e commerce business plan assignment

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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• Sample Business Plans
• Retail, Consumers & E-commerce

How to Write E-commerce Business Plan + Template

So apparently everyone is jumping in to start an ecommerce business. Considering you already have your star product or service ready, you must be very thrilled to launch your business and make your first sale.

However, wait. Is your business plan ready? If you haven’t marked writing a business plan as the most important task on your checklist, you need to do that right away.

We know writing an ecommerce business plan is challenging. As a business owner of this new challenging enterprise, you don’t have much time. But this detailed guide with step-by-step procedures is likely to make the entire process of writing easier for you.

Don’t waste a minute further. Let’s dive right into the topic.

Key Takeaways

• Elements like executive summary, product or service, operations, marketing and sales plan, management team, and financial plan come together to make a compelling business plan.
• Determine marketing strategies for your ecommerce business and lay a clear action plan for building a solid brand image.
• Clearly establish your value propositions, business goals, and objectives to form relevant strategies for your ecommerce company.
• Make financial projections and consider various progressive and aggressive scenarios to establish the feasibility of your business idea.
• Identify the gaps and loopholes in your planning and make changes to your business idea accordingly.

Why do you need an Ecommerce business plan?

A business plan has many more advantages apart from helping you get approved for a business loan. Here are a few potential benefits of having one for your ecommerce company:

• Goals fulfillment: You will have to juggle multiple roles while running your ecommerce store. A well-crafted business plan will offer a roadmap to your business while helping you realize your business goals.
• Business strategies: A  business plan simplifies your business strategy and helps put the strategies for sales, marketing, and operations in perspective.
• Market analysis: A business plan strengthens your stand in the market by compelling you to conduct a detailed market analysis of the industry, competitors, and potential customers.
• Test ideas: An ecommerce plan will help you realize the gaps and errors in your planning. This allows you the luxury to make changes in the business model before investing your money in it.
• Simplifies the finance: A well-structured business plan lays a clear financial plan for your ecommerce business. The figures will help you understand the profitability, costs, and expenses of the company and its viability in monetary terms.

There’s much more to it. A business plan is like a beam of bright light that will make walking through the woods easier. It’s a living document that will evolve as the business grows.

Key components of an ecommerce business plan

Wondering what goes into making a perfect ecommerce business plan? Well, these are the key components you shouldn’t be missing.

• Executive summary: The executive summary will highlight the key details of your entire business plan.
• Business overview: This section will include a brief business overview along with its value proposition, objectives, mission, and vision statement.
• Market analysis: This section will define your potential customers and competition. A detailed industry analysis and competitors analysis will lay a foundation for important business strategies.
• Products and services: Define the products and services you will sell to your ideal customer. Also, offer a brief description of each product.
• Sales and marketing strategy: Highlight your sales and marketing plan to attract your potential customers. From content marketing to social media- include every detail of your strategies here.
• Operations plan: A well-defined plan that will help you run a smooth online business. Clearly defined process for inventory, order fulfillment, sales, storage, etc.
• Management team: A brief introduction of your company’s management team and their expertise in the field.
• Financial plan: Includes detailed financial forecasts and key reports like balance sheet, cash flow, P&L, and investment plan.

There is no definite format for business plans. However, a comprehensive plan accounts for all these components and makes it effective.

How to Write an Ecommerce Business Plan: A Complete Guide

From undertaking thorough market research to creating a marketing plan- uncover every detail on writing an effective plan for your online business with this guide.

1. Get an Ecommerce business plan template

Crafting a stellar business plan is a challenge. However, it can be the most precious reward for your business if you manage to write it comprehensively.

The process of translating your business idea into a business plan is lengthy and time-consuming. One is likely to leave behind an important detail or two without any definite format.

This is why you need an Ecommerce business plan template to write your plan in a structurally organized format. A template will help streamline your thoughts, organize the vision, and bring your ideas to life effortlessly.

Let’s not look elsewhere for a perfect template. Upmetrics business plan template is intuitive and is enriched with relevant examples that can be easily used as a reference while writing your plan.

Need Assistance Writing a Ecommerce Business Plan?

Get Upmetrics’ business plan template, import data directly into the editor, and start editing using Upmetrics AI Assistant.

Start Planning Now

2. Write an executive summary

Executive summary is a concise rundown of key points that summarizes your business plan. Though presented at first, it should be written in the end after you have walked through all the other aspects of planning.

Consider it as a document that will offer a brief insight into your overall business. Investors will read this part and gauge the viability of your business idea. If they find it fascinating and intriguing enough they will read it further in detail.

Add brief details of your ecommerce business, target market, problem, solution, service model, business goals, and financial figures in this section.

Adapt a narrative tone to make it interesting and keep it highly informative. And, most importantly keep it within a limit of 1-2 pages.

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3. Create a company overview section

As the title suggests, this section offers a brief company description of your ecommerce business. You must also include brief details about the company’s history in this section if it’s not a new venture.

So what does this section include?

• Name and location of the business , i.e. location of your warehouse, back end office.
• Type of your Ecommerce business , i.e. B2B, B2C, D2C, C2C, etc.
• Business structure of your e-commerce brand , i.e. sole proprietorship, Partnership, LLC, limited partnership, etc.
• Business goals : Highlight milestones such as sales or revenue goals.
• Mission statement : Describe the fundamental purpose of your business explaining why the business exists. For instance, the mission of First Cry is to offer eco-friendly baby care and maternity items to conscious buyers through its website and listings on a third-party platform.
• Vision statement : It is a declaration of what you want to achieve with your ecommerce business. For instance, First Cry wants to become the preferred brand for baby care products in the markets of North America, Asia, and Europe.

4. Conduct a competitive and market analysis

In this section of competitive and market analysis, you will dive deep into the study of the target market, industry trends, and your competition. Only a thorough understanding of these key elements will help you build a resilient business.

Target market and market opportunities

Begin by determining the Total Addressable Market (TAM) for your products and services. This part of the market analysis will offer a realistic idea of your market size.

Further, strengthen the understanding of your target market by identifying your target audience. Create a buyer persona by considering the psychographic and demographic details of your ideal customer.

Collect data from US census boards, government websites, and industrial publications for solid and foundational market research.

Lastly, identify the market trends and highlight your business strategy to fill the gaps in the existing market.

Competitive analysis

Ecommerce companies operate in a severely competitive marketplace. Understanding your competition will help you safeguard the business against potential threats and risks from your direct and indirect competitors.

Collect the data and analyze your competitors on the grounds of prices, services, quality, product offering, target market, and market size to make conclusive points. Evaluate their strengths and weaknesses using methods like SWOT analysis.

Now, detail the competitive advantage of your products and service offerings. This analysis should reflect that your business idea has a solid advantage over competitors’ offerings.

Focus on quality research. The study of the target market and competition will lay a foundation for crafting efficient business strategies.

5. Detail your products and services

After completing your market analysis, you will create a detailed section for your products and services.

Highlight all the product lines that your online business will offer. Also, mention the products within each product line and the product source.

If you are amongst the ecommerce businesses that sell digital products or services, mention those and explain how the customers will access them.

For instance, an OTT platform offers streaming services to its clients through an application.

Keep this section detailed by adding a brief description of each product and its pricing.

Consider this as a checklist of questions you must answer within this section:

• What are the products of your online store?
• Will you manufacture the products or source them from vendors?
• How will your customers buy the product- Website, application, shopping platforms, etc.
• What will be the pricing of your product offerings?

6. Develop a sales and marketing plan

By now, the readers are aware of the products and services that your online business will offer. It’s now time to tell them your sales and marketing plan.

Millions of ecommerce businesses start every year. But very few manage to crack their desired sales.

In this section, you will make sales strategies to ensure that your desired sales become achievable.

Try answering the following to form an efficient sales plan:

• Sales channels: website, application, ecommerce platforms, subscription box platforms, flash sale sites, etc.
• Sales method: Inbound methods or outbound methods
• Sales personnel: Who will be responsible for product/service sales
• Sales tools: CRM

The decisions you make here will influence the marketing strategy of your online store.

Marketing strategy

Now you need a well-rounded marketing plan to market your online store. After all, marketing is crucial to developing a brand, reaching your target customers, and acquiring sales.

In this section of a business plan, you will highlight the marketing plan for your ecommerce business. Identify the marketing channels that will be most effective for your target customers and design your strategies accordingly.

Here are a few prevalent marketing methods that can help you grow your online store:

• Content marketing: Start writing informative and useful blog posts for your target audience. Focus on principles of SEO and keyword research to grow your reach organically. Also, post guest blogs on websites to increase your chances of reaching a wider audience.
• Social media marketing: Identify the social media platforms that are used the most by your target audience and dedicate your marketing efforts accordingly.
• Email Marketing: Email marketing is the most rewarding marketing channel for thousands of ecommerce businesses out there. Explain how you will build your Email list and draw conversions through them.
• PPC: Design strategies for running paid ads on Google, Facebook, and other platforms and determine your budget for the same.
• Traditional PR: Traditional methods of publications can also help you market your product effectively. If you will be using such methods, highlight the details regarding the same.
• Influencer marketing: Will you hire or barter with influencers to promote your product? If so, define your strategy for the same.

All in all, the marketing plan should clearly define a roadmap to reach your target audience. Also, highlight different marketing tools you will use for your online business.

7. Introduce your management team

Having the right team will help you build a successful ecommerce business. So take your time and figure out the manpower needs for your business.

In this section of your business plan, you will introduce the key management members at your ecommerce store. Define their role, responsibility, experience, expertise, and achievements to prove their suitability in your organization.

Outline the organizational structure of your online store and explain how these people will be responsible for the smooth functioning of your business.

8. Outline your operational plan

Running an ecommerce store is not an easy task. From managing the backend to offering timely deliveries- a lot goes into ensuring smooth business operations.

A solid business plan cannot be complete without a detailed section of operations in it. So take your time and set your operations in line before you start with the store.

Here are a few things that most ecommerce business plans have in common. Consider adding them to your operations plan as well.

• Order fulfillment process: Everything from getting an order to delivery, managing returns, shipment, packaging, exchange, and tracking is defined at this step. Explain how the order will be fulfilled at your online store.
• Manufacturing and quality control: If the products will be manufactured in-house, what will be the manufacturing process? How will you ensure quality? Where will the goods be manufactured? What machinery will you use?
• Suppliers: Who will be your supplier for products and services? What will be the purchase terms? Will there be an agreement or contract? What would be the contingency plan in case of casualty?
• Storage: Will you dropship the products or store them in a warehouse? Where will be the storage located? How will you manage stock? What methods will you use?
• Technology and payment processors: How will the customers pay for online shopping? What payment methods are available for them? What technologies will you use to facilitate payments? How will you secure their personal information?
• Customer service: How can the customers reach you? What will be your order policies? Will there be any customer service team?

The logistics and operations plan will serve as a policy book for your organization. It will answer every query and doubt regarding the process.

9. Prepare financial projections

Now comes the most taxing part of creating a business plan- preparing a financial plan.

A financial plan is crucial because it will help you determine the feasibility of a business idea. Moreover, if you plan to seek funding for your online business, the projections in this plan will compel potential investor’s interest in your business.

Here are a few things to include in your financial plan:

• Startup costs: Estimate the startup costs for your ecommerce business . From website development to inventory costs, licensing fees, security, and software charges- include every cost that will go into establishing your online business.
• Funding source: Determine your funding requirements and what sources will you use to acquire the funds, i.e. business loans, angel investors, friends and family, etc.
• Pricing strategy: Include your pricing plan for the products and services. Consider various overhead and operational costs to determine the final pricing.
• Sales projections: Include your monthly, quarterly, and annual sales projections through different sales channels and also estimate your revenue.
• Income statement: Also known as profit and loss statement, in this key report you will forecast the company’s profit and loss for the next 3-5 years. The difference between a company’s revenue and expenses will give you gross profits and net profits.
• Cash Flow Statement:   A clear documentation of cash that is generated and spent in a business. This will help potential investors understand whether your business will make or lose money.
• Balance sheet: A key summary of your business assets and liabilities that indicates your net worth. Calculate your equity in the business by deducting all the liabilities from your assets.
• Break-even analysis: Break-even will help you evaluate how long before the business will start making money.

Too much of calculations right? Not with the financial forecasting tool from Upmetrics. Simply enter your numbers in the tab and the tool will do all the detailed calculations for you. Import the data from Excel sheets and before you know your projections will be done.

