past holiday season (November 20 to December 19), retailers saw online revenues quadruple, jumping 300% to about $11 billion and far exceeding expectations, according to a study by Shop.org and Boston Consulting Group. The study of 30 retailers in such categories as apparel, books and music, home and garden, specialty foods and electronics showed a 270% growth in the number of orders. The study indicated that online sales were growing at 145% annually and it projected online retailer revenues of more than $36 billion for last year. An earlier study conducted by Ernst & Young, before the holiday frenzy, already estimated that total revenues for online retail and consumer products for the calendar year just completed were around $25-30 billion. Currently, the average rate of returns for Internet-based companies is 9%. In the coming year the value of returned merchandise was $1.5 billion. This indicates an amazing opportunity.

Competition`

The company foresees three types of competition for the services we offer: Direct

If we prove successful, others will follow. Our most worrisome competition would be combining delivery and/or courier services, like something of this type owned or partnered with UPS or FEDEX. 

The first competitors to the new service are the online retailers themselves. Since NoHassleReturn.com will need to strike partnerships and strategic agreements with retailers in order to offer its services, they are classified as internal competitors. 

With NoHassleReturn.com, at least one selling opportunity will be given to retailers while consumer is on the Web–something a partnership with a carrier cannot provide. Moreover, serving as a demand aggregator NoHassleReturn.com should be able to arrange necessary agreements and provide consumers with greatly reduced, or even free, shipping for all returned merchandise.

Thinking in reverse to the previous paragraph, service providers such as Mail Boxes Etc. and PostNet may try to forge strategic partnerships with numerous online retailers to simplify the return process. 

Our mission is to enhance customer service of online merchants, boost their customer retention and increase their sales. We strive to improve the overall image of the online merchant and therefore stimulate growth of online shopping. We put our efforts to increase customer satisfaction when consumers deal with retailers, to enhance the interaction process when retailers communicate with consumers, and to streamline the problem resolution order in all possible ways.

Expectations

NoHassleReturn.com’s financials are conservative yet quite promising. Once they are up and running and sign up some merchants as customers, NoHassleReturn.com will quickly gain momentum and generate impressive sales. 

Financial Highlights by Year

Financing needed.

We need $50,000 to start. We will get that from the two owners to start $25,000 each.

Problem & Solution

Problem worth solving, our solution.

NoHassleReturn.com is an e-commerce start-up company positioning itself to become the market leader in offering online merchants and consumers a uniform and trouble-free way to return merchandise purchased online. The company offers a business-to-business solution to online merchants of physical, non-perishable products. The company utilizes a consolidation approach in handling all product returns that allows online merchants to instantly save bad sales, restore customer satisfaction and stimulate repeat sales, while offering consumers a convenient, centralized online location to claim returns. By creating a new service category and utilizing the first-mover advantage, NoHassleReturn.com positions itself for rapid growth and gains a strong opportunity to raise entry barriers for possible competition.

Target Market

Market size & segments.

E-commerce continues to accelerate and the amount of money spent on purchases made through the Internet shows no sign of decline. During the holiday season (November 20 to December 19), retailers saw online revenues quadruple, jumping 300% to about $11 billion and far exceeding expectations, according to a study by Shop.org and Boston Consulting Group. The study of 30 retailers in such categories as apparel, books and music, home and garden, specialty foods and electronics showed a 270% growth in the number of orders. The study indicated that online sales were growing at 145% annually and it projected online retailer revenues of more than $36 billion for 1999. An earlier study conducted by Ernst & Young, before the holiday frenzy, already estimated that total revenues for online retail and consumer products for the calendar year 1999 were around $25-30 billion.

While a notable amount of positive publicity about the Internet shopping has recently appeared in the media, the number of problems encountered by online shoppers actually increased more dramatically than the sales figures. According to a poll conducted by WebAssured.com, the number of complaints filed between November 25, 1999 and January 13, 2000 was up 404% over the same period last year. Over 62% of the respondents claimed they had experienced at least one problem with an online transaction. Misrepresentation/misinformation and delivering defective products each accounted for at least 22% of all complaints. In the breakdown of types of problems occurred, delivery of a wrong item accounted for 17.2%. These kind of problems ultimately result in product returns that cause additional costs to the consumers and both costs and lost revenues to the retailers.

