You want to start an online business. You have the skills, time and capital to take it off the ground. But you can’t pin down that ultimate ecommerce business idea.
The advice online doesn’t help either. Some say to “follow your passion.” Others urge to focus on “where the money is at” right now.
According to the U.S. Small Business Administration, only half of all new businesses with employees survive past the five year mark.
So should you get into ecommerce in 2021, when the market signals are mixed?
Stepping into Ecommerce: Advantages and Disadvantages
The latest online business statistics suggest that ecommerce as a sector is growing steadily year over year. But the latest global events added some calamity to the markets. Spending across certain product categories is down, while other product verticals are booming.
With that in mind, let’s take a look at the pros and cons of dabbling into ecommerce.
1. Advantages to starting an ecommerce business
Here’s why a growing cohort of entrepreneur goes for ecommerce:
- Location independence. You can run an ecommerce business from anywhere in the world as long as you have a laptop and reliable internet access. On a personal level: you can travel indefinitely, live abroad, move to a more affordable location, etc. On an operations level: you have the flexibility to scale, compete internationally, earn a passive income and profit from arbitrage;
- Flexible work schedule. Once you get your business up and running, you can tune your work schedule to fit your lifestyle. By using smart integrations, delegation and automation you can run a growing ecommerce business with a co-founder, lean team (or even alone) without clocking in 12-hour shifts.
2. Disadvantages of starting an ecommerce business
Despite all the good things about ecommerce, there’s also a flip side to it:
- Fragility. Ecommerce businesses are not as resilient as other types of online businesses, because there are a lot of moving pieces that can be prone to disruption. Shipping can be delayed. Manufacturing can get stalled. Product recalls are costly. Since many third parties are involved in your supply chain, there are a lot of risks;
- Competition. Small business owners in the ecommerce industry are in a particularly tough situation because they have to compete with other SMBs and with ecommerce giants like Amazon. The big-box retailers also set a high bar in terms of customer expectations. Because Amazon has Prime delivery, a lot of consumers now expect fast and free shipping from all other retailers. Differentiating from the competition and meeting customers’ expectations can be challenging.
These disadvantages are part and parcel of running an ecommerce business. But even as a small business owner with a limited budget, you can overcome them with the right strategy in place.
14 Best Ecommerce Business Ideas to Try in 2021
Okay, now you are better informed on what you are getting into. So let’s circle back to ecommerce business ideas: what’s hot and what’s not in 2021?
Our team did some research and cross-checked different online business ideas based on:
- Market saturation;
- Execution difficulty;
- Growth prospects.
And then we grouped all of them into the following categories:
- Health and beauty;
- Reselling products;
- Digital downloads;
1. Create a niche apparel product
You can create an ecommerce website to sell niche, custom-made apparel products such as branded merch or slogan t-shirts.
You don’t even need to invest in the inventory up front. You can use print-on-demand services like Printify to drop ship t-shirts, sweatshirts, hoodies… even socks!
You can easily connect a BigCommerce online store with an on-demand partner. When a new customer orders your product, the partner will produce the product and ship it to the new owner.
Why sell niche apparel products?
- We all need clothes, don’t we? When you enter the apparel market, you don’t have to worry about the demand unexpectedly drying up. Last year, in April 2020, t-shirt sales increased by 47% and pajama sales jumped by 143% as per Adobe Digital Index;
- Apparel remains a growing industry. In 2020, the global apparel market generated approximately $1.46 trillion in revenue. And it’s predicted to grow to roughly $2.25 trillion by 2025.
2. Sell industrial B2B products with little competition
When people think about starting an online business, especially an online store, they tend to think about the B2C space first. But there’s no reason to limit yourself to it. Test out the B2B market space!
Why sell industrial B2B products?
- Rapid sector growth. Last year, digital B2B sales grew 10X faster than total offline than total manufacturing and distributor sales. Businesses are ready to purchase online, but suppliers are not up to speed yet;
- Anyone can dropship B2C products nowadays. Meanwhile, sourcing new products in the B2B space is less challenging.