Ecommerce Industry Highlights 2023

Ecommerce is a trillion-dollar industry. It’s indeed a rewarding market for anyone who wants to start an ecommerce business. But before that, you must check out these latest industry highlights of 2023.

• Global market size: The global Ecommerce market size is expected to reach 6.3 trillion dollars in 2023. There is ample room for new businesses to venture into this market.
• Online marketplace : According to Forbes , 24% of total retail purchases will be made online by 2026.
• Market leader: Amazon accounts for 37.8% of Ecommerce sales , which is far more than other ecommerce businesses.
• Cart abandonment: 48% of online shoppers abandon their carts because of extra costs on shipping and taxes. You are likely to lose your potential customers if you fail to consider these aspects.
• Frequency to shop: 79% of online shoppers will shop for something or the other at least once a month. Considering the customer segments, nearly 96% of Gen Z shop at least once a month online.
• Social media commerce: If you think websites and platforms are the only way to reach your potential customers, you are wrong. 96.9 million people in the USA are reported to shop on social media.

The US online marketplace is expected to reach 940.9 billion by 2023 end. There is enough scope for new businesses to emerge and grow in this competitive market space.

Related Ecommerce Resources

• Creating a Successful E-commerce Marketing Plan
• E-commerce Financial Plan
• E-commerce Industry Statistics
• Calculating Your Online Store Startup Budget
• How To Open n E-commerce Business

Download a sample ecommerce business plan

Looking for help to write your business plan? Well, we have something absolutely perfect for you. Download our ecommerce business plan sample pdf and get a detailed guide to write a plan along with relevant examples.

Upmetrics business plan templates are designed specifically for entrepreneurs and business owners who want to write their own business plans. Our templates are modern, intuitive, and easily available to kickstart your plan writing.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

Write your business plan with Upmetrics

All set to start your own ecommerce business? Let’s simplify the entire business planning process for you with Upmetrics. We have more than 400+ customizable sample business plans suited for varying different businesses. With features like AI assistance and financial forecasting, you can bring together an actionable business plan in easy steps.

So whether you are aiming to start a business-to-business or business-to-customer or any other type of ecommerce business, you are well equipped to write the most stellar plan with our business planning app .

Get started now.

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Frequently asked questions, can i get expert help to draft my ecommerce business plan.

Of course, you can. Writing a business plan is not an easy task. You may lose context or can leave behind an important detail while writing. A plan writer can translate your business idea into a plan efficiently with his compelling skills. If not, you can take the help of online tools and search for relevant templates to write your own business plan.

Can I customize my ecommerce business plan as per my business needs?

Absolutely yes. No two ecommerce businesses are the same. The very purpose of a business plan is to address the unique concerns, ideas, and questions relating to your ecommerce business. From executive summary to a financial plan, customize every aspect of your plan with Upmetrics business plan builder.

What are the common mistakes to avoid while crafting an ecommerce business plan?

Here are a few mistakes to avoid while drafting a business plan for your new business:

• Lack of market research
• Inadequate financial planning
• Overlooking the competition
• Not having a clear value proposition
• Undermining the technology needs
• Not considering casualties and emergencies
• Using complex language

Can I create an e-commerce business plan on my own, or should I hire a professional?

Ideally, you should be the one drafting your business plan. This is because no one knows your business better than you yourself and your business partners. So instead of hiring a professional, take the assistance of plan builders and step-by-step guides and create a compelling plan. Upmetrics AI assistant will simplify the writing process by helping you put together a cohesive write-up.

What are some emerging payment technologies to consider in your e-commerce business plan?

If you are planning to start a competitive ecommerce brand, you need to offer a bunch of payment solutions preferred by your target audience. Here are a few payment technologies you must definitely have in your business:

• QR code payments
• Mobile wallet
• Contactless payment
• Real-time payments
• Buy now pay later solutions

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How to Make an Ecommerce Business Plan for Your Startup

Darren DeMatas

June 5, 2024

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In addition to receiving commissions generated through affiliate marketing, we are able to fund our independent research and reviews at no extra cost to our readers. Learn more.

So you’ve decided that you want to quit your day job and start your very own ecommerce empire. That’s great!

But before you become the next Jeff Bezos  (and definitely before you quit your job!), it’s worth spending some time thinking about a business plan. In this article, we’ll dive into the key elements of an ecommerce business plan, which is very different than writing traditional business plans.

Why You Should Create a Business Plan

We know that starting an ecommerce business is exciting, and it can be tempting to jump right in without constructing a business plan. READ: PLEASE DON’T DO THIS.

If you haven’t put your ideas, questions and concerns on paper, then you haven’t given your business model enough thought .

Taking the time to write a business plan might seem like a lot of work, but it can save you a lot of time and money in the long run by better preparing you for potential challenges and opportunities that you’ll face as a first-time entrepreneur. Think of it as a roadmap for your new business venture.

It’s exciting to start your own ecommerce business. However, you want to be well prepared and not jump into anything without having a solid, foolproof ecommerce business plan in place.

After all, you wouldn’t jump out of a plane without a parachute, so why start a business without a safety device in place? That safety device is your business plan.

The business plan is the brainstorming process that ensures your concept and goals are realistic.

This is more than just mental notes. True business plans take your ideas , questions, and concerns and put those in writing.

As you start creating your business plan, you’ll soon understand that it’s more than a single piece of paper with handwritten details on it. It’s a clearly constructed format of how your business will be created, how it will operate, and what you hope the future holds in terms of a successful ecommerce business.

When you write your business plan, be sure to have a target audience in mind. Are you going to look for investors or put a Kickstarter campaign into motion and use this as your descriptive platform? If so, make sure that your business plan contains everything the audience would want to know about your business (and more!). Many traditional funding solutions require a business plan in order to give you capital. However, there are alternative solutions, such as  Payability  that specialize in ecommerce and don’t require credit checks, a business plan, or any complicated paperwork. They can also get you approved in as little as 24 hours.

When your business plan is completed, you should have achieved the following goals:

• Knowledge:  A greater sense of knowledge of the business aspects.
• Resources:  The resources you’re going to need to make your business successful, such as partners, money, employees, etc.
• Road Map: Have clear set goals to take you from the very beginning of your business and onward.
• Viability: In other words, is your business possible? Will you have enough profit margins to keep the doors open long-term?

Now that you know why you should create a business plan, it’s time to move on to how you can create your business plan and get started putting your ecommerce business into motion.

How to Start an Ecommerce Business Plan

At the very beginning of the planning stages, it’s a good idea to develop a framework for your business model. This business model will continue to evolve as you create each section of your ecommerce business plan, so don’t strive for a perfect completed plan on the first try. You will be making tweaks to the plan of certain steps along the way.

There are many ways to sell products online and different business models  to pursue. Research and learn from successful ecommerce business examples in the market. The exact business model you follow will be one that makes the most sense with your resources, skills, and interests.

In order to create the best online business plan with your product in mind, you need to figure out the following things:

What are you selling?

The first step to creating an online business is to learn the absolute basics of what you can sell.

• Physical products: Clothing , shoes, home goods
• Digital products: Software as a Service products, ecourses, ebooks
• Services: Consulting services, home cleaning

Who are you selling to?

• Business-to-Business (B2B): You are selling to organizations, corporations, and non-profits rather than individual customers
• Business to Consumer (B2C): This means you are selling to individual consumers rather than businesses
• Marketplace: You are acting as a middleman by bringing businesses and (B2B or B2C) customers to one website.

How are you sourcing your product?

• Manufacture in-house: You make your product or service in-house
• Third-party manufacturer: You outsource the manufacturing of your product or service to a third-party manufacturer
• Dropship: You partner with a dropship manufacturer. Basically, this means that they make your product, package it and ship it directly to your customer while your company handles the entire customer relationship.
• Wholesale : You buy goods or services from other companies in bulk and re-sell those products on your online store

Additional References

• Entrepreneurship: Business & Marketing Plans
• Small Business and Entrepreneurship
• Entrepreneurship Resources
• Business Plan Resources

Executive Summary

The executive summary will be written according to your goals, and it’s recommended that this is done at the very end of your business plan completion. This will ensure that you include all of the important factors about your business and present your ideas in a concise and complete way.

Some of the features you’ll include in the executive summary include information showing that you’ve done your research, you have concrete sales forecasts, and the main details about your brand.

Business Model

When you’re figuring out your business model, you have to consider four different areas:

• Monetization strategy
• Product/industry
• Target market
• Sales channel

Monetization Strategy

The monetization strategy delves into the methods you are going to use to sell your products.

This strategy will look at different product monetization methods, including white label, private label , affiliate marketing, wholesale, dropshipping, and even selling ads.

Product/Industry

The product industry section is where you summarize your main niche.

For example, “Vegan Skincare Products.”

Target Market

In the target market section, you will write a sentence or so on who your target market, or ideal customer, is in the community.

If you’re selling vegan skincare products, your target customers might be women who embrace the vegan lifestyle and use natural skincare products in their daily beauty regimen.

Sales Channel

The sales channel refers to where you’re going to sell your products.

For example, you might be selling your products on your own website, and this should be entered in this section.

Business Overview

This next section covers your company overview.

This section of your business plan will cover various features of your company, including the following:

• Company type
• Domain name
• Value proposition
• Brand traits

The brand name section lists your business name or brand name.

This is an extremely important aspect of your business plan as it’s what will set the tone for everything that follows.

Pick a brand name that’s simple yet unique and is something that can be used in a wordplay manner, if desired, but not pun-worthy.

Company Type

The company is how your business operates. For example, you might label your business as an LLC , S-corporation, sole proprietor, or some other type of business organization.

The best way to determine how you should categorize your company is to speak to your accountant. There are various tax and legal aspects to forming your business in a certain way.

Speak with the professionals in the company and corporation formation field to determine how to label your company and which company type best benefits your business in a variety of ways.

Domain Name

This section is where you list your domain name.

Choose a domain name that is memorable and embraces the overall traits and features of your business.

And, when choosing a domain name, be sure to think of SEO aspects when doing so. You’ll find out just how much all of these things tie together and ensure a frequently-visited website is the end result.

Keep in mind that with ecommerce, the domain name is just as important as the brand name. Maybe even more so!

Value Proposition

A value proposition is a short, crisp statement that will gauge how clear your idea is. Write this section as if you had one minute to explain your business to a potential investor or customer and then practice it over and over again.

The value proposition can be used on your ecommerce store as your company description.

Here’s a good example: Say you’re looking to start a hiking company called Atlas Hiking Co. which sells premium performance hiking shirts. A possible company description could be the following:

Atlas Hiking Co. is a lifestyle hiking company that produces high-performance hiking shirts for outdoor lovers. Our proprietary SPF40 fabric is one of the lightest fabrics on the market, providing mountain lovers with maximum comfort, both from a breathability and sun-protection standpoint. Our product is made in the U.S.A. and a portion of our profits are donated to preserve national parks around the country.

Pay special attention to all the sensory words !

The mission statement in your business plan is the “why” of it all.

For example, why you started the business, why you are selling the products you are selling, etc., can all be added to this section of your business plan.

You can make this portion as simple or detailed as you like. Just make sure to properly and clearly explain your business mission.

The vision part of the business plan is your “how” in the grand scheme of things. It is the dream you have for your company and the path you’re going to take to realize that dream.

When you write the vision portion of the business plan, think long-term. What are you hoping to achieve, not just in the near future but for the long haul of the life of your business?

Look into the future and plan out where you see your business in 5, 10, even 20 years from now.

This will help you construct the rest of your business plan if you know where you want your business to head, now and in the future.

Brand Traits

The brand traits section is a short section in your company overview.

Basically, in the brand traits section you’re going to want to list three to five words that describe your brand.

Think of your brand personality and describe it using a few separate powerful words.

The personnel section lists all individuals, including yourself, who will be involved in the daily operations of your business. You can create a separate section for a full operations plan or add that later.

Some business owners choose to handle all duties on their own or with a partner, while others will hire individuals to fill the following roles:

• CEO (usually the business owner)
• Management team
• Customer service/logistics
• PR/Social media specialist
• SEO manager
• Advertising manager

Competitive Market Analysis

Here’s a fact you can bank on: there has never been a successful e-commerce entrepreneur that didn’t understand his/her target market cold.

That’s why this section is one of the most important in the entire business plan. It will force you to understand the industry in which you operate, the overall industry analysis and outlook, the existing competition, and your target customer demographic.

Market Segment

The market segment portion of the business plan will help you to put your ideas down on paper, make them more focused, and get your team together.

This area will include your niche selection, target market, and competitive analysis.

