How to Make an Ecommerce Business Plan for Your Startup
Darren DeMatas
September 20, 2024
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So you’ve decided that you want to quit your day job and start your very own ecommerce empire. That’s great!
But before you become the next Jeff Bezos (and definitely before you quit your job!), it’s worth spending some time thinking about a business plan. In this article, we’ll dive into the key elements of an ecommerce business plan, which is very different than writing traditional business plans.
Why You Should Create a Business Plan
We know that starting an ecommerce business is exciting, and it can be tempting to jump right in without constructing a business plan. READ: PLEASE DON’T DO THIS.
If you haven’t put your ideas, questions and concerns on paper, then you haven’t given your business model enough thought .
Taking the time to write a business plan might seem like a lot of work, but it can save you a lot of time and money in the long run by better preparing you for potential challenges and opportunities that you’ll face as a first-time entrepreneur. Think of it as a roadmap for your new business venture.
It’s exciting to start your own ecommerce business. However, you want to be well prepared and not jump into anything without having a solid, foolproof ecommerce business plan in place.
After all, you wouldn’t jump out of a plane without a parachute, so why start a business without a safety device in place? That safety device is your business plan.
The business plan is the brainstorming process that ensures your concept and goals are realistic.
This is more than just mental notes. True business plans take your ideas , questions, and concerns and put those in writing.
As you start creating your business plan, you’ll soon understand that it’s more than a single piece of paper with handwritten details on it. It’s a clearly constructed format of how your business will be created, how it will operate, and what you hope the future holds in terms of a successful ecommerce business.
When you write your business plan, be sure to have a target audience in mind. Are you going to look for investors or put a Kickstarter campaign into motion and use this as your descriptive platform? If so, make sure that your business plan contains everything the audience would want to know about your business (and more!). Many traditional funding solutions require a business plan in order to give you capital. However, there are alternative solutions, such as Payability that specialize in ecommerce and don’t require credit checks, a business plan, or any complicated paperwork. They can also get you approved in as little as 24 hours.
When your business plan is completed, you should have achieved the following goals:
- Knowledge: A greater sense of knowledge of the business aspects.
- Resources: The resources you’re going to need to make your business successful, such as partners, money, employees, etc.
- Road Map: Have clear set goals to take you from the very beginning of your business and onward.
- Viability: In other words, is your business possible? Will you have enough profit margins to keep the doors open long-term?
Now that you know why you should create a business plan, it’s time to move on to how you can create your business plan and get started putting your ecommerce business into motion.
How to Start an Ecommerce Business Plan
At the very beginning of the planning stages, it’s a good idea to develop a framework for your business model. This business model will continue to evolve as you create each section of your ecommerce business plan, so don’t strive for a perfect completed plan on the first try. You will be making tweaks to the plan of certain steps along the way.
There are many ways to sell products online and different business models to pursue. Research and learn from successful ecommerce business examples in the market. The exact business model you follow will be one that makes the most sense with your resources, skills, and interests.
In order to create the best online business plan with your product in mind, you need to figure out the following things:
What are you selling?
The first step to creating an online business is to learn the absolute basics of what you can sell.
- Physical products: Clothing , shoes, home goods
- Digital products: Software as a Service products, ecourses, ebooks
- Services: Consulting services, home cleaning
Who are you selling to?
- Business-to-Business (B2B): You are selling to organizations, corporations, and non-profits rather than individual customers
- Business to Consumer (B2C): This means you are selling to individual consumers rather than businesses
- Marketplace: You are acting as a middleman by bringing businesses and (B2B or B2C) customers to one website.
How are you sourcing your product?
- Manufacture in-house: You make your product or service in-house
- Third-party manufacturer: You outsource the manufacturing of your product or service to a third-party manufacturer
- Dropship: You partner with a dropship manufacturer. Basically, this means that they make your product, package it and ship it directly to your customer while your company handles the entire customer relationship.
- Wholesale : You buy goods or services from other companies in bulk and re-sell those products on your online store
Additional References
- Entrepreneurship: Business & Marketing Plans
- Small Business and Entrepreneurship
- Entrepreneurship Resources
- Business Plan Resources
Executive Summary
The executive summary will be written according to your goals, and it’s recommended that this is done at the very end of your business plan completion. This will ensure that you include all of the important factors about your business and present your ideas in a concise and complete way.
Some of the features you’ll include in the executive summary include information showing that you’ve done your research, you have concrete sales forecasts, and the main details about your brand.
Business Model
When you’re figuring out your business model, you have to consider four different areas:
- Monetization strategy
- Product/industry
- Target market
- Sales channel
Monetization Strategy
The monetization strategy delves into the methods you are going to use to sell your products.
This strategy will look at different product monetization methods, including white label, private label , affiliate marketing, wholesale, dropshipping, and even selling ads.
Product/Industry
The product industry section is where you summarize your main niche.
For example, “Vegan Skincare Products.”
Target Market
In the target market section, you will write a sentence or so on who your target market, or ideal customer, is in the community.
If you’re selling vegan skincare products, your target customers might be women who embrace the vegan lifestyle and use natural skincare products in their daily beauty regimen.
Sales Channel
The sales channel refers to where you’re going to sell your products.
For example, you might be selling your products on your own website, and this should be entered in this section.
Business Overview
This next section covers your company overview.
This section of your business plan will cover various features of your company, including the following:
- Company type
- Domain name
- Value proposition
- Brand traits
The brand name section lists your business name or brand name.
This is an extremely important aspect of your business plan as it’s what will set the tone for everything that follows.
Pick a brand name that’s simple yet unique and is something that can be used in a wordplay manner, if desired, but not pun-worthy.
Company Type
The company is how your business operates. For example, you might label your business as an LLC , S-corporation, sole proprietor, or some other type of business organization.
The best way to determine how you should categorize your company is to speak to your accountant. There are various tax and legal aspects to forming your business in a certain way.
Speak with the professionals in the company and corporation formation field to determine how to label your company and which company type best benefits your business in a variety of ways.
Domain Name
This section is where you list your domain name.
Choose a domain name that is memorable and embraces the overall traits and features of your business.
And, when choosing a domain name, be sure to think of SEO aspects when doing so. You’ll find out just how much all of these things tie together and ensure a frequently-visited website is the end result.
Keep in mind that with ecommerce, the domain name is just as important as the brand name. Maybe even more so!
Value Proposition
A value proposition is a short, crisp statement that will gauge how clear your idea is. Write this section as if you had one minute to explain your business to a potential investor or customer and then practice it over and over again.
The value proposition can be used on your ecommerce store as your company description.
Here’s a good example: Say you’re looking to start a hiking company called Atlas Hiking Co. which sells premium performance hiking shirts. A possible company description could be the following:
Atlas Hiking Co. is a lifestyle hiking company that produces high-performance hiking shirts for outdoor lovers. Our proprietary SPF40 fabric is one of the lightest fabrics on the market, providing mountain lovers with maximum comfort, both from a breathability and sun-protection standpoint. Our product is made in the U.S.A. and a portion of our profits are donated to preserve national parks around the country.
Pay special attention to all the sensory words !
The mission statement in your business plan is the “why” of it all.