3. Do what Amazon can’t
You may think that starting an ecommerce business is a doomed endeavor. How can you possibly compete with Amazon? Well, truth be told… You can’t. And you shouldn’t.
If a product is available both on Amazon and on your ecommerce store, guess which option the customer will choose? They will go with Amazon every time because they know it, they are used to it and they trust it.
That’s why you should remove yourself from direct competition with “the everything store.” What you need to do is offer your potential customers something that Amazon can’t — a personalized high-quality selection of niche products.
Why do cheese aficionados happily patronize more expensive artisanal stores? Because they don’t want just any cheese — they want high-quality specialty cheese made from grass-fed raw milk. And they will pay a premium for it.
That’s the positioning you’d want to pursue as a small business owner. Amazon is the ecommerce version of a grocery store. You want to be the ecommerce version of a specialized cheese store.
Find a profitable ecommerce niche. Do extensive market research. Make sure that you understand your potential customers… And then ‘wrap’ your findings into a curated online shopping experience they won’t get on Amazon.
4. Sell something that is trending
You can also make money by capitalizing on current market trends. How do you find one?
- Go to Google Trends;
- Put in the keyword;
- Pick the timeframe;
- Analyze the results.
Google Trends is an excellent free tool for evaluating trending products (say, a novel gadget).
Why sell something that is trending?
- Hype: When some blogger-approved product becomes trending, everyone rushes to get their hands on it. So you can spend less on advertising and capitalize on the surged demand;
- Instant cash injection. You can turn a good profit quickly if you jump on the bandwagon. This can improve your cash flow and give you extra funds to re-invest in your business.
Dropshipping is a method of selling products online, without actually stocking them. Instead, you sign up with a manufacturer who’ll supply the goods to your customers after they purchase them from your ecommerce site.
- Lower startup costs: Dropshipping reduces the costs of launching an online business because you don’t need to invest in inventory up front;
- Diverse product range: You can offer a wider range of product categories and jump on new trends.
6. Sell toys online
Kids and adults alike love toys — especially, all sorts of novelty gizmos or unique hand-made products. Research different toys types and come up with your specialty such as:
- Eco toys, made from natural materials;
- Supplies for children’s activities;
- Educational toys.
For example, Scentos specializes in selling fun arts and crafts supplies, featuring a cast of cutie-patootie characters.
Why sell toys online?
- Growing industry: In Europe, revenue in the Toys & Games segment is projected to reach $48,225 million in 2021. This market is expected to grow by 1.7% annually between 2021 and 2025;
- New approaches to parenting: Modern parents place greater importance on safety and sustainability. At last year’s New York Toy Fair, sustainability was one of the most-discussed topics.
7. Launch a CBD business
CBD products, such as CBD oils, ingestibles and ointments, are highly coveted by many consumers. So why not launch a CBD business?
Again, start with selecting your niche — this can be anything from CBD-infused food to CBD pet products.
Why launch a CBD business?
- CBD products attract a lot of interest at the moment. It’s a viable market with tempered competition at the moment.
8. Consider print-on-demand
Apart from niche apparel, you can sell an array of other on-demand products such as home decor, stationery, accessories and more!
Why sell print-on-demand products?
- Print-on-demand is a type of dropshipping, so this ecommerce model drastically reduces the financial risk of starting an online business;
- Print-on-demand is a great option for those who already have an audience and want to monetize it by selling branded merchandise.
9. Sell a beauty subscription box
Beauty subscription boxes are another great online business opportunity.
Instead of selling items as one-off purchases, you can package them together into a bundled box and charge a subscription fee.
Why sell beauty subscription boxes?
- Subscription boxes provide predictable, recurring revenue;
- Beauty supplies are perfect for this business model since they need to be frequently replenished.
10. Rent or resell fashion
“Recommerce,” or selling second-hand goods online, is a growing new sub-niche.
In Spain alone, the ecommerce revenue from the sale of second-hand goods has grown by a staggering 40% between Q1 2019 and Q4 2019.