Niche Selection

The niche section  provides an overview of your niche, why you selected it, whether there’s a micro niche included, and the type of niche you’ve chosen.

The purpose of this section is to crystalize the ideas that you have and make sure they are understandable and viable.

The target market section covers an overview of your target market plus describes your market segments.

Ask yourself who your  target customer  is (population size, age, geography, education, ethnicity, income level) and consider whether consumers are comfortable with buying your product category online.

When listing the target market information, make sure to mention your target audience size as this is important for ensuring that your audience will be adequately covered.

Competitive Analysis

With the competitive analysis portion of your market analysis, you want to list your market leader and direct and indirect competitors.

After you mention who these entities are, you need to list the characteristics of each one, such as domain name, business model, monthly traffic, and pricing range.

However, before you even get started in writing this section, you need to spend several hours researching your target market.

Here are some of the most efficient ways to research a particular market:

Industry reports

Google is your best friend. Look for any recent industry reports on your market of choice. This will give you a good sense of how much growth the industry is experiencing, why this growth is happening, and what are the largest customer segments. In our example of Atlas Hiking Co., we should research the outdoor apparel market.

Let’s say that through our research of the outdoor apparel industry, we discovered that there was a huge boom in youth hiking apparel. Perhaps parents were increasingly concerned about their kids’ exposure to UV rays while hiking, so they began to spend more money on their kids. We could use this valuable information to guide our business strategy.

There’s only so much you can read online. Go to a nearby store that sells similar products to yours and interview the store representative. The store rep has interacted with hundreds of interested customers, which can lead to thousands of valuable insights! It’s amazing how these insights can translate into a meaningful business opportunity.

Here’s an example:

If I were going into Billy’s Outdoor Store to research the outdoor apparel market, I would probably ask Billy the following:

• What are your best-selling products?
• What are your worst-selling products?
• Find products similar to yours and ask the representative his/her favorite features on products similar to yours.
• How much are customers generally willing to spend on these types of products?
• Do customers make repeat orders of any of these products?
• Do you get a lot of customers that are looking to buy last-minute hiking gear before they go on a hike?

Competition

Create an Excel spreadsheet of all of your competitors. In your spreadsheet, you should have the following columns:

• Competitor Name
• Price point
• Product Description
• Key Features (e.g., fabric, waterproof, slim fit, etc.)

What is the competition missing? Is there a gap in the offering? Where you can add some additional value?

After conducting the competitor analysis, Atlas Hiking Co. might find that the competition’s hiking shirts offer very few features at a low price point, but no one offers a luxury hiking shirt with additional features at a higher price point.

This is just an example of the types of insights one can gain from market research which can drastically alter your business model.

Keyword Research

By using Google’s keyword planner  and trends pages, you can get a good sense of how in demand your product is and whether it’s trending upward or downward. Google is great for a general idea, just don’t bank on it.

Some other keyword tools you can use for keyword research include Ahrefs, JungleScout, and Viral Launch. Check out this list  for more ideas.

Trade shows

Are there nearby trade shows that you can go to? Again, creating connections with other people in your industry is a surefire shortcut to countless hours of reading on the internet. Trade shows are also a great opportunity to talk to competitors, meet manufacturers, and better understand where things are heading in your industry.

Once you finish researching the relevant industry, you should summarize your findings by answering the following questions:

General Industry

• How big is the overall industry?
• How big is the specific sub-industry in which you intend to operate?
• Where has most of the historic growth in the market come from?
• Why is this the right time to enter this market?
• What are the sub-segments that are poised for future growth (e.g., youth apparel)?
• How crowded is the product category with competition?
• How is your competition distributing its product (online, retail, wholesale, etc.)?
• What’s missing from the competition’s product offering?

Products and Offers

So we know we want to sell hiking shirts, but how do you research specific products?

But for some of us, we’re not quite sure what we should sell. To succeed in online retail, you need a product that is trending upwards in a growing niche.

Different types of products

Some of the different types of products include the following:

• Convenience products: Frequent purchase products, little effort on buying
• Shopping products: Less frequently purchased in between purchases, little more effort and planning, shop around
• Specialty products: Strong brand preference and loyalty, will buy no matter what the price

The various types of niches include the following:

• Hobby niches
• Lifestyle niches
• Problem niches
• Weird/embarrassing niches

Existing products

Come up with detailed specifications for each product or service you intend to sell. If it’s a hiking shirt we’re selling, we would want to have:

• Detailed sketches of the shirt
• Fabric weight, materials, type
• Key features (e.g., pre-shrunk, water-proof, SPF 40)

Future product pipeline

What are other products that you have in the pipeline? Perhaps once you’ve successfully sold hiking shirts, you’re able to leverage your manufacturing relationships to provide hiking socks and shorts. Include that information in this section.

The products and services section will cover the various selling categories of items.

These product offerings will include the following:

• Core product

Each product group will have its own purpose in your sales catalog. For example, tripwire is the product that brings customers to your ecommerce store or online marketplaces  while the core product is your main seller.

Knowing what products you’ll include within each section allows you to have a firm grasp on what your main product will be and how the other types of products will work alongside your main product.

This section will also cover the search volume and Amazon pricing range.

You’ll need to calculate your true costs. You have to make sure you don’t overestimate your margins.

To tabulate your total true costs, you need to write down the costs in the following areas:

• Target price
• Supplier cost of the product
• Total cost per unit
• Net profit per unit
• Profit margin per unit

Once you complete the pricing portion, you’ll have everything on one sheet and readily accessible whenever you need it.

Marketing Plan and Operations

So, now you’ve concluded that you have a great business idea, and it’s in a growing market. That’s fantastic – but how are you going to drive traffic to your ecommerce website and get customers to buy it ? And how much can you afford to spend on your product?

Marketing  is everything. It’s important that your marketing efforts match your business model.

If you have a website and no marketing, your site won’t have any visitors. With no visitors, you will make no sales. Then how do you grow and sell your ecommerce business (if that’s your long-term goal)? Even with the best possible products, nobody will buy them if they aren’t directed to them in some way.

In order to come up with a marketing strategy, you need to first know your customer inside out. You should be able to answer such questions as:

• How old is your customer?
• Where does your customer live?
• What is the population of your customer base?
• What is their education level?
• What is their income level?
• What are your customer’s pain points?

With so many channels to reach your customer, which one is best for you?

Once we know pretty much everything there is to know about our target customer, we can shift focus to our marketing strategy. You want to choose marketing strategies that equal positive conversion rates. What channels should you use to grab the attention of your customer demographic? Some of the key marketing channels include:

Paid Marketing

• Pay-per-click – this online marketing typically involves using Google Shopping campaigns  and managing a product data feed.
• Affiliate sales networks – Allowing other blogs and websites to sell your product for a cut of the revenue. List the different affiliate sale networks that you plan to promote through.
• Facebook ads ⎯ Ads posted on Facebook to draw in buyers through social media means.
• Influencer marketing ⎯ Hiring industry influencers to get the word out about your product through their social media platforms and contacts.

Organic Marketing

• Social media (Facebook, Instagram , Pinterest, etc.): What is your strategy for social media, and where will you dedicate your attention?
• Search Engine Optimization : Create and promote awesome content so people find your product organically through search.
• Content marketing: Figure out how you’ll use content marketing in your business. Consider various article topics that will persuade your target audience to buy your products.
• Blogger networks: could be organic or paid through affiliate sale programs.
• Key bloggers: Develop a list of the key bloggers in your product category. For Atlas Hiking Co., this might be an influencer that blogs about the best hiking trails in America.

Finding the optimal mix of these advertising tools depends 100% on your customer segment as well as your product type. For example, a SaaS product targeting millennials will require an entirely different marketing strategy than an e-commerce physical product targeting baby boomers. Perhaps that should be a post on its own for another day!

How much should you spend to acquire a customer?

In order to understand this, we need first to discuss a concept known as customer lifetime value or LTV. In essence, this is a formula that helps you better understand how much an average customer will spend over time.

Here’s  a good read on how to calculate LTV.

It’s important to remember that for new businesses, you don’t have a lot of data on customer purchase habits so it’s a good idea to be more conservative with your assumptions in calculating LTV.

Let’s say, for Atlas Hiking Co., I determine that the average LTV per customer is $300. This means that over time, the average customer will spend $300. Let’s say, on average, if I receive $300 in revenue, $100 of that will translate to gross profit before I factor in my marketing costs (basically, I’m just subtracting the cost of making the shirts).

Knowing that my gross profit is $100 per shirt is a critical piece of information because it tells me that I can spend up to $100 in marketing to acquire a customer and still be profitable!

Some of the marketing options include social media marketing and content marketing.

Think about your business model and then line up your marketing budget. Your marketing budget may include the following items:

• Sales/branded content
• SEO/blog content
• Facebook/Instagram ads
• Influencer marketing
• Marketing tools
• Niche advertising

Choosing The Right Technology

With so much technology and SaaS products out there, it’s important to understand the various moving parts and diagram how they all integrate with one another.

Some of the different elements include:

• Shopping Cart Platforms  – e.g., Shopify , BigCommerce , WooCommerce , or any open-source platform
• Hosting – Nexcess , BigScoots , 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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Creating a Stellar Ecommerce Business Plan for Your Online Store

Choose the Right Ecommerce Platform

For years, you’ve purchased items from online businesses or marketplaces like Etsy, eBay and Amazon and thought to yourself, “I could do something like this, too.”

Starting your own ecommerce business may seem intimidating — writing a business plan, even more so.

However, a business plan allows you to validate your business idea, assess your financial position and create a concrete action plan for how you’ll deliver a product from the original source to the end consumer.

In other words, while the business plan might seem like it’s ultimately meant for other people’s benefit — potential investors, business partners or well-meaning family members who keep pestering you to write one — in reality, the business plan benefits you, the business owner, the most.

You’ll shape the vision and mission for your business and map out how you’ll get there. One study by Harvard Business Review found that entrepreneurs who write a formal business plan are 16% more likely to achieve viability than those who don’t.

An ecommerce business plan is a document that outlines your business purpose and goals, analyzes your industry and competitors and identifies the resources needed to execute your plan.

For example, which suppliers will you work with? What types of products will you stock? Who is your ideal buyer? How will you advertise your business? Can you afford to provide free shipping and still make a profit?

Here’s a step-by-step primer on how to write a business plan for your ecommerce store, what elements to include and how to use your own business plan to increase your chance of success.

How to Create An Ecommerce Business Plan

Business plans help entrepreneurs maintain focus on their goals and shape the day-to-day running of a new business. The key elements of an ecommerce business plan template describe blueprints for growth, projected timelines and financial goals — clarifying topics like cash flow, expenses, marketing tools and distribution channels.

Draft an executive summary.

An executive summary provides a concise rundown of the key points in your business plan. In short, it should summarize your chosen industry, business purpose, competitors, business goals and financial position. Executive summaries average 1-3 pages and are ideally under two pages.

What does your business do?

Explain the raison d’être for your startup. What problem will you solve for your customers? Who is the target audience? Where do you want your business to be in one, five, or 10 years?

Here are the main elements of an executive summary:

The problem statement or business opportunity : Describe a pain point or gap in the market that you are uniquely qualified to fill. (“As someone who used to own a convenience store, I heard many of my customers complain about the lack of healthy food options while traveling domestically.”)

Your business idea : State how you plan to approach the problem (“XYZ is a ready-to-eat meal company that lets travelers order and pack healthy meals ahead of trips so they can avoid eating fast food.”)

Company history : Describe what milestones you have achieved. Are you already working with suppliers? What is your current revenue? (“In 2021, XYZ fulfilled over 10,000 orders, generating $150,000 in revenue.”)

Industry and market analysis : Outline the trends in the market that affect your business, market size, and demand for your product. (“In 2022, the global health and wellness food market was valued at $841 billion and is projected to increase to one trillion by 2026.”)

Competition : Explain who your competitors are, outline their strengths and weaknesses, and make it clear how you will differentiate.

Timeline for key milestones : Project when you plan to achieve goals like breaking even, launching an IPO, or other key milestones.

Financial plan (if you are seeking funding from investors or banks).

What goals does your business want to achieve?

Set short- and long-term goals for your business, such as achieving a certain amount of revenue or testing a new product idea. Business goals can be general and high-level or they can focus on specific, measurable actions (SMART goals).

The most realistic goal-setting approach is to set short-term goals as stepping stones to your long-term goals. For example, your short-term goal to decrease website bounce rate by 25% within 12 weeks might help you reach the long-term goal of growing conversions by 50% within one year.

