Ecommerce business: Start, manage and grow your online store

Published Friday 17 October 2025

Table of contents

• Ecommerce definition
• Types of ecommerce businesses
• How ecommerce works
• Examples of successful ecommerce businesses
• Advantages of ecommerce
• What you need for an ecommerce business
• Getting started with your ecommerce business
• Managing your ecommerce business finances
• Start your ecommerce journey with confidence
• FAQs on ecommerce businesses

Key takeaways

• Choose your ecommerce business model based on your target customers, whether selling directly to consumers (B2C), other businesses (B2B), or through government contracts (B2G), as each requires different strategies and approaches.

• Start with an established marketplace like Amazon or eBay to minimize upfront costs and technical complexity, then consider building your own website using platforms like Shopify or WooCommerce as your business grows.

• Implement integrated accounting software from day one to automatically track sales, expenses, and profitability, as digital transactions can quickly become complex to manage manually.

• Plan your fulfillment strategy early by deciding whether to handle inventory and shipping yourself or use dropshipping to reduce initial investment and operational overhead.

Ecommerce definition

Ecommerce (electronic commerce) means selling goods and services online, so your customers can buy from you without visiting a physical store.

The most common types include:

• Sell physical products through your website or marketplaces like Amazon or eBay
• Offer services and accept payments online using digital payment systems
• Sell digital products, such as downloadable content, software, or subscriptions

Types of ecommerce businesses

Ecommerce includes several business models. Each model depends on who is buying and selling. Knowing the differences helps you choose the right approach for your business.

B2C (Business-to-Consumer)

In this model, you sell products or services directly to individual customers. For example, you might run an online clothing store or offer a subscription box.

B2B (Business-to-Business)

In this model, you sell to other businesses. For example, you might offer software to other companies or supply parts to manufacturers.

C2C (Consumer-to-Consumer)

In this model, you sell directly to other individuals, often through a third-party platform. For example, you might use an online marketplace to sell used goods. If your sales exceed certain income thresholds, the platform must report your payments on Form 1099-K.

B2G (Business-to-Government)

In this model, you sell your products or services to government agencies. For example, some U.S. government agencies buy commercial products through online marketplaces to speed up procurement.

How ecommerce works

An ecommerce transaction usually follows a clear path, from a customer finding your store to receiving their order.

Here’s how a typical ecommerce transaction works:

1. A customer finds your online store and browses your products
2. They add items to their shopping cart
3. At checkout, they enter payment and shipping details
4. You process the payment and confirm the order
5. You prepare and ship the product to the customer

Examples of successful ecommerce businesses

Ecommerce businesses sell physical goods, digital products, or services in many industries.

For example, you might run an online boutique, sell handmade crafts on a marketplace, or offer a subscription box. You could also sell online courses, software, or consulting services.

Advantages of ecommerce

Customer convenience: Shoppers can browse and buy 24/7 from anywhere, increasing sales opportunities

Faster payments: Digital transactions process immediately, improving your cash flow

Automated sales: Online stores operate continuously without staff, generating revenue around the clock

Lower overhead costs: No physical storefront means reduced rent, utilities, and staffing expenses

Global reach: Sell to customers worldwide without geographic limitations

Simplified bookkeeping: Digital transactions automatically integrate with accounting software for easier record management

What you need for an ecommerce business

To sell online, you need a few key tools and systems. Here’s what to set up:

Online storefront: A website or marketplace listing where customers can view products, prices, and descriptions

Shopping cart system: Technology that lets customers select multiple items and proceed to checkout

Payment processing: Secure systems like PayPal, Stripe, or Square to handle credit card and digital payments. For tax year 2024, these payment apps are required to send you a Form 1099-K if your gross payments for goods or services total over $5,000.

Fulfillment method: Shipping, delivery, or digital download systems to get products to customers

Business policies: Clear terms covering returns, refunds, privacy, and customer service procedures

Digital marketplaces often provide payment and delivery services for you. Keep in mind, they charge fees and may take longer to send your payments.

If you want to build your own shop, you can use an ecommerce platform to process orders and payments.

Getting started with your ecommerce business

Ready to start your ecommerce business? Follow these steps:

1. Choose your selling method: Start with an existing marketplace like Amazon or eBay, or build your own website using platforms like Shopify or WooCommerce
2. Set up payment processing: Connect services like PayPal, Stripe, or Square to accept customer payments securely
3. Plan your fulfillment: Decide how you'll store inventory and ship products, or consider dropshipping to start with minimal upfront costs
4. Manage your finances: Use accounting software like Xero to track sales, expenses, and profitability from day one

Managing your ecommerce business finances

Running an ecommerce business means you manage both sales and finances. Keeping your finances in order is key to your success. This includes tracking every sale, managing inventory, and understanding fees from payment processors and shipping carriers.

Accounting software automates your bookkeeping and shows you your cash flow in real time. This helps you make smart decisions and focus on growing your business.

Start your ecommerce journey with confidence

Ecommerce gives you a flexible way to reach customers worldwide and grow your revenue. Whether you sell physical products, digital services, or both, start with the right tools and financial management.

To succeed in ecommerce, know your customers, choose the right platform, and keep track of your finances. With the right planning and tools, you can build a business that grows with you.

Ready to manage your ecommerce finances like a pro? Get one month free and see how easy it is to track your online sales, expenses, and profitability in one place.

FAQs on ecommerce businesses

Here are some common questions and answers about starting an ecommerce business.

What is the most profitable ecommerce business?

There’s no single answer. Your profitability depends on your niche, marketing, and business model. You’ll do well if you find a product or service people want and offer it in a unique way.

How profitable is ecommerce compared to traditional retail?

Ecommerce can be very profitable because you have lower overhead costs – you don’t need a physical storefront. But the online market is competitive. Your profitability depends on your pricing, marketing, and how well you manage costs like shipping and transaction fees.

What's the difference between ecommerce and online marketplaces?

An ecommerce business usually means selling on your own website. An online marketplace, like Amazon or Etsy, lets many sellers list products. Marketplaces give you a bigger audience, but your own site gives you more control.

Do I need technical skills to start an ecommerce business?

No. Many platforms let you build an online store without coding. Drag-and-drop tools make it easy. Being willing to learn is more important than technical skills.