Apart from selling pre-loved clothes online, you may also consider renting clothes. People often buy clothes for a specific occasion, then never use them again. Also, some of us just love to have a bigger wardrobe without paying too much for it.
Why rent and resell fashion?
- With 59% of adult individuals saying that they are living paycheck to paycheck, the growing demand for second-hand fashion is not surprising. People want to dress well, but they are on tight budgets. And with the economic consequences of the pandemic, this trend is likely to continue for the foreseeable future.
11. Sell online courses
You don’t need to sell physical products to have a thriving online business. You can also sell digital products like online courses. Create a great course once, they distribute and re-sell it across different platforms for as long as it remains relevant. Additionally, you can scale your distribution with affiliate marketing — enlist other marketers to promote and sell your digital products for a profit cut.
Why sell online courses?
- Online courses have incredible profit margins because you don’t have to think about manufacturing, storage, shipping, etc.
12. Create handmade goods
Are you into arts and crafts? Consider listing your ‘maker’ items for sale!
Why sell handmade goods?
- Consumers place an increasingly high value on handmade goods. Etsy’s gross merchandise sales, which have grown to $4.97 billion in 2019, are a good proxy for the rising interest. And this trend is likely to continue in the foreseeable future.
13. Pursue eco-friendly products
A great way to find ecommerce business ideas is to look at the everyday products you use, then figure out how to produce (or source) eco-friendly versions of them.
Why sell eco-friendly products?
- According to the Walker Sands “The Future of Retail 2019” report, sustainability is increasingly important to consumers, especially young ones. 65% of consumers in the 18-35 age bracket said that they are at least somewhat more likely to purchase from a brand or a retailer that is committed to sustainability.
14. Hop on the health and fitness train
As our lifestyles become more sedentary, people are increasingly interested in health and fitness. Makes sense, doesn’t it?
So consider going into the health and fitness market. This includes wellness products such as supplements, various exercise equipment and even digital products such as workout routines and meal plans.
For example, CrossCore built a successful ecommerce business by selling bodyweight exercise equipment.
Why sell health and fitness products?
- According to the Global Wellness Institute, in 2018, the physical activity industry was valued at $828 billion and the healthy eating, nutrition and weight loss industry was valued at $702 billion. You can find yourself a niche in markets this big.
Why You Should Do Something with Your Ecommerce Business Idea
Of course, coming up with an ecommerce business idea is just the beginning. You then have to build an actual business.
Here are three reasons why you should take action in 2021.
1. Expected growth
Data from Statista projects the ecommerce industry will have $6.5 trillion in sales globally by 2023. It would be foolish to miss out on an opportunity like that.
2. Easy to get started
You don’t need that much upfront capital to start an ecommerce business.
If you decide to get started as a dropshipper, you can launch an ecommerce website with as little as $1,000.
The above budget would be enough to set up an online store with BigCommerce using pre-made templates, then attract your first buyers with social media ads, SEO, and influencer marketing.
Modern out-of-the-box ecommerce platforms come with extensive native functionality such as ready-to-use store designs, payment processing integration, customizable product catalogs and website design tutorials. That makes it easy to navigate the technical side of designing an ecommerce website.
3. Opportunity to scale business
It may take a while to figure out what works and what doesn’t… But once you do, you will be able to scale your ecommerce business.
Introduce repeatable processes, automate routines and delegate some day-to-day tasks to business partners or freelancers. Ensure that you are focusing on business development and growth, while the operational aspects run smoothly in the background.
You Have an Ecommerce Business Idea… Now What?
Okay, so now you have an ecommerce business idea, how can you start working on it? Here are the next four steps:
1. Determine the who and why for your business idea
A new business needs to carve out space for itself in the market. You cannot do this unless you understand your target audience.
So take time to do proper market research. Who is buying the products that you sell? And why are they buying them? Gather intel to align your product catalog and marketing collateral with your customers’ expectations.
Remember: every successful ecommerce business sits atop of extensive customer research.
2. Search for similar business idea solutions
Chances are, your idea isn’t 100% unique. But it’s great to NOT stand out. Here’s why:
- Competition means there’s market demand;
- Also, you can easily analyze your competition via the search engine.