Timeframes for short-term goals can range from a few hours to a year, while long-term goals generally take 1-5 years to achieve.

What products do you sell?

Outline your product offerings and specify where you’ll source each item. Some ecommerce businesses manufacture products in-house. Others work with wholesalers, manufacturers or print-on-demand businesses to resell their products.

Curate a tight product line that demonstrates your value proposition. Why should someone buy from your online store rather than another brand? Why would someone choose your products over a substitute if you don't produce goods in-house?

Ecommerce companies sell three types of products: goods, services and digital products. Tell your readers what you intend to sell and why. List each item and its purpose. For each, you want to answer the question “why?” Why are you choosing to offer these specific products and services? How do you plan on fulfilling orders?

If you’re offering a service, explain what you do and where. Are you local? Do you travel to your customers? Will you partner with similar service providers in other areas?

How will customers access the item if you're offering a digital product? Will they download software or education videos from your site? Will they pay a subscription or usage-based fee? What about licensing requirements? Mention intellectual property ownership (if applicable) including trademarks, patents and copyrights.

Who is your audience?

Describe your ideal customer. Define your product or service from their point of view. What problems does your product solve for them? What benefits or features do customers look for when shopping for that product type?

Create customer profiles that summarize your target audience in terms of demographics (age, location, gender, etc) and psychographics (pain points, interests, buying patterns). Consider creating customer segments based on shared characteristics if you cater to a wide audience.

Demographic data should include the following points:

Education level.

Relationship status.

Occupation.

Meanwhile, discover your target customer’s motivations, needs and wants as much as possible. Psychographic data should include the following points:

Where are you going to sell your products?

Outline your sales channels, both future and existing. For example, your main point-of-sale might be your ecommerce site. Be sure to include stats on site traffic and conversions so readers know how your site is performing.

Still, you might also offer your products online on marketplaces like eBay, Amazon and Etsy. Explain how each of these channels is performing and how you’re optimizing them for product discoverability and conversions (eg: following SEO best practices, using high-quality images, highlighting user-generated content).

Identify your company overview.

Tell your brand's story , its purpose, and how the company was founded. In addition to the company description, provide details on how you currently run the business. List your business partners and employees and describe the business's legal structure.

The best brand names are memorable and communicate the essence of your business. Brand names gain icon status because they represent an excellent product or service, so don’t obsess over it.

That said, the right brand name can be your brand’s most valuable asset, driving differentiation and speeding acceptance. In fact, 71% of consumers prefer to buy from brands they recognize.

If you’re struggling to come up with a name, try using an online brand name generator as a jumping-off point. Remember, you’re not locked into a single brand name forever.

Business structure

Describe the legal structure of your business. Is it a sole proprietorship, LLC, an S-Corp or a partnership? Consider speaking to an accountant if you’re not sure. Who is in charge of the business? List founders and officers and their contributions (both capital and expertise) to the company. Who works for the company? Include an org chart that illustrates who currently works for the business and the roles you plan to hire for . List their responsibilities, salaries and terms of employment (freelance, full-time, part-time).[

Your business structure]( https://bristax.com.au/business-articles/business-structures/ ) affects how much you pay in taxes, your ability to raise money, the paperwork you must file and your personal liability in the event of business bankruptcy, so this information is important to lenders. Also mention if you have filed or plan to file for any applicable licenses or permits.

Domain name

Register a unique domain name for your business. A catchy brand name is essential because the domain is less likely to have been claimed by another business. Keep your domain name as short as possible and ensure it includes your brand name for SEO purposes.

Your mission describes the fundamental purpose of your business. It should tell people why the business exists and how it benefits its customers. For example, LinkedIn’s mission statement is “connect the world’s professionals and make them more productive and successful.”

However, be careful not to exaggerate. An overly aspirational mission statement is disingenuous and wishy-washy — no single corporation or small business will single-handedly “change the world.”

A vision statement is a declaration of what you want your business to achieve in the future by fulfilling its purpose. It describes your company’s “why,” while the mission statement describes the “who” and “what” of the business.

Your vision statement should define your values as a business (eg: reducing waste generated by single-use toiletries) and future goals (achieving a zero-waste world by implementing a circular economy).

Background information

Tell the story of how you conceived your business idea. Say you’re a former school teacher who discovered your artistic flair from making handmade pottery in your garage on weekends. Describe how your business has grown and changed since you first started it.

Your team and key people

List the key personnel in your company. Aside from the founders and executive team, who keeps the business running each day? Here are a few examples:

Company owner — that’s probably you.

CEO — that’s probably also you.

Management team.

Customer service manager.

Logistics manager.

PR and social media specialist.

Advertising manager.

SEO manager.

Copywriters.

Conduct market research.

Ecommerce businesses face intense competition and are liable to market disruptions because they rely on third parties (suppliers, shipping companies, wholesalers) to deliver a product or service. Knowing the market in and out will help you build a more resilient business.

A market analysis considers your ideal customer (their purchase habits and behaviors), competitors (their strengths and weaknesses), market conditions (industry trends and long-term outlook), and how your business fits into this landscape.

The point of a target market analysis is to:

Identify the most and least valuable markets.

Develop buyer personas.

Find gaps in the market to fill.

Assess the viability of a product or service.

Improve business strategy .

Market opportunities

The first step to identifying your target market is determining your total addressable market (TAM) — the maximum market size for your product or service. Who are your customers? What are their demographic and psychographic traits? When and how often will they buy your product?

The best way to obtain a high-level overview of your customer base is to consult your social media and web analytics. These dashboards show where your customers live, their age, gender, general interests and more. You can also use U.S. Census Bureau data to pad up this information.

Competitive analysis

Analyze the strengths and weaknesses of your current and potential competitors. First, find out who your direct and indirect competitors are. You can perform a Google search of businesses that sell similar products or scope out rivals in your local area.

Here’s what you need to know about your competitors:

What markets and segments they serve.

What benefits they offer.

Why their customers buy from them.

Details of products and services, including pricing and promotional strategies.

Search for publicly available information about your competitors. Aside from that, do some of your own primary research. Visit their website and complete an order or visit their physical outlet.

Next, analyze the information. Is there a segment of the market your competition has overlooked? Is there a product they don’t supply? Did you have a bad customer experience when you walked into the store?

Detail your competitive advantage in your business plan. Don’t just list things that your competitors do — that’s not analysis. The competitive analysis section aims to persuade the reader that you are knowledgeable about the competition and that your business idea has a significant advantage over the competition.

Products and services

List the products and services you provide and how customers will access them. If you’re selling digital products, will customers have to stream or download the content? Do they pay a subscription fee to access a content platform or do they pay for each individual content piece? If you’re providing a service, will you provide it on physical premises or will you travel to customers’ homes? Will you sell physical products in a physical store or online? What is your website like? List each product, including a short product description and pricing information.

Develop a marketing plan.

You need a go-to-market strategy if you haven’t already launched your business. How will you spread the word about your business? How and where will you advertise and what is your budget? If you run social media ads, for example, what platforms will you use and who is your target audience? Will you do content marketing and SEO? A thorough marketing plan answers all of these important questions.

Marketing channels

Define which channels match your consumer demographic. Do your potential customers spend time on Facebook or do they prefer YouTube? First, figure out where your potential customers are. Next, create attention-grabbing marketing strategies and use them to reach your customer base.

Paid marketing channels

PPC advertising : Advertise on Google’s search engine and pay only once someone clicks on your ad. You can bid for ad placement in the search engine’s sponsored links when someone searches a keyword related to your business offering.

Affiliate marketing : Embed links to another business’s products in your content and receive a commission when someone makes a purchase using your unique affiliate link.

Social media ads : Run paid ads on social media apps and platforms like Facebook, Instagram and YouTube to reach targeted audiences. Ads can use different creatives such as images, videos and GIFs.

Influencer marketing : Work with a popular influencer who will promote your products to their followers. Influencers are paid based on conversions or reach.

Organic marketing channels

Brands must use an organic marketing strategy to build brand awareness and engagement and drive website traffic.

Examples include:

Search engine optimization (SEO) : Optimize your website, web pages and blog posts for maximum discoverability on search engines. This involves doing keyword research for your industry, creating high-quality content that attracts and converts and using keywords in the right places.

Social media posts : Organic social media posts build brand awareness and humanize the brand by providing a behind-the-scenes look at the company and allowing you to share engaging visual content to inspire, educate and entertain.

Blogger networks : Collaborating with trusted bloggers on link exchanges can help you build website backlinks, improving your search engine ranking.

Content marketing : Organic content includes blog posts, white papers, SEO pages, and more. This gives you content to post on social media and improves the discoverability of your website. Websites that publish high-quality content consistently rank higher in search results.

Email marketing : Create email templates for new and potential customers, cart abandonment, promotions and announcements and more.

Logistics and Operations plan

This portion of the business plan covers what you physically need to run your ecommerce company. Basically, it outlines how you’ll manage the flow of goods from the supplier (you or a third party) to the consumer. You cannot start a business without an established supply chain.

Your logistics and operations plan should cover the following:

Suppliers : Where do your raw materials or products come from? Do you work with a manufacturer who produces your product idea or are you reselling products from a supplier, wholesaler or distributor? What is the minimum order value? Do they require payment upfront or after the sale? Do you have a backup supplier in case demand spikes or there is a problem with fulfillment?

Production : Will you create your own products or use a third-party manufacturer or dropshipping company? If you’re creating your own products, where will this be done? What assets and equipment do you need? What are your operating costs?

Shipping and fulfillment : Outline how the product will reach the end consumer. How long will it take you to pack and ship products to customers? Will you use a third-party shipper? Will you ship internationally?

Inventory : How much inventory will you keep on hand and where will you put it? How will you track incoming and outgoing inventory? Do you need warehouse storage space?

Establish a financial plan.

The financial section of your business plan is where you prove the feasibility of your business idea and calculate your startup costs. It includes financial projections and statements that show your business’s current financial position and project where you hope to be in the future. This is one of the essential components of the business plan, particularly if you are seeking investment funding, a bank loan or a business partner.

Income statement

In this document, you’ll forecast the company’s revenues and expenses during a particular period. Total revenue is the sum of both operating and non-operating revenues while total expenses include those incurred by primary and secondary activities.

If you subtract your expenses from your revenue sources, you’ll come up with your bottom line (profit or loss).

Balance sheet

A balance sheet helps you calculate how much equity you have in your business. It summarizes your company’s assets (what you own), your liabilities (what you owe) and equity (money invested into the business plus profits).

A balance sheet enables you to calculate your net worth. All of your assets (machinery, inventory, business premises, etc.) go in a column on the left and your liabilities (accounts and wages payable, business loan repayments, business credit card payments, taxes) go in a column on the right. If you subtract your liabilities from your assets, you get your business’ shareholder equity.

Cash-flow statement

This document shows how much cash is generated and spent over a time period. Cash flow determines whether your business is primarily gaining or losing money. Positive cash flow and profit margins are important because it enables your business to repay bank loans, purchase commodities and keep the lights on.

How to Increase Ecommerce Sales

Explore our collection of free resources designed to help you scale smarter and accelerate your online growth from $1 million to $100 million.

The Final Word

Writing a comprehensive business plan is crucial not only for staying on track in the first year or so after launching your business but also for securing funding, finding a business partner and evaluating the viability of your business idea.

FAQs About Ecommerce Business Plans

Who needs an ecommerce business plan, what are the benefits of creating a business plan, how do i start an ecommerce business with no money, browse additional resources.

May 24, 2022 | 9 min read

How to Write an E-Commerce Business Plan (Step-by-Step)

Dream of being your own boss? So do lots of other people, including 64 percent of the UK workforce and 65 percent of Americans . And I’m sure you’d see similar figures across a bunch of other countries.

I get it—after all, I did it myself.

But sadly, not every business is destined to become the next Amazon, Google, or Sleeknote.

Much-quoted data from the US Bureau of Labor Statistics show that about one in five new businesses survive for 12 months or less , while only half make it to the five-year mark:

So what separates the successes from the also-rans and the never-weres?

While some people will tell you the secret to “making it” lies in adopting a rise-and-grind mentality , truth is there is any number of reasons why some businesses thrive and others fail. 

But I can categorically tell you there’s one thing every successful startup has in common, and that’s a killer e-commerce business plan.

Basics of Writing an E-Commerce Business Plan

What is an e-commerce business plan, why do i need an e-commerce business plan, how to write an e-commerce business plan.