When a wrong, defective, or misrepresented item was delivered to a consumer, the return process often proved uneasy. According to recent findings by PC Data Online, 30% of all consumers who returned items found the return process difficult. It is apparent that existing return procedures are inadequate and sometimes irritating. The solution, however, does not lie in forcing all online retailers to establish a "no-questions-asked" return policy and to post it clearly at the top of their websites. The entire sequence a consumer has to follow, starting from looking up the procedures on the Web and then having to make a trip to UPS or the Post Office, has to be streamlined. There is clearly a need, as well as an opportunity, for a new service company to improve the overall return process for online shoppers. As a result, the consumer satisfaction will be enhanced and it will translate into increased repeat sales for online retailers.

Market Segmentation

As stated in the previous section, the estimated online retail revenues were around $25-36 billion. Both sources providing the estimates indicated that only merchants selling physical products (books, CDs, electronics, apparel, etc.) were included in the breakdown by category. No mention was made of services such as online hotel reservations, news subscriptions, or online brokerage being included in the total figures. However, it would be advisable to use a more conservative approach when estimating the total revenues of online merchandise sales. Presented below are estimates for Internet retail sales made by National Retail Federation shortly after the 1998 holiday season.

Competition

Current alternatives.

Direct Competitors

Based on the current intelligence, there is no independent company out there specializing in a "returned merchandise" service to online consumers. No single company is known to be employing a concept of establishing a single point of presence on the Internet for consumers to claim returns. The current situation allows the new company to gain the first-mover advantage and build entry barriers for any possible new entrants.

Internal Competitors

The first competitors to the new service are the online retailers themselves. Since NoHassleReturn.com will need to strike partnerships and strategic agreements with retailers in order to offer its services, they are classified as internal competitors. Retailers may perceive that their internal return procedures are adequate and fully meet customer demands. However, the discussion under the Need Assessment section of this plan clearly indicated that there are significant drawbacks and shortcomings in the return process across the entire industry. Even companies like Amazon.com that touts a quick and easy return policy now sees its customers go to Barnes & Noble superstores to return books. Partnering with brick-and-mortar retailers may be seen as a solution by some e-tailers. However, from the consumer perspective, there still will not be a centralized location to return merchandise, no quick and easy return procedure, and no savings on shipping costs. Consumers may end up having to go from one physical retailer to another to return various items.

Online retailers may try to partner with carriers and service providers such as UPS, Mail Boxes Etc., or Rite Express. Reportedly, eBay.com is working out an agreement with Mail Boxes Etc. to appoint them as a preferred/exclusive service for product returns. eBay.com may receive rebates per shipment for directing its clients to Mail Boxes Etc., but consumers again will have little or no benefit. The standard shipping rates are applied, the choice of carriers is now limited, and online merchants are not informed about product returns ahead of time so that bad sales could be saved. With NoHassleReturn.com, at least one selling opportunity will be given to retailers while consumer is on the Web–something a partnership with a carrier cannot provide. Moreover, serving as a demand aggregator NoHassleReturn.com should be able to arrange necessary agreements and provide consumers with greatly reduced, or even free, shipping for all returned merchandise.

 Channel Competitors

Thinking in reverse to the previous paragraph, service providers such as Mail Boxes Etc. and PostNet may try to forge strategic partnerships with numerous online retailers to simplify the return process. But as it was described, online retailers will be shortchanged in overall customer satisfaction, information exchange, total costs, and additional selling opportunities. Consumers, on the other hand, will lose out on the limited number of "exclusive" carriers for particular retailers, and uniform simplicity in the return process will not be achieved. Moreover, both Mail Boxes Etc. and PostNet combined do not have sufficient physical presence in the market.