For example, why you started the business, why you are selling the products you are selling, etc., can all be added to this section of your business plan.
You can make this portion as simple or detailed as you like. Just make sure to properly and clearly explain your business mission.
The vision part of the business plan is your “how” in the grand scheme of things. It is the dream you have for your company and the path you’re going to take to realize that dream.
When you write the vision portion of the business plan, think long-term. What are you hoping to achieve, not just in the near future but for the long haul of the life of your business?
Look into the future and plan out where you see your business in 5, 10, even 20 years from now.
This will help you construct the rest of your business plan if you know where you want your business to head, now and in the future.
Brand Traits
The brand traits section is a short section in your company overview.
Basically, in the brand traits section you’re going to want to list three to five words that describe your brand.
Think of your brand personality and describe it using a few separate powerful words.
The personnel section lists all individuals, including yourself, who will be involved in the daily operations of your business. You can create a separate section for a full operations plan or add that later.
Some business owners choose to handle all duties on their own or with a partner, while others will hire individuals to fill the following roles:
- CEO (usually the business owner)
- Management team
- Customer service/logistics
- PR/Social media specialist
- SEO manager
- Advertising manager
Competitive Market Analysis
Here’s a fact you can bank on: there has never been a successful e-commerce entrepreneur that didn’t understand his/her target market cold.
That’s why this section is one of the most important in the entire business plan. It will force you to understand the industry in which you operate, the overall industry analysis and outlook, the existing competition, and your target customer demographic.
Market Segment
The market segment portion of the business plan will help you to put your ideas down on paper, make them more focused, and get your team together.
This area will include your niche selection, target market, and competitive analysis.
Niche Selection
The niche section provides an overview of your niche, why you selected it, whether there’s a micro niche included, and the type of niche you’ve chosen.
The purpose of this section is to crystalize the ideas that you have and make sure they are understandable and viable.
The target market section covers an overview of your target market plus describes your market segments.
Ask yourself who your target customer is (population size, age, geography, education, ethnicity, income level) and consider whether consumers are comfortable with buying your product category online.
When listing the target market information, make sure to mention your target audience size as this is important for ensuring that your audience will be adequately covered.
Competitive Analysis
With the competitive analysis portion of your market analysis, you want to list your market leader and direct and indirect competitors.
After you mention who these entities are, you need to list the characteristics of each one, such as domain name, business model, monthly traffic, and pricing range.
However, before you even get started in writing this section, you need to spend several hours researching your target market.
Here are some of the most efficient ways to research a particular market:
Industry reports
Google is your best friend. Look for any recent industry reports on your market of choice. This will give you a good sense of how much growth the industry is experiencing, why this growth is happening, and what are the largest customer segments. In our example of Atlas Hiking Co., we should research the outdoor apparel market.
Let’s say that through our research of the outdoor apparel industry, we discovered that there was a huge boom in youth hiking apparel. Perhaps parents were increasingly concerned about their kids’ exposure to UV rays while hiking, so they began to spend more money on their kids. We could use this valuable information to guide our business strategy.
There’s only so much you can read online. Go to a nearby store that sells similar products to yours and interview the store representative. The store rep has interacted with hundreds of interested customers, which can lead to thousands of valuable insights! It’s amazing how these insights can translate into a meaningful business opportunity.
Here’s an example:
If I were going into Billy’s Outdoor Store to research the outdoor apparel market, I would probably ask Billy the following:
- What are your best-selling products?
- What are your worst-selling products?
- Find products similar to yours and ask the representative his/her favorite features on products similar to yours.
- How much are customers generally willing to spend on these types of products?
- Do customers make repeat orders of any of these products?
- Do you get a lot of customers that are looking to buy last-minute hiking gear before they go on a hike?
Competition
Create an Excel spreadsheet of all of your competitors. In your spreadsheet, you should have the following columns:
- Competitor Name
- Price point
- Product Description
- Key Features (e.g., fabric, waterproof, slim fit, etc.)
What is the competition missing? Is there a gap in the offering? Where you can add some additional value?
After conducting the competitor analysis, Atlas Hiking Co. might find that the competition’s hiking shirts offer very few features at a low price point, but no one offers a luxury hiking shirt with additional features at a higher price point.
This is just an example of the types of insights one can gain from market research which can drastically alter your business model.
Keyword Research
By using Google’s keyword planner and trends pages, you can get a good sense of how in demand your product is and whether it’s trending upward or downward. Google is great for a general idea, just don’t bank on it.
Some other keyword tools you can use for keyword research include Ahrefs, JungleScout, and Viral Launch. Check out this list for more ideas.
Trade shows
Are there nearby trade shows that you can go to? Again, creating connections with other people in your industry is a surefire shortcut to countless hours of reading on the internet. Trade shows are also a great opportunity to talk to competitors, meet manufacturers, and better understand where things are heading in your industry.
Once you finish researching the relevant industry, you should summarize your findings by answering the following questions:
General Industry
- How big is the overall industry?
- How big is the specific sub-industry in which you intend to operate?
- Where has most of the historic growth in the market come from?
- Why is this the right time to enter this market?
- What are the sub-segments that are poised for future growth (e.g., youth apparel)?
- How crowded is the product category with competition?
- How is your competition distributing its product (online, retail, wholesale, etc.)?
- What’s missing from the competition’s product offering?
Products and Offers
So we know we want to sell hiking shirts, but how do you research specific products?
But for some of us, we’re not quite sure what we should sell. To succeed in online retail, you need a product that is trending upwards in a growing niche.
Different types of products
Some of the different types of products include the following:
- Convenience products: Frequent purchase products, little effort on buying
- Shopping products: Less frequently purchased in between purchases, little more effort and planning, shop around
- Specialty products: Strong brand preference and loyalty, will buy no matter what the price
The various types of niches include the following:
- Hobby niches
- Lifestyle niches
- Problem niches
- Weird/embarrassing niches
Existing products
Come up with detailed specifications for each product or service you intend to sell. If it’s a hiking shirt we’re selling, we would want to have:
- Detailed sketches of the shirt
- Fabric weight, materials, type
- Key features (e.g., pre-shrunk, water-proof, SPF 40)
Future product pipeline
What are other products that you have in the pipeline? Perhaps once you’ve successfully sold hiking shirts, you’re able to leverage your manufacturing relationships to provide hiking socks and shorts. Include that information in this section.
The products and services section will cover the various selling categories of items.
These product offerings will include the following:
- Core product
Each product group will have its own purpose in your sales catalog. For example, tripwire is the product that brings customers to your ecommerce store or online marketplaces while the core product is your main seller.
Knowing what products you’ll include within each section allows you to have a firm grasp on what your main product will be and how the other types of products will work alongside your main product.
This section will also cover the search volume and Amazon pricing range.
You’ll need to calculate your true costs. You have to make sure you don’t overestimate your margins.
To tabulate your total true costs, you need to write down the costs in the following areas:
- Target price
- Supplier cost of the product
- Total cost per unit
- Net profit per unit
- Profit margin per unit
Once you complete the pricing portion, you’ll have everything on one sheet and readily accessible whenever you need it.
Marketing Plan and Operations
So, now you’ve concluded that you have a great business idea, and it’s in a growing market. That’s fantastic – but how are you going to drive traffic to your ecommerce website and get customers to buy it ? And how much can you afford to spend on your product?