E-commerce business plans are roadmaps that plot the route to achieving your business goals. They set out who you are, what products you sell, and how you plan to operate (among many other things).

Just like a real roadmap, e-commerce business plans also highlight potential hazards, helping you plot alternate routes well in advance.

No one expects you to stick precisely to your original plan throughout the entire lifespan of your business. But by gathering business-critical information like cash flow, sales projections, and marketing budgets in a single place, your business plan can help you build a persuasive pitch to win backing from investors, which can be absolutely vital at the start of your journey.

And even if you’re not looking for external funding, figuring out your strengths, weaknesses, and objectives early on will save you a lot of pain down the line.

I know what you’re thinking: “I’ve got a to-do list as long as my arm; why should I spend days or weeks writing a business plan? Why can’t I just get on with it?”

You’re not completely wrong. Honestly, if you think buying a house or having a baby is stressful, try starting a business.

One study claims the biggest challenge founders face in the first three months is building a customer base, but there are countless others.

From dealing with suppliers to building a website and chasing invoices, it’s one headache after another, and you never feel like you have enough time to give each problem your full focus.

But you really can’t afford to overlook your e-commerce business plan. Here are five benefits to creating one.

1. Understanding the Competitive Landscape

You might like to think of yourself as a visionary, but I can pretty much guarantee that someone, somewhere has had a similar business idea to yours.

They might have been doing it for years, or they might be gearing up to hit the market at the same time as you.

Either way, you need to know about them, and the research you carry out while building a business plan will naturally help you do that. Which means you’ll be better placed to differentiate yourself through marketing.

2. Getting to Know Your Audience

Another key element of creating a business plan is assessing the market you’re trying to reach. That means digging into who you’re selling to, where they hang out online and “in real life”, and what they’re looking for in a product like yours.

Why would they buy it? When would they buy it? How much would they spend on it?

All of that will help inform your messaging .

3. Locating Potential Investors

Unless you have a metaphorical (or literal) gold mine to fall back on, money is definitely going to cause you a few headaches in the early days of your business.

Even successful e-commerce companies struggled to keep the lights on when they were just starting up.

Building a business plan will help you identify potential sources of financial backing, like angel investors, business loans, venture capitalists, or wealthy business partners.

4. Finding Your Niche

There’s a reason Amazon started out as an online bookstore, rather than immediately selling every product you could ever imagine.

As an e-commerce startup, you need a niche . Ideally, you need to go further and find a niche within a niche. Rather than founding a womenswear e-commerce site, launch one that’s 100 percent sustainable and carbon-neutral. Or instead of selling regular sunglasses, sell sunglasses made from hemp (I don’t know, I’m just spitballing here).

My point is, all the other research you’ve done at this stage—studying your competitors, understanding your audience, figuring out your pricing strategy—will naturally guide you toward the best niche with the biggest opportunities.

5. Sourcing Fresh Talent

Admittedly, recruitment might not be on your immediate agenda.

But if things go well, you’re going to need a little help in the not-too-distant future. You might need people in the warehouse, a customer success agent or two, a marketing team, a developer, someone to handle the finances… The list is huge.

Problem is, a lot of other businesses want to get their hands on those people, too.

If you don’t want recruitment to constrain your growth, start reaching out to potential candidates early, using the information in your business plan to get them bought into your project.

Hopefully, by this point, I’ve demonstrated the value of creating an e-commerce business plan. Now, let’s dive into how to do it.

There are no hard-and-fast rules to how long a business plan should be. The more complex the business, the more in-depth the plan. But as a minimum, your business plan should include these seven sections:

• Executive summary
• Company overview
• Market analysis
• Products and services
• Marketing plan
• Logistics and operations plan
• Financial plan

You might want to add a few more too. For instance, if you’re entering a largely untapped niche, you might want a section dedicated to the audience you’ll be targeting.

But for most e-commerce businesses, those seven categories should do the job.

Section 1: Executive Summary

Think of this as the “elevator pitch” element of your business plan.

Your goal here is to sum up the rest of your business plan in no more than one page, communicating key information to time-poor reviewers, and (hopefully) tempting them to read on.

Generally, you should look to answer the following questions:

• What does your business do?
• What do you want to achieve?
• What do you sell?
• Who will you sell it to?
• What sets you apart from the competition?
• How will you raise awareness among your target audience?
• What is your current monthly/annual revenue?
• What is your projected revenue for next year and the following years?
• Who’s currently on your team?
• What are their backgrounds and skills?
• How much money are you asking for (if you’re looking for financial backing)?

Section 2: Company Overview

Again, heed the word “overview”. Like the executive summary, this is a concise section that demonstrates who you are, what you do, and why people should care.

Whether you’re seeking investment or planning your e-commerce marketing strategy , it’s vital you get all this information down in one place. Make sure to include your:

• Company name
• Business structure (e.g. sole proprietor, partnership, LLC)
• Vision, mission statement, and value proposition
• Product or service
• Business model (e.g. direct to consumer, dropshipping, wholesale)
• Team members, including their roles, backgrounds, and salaries
• Short and long-term business objectives

Section 3: Market Analysis

A bad product in a good market stands a chance of success.

If you don’t believe me, check out your own purchase history—if you’re anything like me, you’ll have bought your fair share of useless products that sounded amazing when you saw them online.

But a good product in a bad market doesn’t have a cat in hell’s chance. You might be completely changing the game; solving a problem that’s never been solved before. But if no one’s prepared to spend money on it, you’ve not got a business—you’ve got a hobby.

The market analysis stage of your e-commerce business plan should help you find the right market: one with lots of customers who have an immediate need for the “thing” you’re selling (and enough money to buy it). Your market analysis should incorporate the following elements:

The Size of Your Market

It’s impossible to come up with a meaningful financial projection without first estimating the number of people who are potentially interested in buying your product.

Of course, to do that, you first need to figure out who your customers are.

The more demographic and psychographic information you have on them, the more accurately you’ll be able to gauge the scale of your market.

At the same time, remember to factor in broader industry trends. If you’re starting an e-commerce store that exclusively sells gas cans, you might have some early growth potential, but bear in mind there’s a good chance we’ll all be driving electric cars within a decade—in which case your whole market will have dried up.

Your Competitors

No e-commerce brand is an island.

To stand out against the competition, you need to find some way to differentiate yourself. That could be through:

• Segmentation: Focusing on a very specific (and, ideally, underserved) niche within a larger market.
• Pricing strategy: Do you plan to undercut your rivals? Or create demand through exclusivity by pricing yourself higher?
• Distinctiveness: Ideally, there’ll be something unique that distinguishes you from the current market leaders.

SWOT Analysis

SWOT analyses are about assessing your business’s:

• Strengths: The things you do best.
• Weaknesses: The things you’re not so good at.
• Opportunities: Gaps and advantages in your market.
• Threats: External challenges you need to tackle.

Typically, a SWOT analysis is presented as a simple, four-section grid, with bullet points under each heading. Here’s a beautifully presented example from the creative geniuses at Asana :

Section 4: Products & Services

In a sense, your whole e-commerce business plan will be centered on your products and services.

However, given their importance to your business prospects, a section of your plan should be dedicated solely to outlining what you’re selling.

If you only sell one product or plan to launch with a very small range, give plenty of detail on each. But if you stock a wide selection of products, stick to general features and benefits such as price, unique selling points, and materials.

Additionally, be sure to reference any new products you’re planning to launch in the near future, along with any intellectual property you own.

Section 5: Marketing Plan

We know who you are and what you’re selling.

Now’s your chance to explain how you’re going to sell it.

As a marketer, I’m well aware that a marketing plan could easily run to thousands of words, and it can be hard to know where to start—you’ve likely got a lot of ideas about positioning and messaging. To make your life a little easier, use the so-called “four Ps of marketing” as the backbone of your marketing plan:

• Product: How does it meet the needs of your customers? What are its unique selling points?
• Price: How much does it cost? What is its value?
• Place: Where are you selling it?
• Promotion: Which channels will you use to reach your target audience? What messaging will you use?

Discuss the first three relatively briefly, as you’ll cover them in greater depth in other parts of your e-commerce business plan.

Reserve the most detail for that final “P”: promotion. That’s the real meat and drink of your marketing strategy.

Section 6: Logistics & Operations Plan

This might not be the “sexiest” part of your e-commerce business plan, but it’s important to discuss the systems and processes that will help you reach your goals. Specifically, you’ll want to cover:

• Suppliers: Who are they and where are they based? What are their payment terms?
• Production: Are you manufacturing your own products, using a third party, or going down the dropshipping route? Can you efficiently scale up or down to cope with changing demand?
• Shipping and fulfillment: Are you handling fulfillment in-house or using a third party? Will you ship internationally? How long will it take for products to reach customers?
• Inventory: How much will you keep, and where will you store it? How will you manage and track it?

Section 7: Financial Plan

Whether you’re seeking backing from an external investor or simply trying to understand your projected revenue and costs, a financial plan is a crucial element of your e-commerce business plan. Most are broken down into three elements.

Income Statement

Designed to demonstrate your revenue sources and expenses over a month, quarter, or year, the income statement also highlights your all-important bottom line. Subtract expenses from revenue and you’ll see whether you’re in profit or loss.

Of course, if you’re yet to launch your e-commerce business, these figures can be projected.

Balance Sheet

The balance sheet is used to calculate the level of equity in your business—that is, the amount you’d be left with if all debts were paid and assets cashed. To work it out, subtract liabilities (things like loan repayments, wages, and accounts payable) from assets (such as stock and equipment).

Cash Flow Statement

Lastly, your cash flow statement is like a real-time version of your income statement. That’s because it takes into account when cash goes in and out of your business, based on when payments are received and debts settled.

Calculating and projecting cash flow should help you identify periods when you’re likely to be in surplus or short on money, which gives you time to prepare.

Sure, an e-commerce business plan requires a whole lot of work.

But as Abraham Lincoln supposedly said: “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”

All that time spent analyzing your audience, honing your messaging , and crunching the financial numbers will give you a better chance of making it through those tough early days and scaling effectively when the time is right.

And honestly, no one ever said starting a business is easy.

Emil Kristensen

Emil is the CMO of Drip. When he’s not busy writing awesome content and building the Drip brand, he spends his time reading blog posts and listening to podcasts.

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Ecommerce Business Plan Template

Written by Dave Lavinsky

Over the past 20+ years, we have helped over 10,000 entrepreneurs and business owners create business plans to start and grow their ecommerce businesses. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through an ecommerce business plan template step-by-step so you can create your plan today.

Download our Ultimate Ecommerce Business Plan Template here >

What is an eCommerce Business Plan?

An ecommerce business plan is a detailed and comprehensive document that outlines the strategies, objectives, and operational blueprint of an online business. It serves as a roadmap guiding the company’s operations and growth within the dynamic and competitive digital marketplace. The plan typically covers various aspects, including market analysis, target audience identification, product or service offerings, marketing and sales strategies, competitive analysis, financial projections, and risk assessments.

Why You Need a Business Plan for an eCommerce Business

If you’re looking to start an ecommerce business or grow your existing ecommerce business you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your ecommerce business in order to improve your chances of success. Your ecommerce business plan is a living document that should be updated annually as your company grows and changes.

Source of Funding for Ecommerce Businesses

With regards to funding, the main sources of funding for an ecommerce business are bank loans and angel investors. With regards to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable. But they will want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.

The second most common form of funding for an ecommerce business is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding, or, like a bank, they will give you a loan.

Venture capitalists will fund an ecommerce business but not in its infancy. You will need to first achieve sales traction. Once you do that venture capitalists might invest $2 million to $100 million into your business over time.

Finish Your Business Plan Today!

Below are the 10 sections a sample ecommerce business plan should include:

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of ecommerce business you are operating and the status; for example, are you a startup or do you have an ecommerce business that you would like to grow further.

Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the ecommerce business industry. Discuss the type of ecommerce business you are operating. Detail your direct competitors. Give an overview of your target customers. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.

Company Analysis

In your company analysis, you will detail the type of ecommerce business you are operating.

For example, you might operate one of the following types of ecommerce businesses.