Research what other small businesses are doing. How are they presenting their products? What’s their pricing strategy? Which marketing channels do they use to drive traffic?
Of course, don’t outright copy your competitors. But learn from them and implement those lessons in your own business.
3. Talk to your potential customers
When you don’t know — ask. This kindergarten rule works like a charm for customer research.
Gerald Zaltman, professor emeritus at the Harvard Business School, says that not only a few conventional one-on-one interviews yield essentially the same data as several focus groups, but there’s evidence that these personal interviews also yield deep insights that can’t be obtained from focus groups.
4. Lock down the details of your business
You need to work out the whole business concept before you launch.
- What inventory will you carry?
- How will you price your products?
- How will you market your business?
These are the three most important things. But you also need to look into operational aspects such as:
Fact: ecommerce business opportunities are abundant.
But there’s a huge gap between idea and profit called “execution”. That’s where a lot of entrepreneurs stumble. Even the most amazing ecommerce business idea is worth nothing unless you act upon it.So gear up, pick that niche (you now know plenty!) and start building your ecommerce store.
Ecommerce Business Ideas FAQs
What is an ecommerce business idea?
A good ecommerce business idea is based on the intersection of customer needs, industry gaps and your delivery capabilities. If you notice that a lot of people struggle with an issue and you have the ability to solve it (e.g., by sourcing or producing a product) that nobody else seems to handle, you are onto something!
Is ecommerce profitable?
In general — yes, ecommerce as a business niche is very profitable. But individual businesses may initially struggle to break even or make a profit.
What is the best ecommerce business idea to start?
The best ecommerce idea is the one that appeals to you personally. Remember: to sell successfully, you’ll need to deeply understand your customer needs. It may prove difficult to make the right marketing decisions if you don’t understand your target market well enough.
What are the best niche ecommerce business ideas?
Some of the best niche ecommerce business ideas in 2021 are in the sustainability and eco sub-niches. A growing number of consumers are searching for ‘clean’, reusable, organic and recyclable products across a variety of product verticals such as cosmetics, clothes, toys, food, etc.
How do I find an ecommerce business idea?
Conduct online market research. Use Google Trends to analyze the flux in demand for different product types. Browse online marketplaces and analyze the most popular products. Try to understand how you could make them better and what could differentiate your business.
Is it difficult to start an ecommerce business?
Depends on the ecommerce business size. Setting up a hobbyist online store is relatively simple with a website builder such as BigCommerce. Launching mid-to-large scale ecommerce operations will require more planning and a detailed technical and operational roadmap.
How long after starting an ecommerce business, will I be profitable?
Profitability is very circumstantial. You can break even or even make a profit within a week of launching if you drop ship or sell on-demand printed products. However, if you invested significantly in purchasing inventory, warehouse facility/operations and enterprise-grade ecommerce development, it may take 12-24 months before you become profitable.
Are all ecommerce business ideas successful?
No, not every ecommerce business idea is worth pursuing. Some niches are too saturated. Others — may lack depth in terms of consumer demand. And some ideas just don’t end up being viable due to lack of interest or originality.
What are innovative ecommerce business ideas?
Innovative ecommerce ideas are based on emerging consumer trends and hype. Or such ideas are aimed at solving a pressing problem no one yet tackled. For example, Burrow noticed that there are few stylish and durable, yet modular furniture pieces on the market. So they designed a line-up of products that are easy to assemble and are suited for long-term use.
Is dropshipping a good business idea?
There are both pros and cons to dropshipping. The advantage is that you can start rapidly and operate an online store at a low cost. The con is that you have little control over product quality, shipping times can be long and you may struggle to differentiate from the competition (sourcing from the same supplier).
What is a B2B ecommerce business idea?
A good B2B ecommerce business idea is one that “fills in” the gap in a B2B market — for example, simplifying the purchasing of new equipment or spare part re-ordering. Similar to B2C, a viable idea is based around the customer’s needs and challenges.