Carriers such as UPS and FedEx may try to enter the arena. Those organizations have extensive networks of facilities, experience in shipping, and a track record of quality. The U.S. Postal Service has recently started a TV advertising campaign of a service for online merchants that allows consumers to print return labels online. This is a step towards addressing the shipping end of the return problem, but it falls short of saving bad sales and creating new selling opportunities for merchants. No single shipping company can fully provide the range of benefits the proposed company can. NoHassleReturn.com will be able to arrange strategic alliances with numerous carriers and even play one against the other in negotiating rate reductions and preferential service terms for both merchants and consumers. Being a smaller company with a focus on the e-commerce community, it will also have a greater degree of flexibility in adjusting to customer needs.

Our Advantages

At NoHassleReturn.com, we feel we provide a value-added service to a variety of consumers. By having a safe and easy-to-use return service, the company benefits more people than simply the average customer.

Merchants Advantages

• Increase revenues! NoHassleReturn.com turns the systemic problem of product returns into new selling opportunities.
• Enhance customer satisfaction and retention with the quick and easy return process and boost repeat sales! NoHassleReturn.com provides the opportunity to instantly deal with returns, save bad sales, and turn unhappy customers into loyal patrons.
• Improve customer service with a simple, trouble-free way to return merchandise! NoHassleReturn.com makes it easy for consumers to return products and follow return procedures.
• Simplify the shipping hassle for consumers! NoHassleReturn.com provides the option to print a shipping label since pre-printed labels sometimes get lost or misplaced, which provides added convenience and peace of mind to consumers.
• Improve inventory management and logistics! NoHassleReturn.com immediately alerts you when your customer initiates the return process so that you can act on it right then, not when the merchandise arrives at your door.
• Fine-tune your internal efficiencies and product offerings! NoHassleReturn.com provides you with invaluable new data on all your product returns by customer group, product category, etc., so you can analyze your operations better.
• Enhance your image! NoHassleReturn.com underscores your customer orientation, which you can use to promote your business.

Consumers Advantages

• Return merchandise with ease! NoHassleReturn.com provides one centralized online location with a simple and trouble-free way to return merchandise in just a few easy steps.
• Buy online, return online! No need to call in or email your merchant if authorization is required–NoHassleReturn.com does the communication for you.
• No need to look up every single merchant for return policies every time! NoHassleReturn.com summarizes it for your particular item and makes sure the return time frames are followed.
• Generate a shipping label! NoHassleReturn.com generates a shipping label for you so that you do not have to worry about misplacing the pre-printed label or spending extra time at a shipping company’s counter if the pre-printed label is not included.
• Reduce or eliminate shipping costs! Through strategic alliances, NoHassleReturn.com reduces or completely eliminates the cost of shipping.
• Keep track of your returns! If you would like, NoHassleReturn.com will remind you to ship the claimed item and will maintain a file of your returns for your records.
• Increase awareness in the community! NoHassleReturn.com serves as a "returned merchandise credit bureau," providing discrete information to consumers on merchants and to merchants on consumers.
• Cross reference marketing leads! NoHassleReturn.com maintains a database of purchases that help custom-target online buyers in a more efficient way.
• Improve the overall image of the online merchant! NoHassleReturn.com enhances customer service of online merchants and overall customer satisfaction by simplifying and streamlining the return process.

Keys to Success

In order for the company to operate, a number of specific ingredients are needed. Following are things to put in place before the service can be offered.

• Retrieve all pertinent information on a participating merchant.
• Match appropriate return procedures against the returning item.
• Present procedures to the consumer in the most concise format.
• Provide reference to the merchant’s entire return policies if requested.
• Inform the merchant of the entire transaction as it occurs.
• Gain authorization from the merchant to return merchandise if needed.
• Present the merchant’s website to consumer for selling opportunities.
• Provide confirmation emails to the customer of the actions taking place if requested.
• Interact with the merchant’s database for further customer details if needed.
• Maintain a record of the transactions for the company’s own database.
• Develop successful relationships with online merchants to facilitate exchange of information.
• Develop strategic alliances with online merchants, shipping companies, and credit card issuers to negotiate reduction or elimination of the shipping costs to consumers on returned merchandise.
• Design, maintain, and promote a user-friendly website, the corporate trademark, that offers an easy and trouble-free merchandise return procedure for consumers.