Ecommerce businesses based on businesses model:

• Drop Shipping: you sell the product on your website and the product’s supplier fulfills it
• Wholesaling And Warehousing: you sell the product on your website and the fulfill it yourself (through your own warehouse and systems)
• Private Labeling And Manufacturing: you sell the product on your website and you manufacture it yourself or have someone manufacture it for you
• White Labeling: you sell the product on your website and have someone manufacture it for you (but unlike private label, your product is not unique; the manufacturer is also creating the product under other brand names)
• Subscription: you sell the product or service on your website on a subscription basis (customer pays you every week/month/year)

Ecommerce businesses based on customer model:

• Business-to-Business (B2B): your business is selling to other businesses
• Business-to-Consumer (B2C): your business is selling to consumers
• Consumer-to-Consumer (C2C): your business provides a platform for consumers to sell to other consumers (e.g., ebay)
• Consumer-to-Business (C2B): your business provides a platform for consumers to sell to businesses
• Business-to-Government/Administration (B2A): your business is selling to governments or administrative agencies
• Consumer-to-Government/Administration (C2A): your business provides a platform for consumers to sell or communicate with governments or administrative agencies

In addition to explaining the type of ecommerce business you operate, the Company Analysis section of your business plan needs to provide background on the business.

Include answers to question such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include sales goals you’ve reached, customer milestones, etc.
• Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry analysis, you need to provide an overview of the ecommerce business.

While this may seem unnecessary, it serves multiple purposes.

First, researching the ecommerce business industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your strategy particularly if your research identifies market trends. For example, if there was a trend towards subscription businesses, it would be helpful to ensure your plan calls for offering subscription options.

The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your ecommerce business plan:

• How big is the ecommerce business (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential market for your ecommerce business. You can figure out your relevant market size by multiplying the amount of target customers by the amount they might spend on a product or service like yours each year.

Customer Analysis

The customer analysis section of your ecommerce business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: college students, sports enthusiasts, soccer moms, techies, teens, baby boomers, manufacturing plants, state government agencies, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of ecommerce business you operate. Clearly baby boomers would want a different offering and branding than teens or government agencies.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other ecommerce businesses.

Indirect competitors are other options that customers have to purchase from you that aren’t direct competitors. This includes offline stores or other ecommerce companies that offer similar products or services. You need to mention such competition to show you understand that not everyone who needs the products or services you provide will frequent a business like yours.

With regards to direct competition, you want to detail the other ecommerce businesses with which you compete. For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:

• What types of customers do they serve?
• What products do they offer?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And check product review websites to learn what your competitors’ customers like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide superior ecommerce services?
• Will you provide ecommerce business products/services that your competitors don’t offer?
• Will you make it easier or faster for customers to acquire your products/services?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For an ecommerce business plan, your marketing plan should include the following:

Product/Service : in the product section you should reiterate the type of ecommerce business that you documented in your Company Analysis. Then, detail the specific products and/or services you will be offering.

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the menu of items you offer/will offer and their prices.

Place : Place refers to the location of your ecommerce business. In general, the place for an online business is well, online. But if there is a physical component to your business, document that here.

Promotions : the final part of your ecommerce business marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:

• Search engine optimization
• Search engine marketing
• Traditional public relations
• Reaching out to local bloggers and websites
• Advertising in physical newspapers, magazines, radio and television
• Partnerships with other websites and/or organizations

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your ecommerce business such as warehousing, invoicing, serving customers, procuring supplies, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to serve your 10,000th customer, or when you hope to reach $X in sales. It could also be when you expect to hire your Xth employee or launch a new product or service.

Management Team

To demonstrate your ecommerce business’s ability to succeed as a business, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally you and/or your team members have direct experience in the ecommerce business. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in ecommerce businesses and/or successfully running retail businesses.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.

Income Statement : an income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you serve 100 customers per day or 200? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets : While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities. For instance, if you spend $100,000 on building out your ecommerce business, that will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100.000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement : Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a company approached you with a massive $100,000 contract, that would cost you $50,000 to fulfill. Well, in most cases, you would have to pay that $50,000 now to fulfill the contract. But let’s say the company didn’t pay you for 180 days. During that 180 day period, you could run out of money.

In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing an ecommerce business:

• Website and technology buildout
• Payroll or salaries paid to staff
• Business insurance
• Taxes and permits
• Legal expenses

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include agreements you’ve negotiated with developers, manufacturers and/or employees.

Ecommerce Business Plan Summary

Putting together a business plan for your ecommerce business is a worthwhile endeavor. If you follow the online store business plan template above, by the time you are done, you will truly be an expert. You will really understand the ecommerce business, your competition and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful ecommerce business.

Download Our Ecommerce Business Plan PDF

You can download our ecommerce business plan PDF here . This is a business plan template you can use in PDF format.

Ecommerce Business Plan FAQs

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Growthink's Ultimate Ecommerce Business Plan Template allows you to quickly and easily complete your Ecommerce Business Plan.

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You can download our ecommerce business plan PDF template here . This is a business plan template you can use in PDF format.

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E-Commerce Start-Up Business Plan

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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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Free eCommerce Business Plan Template & Guide

Are you thinking about creating an online shop? If you think it is as simple as setting it up and starting to wait for clients to come, you are quite wrong.  You need a business plan for your online store. 

Even if you are not a startup and you don’t need to get people to invest thousands of dollars in your project, the business plan is still essential to put your best foot forward.

Having a business plan for your online shop will save you a lot of headaches,  such as finding out that your online shop doesn’t sell as you expected.

In today’s article, we will show you the main points that your eCommerce business plan must include so you can start working on it today.

Are you ready to jumpstart your online shop? Download our FREE business plan template to help you get started with your eCommerce!

Let’s get to it!

Why do you need an eCommerce business plan?

There are two types of actions in life:

• Those that bring gratification first and pain later.
• Those that bring pain first and gratification later.

When we have an idea, what we want is to get it off the ground as quickly as possible. We can picture ourselves killing it with our e-commerce shop and what we don’t feel like is wasting time on writing down a business plan.

“Everything is in my head!” you’ll hear.

Creating a good eCommerce business plan is one of those actions that bring pain first, but that leads to huge rewards afterwards.

An online store business plan can help you earn lots of money, or save it, if while creating it you realize that your project wasn’t as perfect as you thought.

Another reason to do it is that you may need to show it to someone: investors, banks, or even friends.

In any case, let’s take a look at the key points that it has to cover.

1. Executive Summary

It is the first thing your supposed investors would read if you were looking for funding since  it is the synopsis of your eCommerce business plan.  This summary creates a first impression for your project and this is why many entrepreneurs make the mistake of making it too long or overwriting it with extravagant words. Experts actually recommend consolidating it. Just  one sheet of paper summarizing every section of the business plan  for your online store should be enough. Although it is typically placed at the beginning, it should be  the last section to be written .

What the executive summary should include:

• Idea presentation: In one or two sentences it has to define your project, the value proposal, and the main competitive advantage.
• Who is behind the idea: A good idea needs the support of a good entrepreneur. It is time to introduce yourself, but don’t overuse the standard CV formula. Be honest, creative, and original.
• Basic information: This is your planned name, the legal status it will acquire, location, and foreseen scope. You can show this as a chart to make it easier to read .

One of the issues that are not always analyzed in depth is the matter of the legal requirements. It shows that you have read them and that you can resolve them easily. Include them briefly, and then you can go into more details if necessary.

2. Description of the Company

The goal of this section is to identify the competitive advantage of your online shop so that you can make use of it in the future. You must reflect the company’s identity by defining:

• Mission:  the reason behind your shop’s existence, the role it plays in the market, who is it directed toward, and what its differential factor is.
• Vision:  the objectives that you want to achieve long term, which must be both realistic and ambitious so they can be motivating.
• Values:  the universal ethical principles that you want your shop to be identified with. Only choose those values that you will be committed to upholding with every action you take.

At this point it will be helpful if you do a SWOT analysis.

We’re going to take a quick look at what’s behind those letters.

A SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) allows you to carry out an external and internal assessment of both positive and negative points of your project.

It is a matrix where each quadrant includes one of the letters.

On one side, the external factors are analyzed:

• Threats: These represent what could happen or what already exists in the market that may be a trouble for the project.
• Opportunities: These could be change of legislation or any other favorable situation, whatever the reason may be.

These are factors that don’t depend on the business itself, but rather that the business either exploits them or foresees the risks.

The internal aspects:

• Weaknesses: These are our weakest points. We may not master the technical part or we may have a lack of resources.
• Strengths: What are we good at and how does that give us an advantage over competitors?

If we had to define the relation between the SWOT analysis and the eCommerce business plan in a sentence, it would be this:

The online shop business plan should show that the strengths outweigh the weaknesses and that, at the same time, they are strong enough to combat the threats and exploit the opportunities.

Now let’s jump into the next point.

3. Environment analysis

Once you have completed the SWOT analysis it will be really easy to complete this one.

A business plan for an online shop should include an analysis of the environment, which we are going to divide into three types:

A. Competition

If you are thinking that the existence of competitors is a negative point, you are wrong.

A lack of competitors would be even worse since it would mean that there is not enough demand.

Your online store business plan should show that there are competitors, but not enough as to be a threat: turn it into an opportunity!

Analyze the main competitors and repeat the strengths and weaknesses process which each of them. This will give you a very clear scenario to see where exactly you can surpass them.

Finding out who your competitors are is very easy with the Internet. Have a look on Google at the best-positioned pages and the ones with the most authority for your main keywords. In addition, analyze the behavior of your ideal client and find out what they visit and what they buy.

At this point you have to dig deep into the legal aspects within your market.

B. Legislation

A modification to the law may mean both a risk and an opportunity.

C. Technology

For some sectors, it would be essential to stay up to date regarding the technological level of the market.

Summarize the main tools that you need:

• Do they require investment? Will it be just one or will it be recurrent?
• Do you have the necessary knowledge to use them?
• Will you need to hire a third party?

The business plan for your online shop should answer those questions.

If you want to further develop this point, you can include a sociological or cultural analysis, but be careful not to include too much irrelevant information because it won’t help you achieve your goals.

Download Your FREE eCommerce Business Plan Template Here

4. Products and Services

What is my product going to offer to clients? This is the fundamental question you need to ask yourself at this stage of your business plan for your online shop. Your target clients and the problems you are going to solve for them must be crystal clear. If there are similar products in the market, clearly  establish what your added value is  compared to the other options.

Again, you can use a table. The table will show your products, their price, and the estimated profits.

If you are looking for funding, what matters to the risk analyst regarding your eCommerce business plan is not the price. What really matter is why users will be willing to purchase and how much you’ll be getting from it.

Talk about pricing strategies and expenses. A company that has 100% control over where its money goes is already on the right path.

5. Marketing Plan

We have already shown how and what we offer to our webpage visitors.  This section includes every action planned in order to get sales.

Another common mistake, both online and offline, is to put too much effort into getting it ready and then just “opening the door” and waiting.

In a physical shop, at least passersby will see you, but for an online one that is just starting up, there is not even a street.

Bear in mind that a website, at the beginning, is located in a desert with nobody around. Telling your friends and family to visit you will make it look better at the beginning, but the real struggle is to make strangers come and make a purchase.

The marketing plan within the online shop business plan should answer the following question:

How are we going to get constant visits to the shop?

Indeed, if this is not the most important part, it’s close. Gaining visibility is a slow process that must be planned.

A good marketing plan  starts with a thorough analysis of the market  . Identifying your direct competitors and deciding which strategies you will implement to try to overcome them will be essential. In addition, this section will include  which channels you will use to convey your message  and to get leads that will become clients.

• Email marketing
• Social networks
• Videomarketing and YouTube.
• Content marketing
• Ecommerce marketing
• Paid traffic with AdWords or Facebook Ads.

Don’t forget to clearly state how you’ll use each of them.

6. Operational Planning

The operational planning includes your  daily tasks as a entrepreneur.  You must establish basic things such as your work schedule, your location, your daily tasks timetable, and your product stock.

If reflects the task-flow from your e-commerce shop and how they’ll be divided.

If you are the only person in charge, you need to show what your routine will be.

Bear in mind that at the beginning you will have more tasks related to promoting and growing, but after some time you will have others to do:

• Manage returns
• Offer support
• Deal with unforeseen events
• Manage the stock
• Negotiate with suppliers

Surely you will have to go through it again in the future , but  it is important to have an initial idea on paper,  and then make small modifications down the line.

By doing this you, will show that everything is under control in your online store business plan. 😉

7. Financial projections

Once you’ve gotten to this point, you will have to think about  where you want to see your shop in 1, 3, and 5 years time .

For those who don’t know where they are going, no wind is favorable.

That’s even truer for an e-commerce or an online business.

The reason for doing this is to give you a direction for moving towards your goals and, most importantly, to ask yourself how are you planning on achieving them. Based on this fact and when you start getting your first sales, you should  establish which percentage of the profits you are going to reinvest  into making your business grow.