Marketing is everything. It’s important that your marketing efforts match your business model.
If you have a website and no marketing, your site won’t have any visitors. With no visitors, you will make no sales. Then how do you grow and sell your ecommerce business (if that’s your long-term goal)? Even with the best possible products, nobody will buy them if they aren’t directed to them in some way.
In order to come up with a marketing strategy, you need to first know your customer inside out. You should be able to answer such questions as:
- How old is your customer?
- Where does your customer live?
- What is the population of your customer base?
- What is their education level?
- What is their income level?
- What are your customer’s pain points?
With so many channels to reach your customer, which one is best for you?
Once we know pretty much everything there is to know about our target customer, we can shift focus to our marketing strategy. You want to choose marketing strategies that equal positive conversion rates. What channels should you use to grab the attention of your customer demographic? Some of the key marketing channels include:
Paid Marketing
- Pay-per-click – this online marketing typically involves using Google Shopping campaigns and managing a product data feed.
- Affiliate sales networks – Allowing other blogs and websites to sell your product for a cut of the revenue. List the different affiliate sale networks that you plan to promote through.
- Facebook ads ⎯ Ads posted on Facebook to draw in buyers through social media means.
- Influencer marketing ⎯ Hiring industry influencers to get the word out about your product through their social media platforms and contacts.
Organic Marketing
- Social media (Facebook, Instagram , Pinterest, etc.): What is your strategy for social media, and where will you dedicate your attention?
- Search Engine Optimization : Create and promote awesome content so people find your product organically through search.
- Content marketing: Figure out how you’ll use content marketing in your business. Consider various article topics that will persuade your target audience to buy your products.
- Blogger networks: could be organic or paid through affiliate sale programs.
- Key bloggers: Develop a list of the key bloggers in your product category. For Atlas Hiking Co., this might be an influencer that blogs about the best hiking trails in America.
Finding the optimal mix of these advertising tools depends 100% on your customer segment as well as your product type. For example, a SaaS product targeting millennials will require an entirely different marketing strategy than an e-commerce physical product targeting baby boomers. Perhaps that should be a post on its own for another day!
How much should you spend to acquire a customer?
In order to understand this, we need first to discuss a concept known as customer lifetime value or LTV. In essence, this is a formula that helps you better understand how much an average customer will spend over time.
Here’s a good read on how to calculate LTV.
It’s important to remember that for new businesses, you don’t have a lot of data on customer purchase habits so it’s a good idea to be more conservative with your assumptions in calculating LTV.
Let’s say, for Atlas Hiking Co., I determine that the average LTV per customer is $300. This means that over time, the average customer will spend $300. Let’s say, on average, if I receive $300 in revenue, $100 of that will translate to gross profit before I factor in my marketing costs (basically, I’m just subtracting the cost of making the shirts).
Knowing that my gross profit is $100 per shirt is a critical piece of information because it tells me that I can spend up to $100 in marketing to acquire a customer and still be profitable!
Some of the marketing options include social media marketing and content marketing.
Think about your business model and then line up your marketing budget. Your marketing budget may include the following items:
- Sales/branded content
- SEO/blog content
- Facebook/Instagram ads
- Influencer marketing
- Marketing tools
- Niche advertising
Choosing The Right Technology
With so much technology and SaaS products out there, it’s important to understand the various moving parts and diagram how they all integrate with one another.
Some of the different elements include:
- Shopping Cart Platforms – e.g., Shopify , BigCommerce , WooCommerce , or any open-source platform
- Hosting – Nexcess , Kinsta , WPX
- Payment Processo r – e.g., Stripe, Paypal
- Fulfillment Center – e.g., Amazon, ShipBob
- Apps – e.g., Zipify, BuildWooFunnels, Gelato
- Accounting & Taxes – e.g., Quicken, Xero
- Marketing Automation – e.g., Klaviyo , Mailchimp
- Marketing Tools – e.g. Buzzstream, Ahrefs
- Customer Loyalty Programs – e.g., Antavo, Smile
Come up with a detailed list of the different products and services you need to run your business as well as the monthly and per-transaction cost of each of them. This will be important in understanding the impact of these services on your margins.
Matching your business model to your technology is essential, too. Certain website platforms are better suited for specific sales models.
Email marketing is another type of technology that should be carefully considered and matched up correctly with your business model.
Keep in mind that it takes, on average, 6-7 interactions with a brand before someone makes a purchase, so you need to keep using technology to get them back to your website.
As you explore the technology options and find out ways to draw potential customers in and keep them happy while they’re there, here are some key points to keep in mind:
- What you say about yourself and your products with your website content
- How you respond to questions on live chat and email support
- How to make use of chatbots
- How you connect on social media
- The information you send through email marketing
- What bloggers and influencers say about your brand
- How existing customers review your company
- How you advertise
- How you establish loyalty beyond sales
After you figure out your technology methods, you have to come up with a technology budget.
The business plan must also include the operations side of things. Determine who will be your manufacturer, secondary manufacturer, and shipping and fulfillment provider.
When looking at supply chain costs and options, ShipBob is an ecommerce fulfillment provider you can consider.
Financial Plan
When figuring out your financial plan, evaluating and pinpointing your startup costs is essential.
The focus of the financial plan is how long it will take for you to make your money back. You also need to figure out if you need a business loan .
Traffic and conversion rates will help you determine how long it will be until you start making money back.
You’ll also want to use an income statement to detail financial information.
This section is used for financial projections, such as forecasting sales, expenses, and net income of the business. Ideally, you’ll want to create a monthly Excel balance sheet showing the following:
- Projected revenue: First, come up with your projected number of units sold and then come up with your projected revenue (Projected Revenue = # of Units Sold * Average Sales Price).
- Fixed expenses: these are expenses that are fixed no matter how much you sell. Typically, these relate to monthly SaaS subscriptions, employee salaries, or rent.
- Variable expenses – these expenses change in direct proportion to how much you sell. Common examples include the cost of goods sold and credit card payment processing fees.
This helps business owners better understand what they need to achieve to hit their profit goals. In reality, projections are usually always off the mark, but it’s good to give yourself some measurable goals to strive for.
This section should aim to answer the following questions about your product offering:
- How much product do you need to sell per year to meet your income goals for the business?
- What are the margins on your product? If you sell one hiking shirt for $50, how much do you make after paying your supplier, employees, and marketing costs?
- What is the lifetime value of a customer?
- How much can you spend to acquire customers? If you conservatively project that the average customer will spend $300 over time on your shirts, then you can afford to spend an amount less than $300 to acquire that customer using the paid marketing channels described previously.
- Do you have any big capital expenditures early on that would require you to need to bring in investors?
- Can you improve gross margins by making bigger orders from your suppliers?
There are various acquisition channels that will help your traffic to convert including:
Your revenue plan will contain a 12-month revenue forecast plan to help you map out each month of earnings.
There are different business earning models you can go through to determine how much you can make with your business.
You want to calculate how much traffic costs. This all depends on the methods you use to gain traffic to your site.