Marketing & Sales

Marketing plan.

Because the company’s service is a business-to-business program, it will be initially promoted to online merchants by direct sales force. Personal selling will be necessary to reach decision makers within online organizations. At first, contacts will be made with Internet service providers, such as America Online, that host online stores and shops. America Online claims to have 20% of the total Internet service provider market in the U.S. Therefore, arranging a strategic partnership where NoHassleReturn.com becomes the preferred or exclusive choice for all returned merchandise bought at AOL.com shops will be invaluable for establishing a well-recognized brand and building up entry barriers for any possible competition. Ideally, a company’s banner with a notation "For an Easy, Trouble-Free Product Return Click Here" will be visibly displayed throughout the shopping section of AOL.com. Portals such as Yahoo! will be approached as well. Reportedly, Yahoo! hosts nearly 6,000 merchants where it charges each merchant at least $100 to $300 per month. Arranging a strategic partnership with Yahoo! will provide a strong leverage in negotiating return contracts with individual merchants. Similar to that of America Online, the company’s banner will be displayed throughout the entire shopping section of Yahoo!

Large online merchants such as Amazon.com and Buy.com will be targeted by the direct sales force during the first stage as well. Those companies have already achieved significant volumes of sales–and therefore product returns–and will find the uniform return process of much benefit to them. Strong "category killers" such as eToys and CDnow are also first sales targets. Auction houses such as eBay.com and uBid.com will be approached with a service offer for products sold to consumers by merchants and direct manufacturers.

Wherever possible, smaller online retailers will be personally approached by the sales force. To stimulate awareness and service penetration among smaller players, industrial marketing techniques will be utilized. Those will include advertising in specialized publications such as Internet World and Red Herring, as well as referral fees for retailers who already use the service. Email campaigns will be used to reach decision makers at smaller companies. The email messages will have an invitation to the NoHassleReturn.com website where a specially designed presentation will explain the benefits of the new service. An invitation to be contacted by a service consultant to discuss details will be included.

The company plans to offer its services right before Thanksgiving 2000. In order to stimulate a quicker adoption of the services, the remainder of the year 2000 will be offered free of charge.

It is estimated that the initial expenses to hire a sales force and a customer service unit of up to five people during the first year will be close to $400,000. Another $200,000 will be needed for sales program development, marketing activities, and training (excludes advertising). The initial compensation package for sales force will include a nominal base salary and a progressive commission structure. This should ensure that during the early stage of the company’s growth not only that sales targets are met, but also that customer (customer here means merchant) satisfaction and retention are fully addressed. The sales force will initially be located at the corporate headquarters. A territorial approach will later be implemented, with sales people located in regions. After one year, sales force members will split into two distinct groups. The first group will include pure sales people, the "go-getters" who will be placed in regions and will work on pure commissions. The commission structure will become more progressive and rewarding for such individuals, including a bonus structure. The estimate for an average commission paid on sales is approximately 5-10%. The second group will include client care professionals who will concentrate on customer satisfaction and retention to ensure the continuity of the program. These individuals will remain at the headquarters and will have a base salary with a bonus structure. The base salary for client care professionals is in the mid-five figures. Industrial advertising and promotional expenses in 2000 are estimated at $250,000.

It is also a possibility to sell the services to merchants via the Internet hosting service providers, portals, and software developers. Those companies will then serve as distributors and agents, compensated on commissions. This approach will eliminate the need for a large sales force. The final layout will depend on how quickly agreements with companies such as America Online and Amazon.com are negotiated, how aggressively they will be able to promote the services, and on what conditions.

The following diagram describes the customer approach (customer here means merchant).