Making an accurate prediction about your profits is difficult—and the person reading your report will know this—but at least you are showing that you have worked on it. Just don’t write figures without a rhyme or reason.

8. Funding Application

This is the last step of your eCommerce business plan, in the case that you need external funding. It should include the amount of money you need and the exact ways that you plan on making use of it.

Put yourself in the investor’s shoes. Imagine that you are the one who is going to invest your money and think about what information you will like to read.

You may know the idea, the risks, the opportunity, and how to exploit it, but the other person doesn’t.

Be careful with the language you use—be precise and specific, and avoid vague expressions like:

“My experience and my multifaceted profile give me everything I need to comprehensively manage the business that I need your money to start.”

If you are only specific about the amount of money that you need, forget about the funding.

Use a chronogram in order to show your online store business plan visually. It is easier to understand it if it comes with a graphic instead of just having a bare text.

This may not be necessary since you can start with a budget based on the popular  family and friends funding  in addition to your own funds.

Remember that the three Fs (Friends, Fools, and Family) will help you get started, but they can’t be the foundation of your strategy.

How to present your online store business plan

You already know how to  create your eCommerce business plan step by step  and now it’s time to take action. Remember that it is just a document and that you can write yourself with just a bit of time. As you can see, you don’t need to have studied business administration at university to be able to write your own online shop business plan.

You don’t need to be a graphic designer. The important part is the content—don’t steal its thunder with an opulent presentation.

Once you have a rough draft with all of the information, bring into a Google Doc or Word document and save it as a PDF.

Just like with other aspects, less is more.

Business Plan Examples

To wrap things up, here you can download lots of examples of business plan templates.

Use the examples carefully. Each project is different and if you just copy-paste it, the result will be a boring, non-informative text.

Get inspired by the business plan templates and this post, then create your own version and make people fall in love of your idea.

eCommerce Business Plan FAQs 1. What should be included in an eCommerce business plan?

An eCommerce business plan should encompass key elements such as a detailed market analysis, competitive landscape assessment, financial projections, marketing strategies, and a comprehensive operational plan.

2. How much money do I need to start an eCommerce business?

The required capital to initiate an eCommerce business varies, but it generally involves expenses for product sourcing, website development, marketing, and initial operational costs. A detailed financial plan can provide a clearer estimate based on your business model and scale.

3. How to start an eCommerce business?

Initiating an eCommerce business involves several steps. Begin by conducting market research, selecting a niche, creating a business plan, registering your business, setting up an online store, sourcing or creating products, implementing secure payment options, and establishing a marketing strategy. Consistent effort in each step is crucial for a successful start.

4. Is online eCommerce business profitable?

The profitability of an online eCommerce business depends on various factors, including the chosen niche, market demand, competition, and effective management. A well-planned business strategy, quality products or services, and efficient marketing can contribute significantly to the profitability of your online venture.

Start Writing Your Online Store Business Plan Today

Do you remember what we starting off talking about?

The things bring in the most profits are the ones that require effort before you see any rewards.

Don’t forget that when creating your eCommerce business plan. That way, you’ll do it with the love and attention it deserves.

Also think about the fact that the main beneficiary is you. It is also true that it will open the doors to funding, but you don’t want funding for a project that isn’t viable.

An online shop business plan will help you in two ways: to get to know your project more deeply and, if it is viable, to gain the resources to make it work.

And don’t worry about the difficulty of writing it. It doesn’t matter whether it is about a clothes shop, a shoe shop, or a shop that sells fishing equipment. You are the person who best knows the project and that is you need to have is knowledge about your project and your sector, as well as a  general strategic vision . 

This is the first step towards creating the online shop you dream of, so what are you waiting for? Download our FREE business plan template to help you get started with your eCommerce! Good luck!

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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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How to Write an eCommerce Business Plan for Your Startup

Jane Vyshnova

The Basics and Purpose of Business Plan for Online Store

1. start with a summary, 2. describe your company, 3. add illustrations of products, 4. analyze the marketing opportunities (target audience), 5. operations in your business, 6. assessment of your finances, 7. proposal for funding.

A business requires proper planning before implementation and any further development. eCommerce business planning makes things easy for startup owners who would also perform the strategy in real life. Sure, an organization plan might sound easy, at first, but there are certain rules to follow once you get going.

Have a project in mind?

Lets talk about it

eCommerce has risen rapidly in 2022. It almost feels like homework or an assignment to write an agenda of your enterprise. Of course, the plan is different for an offline establishment than the online startups.

There is a plan for a venture that consists of all the characteristics in a particular format. Mostly, bank provides a loan based on this write-up to set up the industry. In the U.S., it is recommended to provide a proposal of about 40-50 pages in order to be effective at convincing the authorities.

Such plans are quite formal, detailed and accurate. They may also contain financial analysis with forecasting. A merchandising strategy gives you a direction to follow and helps you analyze whether the idea is profitable or not.

Building a strategy and strictly implementing it is crucial. Listed below are some other points that will explain its importance:

• Funding - the scheme will ease your way to get a credit from a bank or funding from stakeholders. You should be affirmative that you build your financial report very well to convince the stakeholders of the required funding.
• Figure out the destiny - it will provide you the right direction to follow if you want to grow your already established online company. An entrepreneur never stops, they always want to expand, and a plan helps in the expansion. It will assist in figuring out the issues, making any necessary changes.
• Find new ways - when all the doors seem locked, the strategy will open up a few to provide you some challenges. If you feel like there are no challenges, the scheme will come in handy. It is not necessary to create the plan beforehand. You can make this proposal in five or ten years (and as many times as you want).
• Discover problems - sometimes, when your company is suffering hefty financial losses and you make common changes (that you can see visually) in the commodities or marketing ideas, you still may not see any different outcomes. It is time to make a comprehensive business plan.
• Before starting - got an idea and have enough motivation? Great! But first, make a plan. It will decide the immediate objectives, resources, and set a proper sequence of actions.

Business Plans for Online Stores

An online store business plan consists of various parts, including a checklist of your business. All these parts can be further subdivided based on the size of the shop and the stuff offered. You must remember that, while describing them, you need to be specific, thorough, and honest. Now, let us go through the components one by one:

An executive summary will elucidate your business in short and will consist of a quick analysis. It also involves the main points of the other parts of the later-described plan. Some of the things that must be included are:

• The main purpose of the business;
• The people who are involved and the date when it started or intend to start;
• The points that differentiate your company, and
• How your commercial business has flourished.

This part will include detailed information of your business. Details that may be a part of this point can be the manufactured items or services that the company is dealing with, the target audience, and the benefits that the company will have (in the form of a brief financial report). In this synopsis, you must include:

• The person who owns the company and if there is a group (all names should be stated);
• A short description of the background which might encompass schooling, university, and the work experience;
• The operations that take place in the company, including the costs for the same;
• The resources required for the starting or expanding the business; and,
• The representation of your business type (B2B or B2C).

You already provided a brief synopsis of your company, so you must have mentioned the amenities which you are going to provide. Now, this segment will provide a detailed view of the service within the company. The major points you must incorporate are:

• The place to source your products - you will also provide an explanation of, for example, the business stereotype. For example, whether the things will be produced in your factory or bought from a wholesale market.
• A detailed analysis of the costs that you will require to produce or buy the stuff - you may provide costs of the required resources.
• The lifecycle of the products - you might want to mention how long the products will last or if they can be recycled.

This is an important component that should be written carefully. You must perform deep research regarding your targeted clientele. The supply method should also be included in the scrutiny. This part requires you to give finer details concerning the clients who will buy from you.

The main wings to be covered are:

• A segmented analysis of the audience along with their demographic, age range, economic status, and personality.
• An assessment of the industry - an analysis of the current situation which you can perform based on the survey of your rival companies forms the main portion.
• You must also study the companies that are in your competition - their performance, strategy, and their current financial status will be important to consider.

You need a plan for your operations to work properly. There are different directions in which your work will be distributed and you have to make sure everything goes smoothly. The agenda will organize all your operations based on priority and departments:

• You must mention the hours that people in different departments will work per week.
• Staff members are also important. If you did not begin yet, you can mention the intended number of staff in each department.

A financial report of your past sales or a report of your investments should be included. This is important for stakeholders, as they must be convinced that this deal will bring them profit. The following should be considered:

• The cost for raw materials and operational machines;
• The current funds that are present;
• Previous profits and future prognosis;
• The costs that you will spend while attracting a customer;
• The funds for advertising and different promos; and,
• The rate at which you intend to make changes or scale-up in business.

If this report is meant for you to receive funding from stakeholders, you should provide a brief paragraph stating how important it is for your enterprise to receive the finances, as well as a reason why they should give you the funds (on what basis):

• Mention the reasons to believe and trust in you;
• Describe the profits that the executive board investors can expect;
• Outline the steps to be taken in case of crisis (risk assessment);
• Go over the things you have achieved in the past or intend to achieve in a particular time-frame.

Examples of an eCommerce Business Plan Template

It is not enough to know the points that must be considered. Visual memory has been said to be the best. We will show you some examples that will assist you to understand the exact structure.

Preparing the plan by just writing it out makes it look boring, so you may add some color to it by adding figures. It makes understanding the financial stuff easier. Also, such a presentation is visually attractive and more preferred. In your financial analysis section, you can add several figures using a special online chart tool that will explain what is going on with your company.

Here is an exemplar of a business plan for an online shopping website - you may go through the whole business plan template by clicking here . It is this plan, for Instant, that also provides solutions related to software.

Your financial report should look something like this. You should divide your budgets into several parts like past financial status and projections, and present it in such a tabular form. Of course, some figures within those tables will also prove to be helpful.

Here is a perfect business plan for eCommerce startup that was intended for an investor to finance the organization. It is quite detailed and well presented, and it is also a startup plan. They mentioned their requirements in point with the costs, which makes it clear how important the funding is to the company and how much profits can be earned. A full version of the template is available here .

Here is a PDF version of a perfect business agenda by pipedream.com. It is well explained and quite detailed with more points and some other details. You can just click the link and review their plan.

Read more in our blog The Best E-commerce Books for Online Entrepreneurs in 2023 .

Once you perceive the importance of an agenda and how to develop one, the important points might change according to size and the merchandise you are selling. A business plan for an online shop will show you the right direction and performance. Some of the extra pieces of a business plan can include competition, strategic partners, website and technology, and an overview of the management team.

If you encounter any questions regarding your plan, you can contact Dinarys to get assistance with these types of solutions. If you are stuck when starting from scratch on the plan, rest assured that the team will show you the right direction. Just contact us to write your scheme and get going!

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How to Start an Ecommerce Business: 2024 Edition

With global online retail sales expected to hit $8.15 trillion by 2026, there’s no better time to start an ecommerce business.

But if you’re new to the business world, launching an online store can be daunting. Where do you begin? Should your initial focus be on product selection, website design, or marketing strategy? These questions are common for any budding entrepreneur.

This guide covers all the steps, from the basics to the more advanced aspects of running an online store. You’ll learn how to set up, manage, and grow your business into a profitable ecommerce venture.

How to start an ecommerce business: 5 steps to launch

1. find products to sell.

Being strategic with your product selection is key. Here are some tips to help you choose:

Capitalize on regional products

Identify products unique to certain regions or cultures that might have a demand in other areas. These can be traditional crafts, local delicacies, or specific fashion styles.

Explore niche communities

Look into niche hobbies or interests and find products that cater to these specific groups. These communities often have passionate followers looking for specialized items.

Solve a pain point

Think of a problem you’ve personally encountered and consider if there’s a product that could solve it. Products that address real-life issues can resonate well with customers.

You’ll find inspiration is abundant once you start your search. Google Trends can be a useful tool to help validate your product ideas.

Additional resources:

• How To Find a Product to Sell Online: 13 Tactics for 2024
• 10 White Label Products Ideas for Ecommerce  

How to source your products

When it comes to sourcing products, dropshipping is a solid option to think about. It’s a setup where an ecommerce business sells products without dealing with inventory. A customer buys something from you, and then you order it from a dropshipping supplier who ships it directly to them.