As you determine what your profit might be with your ecommerce business or ecommerce businesses, there are certain math formulas to use:
- The profit equation
- Break-even analysis
- Units needed to achieve the profit target
You should also consider how you will use fintech companies in your ecommerce business.
What are the key elements of an ecommerce business plan?
The main components of an eCommerce business plan include the executive summary, company description, market analysis, organization and management structure, product line or service, marketing and sales strategy, financial projections, and funding request, if applicable.
How do I create a budget for my ecommerce business?
Start by estimating your initial startup costs and ongoing expenses. Consider costs like website development, inventory, marketing, shipping, taxes, and any necessary licenses or permits. It’s also important to factor in a contingency plan for unexpected costs.
How do I find the right product to sell?
Research is fundamental. Look at market trends, customer needs, and competitor products. Use tools like Google Trends or social media platforms to understand what customers are currently interested in. Always consider your passion and knowledge about the product too, as this can drive your business forward.
How can I differentiate my product from competitors?
Differentiation can come from unique product features, superior customer service, better pricing, or a compelling brand story. Understand what your competitors offer and how you can do it differently or better.
Wrapping Up Your Business Plan
Careful planning is crucial to get your e-commerce business from the planning phase to the launch phase and to ensure its successful future.
Going through the exercise of writing a business plan will cement your own understanding of your business and your market. It will also position you to take advantage of lucrative opportunities while mitigating harmful threats to your business down the line.
Your turn! Have you written a business plan for your online store? Do you have anything to add? Tell us about it in the comments below!
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How to Write an Ecommerce Business Plan [Examples & Template]
Updated: April 03, 2024
Published: November 20, 2019
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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HubSpot's template provides clear steps to structuring one for your ecommerce business. Throughout this section, I’ll use the example of a photography company specializing in online photo editing.
How to Write an Ecommerce Business Plan
- Give an executive summary.
- List and describe your business.
- Detail your products and services.
- Conduct a market analysis.
- Strategize your marketing plan.
- Create a sales plan.
- Outline legal notes and financial considerations.
1. Give an executive summary.
An executive summary is a one-to-two-page overview of your business. The purpose of an executive summary is to let stakeholders know what the business plan will contain. HubSpot‘s free template offers some tips on how to write one, as I’ve done below:
It's important to provide an executive summary so that an investor or executive, who doesn’t have the time to read your full plan, can quickly see the most important highlights of your business.
2. List and describe your business.
This is the section that needs the most detail because it highlights what you're selling. To begin, provide an overview of your product or service. For instance, a photography company would probably list their photo packages arranged by price and services, as I did below:
Download This Template
4. Conduct a market analysis.
For the market analysis, provide the operational climate of the industry you‘re in. To illustrate, at this step, the photography company would need to analyze its position in a world of rival companies like Adobe or online services like Canva. Below, I’ve done a quick competitor analysis, available in the template:
Using directions in the template as a guide, I was able to come up with more selling points of the company and how it stands out from competitors.
Filling out the market analysis section of the business plan assists with providing the framework for future campaigns. You’re able to define your target market and ideal customer. Refer to my example below for how to structure this analysis in your ecommerce plan.
6. Create a sales plan.
When creating your sales plan, describe your methodology, organization structure, sales channels, and tools and technology.
For example, when discussing methodology, will you focus on an inbound strategy where you attract customers to your business through your content or an outbound strategy where you initiate contact with your prospects?
This part of your ecommerce business plan will also require you to outline the people in charge of selling your products and services, as well as what channels they’ll use to sell your products.
Similar to creating your marketing plan, the sales plan will also require a brief on what tools you plan to use.
While your marketing plan might need a CMS, your sales plan might need a customer retention management (CRM) software like HubSpot to manage your relationships with current and potential customers.
7. Outline legal notes and financial considerations.
In the following two sections of your business plan, describe the legal and financial structures.
The photography company should provide details on the legal considerations like online safety rules, ecommerce regulations, and the company's costs.
Listing legality and every cost needed to start ecommerce is crucial information for investors and stakeholders. In this section, it's important to be honest and thorough to give partners a realistic idea of how to contribute.
Ecommerce Business Plan Tips
Before you lay out the business plan and set the tone for your ecommerce business, there are some factors that are essential to consider. These factors lay the foundation of your business and will help you construct the document with ease.
Here are some of the most crucial business plan tips and tricks:
Find the purpose of your plan.
There is not merely one purpose behind writing the business plan. Different business plans serve different purposes for ecommerce owners.
There are three main purposes of a business plan:
- Gain secured financial support: Ecommerce businesses are in dire need of investors, and hence, their business plan with all the objectives, competitor analysis, frameworks, and supporting documents use this to gain financial support.
- To set the direction for your teams: Businesses include metrics like target market, pricing comparison, working process, objectives, and other nitty-gritty in their plans to help their teams align and achieve the desired results.
- Attract relevant customers: With the current markets and trends in a well-laid business plan, it becomes easier to determine the segment of your target audience.
Know your competitors.
Competitors can inspire you to take risks and help you analyze what’s going to impact your business negatively.
The competitor analysis is done by looking at the companies that offer similar or substitute products in your industry. However, there are two types of competitors: direct and indirect competitors.
Direct competitors are the ones that serve similar products with the same customer base, whereas indirect competitors have different target audiences with similar products or vice-versa.
A customer who wants to purchase a two-wheel vehicle can also opt for the electronic vehicle.
Hence, an electronic vehicle company can use a similar two-wheeler company as their competitor.
To identify the competitors, consider metrics like selling price, ratings and reviews, revenues, and organic search traffic.
(For HubSpot customers: If you’re baffled about creating a competitive analysis, check out the best competitive analysis templates. )
Perform a SWOT analysis.
Once you’ve identified the competitors, start with the SWOT (strengths, weaknesses, opportunities, and threats) to dive deeper into your competitor’s loopholes. SWOT analysis works as well as performing a real audit of the company.
SWOT analysis for competitors can hit various birds with one shot. It answers the following questions:
- What keeps them at the top of the industry?
- What makes the competitor’s business model unique?
- What are the most negative aspects of their business?
- Are there any new technologies to scale the ecommerce business?
- What shifts in the market or the future of the industry can affect the competitor’s target market?
If you don’t want to write SWOT from scratch, check out the list of SWOT analysis templates here.
Keep it clear and short.
Keep your business plan clear, concise, and with less jargon. A longer business plan with congested portions of text will leave your stakeholders and investors disinterested.
An ideal business plan comprises 20-25 pages of text with visuals and around 10 pages of appendices and other details. Anything more than 50 pages will turn your business plan as dull as dishwater.
However, there are always exceptions to it. Consider a restaurant chain. This business plan should include clear images, mock-up menus, proposed outlets, maps, and graphical representations of the customer base.
This longer plan will catch more eyeballs than the one with short pieces of text and less detailing.
Set out clear objectives and research points.
The first thing that gets noticed is the objective that the business wants to serve. Whether you are setting out your first presentation or submitting a thesis for your research work, objectives help in setting goals and provide focus to your project.
For example, a sales company can set its business objective as “Convert 60% of the customers through calls.”
Instead of shooting for the moon right away, set out the stepping stones for the stakeholders to easily understand your business objectives.
Ecommerce Business Plan Examples
1. maple ecommerce plan.
