How to Become an E-Commerce Merchant
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- E-commerce merchants sell products online.
- Earning a bachelor's or associate in business or entrepreneurship may benefit aspiring e-commerce merchants.
- E-commerce merchants must develop a business plan before opening an online store.
- Continuing education can help an e-commerce merchant grow their business.
Digitally savvy professionals with a passion for entrepreneurship are well-suited to a career in e-commerce. E-commerce merchants sell goods and services online rather than in a storefront.
These digital businesses possess the chance for unlimited growth because they can reach customers all over the world. In fact, current successful e-commerce companies like Amazon and Warby Parker once started as small businesses. Upfront, working as an e-commerce manager may require longer hours than a traditional job. Once the business becomes viable, hiring additional employees can reduce this workload.
An aspiring e-commerce merchant must possess comprehensive business knowledge. They must understand supply chain logistics, accounting, and marketing basics. Once their business grows, they must know how to successfully manage other employees.
This guide highlights how to become an e-commerce merchant. Keep reading to learn about the recommended education level and business plan creation process.
What Does an E-Commerce Merchant Do?
E-commerce merchants usually start their careers with a large range of job responsibilities. They may handle all the inventory management, marketing, and product sourcing themselves. As the business grows, their role may change to more of a director role. Some e-commerce merchants even sell their businesses after growing them. For individuals looking for a career change, e-commerce can be a way to turn an individual skill or talent into a profitable career.
Traditional small business owners and e-commerce merchants perform similar job tasks. However, online business owners complete more of their job tasks virtually. For example, a traditional business owner may host an in-store sale event for a product launch. Instead, an e-commerce merchant may plan an email marketing and social media campaign with a digital discount code.
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What Are the Steps to Become an an E-Commerce Merchant?
The path toward becoming an e-commerce merchant looks different for everyone. While there is no textbook template for pursuing this career, there are a few steps entrepreneurs commonly take. Here, we outline one career path that can lead to an e-commerce career. Keep in mind not every step is crucial.
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Step 1: Consider a Business Degree
Earning a degree can help learners discover how all aspects of business work together to create a successful e-commerce store. Although a business degree is not a requirement for entering this field, it comes with benefits:
- A degree helps learners gain networking opportunities.
- A business degree offers information on theories and practical applications.
- A formal degree may add legitimacy and credentials to a resume.
- Students can hone their math, communication, and planning skills during their studies.
Research is the key to selecting the right major. Some aspiring e-commerce merchants begin their studies with an associate degree in a subject like small business or entrepreneurship studies.
For learners considering a bachelor's degree or looking to extend their studies after an associate degree, common subjects include entrepreneurship, business management, and international business. An international business major mainly suits individuals who want to sell their goods worldwide.
During their studies, learners can take additional steps to prepare themselves for entrepreneurship. For example, they can complete an internship or work part-time for a successful e-commerce shop.
The price of a business degree varies greatly. However, according to the National Center for Education Statistics (NCES), learners spent an average of about $25,910 on their studies in the 2020-21 academic year.
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Step 2: Create Your Business Plan
E-commerce merchants looking to launch their own online store need a solid business plan as a foundation for their venture.. It can take anywhere from a few months to a year to create a business plan and obtain the right license and legal paperwork.
After putting together a business plan, entrepreneurs can show it to industry thought-leaders — like successful business owners or business professors — and ask for feedback. This upfront work takes time but is crucial to operating successfully and legally. Use this chart to get an idea of the business plan creation process.
Your Business Plan Step Strategy Finalize your product - What are you selling?
- How will you ship the product?
- How is your product different or better from others on the market?
- What is your production capacity? How will you scale production?
Identify your customer base - Who is your target demographic?
- What are your customers' interests?
- How can you market your products to your customer base?
Choose your business structure - Do you want to handle storing inventory and shipping products yourself?
- Are you interested in a dropshipping business model instead?
- Will you need to hire employees immediately?
Obtain permits and licenses - Do you have an accountant and lawyer?
- Do you have the correct business license?
- Are your contracts ready?
- What paperwork do you need to open a business checking account?
Choose an e-commerce platform - Which e-commerce platform has the best user experience?
- Do you need a platform that allows international sales?
- What are the custom features that would benefit your business?
Establish your selling policies - What is your return policy?
- What procedures do you have in place for missing or damaged products?
- How will you handle quality control on your products?
- Will you set up a customer review section on your website?
- What social media policies will you put in place for dealing with hate speech or criticism?
Set up your e-commerce store - Do you need to hire professional help to create a website?
- What website hosting platform works the best with your e-commerce platform?
- After setting up the store, how will you market the website?
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Step 3: Launch and Market Your E-Commerce Store
After setting up your e-commerce store, it's time to drive traffic to the website. E-commerce merchants should research best practices for search engine optimization (SEO). For example, updating the website frequently and using strategic keywords can help a site rank higher on Google. Merchants can also use Google Ads and social media ads to encourage their target audience to visit their site.
E-commerce merchants can also run promotions to increase sales. For example, they could offer discount codes to people who leave product reviews. Or, they can work with social media influencers and give their followers discount codes.
It may take a while to start seeing a profit from a newly opened e-commerce store. For this reason, entrepreneurs may want to work a part-time job in the early phases of their business. Merchants who have a hard time attracting customers to their site may need more education. They can learn how to increase sales through a mentorship opportunity or career bridge program.