Service consultants are the direct sales force that approaches prospective customers with service offers. Once a customer has been signed, a service consultant will only approach the client with new service offers and product upgrades. A client care professional is then assigned to each customer to deal with all customer service issues. Each customer will be advised to direct all service inquiries to the professional. A professional will also proactively call on customers to ensure high quality of service and customer satisfaction. The consultants and professionals will have direct communication lines between themselves to ensure open information exchange and a quick and efficient problem-resolution culture. This structure will guarantee an aggressive sales approach, client-oriented service, and efficient post-sales support.

NoHassleReturn.com will strive to eliminate the shipping costs to consumers by means of strategic agreements with online merchants, shipping companies, and credit card companies. As stated in the last quote, 58% of all product returns were due to merchants’ faults, hence merchants will have to reimburse shipping costs to consumers in those cases. NoHassleReturn.com therefore proposes that 65% of a given shipping cost should be allocated to corresponding merchants. Due to demand aggregation, the company will be able to negotiate a shipping rate discount with companies such as UPS or FedEx. Hence 20% of shipping costs should be allocated to shipping companies in a form of a discount. Credit card issuers such as Chase and BancOne currently offer a 5% rebate to consumers on purchases with selected online merchants. It is therefore feasible to arrange an agreement with credit card companies and/or issuers to include a 5% shipping cost rebate on all returned merchandise. Since product returns are only 9% of all purchases, it will not represent a large cost to credit card companies to add this differentiating feature to their products. These allocations in total will cover 90% of the shipping cost. The remaining 10% will be absorbed by NoHassleReturn.com via a special "instant rebate."

NoHassleReturn.com will charge merchants a program fee that will average only 0.5% of a given merchant’s total sales. Also, the company will charge a low per-claim fee of 12% of each item’s listed price (each item that has been claimed through the company’s website). However, of the 12% charged per item, up to 4% will be instantly given back to merchants to cover the remaining portion of the shipping cost. The previous table indicates that the 4% rebate is sufficient to cover the remainder of the shipping cost in the first product category. It is actually far more than sufficient in other product categories (refer to ASC Coverage Ratio). NoHassleReturn.com can then decide whether to offer merchants a reimbursement of the remaining portion of shipping costs only or a flat 4% "instant rebate" regardless of shipping costs. For the purpose of this business plan and financial projections, a flat 4% "instant rebate" was used thus reducing the per-claim fee from 12% to 8% across the board.

As it was stated in a prior chapter, retailers should see an average sales increase of at least 15% due to the service offered by the company. On the other hand, based on the proposed pricing structure the service should not cost merchants more than 1.5% of their total revenues. The cost-benefit ratio of 10 will be a strong promotional point for NoHassleReturn.com.

While it is a possibility to charge merchants commissions on all sales made through the company’s website (when consumers claim their returns), it would not capture all sales stimulated by the company. The program will increase consumer satisfaction and loyalty. However, when consumers start buying more due to the program’s effect but dealing directly with the merchant, the company will not receive any commissions and will in effect be giving its services away for free. Hence both fees charged should fully reflect the benefits of the easy-return procedure, early information on all returning items, restored customer satisfaction, selling opportunities created during the claim process, and all repeat sales thereafter.

The company also plans to draw revenues from advertising on its website, but for the purpose of this business plan advertising revenues will be considered negligible. A fee/rebate agreement may be arranged with such companies as UPS and Mail Boxes Etc. for bringing customers to them for shipping needs. Other revenue generating activities such as affiliate programs with VISA, American Express, or Citibank can be arranged to promote certain credit cards as a preferred method of payment online. Those revenues will also be omitted in the financial projections. Once the company has generated a sufficient customer database, it may also market information to retailers and other organizations for a fee. Any fees and payments NoHassleReturn.com could generate from consulting activities in the field of product returns will not be included in the financial projections either.

The service positioning in the eyes of online merchants is imperative to the success of the enterprise. The service proposed by the company is a business-to-business solution offered to online merchants of physical, non-perishable products. However, because online consumers will deal directly with the company via its website, the proposed solution also incorporates some features of a business-to-consumer service. It is therefore of utmost importance to clearly define what this company offers is a customer service & customer satisfaction program for online merchants. The most unique feature is that the proposed company takes the systemic problem of product returns and turns it into new selling opportunities for online merchants.