This sample plan, provided on LinkedIn, is for a fictional company called Maple, an online store that sells exclusive Apple products.
Maple's sample plan is great because it provides easy-to-follow charts and graphics while highlighting the most important information. For example, their market analysis included a SWOT plan for the business.
Image Source
Outlining the strengths, weaknesses, threats, and opportunities of Maple in this format is easy for potential investors to follow. Notating each value with a letter keeps the format consistent, which is carried throughout the plan.
For businesses that find their information is best presented in graphics, Maple is a good plan to follow.
2. Nature's Candy Ecommerce Plan
Nature's Candy is an online retailer that provides nutritional supplements. Its business plan is available online and is helpful in seeing how businesses go from planning to execution.
Below is a preview of its plan in the financial forecasting section.
This example shows who will be on the payroll yearly, giving investors an idea of how their investment will work in the long term. Planning ahead also shows stakeholders’ dedication to starting up your business.
3. NoHassleReturn Ecommerce Plan
Fictional company NoHassleReturn's sample ecommerce plan is an expansive, detailed version of how ecommerce would translate to a completely online store.
The company itself is structured to offer a simple way to return items bought from an online store, and the steps to take are featured below.
Having a sequence of processes like this is useful if your company is a niche idea. Investors and stakeholders need to know how your business will be new and unique for the market.
Even though writing out a business plan seems like a painstaking process, we have a step-by-step guide to help. This will keep you organized and keep you on track when structuring your business.
4. OGS Capital Ecommerce Plan
This sample ecommerce business plan comes from OGS Capital, where they created a test business plan for Botswana’s first private psychiatric hospital focused on inpatient and outpatient clinical health care.
It features detailed sections for the business model, marketing plan, financial projects, and more. This level of detail is demonstrated below in their executive summary section.
While some ecommerce business plans will explain the executive summary through a series of paragraphs, the layout in this sample makes the information more digestible.
The project is separated into sections that detail the business idea, as well as its goals and strengths. The business idea includes price projects, geographical focus, and target customers.
Goals for this project are created for 10 years with specific, individual goals built at one-, five-, and seven-year time markers. Lastly, this executive summary highlights the strengths of this business plan to solidify this project and its importance.
5. Egrocery Ecommerce Plan
For centuries, people have left their homes to buy groceries from stores, supermarkets, farmer’s markets, and more.
At-home grocery delivery has grown in popularity and is reflected in this sample ecommerce plan for a fictional business named eGrocery.
This sample plan establishes the company as an online grocery retail business with plans for connecting customers to distributors for fast, convenient at-home deliveries.
In its business model section, eGrocery outlines how it will implement both a business-to-business (B2B) and business-to-consumer (B2C) model to get products from distributors, retailers, and wholesalers to its household customers.
This section provides an effective demonstration of the company’s overall function.
6. Shannon & Shavonne Inc. Ecommerce Plan
Shannon & Shavonne Inc. is a fictional United States-based online retailer that offers its customers an abundance of products in fashion, home appliances, electronics, and more.
The depth seen in this plan is particularly helpful, especially with the detail seen in outlining the business structure and each job’s roles and responsibilities.
The plan first lists all the necessary roles, from the chief executive officer (CEO) to a call center agent. It then describes the responsibilities of each role.
As displayed in the image above, an information technologist (IT) would be tasked with managing the organization’s website, updating the online store, and ensuring the security of the company’s payment platform.
The clear distinction of roles helps manage employee expectations and accountability.
7. Firstcry.com Ecommerce Plan
In this sample, we have Firstcry.com — a fictional ecommerce site that creates eco-friendly baby and feminine hygiene products.
Because the company is looking for funding to launch the business, its plan focuses on its financial highlights and projections, which is crucial information for investors.
While disclosing what the startup funds will be used for, this plan also estimates its top-line projections over the next five years. As seen in the chart above, they include revenue, expenses, interest, and net income.
The plan even breaks down how many customers per day and annual orders will be needed to reach this goal.
When it comes to building an ecommerce business plan, you’ll likely find that the more detail you include, the better.
Planning is the first step.
When starting a business, planning is always a crucial first step. If you find that you’ve launched a company without a concrete plan, it’s never too late.
Successful businesses require strategy, and that’s what an ecommerce business plan gives you. It allows you to strategize what your business does, how it operates, and why it's essential.
Not only does it help you pinpoint who the key players of your company are, but it helps you identify who your target audience should be.
With the steps listed in this article and the examples to take inspiration from, you’re one step closer to building an ecommerce business plan for success.
Editor's note: This post was originally published in November 2019 and has been updated for comprehensiveness.
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How To Create The Perfect Ecommerce Business Plan (Examples & Templates)
Carl Torrence is a Content Marketer at Marketing Digest. His core expertise lies in developing data-driven content for brands, SaaS businesses, and agencies. Carl’s work has been featured in Famous Bloggers, The Inspiring Journal, and AllTopStartups.
Expert Evidence
Sean is the Senior Editor for The Ecomm Manager. He's spent years getting to know the ecommerce space, from warehouse management and international shipping to web development and ecommerce marketing. A writer at heart (and in actuality), he brings a deep passion for great writing and storytelling to ecommerce topics big and small.
The ecommerce market is full of innovative ventures that started as an ecommerce business plan. This guide tells you how to convert your vision for an ecommerce company into a strategic plan.
Click and Cart Revolution: Ecommerce is massively expanding, now a $6.31 trillion market, expected to rise above $8 trillion by 2026. Online sales are booming, making now a ripe time for starting an ecommerce venture.
Blueprint for Success: An ecommerce business plan is essential, serving as a detailed roadmap for starting, running, and growing an online store. It includes market analysis, product details, and financial strategies to achieve business goals.
Investor's Compass: A well-crafted ecommerce business plan is crucial for attracting investment, showcasing your business model, revenue generation plans, and overall strategy to build brand value and equity in the competitive market.
DIY Business Plan: Creating an ecommerce business plan involves outlining your vision, analyzing the market, and detailing operational strategies. An essential step includes drafting an executive summary that encapsulates the company's mission, history, and unique selling points.
Ecommerce is rapidly growing around the world. We love to buy our little treats and trinkets on the internet.
The industry has reached a market valuation of $6.31 trillion worldwide and is expected to cross $8 trillion by 2026.
In 2023, ecommerce accounted for 20.8% of all retail sales .
The contribution of ecommerce is expected to grow even further to cover 24% of retail sales in 3 years.
This seems like a good time for anyone thinking about starting an ecommerce business. Despite many companies enjoying pieces of this $6 trillion pie, starting an online store is not a piece of cake (pause for laughter...).
As with any other business, you need research and careful planning before jumping into action. That’s exactly what this guide is about.
I will shed light on some basic business concepts, discuss examples, provide insights with statistics, and give you ready-to-use templates for various stages.
But first, let’s begin with the fundamentals.
What is an Ecommerce Business Plan?
An ecommerce business plan is a document containing the roadmap for initiating, maintaining, and expanding an online selling company.
This document contains several details that are crucial for establishing your ecommerce business.
It serves to guide the formation of a company and draw insights to make business decisions to achieve short-term and long-term goals.