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Step 4: Grow Your Business
Small business owners can grow their businesses by expanding and updating their product inventory and investing in marketing efforts. Once the business becomes profitable, the owner can start hiring other professionals with expertise. For example, hiring a graphic designer and marketing specialist may help drive profits.
Eventually, some e-commerce stores will open brick-and-mortar locations in larger cities. Expanding in this way may require rewriting and reworking a business plan.
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Step 5: Consider Continuing Education
Consumer habits change often, and so do best practices for e-commerce businesses. Continuing education helps business owners stay up-to-date on trends. E-commerce merchants can pursue continuing education through a master's program like an MBA. Some MBA programs offer specializations specifically for business owners, like an MBA in entrepreneurship. Earning an MBA may impress future investors.
However, an MBA may cause business owners to go into even more debt. Fortunately, there are graduate school alternatives. E-commerce merchants can pursue continuing education in different ways. For example, they can join an educational networking group. Professional organizations like the Entrepreneurs' Organization offer educational opportunities. Or, they can learn more about a business specialization through a certificate or certification.
What to Know Before Becoming an E-Commerce Merchant
E-Commerce Degree Accreditation
Before pursuing an online degree program, learners should research the school's accreditation status. Schools earn accreditation through Department of Education evaluations. Specific degree programs can also earn programmatic accreditation through independent accrediting organizations. The Association to Advance Collegiate Schools of Business functions as the main accrediting body for business programs. You can use the U.S. Department of Higher Education's lookup tool to verify accreditation.
The Cost of E-Commerce
Running an e-commerce business requires an upfront investment. For starters, professionals who choose to earn a formal degree must budget for tuition, fees, and other costs of college. According to the NCES, undergraduate learners spent an average of about $29,030 in tuition and fees at four-year schools and about $22,890 at two-year schools in the 2020-21 school year.
The NCES reports that graduate students spent an average of about $19,790 in the 2019-20 school year. However, business scholarships can significantly lower costs for students. Additionally, some schools may charge different rates for in-state vs. out-of-state students.
E-commerce stores that sell physical items usually have to spend a few hundred to a few thousand dollars to purchase inventory. E-commerce platforms also charge fees. So, it may take a year or more for a business owner to start to see profits.
E-Commerce Income
E-commerce professionals earn varying amounts depending on their business's size. According to August 2022 data from Payscale, small business owners earn an average income of about $61,370. However, professionals with more than 20 years of experience earn an average income of $75,000.
It may take 1-4 years for an e-commerce merchant to earn enough money from their business to make it their primary income. According to Payscale, small business owners with 1-4 years of experience earn an average of $46,000.
Frequently Asked Questions About Becoming an E-Commerce Merchant
What is e-commerce?
E-commerce stands for electronic commerce. This term refers to the buying and selling of goods online. Consumers purchase items from online businesses through e-commerce platforms like Shopify. The Bureau of Labor Statistics (BLS) projects employment in the e-commerce industry to grow to 450,000 jobs by 2026.
E-commerce merchants sell things exclusively online, with no brick-and-mortar storefront. They may do so through dropshipping, which means they never handle physical inventory. Rather than handling the storing, manufacturing, and shipping of the item, they outsource these tasks.
What is the fastest way to become an e-commerce merchant?
Aspiring e-commerce merchants can open a small online business after gaining basic computer skills and business knowledge. They can do so by completing a certificate program or webinars offered by organizations like the American Marketing Association. Certain e-commerce platforms also offer tutorials on how to use the software.
To grow your business, you may benefit from an accelerated bachelor's in business or marketing to grow their business. This degree usually takes about three years to complete. You can pursue an internship with a large or successful e-commerce merchant or company while completing your studies.
What is the difference between e-commerce and e-business?
E-commerce and e-business are not interchangeable terms. E-commerce refers to selling items online. E-business is a more holistic term that refers to all the aspects of running an online business. E-commerce is a subset of e-business.
In order for items to sell successfully online, an e-business manager must oversee marketing efforts, product quality control, and shipping. They must also ensure the e-commerce platform features an optimal user experience. Inventory is another aspect of e-business that contributes to e-commerce success. E-business managers usually set up notifications through their e-commerce platform to alert them when inventory starts running low.
How do I start an e-commerce business?
Opening an e-commerce business starts with a creative idea for a product and a solid business plan. Next comes the market research phase. Aspiring entrepreneurs should research the viability of their product and determine their target audience. They can study other companies with similar products as a starting point. They can also conduct focus groups with potential customers from different demographics.
If the findings suggest a new product could fulfill a need, they can start deciding on a business model and working with a manufacturing and shipping company. The final step usually involves building a website on an e-commerce platform. To keep the business profitable, e-business managers can run digital advertisements.
How much money can I make as an e-commerce merchant?
According to August 2022 data from Payscale, people with e-commerce skills earn an average income of $73,000. Several factors influence exact income. E-commerce merchants who do not have as much business overhead may earn more money. For example, digital products like e-books do not cost anything to manufacture. Business owners who do not outsource work may have extra profits to pay themselves. However, not hiring employees may stunt a business's growth, which means less profit.
To earn more money, e-commerce merchants must find a way to increase profits and decrease expenses. Selling products with low production costs can help. Investing in marketing services through a professional agency may also yield more profits.