It is also important to note that NoHassleReturn.com does not try to position itself as a competitor to any incumbents with a similar service, online merchants, or shipping companies. The proposed company strives to position itself as a strategic partner to all parties participating in handling product returns. If nothing else, NoHassleReturn.com should be viewed as an outsourcing company to online merchants with the core competency and focus in handling returned merchandise.

The service offered by NoHassleReturn.com is designed to enhance customer retention and loyalty by offering an easy and trouble-free merchandise return process to online shoppers. According to Jupiter Communications, the goal of the 1999 holiday season was not about generating impressive sales, but rather securing long-term relationships. Retailers now need to focus on retention and loyalty. NoHassleReturn.com will help to achieve just that through establishing lasting, productive relationships with online merchants. Providing an easy, uniform, and trouble-free return process to all online shoppers will enhance the overall image of online merchants. While the number of retailers continues to grow, consumers will not have to look up every single one to find out about return policies and later keep abreast for possible changes. A centralized Internet location–the company’s website–will retrieve, summarize, and present the appropriate policies. Based on product information, it will make sure the correct procedures are used. The company’s banner with a notation "For an Easy, Trouble-Free Product Return Click Here" will be placed visibly on retailers’ websites and will serve as a symbol of customer orientation and care.

Moreover, the shipping process will be streamlined. Customers will be able to generate a shipping label on the company’s website thus reducing the hassle at the shipper’s counter. Although some online retailers already supply pre-printed shipping labels for sold items, customers sometimes lose, or throw away, those labels when they first see and like the products they ordered. Shortly after they may change their mind and would like to return a particular item, but the label is gone. With the proposed program, the label is always available online so that consumers can have peace of mind and also reduce the amount of documents they need to keep just in case. The service therefore offers a dual benefit to consumers. The retailers may then choose to stop including a pre-printed return label with every outgoing shipment thus reducing costs of selling. From a shipping company’s perspective, the shipping process is streamlined because the online-generated label will have all the necessary information, possibly including a tracking number if it is going to be shipped by UPS. That way consumers do not have to spend time at UPS counters filling out forms–both a customer service and operations improvement for UPS. NoHassleReturn.com will be a strategic merger between online merchants, carriers, and their partners targeted at overall improvement of customer satisfaction and ultimately the bottom line of merchants.

Another important feature of NoHassleReturn.com is that shipping of returned merchandise should be free of charge to consumers. (Means of achieving it are discussed in more detail in the Pricing and Revenue Generation section.) This differentiating feature will tremendously increase the consumer acceptance factor of the proposed service. The fact that products purchased online can be returned in an easy and trouble-free way, and that shipping is also free, will help expand the entire online shopping industry. The added convenience and peace of mind consumers will gain with NoHassleReturn.com will translate into more shopping with those online merchants that participate in the NoHassleReturn.com program.

When customers go through the sequence of online entries on the company’s website, the retailer whose product is being claimed for return will be offered at least one selling opportunity. At the end of the sequence the retailer will be able to target the consumer with any new sales offers as its website will appear onscreen. Should an exchange or replacement be preferred by the customer during the online return process, the retailer will receive an additional selling opportunity as its website will appear with offers during that step. These opportunities will translate into more sales for retailers. This will also stimulate customer retention, which means repeat sales. All in all, the program will increase customer satisfaction and generate more sales.

The program has a number of unique features. First, it alerts the retailer that a particular customer is claiming a particular product for return as it happens. That way the retailer knows about it as it occurs and not when the merchandise arrives at its warehouse. This allows to plan ahead. Since 9% of all products are returned, this feature offers useful information to better handle logistics and inventory.

Secondly, and more importantly, by asking consumers during the online sequence why they want to return a particular item merchants gain an invaluable piece of information. If the reason for return is defective product (30% of all reported returns), the retailer can save the sale and turn an unhappy customer into a delighted one by sending a new item right away. If the reason for return is wrong color, wrong size, or wrong product altogether (28% of all reported returns), the retailer may choose to send the correct product right then, thus instantly restoring customer satisfaction and saving a bad sale. It will be up to the retailer to decide on payment and credit terms of the exchange. These benefits ultimately translate into increased customer retention, reduced costs, more sales, and improved bottom line.