The ecommerce business plan also contains information about the market, competitors, products, pricing strategy, company finances, supply requirements, etc. The more details you can add to an ecommerce business plan, the better you can execute it.
Why Do You Need An Ecommerce Business Plan?
An ecommerce business plan acts as a roadmap for your online business, helping you navigate the market and scale your brand. It's your ecommerce north star, so to speak.
It helps you analyze the market systematically and develop strategies to stand out from the competition. This plan covers various aspects of your business, such as your goals for marketing, operations, and finances, and shows how these parts are connected.
For example, it can help you see how your marketing budget affects your overall cash flow. You’ll get these insights from the market research and financial sections of your business plan.
If you’re looking for funding, a business plan is essential. Investors use it to assess the feasibility of your business. It outlines your business strategy and makes a strong case for why you need investment.
Entrepreneurs can highlight their operational plans and budget to show how they will run a successful ecommerce store.
Most importantly, it demonstrates the value proposition to potential investors, showing how the company will generate revenue, build brand value, and increase equity.
How To Create The Perfect Ecommerce Business Plan
Let’s look at the step-by-step process for creating an ecommerce business plan.
Each of these stages will help you get a deeper understanding of your business. It'll also help you define your vision through organizational structure and processes. Let’s begin with the executive summary.
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Step 1: Draft an executive summary
Although this is the first part of an ecommerce business plan, it's better to tackle the executive summary after completing the entire document.
The executive summary gives an overview of the business plan on a single page.
The executive summary presents a company overview and highlights of the most important parts of the document.
It gives a brief overview of what the new business is about and what it sets out to achieve. You will discuss these points in-depth later in the document.
You can use the below template to draft your executive summary:
Why does the company exist? "To provide eco-friendly products that promote sustainable living." | |
Origin and background of the company "Founded in 2010 as a small eco-friendly shop, now expanded to a global online presence." | |
Key leadership figures and their qualifications "Jane Doe, CEO, MBA from Harvard, 15 years in ecommerce." | |
Individuals or entities with a stake in the company "Founders, investors, key employees." | |
Specific market segment the company serves "Eco-conscious consumers aged 25-45." | |
Items the company will sell "Reusable bags, bamboo toothbrushes, eco-friendly cleaning products." | |
Services offered to customers "Subscription boxes, personalized eco-living consultations." | |
What makes the products or services unique "Products made from 100% recycled materials, carbon-neutral shipping." | |
How the company stands out against competitors "Exclusive partnerships with green manufacturers, award-winning customer service." | |
External products or services required "Sustainable packaging suppliers, logistics providers." | |
Future financial outlook "Projected revenue of $1M by year 2, break-even by year 3." | |
Cost and types of resources required "Initial investment of $500K for inventory and marketing." | |
Strategic objectives "Become the leading online retailer for sustainable products within 5 years." |
You will have better clarity regarding some of these aspects after you complete the entire ecommerce business plan.
For instance, you can provide a more accurate competitive analysis after conducting market research.
Similarly, you will have a clear understanding of financial projections and investment requirements after you source potential suppliers.
You can create a rough draft of the executive summary at the beginning. Then you can circle back to it when you have more clarity.
Tips for an effective executive summary:
- Conciseness: Keep it brief yet comprehensive. Aim for one to two pages.
- Highlight key points: Focus on the most critical aspects of your plan, such as your business model, market opportunity, and financial projections.
- Engaging language: Use clear and engaging language to make a compelling case.
Step 2: Company description
In this section, you provide details about your brand. At this point, the ecommerce business plan begins to take shape.
Start filling out the details in the template below to describe your company using the examples to help give it some shape.
What will the company do, and how does it help the target customer? Why will the company succeed? "Providing eco-friendly products to promote sustainable living. Our unique products cater to the growing demand for sustainable solutions, ensuring market success." | |
What core values will the company uphold in customer service, operations, and employee management? "Sustainability, Integrity, Innovation, Customer Centricity." | |
What roles are needed to run the company's operations? "CEO, Operations Manager, Marketing Team, Customer Support, Logistics Manager." | |
Where will the company's office be located? "Headquarters in San Francisco, with additional offices in New York and London." | |
What resources does the company already possess? "Established supply chain, experienced management team, proprietary technology, initial funding of $1M." | |
What additional resources are needed for the company to be operational? "Additional funding of $500K, office space, skilled labor, marketing tools, logistics partners." |
In this section, you'll outline what your company will look like and what it'll do.
You'll detail the types of people needed to run the company, along with the resources you already have and the ones you'll need.
For example, if you've already purchased a domain name and registered your company name as a trademark, you can list these as existing resources.
If you still need to develop an ecommerce website, list that under required resources (and find the right ecommerce platform to make your job easier).
This section also provides an overview of your company’s hierarchy and management team. Describe the different departments in your company and the key team members for each one.
You should also specify which operations will be done in-house and which will be outsourced to external agencies .
This part of your business plan will give you a clear picture of your current status and help you identify what you’re missing. Keep in mind, this section may change as you do more research and discover new requirements.
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Step 3: Describe your products and services
In this section, you'll define details about the products and services your ecommerce brand will offer. You'll describe what you're offering to your customers.
It includes both products and services. You can use the ecommerce business plan template below to define these aspects.
Various names of your products. : Key characteristics of the product. Unique features of the product. Advantages and benefits for the customer. How the product can be used. Different versions or variations of the product. Manufacturing cost per unit. Selling price of the product. | |
Name of the service. Key characteristics of the service. Who provides the service. Unique features of the service. Advantages and benefits for the customer. Cost to provide the service. Selling price of the service. | |
Name of the product or service being priced. Strategy used to price the product or service (e.g., cost-plus, competitive pricing). Expected profit margin. |
While you might only sell products on your ecommerce platform , you could also be selling services (which many ecommerce platforms allow you to do).
For each product, include a short description and pricing information. Specify whether you're selling physical or digital products, and explain how customers will receive them.
Describe any services you provide, such as digital subscriptions or in-person consultations. Specify how customers will access these services and any relevant pricing information.
Step 4: Conduct market analysis
This is the most important part of an ecommerce business plan. You must analyze several factors concerning the market segment, competing brands, and competitor products.
You must understand how your products, services, and brand perception compares against the competition .
Use the template below to create a detailed overview of the market you will compete against.
Who are the potential customers? "Eco-conscious millennials aged 25-40, living in urban areas, interested in sustainable living." | |
Create a detailed profile based on different target audiences. "Jane, 30, urban professional, shops online for eco-friendly products, values sustainability and quality." | |
What specific needs does your ecommerce business fulfill? "Providing high-quality, eco-friendly household items." | |
What challenges or problems does your company resolve for customers? "Difficulty finding reliable eco-friendly products at affordable prices." | |
Where are your customers? "Primarily in the US and Europe, with growing interest in Asia and Australia." | |
Brand name of competition. Where does the competitor stand in the market? What are the competitor's strengths? What are the competitor's weaknesses? How is the competitor similar to your business? How is the competitor different from your business? Which marketing channels does the competitor use? |
This analysis will affect several other aspects of your ecommerce business plan.