While dropshipping is a popular choice, there are other business models like wholesaling or direct-to-consumer that might suit different business needs. However, dropshipping stands out for several reasons:

• Testing new ideas is easier: With dropshipping, trying out new products is a breeze. You don’t buy a bunch of stock upfront, so experimenting with different items to see what sticks is less risky.
• Geographic flexibility: Run your business from anywhere. As long as you have internet access, you can manage a dropshipping store, making it perfect for those who love flexibility.
• Lower entry barriers: You don’t need a big budget to start. This makes dropshipping ideal for those beginning their ecommerce journey.
• The Ultimate Shopify Dropshipping Guide (2024)
• 11 Best Dropshipping Suppliers and How To Choose the Right One

2. Analyze the competition

Research is integral to the success of your ecommerce store. Once you’ve chosen your products, look at competitors and what they’re doing. Here are a few things to pay attention to when doing a competitor analysis: 

• What is their business model?
• Are they selling multiple items or just one product?
• What social media channels do they utilize?
• Who is their target market?
• How do they push sales? (e.g., paid social, PPC, SEO, email, etc.)

Competitor analysis can lead you to identify better products to sell and give you a good understanding of how to launch an online business. Additional resources:

• SWOT Analysis: How to Create One + Examples to Inspire You

3. Write a business plan

With your competitive research complete, it’s time to write your business plan. This plan serves as a roadmap, guiding your ecommerce journey from start to growth. It’s especially important for aligning your goals and strategies.

Tips for crafting a successful business plan:

• Define clear objectives: Start by setting specific, measurable goals for your business. This could include sales targets, customer acquisition numbers, or market penetration rates.
• Outline your business model: Describe how you will manage inventory, whether through dropshipping or holding stock.
• Detail your marketing approach: Explain how you’ll attract customers. Include tactics like SEO, social media marketing, and influencer collaborations.
• Make financial projections: Include detailed financial forecasts. Show expected revenue, expenses, and break-even point.
• Conduct a risk analysis: Identify potential challenges and how you’ll address them. This could include market changes, supply issues, or technological advancements.
• Include an action plan: Break down your strategies into actionable steps with timelines. This makes your goals more attainable and trackable.
• The 7 Best Business Plan Examples (2024)
• Business Plan Template: The Ultimate Guide for Ecommerce Businesses

4. Choose a name and logo

Choosing a business name.

Choosing the right name for your online business is a critical step. A good name sticks in people’s minds and becomes synonymous with your brand’s identity. Tools like Oberlo’s business name generator are great for sparking unique ideas and checking if a domain is up for grabs.

After picking a few names, see if they’re available on social media. Your brand needs the same name everywhere for people to recognize you easily. Thinking of selling worldwide? Make sure your name works across different cultures. You don’t want any surprises there.

Crafting a logo

Your logo is the visual heartbeat of your brand. Begin with something straightforward yet impactful using Shopify’s free logo maker . This tool is ideal for those new to logo design.

Consider how your logo will appear in different settings. It needs to shine on everything from your website to product packaging. A well-designed logo, aligned with your business name, lays the foundation for a strong brand presence in the online marketplace.

• How to Build a Brand: An 8-Step Guide
• Branding Design: What It Is and How to Do It

5. Build your online store

Once you have chosen a name and logo, the next thing to do is build your store. Choosing ecommerce hosting platforms like Shopify can make setting up your store easy. Shopify has lots of templates to start with and an easy-to-use online store builder that doesn’t need coding input. 

When your website is ready to start taking orders, remember to try a test order yourself to make sure the process is smooth for the customer. Alleviate any additional steps needed to buy something online and ask only for information that is necessary for the checkout process.

• 7 Best Free Shopify Themes For Your Online Store
• 58 Most Inspiring and Successful Shopify Stores in 2024

6. Choose your sales and marketing channels

There are various sales channels available, and selecting the right ones depends heavily on your target audience and the types of products you sell. If you specialize in unique or handcrafted items, niche marketplaces like Etsy are more suitable than broader platforms like Amazon or eBay. 

Here’s a list of marketplaces that cater to different niches:

• Bonanza : A great platform if you’re selling unique and diverse items. From fashionable clothing to rare collectibles, it attracts a wide range of buyers.
• Newegg : If your specialty is electronics and tech gadgets, Newegg is your marketplace.
• Reverb : This niche marketplace is dedicated to musical instruments and gear. It connects sellers with a targeted audience of musicians and enthusiasts.

On the marketing front, balancing cost and effectiveness is key. You want to reach the right people without breaking the bank. Here are some strategies to consider:

• Social media marketing: Engage on Instagram with live sessions, for example—a cost-effective way to connect and show your brand’s personality.
• Email marketing: Interactive emails with quizzes or polls boost engagement without significant expense, offering valuable customer insights.
• Influencer partnerships: Working with niche micro-influencers can be more affordable and effective for targeting specific customer groups.
• Search engine optimization (SEO): Focus on voice search optimization. It’s a smart, future-proof strategy that can reduce long-term marketing costs.

Additional resources

• 10 Best Marketing Channels for Ecommerce Stores
• 9 Marketing Strategies That’ll Level Up Your Ecommerce Store

7. Launch your business 

Now, you’re ready to launch your online business. It’s a big step, and there’s plenty to keep an eye on as you start. First up, watch your key performance indicators (KPIs) closely. They tell you how well your store is doing and what you might need to tweak.

Next, make sure your shipping runs smoothly. Happy customers often come back, so getting orders to them without a hitch is crucial. If something goes off track, be ready with a backup plan.

Finally, keep learning and adjusting based on what your customers say and what your data shows. This way, your business keeps growing and improving.

How much does it cost to start an ecommerce business?

Starting an ecommerce business can be more budget-friendly than you think. Often, you might need only about $100 to get going, mainly for a website subscription and a theme for your store. One of the perks of an ecommerce business is that it typically costs less than a brick-and-mortar store. You won’t have the same overheads like rent for a physical space.

If you opt for a dropshipping business model, the initial costs can be even lower. In dropshipping, you pay for products only after customers buy them, so there’s no upfront expense for stock. However, if you’re making products yourself or working with manufacturers, you’ll need to invest in materials and labor from the start.

Shopify’s research sheds some light on what to expect financially. They surveyed 150 entrepreneurs and 300 small business owners across the US. The findings suggest that new ecommerce store owners might spend up to $40,000 in their first year, covering everything from products and operations to marketing and staff wages. But these costs are usually offset by your business’s profits.

Here’s a rough breakdown of typical first-year expenses: 

• Online store setup: 9%
• Operating costs like legal fees and software: 11%
• Marketing: 10.3%
• Product-related costs: 31.6%
• Shipping: 8.7%
• Team and staff expenses: 18.8%
• Offline costs, like event fees: 10.5% 

However, the actual amount can vary based on factors like your industry, the type of ecommerce model you choose, and whether you hire employees. And you don’t need to have the entire sum upfront. Many entrepreneurs start with personal savings, while others may seek support from friends, family, or personal loans.

4 tips for creating a profitable online store

Launching an ecommerce business is just the beginning. To make it profitable, you need to think differently. Here are some actionable tips for success: 

1. Enhance customer interaction 

Revamp your customer service approach. Implement interactive features like virtual product trials or augmented reality on your site. This will give customers a new way to experience your products.

2. Gamify your shopping experience

Transform your website into an interactive playground. Add elements like scavenger hunts for discounts or fun quizzes that lead to personalized offers. These tactics can make shopping more engaging and increase sales.

3. Personalize with AI

Incorporate AI technology into your store. Use it to analyze customer behaviors and preferences. Then, tailor product recommendations and content accordingly to enhance the shopping experience.

4. Keep your inventory fresh 

Regularly update your product offerings. Use market trends and customer feedback to introduce new items. Consider limited-edition products or collaborations to create excitement and attract repeat visits.

Open your ecommerce store

Building an ecommerce business from scratch has its mix of highs and lows. You’ll be choosing products, gauging their market fit, and handling production. Next comes developing your online store and drawing in customers. It’s a bit like solving a complex puzzle, and the satisfaction of seeing it come together is immense.

Hopefully this article has helped you understand how to start an ecommerce business. You’ve got everything you need at your fingertips to make this the year your store takes off, and we’re happy to help you meet this goal.

Ecommerce business FAQ

What are the 4 ecommerce business models.

There are four primary ecommerce business models, : 

• Consumer to business (C2B): In this model, individuals offer products or services to businesses. An example is an influencer charging a fee to provide brand exposure to their audience.
• Business to business (B2B): Here, one business sells goods or services to another business. For instance, a company might sell wholesale products to another business for their use.
• Consumer to consumer (C2C): This model involves transactions between consumers. An example is selling vintage clothes on a platform like Facebook Marketplace to another individual.
• Business to consumer (B2C): In this common model, ecommerce businesses sell goods or services directly to individual consumers, like purchasing a jacket from an online retailer.

How do I start an ecommerce business without money?

To be honest, you’d need at least a few hundred dollars to start an ecommerce business. That’s because it’s a product-based business that requires you to build an online store, do marketing, and invest in the growth of your brand.

That said, you can start an ecommerce business on the cheap by choosing dropshipping as your business model, tapping into free marketing channels, and creating brand awareness via word-of-mouth strategies. You can also look into funding programs like Shopify Capital to get the money you need to start and grow your ecommerce business.

Is an ecommerce business profitable?

In a word: yes. But realizing your profits could take a while, since an ecommerce entrepreneur’s journey is a marathon rather than a sprint. It could take you 18 to 24 months to see a profit. That’s why we recommend you don’t measure the success of your ecommerce venture by your net profit in the first year.

Want to Learn More?

• How to Start a Photography Business
• 30 Amazing Startup Business Ideas
• The Ultimate Guide to Mobile Commerce
• How to Start a Business

Developing an E-Commerce Business Plan

Objective | Guidelines | Deliverables | Grading Rubrics | Best Practices

Objective :The purpose of the course project is to provide you the experience of creating a unique e-Commerce solution.  You are forming an e-Commerce company to take advantage of the opportunities in the e-marketplace, and will author a Business Plan for that venture.

Your choice of firm may include any industry, business or service. Your project can involve the sale of products or services. This project provides extreme latitude for creativity and demonstration of your mastery of course objectives, in addition to relevant topics studied in other courses you have taken and your own professional experiences.

Note that a project of reasonable similarity submitted for any other DeVry course may not be used in this project.

Guidelines : Your Business Plan should follow this basic outline, plus include any content unique to your choice of product or service. Your plan should demonstrate your understanding of concepts covered by course readings, lectures, and assignments. Your business plan should discuss all strategies needed for the creation of an e-commerce site.

I.   Executive Summary II.  Business Description      a. Products / Services Offered      b. Mission Statement      c. Industry      d. Business Goals and Objectives      e. Business Models – Revenue and Payment Models III. Marketing      a. Market Analysis / Market Forecast      b. Target Markets      c. Marketing Strategy IV. Competitor Analysis      a. Competition      b. Strengths and Weaknesses      c. Competitive Advantage V.  Conclusion VI. References

To help you write your Business Plan, follow the Online Tutorial titled Introduction to the E-Business Plan  from the publisher’s student website. This tutorial includes detailed tips for each section and links to more information.

Deliverables :Your finished Business Plan is a Word document:

• Use 12 point Times New Roman font, double space
• Add page header with a shortened title for your paper and the page number per APA
• Includes a Cover Page, Table of Contents, Executive Summary, Body (see guidelines above), Summary or Conclusion and Reference Page
• Your paper should be 8 to 10 pages in length plus the title page and reference page
• include at least 6 valid outside references with proper APA citations

Grading Rubrics :

Best Practices : The following are the best practices in preparing this paper.

• Cover Page – Include who you prepared the paper for, who prepared, and date.
• Table of Contents  – List the sections of your paper and the pages in which they are located.
• Executive Summary – The purpose of an executive summary is to set the stage for the reader and entice the reader to continue reading your paper. 1. Introduce the subject and why the subject is important. 2. Include an overview of what you are going to cover in your paper and the importance of the material. 3. Establish a tone for the document. 4. Include a reason for the audience to read the paper.
• Body of Your Report – Following the guidelines above, break out the main ideas, state the main ideas, state major points in each idea, and provide evidence. Use headings and subheadings to label each section. You need to include the information you found during your research and investigation (remember to add in text citations per APA guidelines).
• Summary or Conclusion – – Summarizing is similar to paraphrasing but presents the gist of the material in fewer words than the original. An effective summary identifies the main ideas and major support points from the body of your report. Minor details are left out. Summarize the benefits of the ideas and how they affect the e-commerce industry. Additional hints on preparing the best possible project. 1. Apply a three step process of writing… Plan, Write, and Complete. 2. Prepare an outline of your research paper before you go forward.

To get an access of the complete assignment solution email : [email protected] or chat with us live.

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