It is estimated that the program will generate an average sales increase for merchants of at least 15%. Online shopping is still at the early stage of consumer adoption. As stated earlier, about half the people who have not shopped online cited the cost and hassle of returns as a significant factor for not shopping online. Another recent survey found that 89% of online buyers said that return policies influenced their decision to shop with an online retailer. Consumers demand not only convenience but peace of mind. The proposed program offers both and it should increase the number of online shoppers, thus causing a market expansion for online merchants. The first retailers who implement the proposed program will also be able to differentiate themselves and capture a larger market share in their respective segments. Once embraced by the majority of online merchants, the program will become an industry standard.

It is important to note that during the entire process the company will not ask for, or try to gain access to, consumers’ credit card numbers. This will significantly limit possible liabilities and security/confidentiality concerns.

Milestones & Metrics

Milestones table.

Key Metrics

Our Key Metrics: 

• Active clients
• Active client leads
• Monitor Facebook and Twitter and reach out to customers who tweet at us or about us
• Easy to understand website and have a online chat and telephone number for questions 
• # of referrals from strategic alliances 
• # of customer who use us month after month 
• # of returns handled and from which company 
• cost of processing returns, make it as streamlined and well thought out as possible 

Ownership & Structure

Those activities that are not crucial to the corporate success (i.e. payroll) will be outsourced or subcontracted. Below are brief summaries of major responsibilities for corporate officers.

• Board of Directors : oversees the overall strategic direction and progress of the company. Specific areas include operational soundness, financial stability, and long-term well-being of the corporation.
• President : responsibilities include strategic guidance of the enterprise, exploration of expansion opportunities, and strategic alliance facilitation and management.
• Chief Executive Officer : the main responsibility is to maintain a strategic fit between the corporate resources and external factors. Responsibilities include running of the overall day-to-day operations, technological and operational soundness, and financial stability.
• Director of Finance and Operations : responsibilities include financial oversight, safeguarding of assets, and human resources management.
• Director of Information Technology : responsibilities include overall technological efficiency, software development, and information control.
• Director of Sales and Marketing : responsibilities include sales generation, marketing programs development, and public relations.

Management Team

There are two principals that are responsible for the idea and the progress of the firm up. They recognize as the companies quickly grows, certain positions such as CEO and CFO will need to be filled. The company was founded by Steve Logic and Dan Codder. Steve has spent the last ten years at Federal Express. While at FedEx, Steve was responsible for their logistics system. Steve has the incredible skill of perceiving business needs and creating a solution to address the need. At FedEx, Steve was the architect behind their benchmarked logistic system that has the ability to track customer packages and share the information with the client. What this meant for FedEx is that they could tell the customer exactly where their package is at any one point. This logistics system is the main driver behind FedEx’s exponential growth. Dan Codder is a twenty-year veteran in the computer industry. Self taught, Dan has worked at IBM, Cadence, Tektronix, and several other companies. Dan has the ability to design and write computer code very quickly and accurately. NoHassleReturn.com will leverage Dan’s skills for the completion of their customer service software engine.

Personnel Table

Financial Plan investor-ready personnel plan .">

Key assumptions.

• $4.1 million investment
• Status quo in market developments related to returns as part of traditional commerce is online commerce.
• Competition as we foresee it in the plan. 

Revenue by Year

Net profit (or loss) by year, use of funds.

START-UP REQUIREMENTS

Start-up Expenses

Stationery etc. $50

Brochures $450

Insurance $100

Research and development $400

Expensed equipment $1,100

TOTAL START-UP EXPENSES $3,000

Sources of Funds

The two co-owners will each contribute $25,000, for a total startup of $50,000. 

The plan depends on $4.1 million investment in the first month. 

Projected Profit & Loss

Projected Balance Sheet

Projected Cash Flow Statement

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E-commerce Business Plan For Service Companies

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