At this stage, you must analyze the market and decide what place your company can take in the competitive landscape. You can also use other methods for market research, such as SWOT analysis or Porter’s Five Forces analysis.
Regardless of the method, you need an accurate understanding of what your competitors offer and how you can differentiate your ecommerce brand.
This brings us to marketing.
Components of a strong market analysis:
- Industry overview: Provide updated statistics and trends in the ecommerce industry. For example, global ecommerce revenue is expected to reach $4.1 billion USD in 2024 .
- Target market: Define your ideal customer with specific demographics and psychographics.
- Competitive Analysis: Analyze your direct and indirect competitors. Tools like SEMrush and Ahrefs can provide insights into competitor strategies and performance.
Step 5: Draft your marketing plan
The marketing plan for an ecommerce business primarily depends on three factors.
These are the target audience, customer segmentation, and market forces. You will draw relevant insights from the market analysis to define your marketing plan.
Here's a template to help you define the marketing strategy for your online store.
How will you differentiate your brand in the market? Example: "Positioning as a premium eco-friendly brand that combines sustainability with luxury." | |
Which products are relevant to this audience segment? Example: "Eco-friendly household items." Age, gender, income level, etc. Example: "25-40 years old, both genders, middle to high income." Lifestyle, values, interests. Example: "Values sustainability, enjoys outdoor activities." Where is this audience located? Example: "Urban areas in the US and Europe." What are their main interests? Example: "Eco-friendly living, wellness." What motivates their purchases? Example: "Quality, sustainability, brand reputation." How will they use the product? Example: "Daily household use, gifting." How will the product be positioned for this segment? Example: "Premium quality with eco-friendly credentials." | |
Which marketing channels will you use to reach and acquire new customers? Example: "Instagram, Facebook, Google Ads." Key features of the channel. Example: "Visual content, targeted advertising." Types of content used (e.g., videos, blogs). Example: "Short videos, infographics, sponsored posts." Which stages of the funnel will this channel target? Example: "Awareness, consideration." Which audience segments will you target on this channel? Example: "Eco-conscious millennials." How does the audience behave on this channel? Example: "Engages with visual content, shares posts." Types of campaigns to run on this channel. Example: "Influencer partnerships, seasonal promotions." | |
What tools are necessary for running your ecommerce marketing? Example: "Hootsuite for social media management." Key features of the tool. Example: "Scheduling, analytics, team collaboration." How will the tool be used? Example: "Managing social media posts, tracking engagement." Which channels will the tool connect to? Example: "Instagram, Facebook, Twitter." Is the tool free, paid, or subscription-based? Example: "Subscription-based pricing." |
Your marketing plan should clearly outline how you'll position your brand in the market.
Define the channels you'll use at different stages of the sales funnel. For example, you might use Facebook ads to raise awareness and email marketing to engage existing customers.
Include sections to define your ideal customers using buyer personas. Create different personas for various types of potential customers, associating each persona with a specific product and its use cases.
Finally, list the ecommerce tools you'll need for your marketing efforts, such as automation tools, CRM software , and SEO tools.
Once you know how to attract your audience, the next step in your ecommerce business plan is to define how you'll convert them into customers.
Step 6: Define sales and customer service processes
At this stage, you will define several aspects concerning your customers.
These include purchase journeys and after-sales services. This strategy serves as an extension of the marketing plan.
See the template below to define your sales and customer service strategy.
Approaches and techniques used to close sales. Example: "Consultative selling, solution selling." Services provided after the sale to ensure customer satisfaction. Example: "Warranty services, returns processing." | |
Methods used to identify and reach potential customers. Example: "Cold emailing, social media outreach." Locations or platforms where sales transactions occur. Example: "Online store, mobile app, pop-up shops." Tools used to support sales activities. Example: "CRM software, sales | |
Methods through which customers find and engage with the business. Example: "SEO, content marketing, social media." | |
Methods through which the business reaches out to potential customers. Example: "Email campaigns, cold calling, direct mail." | |
How sales transactions are processed. Example: "Online payment gateways, mobile payment options." | |
How the company stays in touch with customers post-sale. Example: "Follow-up emails, feedback surveys, loyalty programs." | |
Organization of the sales team. Example: "Sales manager, account executives, sales representatives." | |
Different stages in the customer interaction process. Example: "Pre-sale inquiries, post-sale support, ongoing engagement." Platforms used for customer communication. Example: "Email, live chat, phone support, social media." Tools used to manage customer service. Example: "Helpdesk software, customer feedback tools, knowledge base." Organization of the customer support team. Example: "Support manager, support agents, technical support specialists." |
With this template, you are essentially defining customer experience with your brand. You'll create a strategy for selling the products on different channels.
These include ecommerce websites, marketplaces, affiliate websites, social media, etc. You'll have to define the sales process for each channel.
You must also draft a plan to create memorable customer experiences. This is crucial for developing a community.
It also has a direct impact on sales and revenue. Repeat customers spend 67% more than first-time buyers. Once you have a strategy for acquiring customers, you must build a strategy for delighting and retaining customers.
Step 7: Create a supply chain strategy
The supply chain strategy includes the journey of the product from the supplier to the customer.
It includes procurement, manufacturing logistics, warehousing , distribution, order fulfillment , and reverse logistics . Use the template below to create your supply chain strategy.
Where do your products come from? Example: "Local manufacturers, international suppliers." Specific details about one of your procurement sources. Name of the supplier or manufacturer. Example: "ABC Manufacturing Co." What products are sourced from this supplier? Example: "Eco-friendly cleaning products." How much product is sourced? Example: "10,000 units per month." Cost per unit from the supplier. Example: "$2.50 per unit." | |
Time it takes for products to be delivered from suppliers. Example: "2-3 weeks." How will you manage the procured inventory? Amount of inventory held. Example: "50,000 units." Size of the warehouse required. Example: "10,000 sq ft." Locations of warehouses. Example: "San Francisco, New York, London." Primary markets where orders will be fulfilled. Example: "North America, Europe." How will and managed? Example: "Using an system. How will inventory be replenished? Example: "Just-in-time replenishment based on sales data." | |
How will you move the products through the supply chain? Example: "Using third-party logistics providers." Vendors used for logistics. Example: "FedEx, DHL." Different stages in the movement of inventory. Example: "From manufacturer to warehouse to customer." Methods used to transport goods. Example: "Air, sea, road." How will inventory be distributed to various locations? Example: "Centralized distribution from main warehouse." Process for fulfilling customer orders. Example: "Using automated order processing systems." How will returns be handled? Example: "Setting up a dedicated returns center." Total cost of logistics operations. Example: "$5 per unit." |
In this section of the ecommerce business plan, you will outline how the product will make its way to the customer.
Supply chain management involves everything from sourcing the products from a supplier to shipping the products to the customer.
Alongside the strategy, you also need to define the stages that you will outsource. Creating your supply chain is quite resource intensive.
That's why ecommerce businesses outsource certain aspects to 3PL companies . Some of the commonly outsourced services include distribution and logistics (42%), manufacturing (37%), product finishing (29%), and packaging (23%).
This process accounts for a significant portion of ecommerce expenses. It will also impact several customer-facing aspects of the business. This includes the availability of stock, shipping charges , delivery time, and more.
Hence, you should define a supply chain strategy for speed, efficiency, and cost-effectiveness.
Step 8: Identify legal frameworks
In this section, you will also cover the applicable legal frameworks for running the ecommerce business .
These include business registration, taxation, permits, legal structure, trade laws, etc. Use the template below to define the legal obligations in your ecommerce business plan.
What are the legal and compliance obligations of the company? Example: "Ensuring all business activities comply with federal, state, and local laws." | |
Required business registrations. Example: "Registering the business with the state, obtaining an EIN from the IRS." | |
Necessary product registrations. Example: "FDA registration for food products, CE marking for electronics." | |
Required trade permits. Example: "Import/export permits, health and safety permits." | |
Necessary product licenses. Example: "Licenses for selling specific products such as alcohol or pharmaceuticals." | |
Relevant regulatory bodies. Example: "FDA, FTC, OSHA, local health departments." | |
Business taxes that apply. Example: "Corporate income tax, payroll tax, property tax." | |
Sales taxes that apply. Example: "State and local sales taxes, use tax." | |
Required insurance coverage. Example: "General liability insurance, product liability insurance, workers' compensation insurance." |
You must understand the laws applicable to running an ecommerce business in your region.
If you plan to ship products internationally, you must also understand international shipping laws, customs clearance requirements, import/export regulations, and trade laws in the target market.
This section ensures that your company always remains on the right side of the law.
Step 9: Define financial requirements
The final section of an ecommerce business plan is concerned with finances and legal compliances.
The preceding sections will give you estimates regarding different aspects of your ecommerce business.
These include operations, marketing, procurement, logistics, and so on.
Based on these estimates, you will define the financial projections for your ecommerce business. This includes both revenue and expenses.
You can use the template below to define the financial aspects of your business.
How much funds will you need to start the ecommerce business? Example: "Initial capital requirement is $150,000." The . Example: "$150,000." Detailed allocation of the startup budget. Example: "Inventory: $50,000, Marketing: $30,000, Technology: $20,000, Legal and Compliance: $10,000, Miscellaneous: $40,000." | |
What is the annual budget required to run the business? Example: "Annual operating cost is projected at $120,000." The overall annual cost. Example: "$120,000." Detailed allocation of the annual budget. Example: "Salaries: $50,000, Marketing: $20,000, Inventory Restocking: $30,000, Technology: $10,000, Miscellaneous: $10,000." | |
How many products will the company sell each year after initiating? Example: "Projected to sell 10,000 units in the first year." Expected profit margins per product. Example: "20% profit margin." Projected revenue per year. Example: "$200,000 in the first year." | |
How long will it take for the company to recover the investment? Example: "Expected to break even within 18 months." Projected growth in sales and revenue year over year. Example: "20% annual growth rate." Projected annual costs over the years. Example: "$120,000 in the first year, $140,000 in the second year." The point at which revenues will cover costs. Example: "Achieved at $150,000 in sales." Detailed analysis of expected profits and losses over time. Example: "First-year profit: $40,000, second-year profit: $60,000." |
If you pitch the ecommerce business plan to an investor, you must add other details to this section.
These would include funding requirements, funding stages, value offerings, etc. This section of your business plan also sheds light on a company’s assets and liabilities.
You must also clarify what you offer the investors against the funds. This can be equity stake, debt, dividends, and so on.
This helps potential investors conduct a cost-benefit analysis.
You can go a step further and present key elements of cost-benefit analysis for the ecommerce company. This should highlight the short-term and long-term gains for the new business.
You can use this section to show potential investors how your new business will grow in market value based on milestones. These milestones can be defined based on sales, inventory size, revenue, market acquisition, etc.
With this section, you conclude your ecommerce business plan.
You need to revisit the executive summary and ensure it aligns with the rest of the document. It is best to review the entire document a few times to ensure you present a unified vision for starting and running your ecommerce business.
Start on the Right Foot With The Best Ecommerce Platform
With your fresh business plan in hand, you're ready to get moving on the foundational parts of your ecommerce journey.
To start strong, you want to choose an ecommerce platform that has all the essential features that ensure your business will be a success.
You can also take a peek at what we think are the top ecommerce platforms for a variety of brands, from big to small. Here's our shortlist of the best ones out there:
- 1. Subbly — Best for subscription-based ecommerce models
- 2. Wix eCommerce — Best for non-technical users
- 3. Shopify — Best for a range of integrations
- 4. Ecwid by Lightspeed — Best for social media selling
- 5. Adobe Commerce — Best for data-driven companies
- 6. Sana Commerce Cloud — Best ecommerce platform for B2B sales
- 7. Volusion — Best customer service
- 8. Shift4Shop — Best free template library
- 9. Elastic Path Commerce Cloud — Best for enterprise organizations
- 10. ShopWired — Best for buy-now-pay-later purchasing
Use The Ecommerce Business Plan to Guide Your Actions
The purpose of creating an ecommerce business plan is to represent your vision systematically.
This document will shed light on several aspects of your ecommerce business idea. It will also serve as a guide, philosopher, and friend when you launch your company.
If you are pitching your idea to investors, this document will show them the value that your ecommerce business idea can generate for them.
The next step for you is to turn the ecommerce business plan into a company.
You should subscribe to The Ecomm Manager newsletter for more news, trends, tips, and guides related to ecommerce. These articles can help you optimize and expand your business further.
Ecommerce Business Plan FAQs
There are always more questions for the end of the post. So, here we are, answering some more questions.
Is ecommerce a profitable business?
The profitability of ecommerce businesses depends on several factors. This includes market condition, business structure, product demand, revenue model, etc. You can understand the profitability of your ecommerce business idea by checking brands selling similar products. When first starting out, you can cut costs by leveraging tools like free inventory management software . This can help ease the financial burden of being a new business.
Do I need a business plan for an ecommerce business?
A business plan gives structure to an ecommerce business idea. It is a really helpful document for business owners and entrepreneurs. This document helps you measure the viability of the business model, products, marketing strategy, financial plan, legal structure, operations, and other aspects of the company.
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By bigcommerce team.
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.
BigCommerce Team
BigCommerce is a leading ecommerce platform that empowers businesses to grow with flexibility and scalability. We are dedicated to helping our customers expand their businesses and improve their bottom line. Through thought leadership on ecommerce trends, best practices, and innovations, we provide in-depth insights into both B2C and B2B strategies, enabling businesses to succeed and thrive in today’s dynamic digital marketplace.
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How to Start an Ecommerce Business Plan. Executive Summary. Business Overview. Competitive Market Analysis. Products and Offers. Marketing Plan and Operations. Financial Plan. FAQs. Wrapping Up Your Business Plan. Why You Should Create a 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.
At their core, ecommerce business plans compel you to think critically about every major component of your online store, allowing you to identify and avoid major problems before getting started.
DIY Business Plan: Creating an ecommerce business plan involves outlining your vision, analyzing the market, and detailing operational strategies. An essential step includes drafting an executive summary that encapsulates the company's mission, history, and unique selling points.
Learn what a business plan is and why your eCommerce company needs one. Discover how an eCommerce business plan is different from business plans for other business types. Learn how to write an eCommerce business plan step by step. Get access to our free eCommerce business plan template.
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.